DeLauro Pushes USDA Inspector General to Investigate Payments to Corrupt, Foreign-Owned Meat Conglomerate JBS
WASHINGTON, D.C— (February 11, 2020) Today, Congresswoman Rosa DeLauro (CT-03) pushed the United States Department of Agriculture (USDA) Inspector General (IG) Phyllis Fong to investigate corrupt, Brazilian-owned and controlled meatpacker JBS during a House Appropriations Subcommittee on Agriculture hearing. In November of last year, DeLauro called on USDA Secretary Sonny Perdue to direct the USDA IG to open a suspension and debarment investigation given the well-documented history of JBS’s corrupt and illegal behavior. A copy of Secretary Perdue’s response letter declining to take up the matter can be found here.
A full video of the exchange can be found here, and below is a transcript:
DeLauro: Thanks so much Mr. Chairman and welcome to all. Ms. Fong it’s great to see you again. I am concerned about the continued and substantial payments to U.S. subsidiaries of the corrupt Brazilian-owned and controlled meatpacker, JBS.
Trade Package, JBS has received a little over $100 million dollars in payments – that money I might add was supposed to have been for struggling farmers, ranchers who have been hurt by the Administration’s failed trade policies.
Unlike farmers and ranchers, JBS also receives payments on an annual basis and that’s through a USDA’s Agricultural Marketing Service. In fact, U.S. taxpayer has subsidized JBS to the tune of tens of millions of dollars over the past several years.
It’s a problem because according to the Federal Acquisition Regulation and related USDA policies, government contractors must have, and I quote, “present responsibility.” I’m not going to go through the explanation of that, it’s too detailed, but you know it. And accordingly, ‘the present responsibility’ can be impacted by fraud, bribery, other violations of federal laws.
JBS is currently under investigation by the Department of Justice for potential violations of the Foreign Corrupt Practices Act. This is because the Batista Brothers, the leading shareholders, have admitted to criminal acts, numerous criminal acts, consisting of the bribery of thousands of Brazilian government officials to obtain illicit loans from Brazil’s National Bank. The ill-gotten loans were then used by JBS to illegally enter and consolidate the meatpacking industry in the United States. You talk to cattle producers, you find out what they think about JBS, you’re not going to get a favorable answer.
November of last year, I wrote to Secretary Perdue urging him to open up a suspension and debarment investigation into JBS to determine whether the company meets the legal requirement of ‘present responsibility.’ Just very, very recently received a reply from the Secretary stating that he refuses to open such an investigation. And Mr. Chairman I would like to submit both my letter and his reply into the record.
So, no action. So, I make an assumption that the Secretary condones the use of taxpayer dollars in order to subsidize a corrupt, foreign owned corporation engaged in illegal activity. So, Ms. Fong, I don’t know what kinds of conversations that you have had with the Secretary on this issue, the criminal allegations, do you take them seriously by this department? And I have two other questions, so I’d like a quick answer: How seriously are you taking these allegations?
Fong: We are aware of these allegations as reported by you and the media.
Fong: And we are doing what we believe to be appropriate at this time.
DeLauro: What are you doing?
Fong: I think it would be useful if our staff talked with your staff.
DeLauro: Happy to do it. Please do and we have been talking to your staff, over and over and over again. Let me just say, that the Secretary said USDA Suspension and Debarment Investigation into JBS would quote, “conflict with investigations by DOJ and SEC.” Is that the case?
Fong: I can’t comment on their position.
DeLauro: I am not asking you that but is it a conflict?
Fong: I don’t know what the basis for his response is.
DeLauro: Fine. Because you by the Inspector General Act of 1978, amended in 2008, you have independent authority and responsibility to ensure that taxpayers dollars do not continue to flow to a company that is engaged in criminal behavior. Are you going to conduct an investigation?
Fong: We are also required by the IG Act to appropriately coordinate with the Department of Justice.
DeLauro: Are you with your independent authority going to conduct an investigation?
Fong: I can’t comment on that.
DeLauro: No comment. That means we don’t know. And whether or not your authority is being challenged in any way, it is. You are independent. That’s what makes the IG so critically important to all of us up here. I’ll make one final comment to you, because in your testimony you talk about workers’ safety and pride yourselves on dealing with workers’ safety. JBS subsidiaries have engaged in the litany of practices leading to violations of labor, environmental, food safety laws, investigation by the Washington Post 2015-2018, JBS has the highest rate of serious worker injuries—those involving amputation, hospitalization, among all meat companies in the United States. And the second highest rate of serious injuries among all companies in the United States. A subsidiary that’s getting over $100 million dollars, investigate. Use your authority. Thank you, Mr. Chairman.