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Thursday, July 23, 2009

A Short Review of JBS Swift's Negative Publicity

Well this has been interesting. I didn't find any archived materials on old issues people have told me about involving JBS Swift. The Tribune recently covered the ICE Raid so I left that out. I had been told that JBS Swift was once called in front of Congress on the issue of bribing Sheriffs or authority figures in the Southeast States. I didn't find anything online about it though. I did find the following commentaries associated with the Brazilian probe. Keep in mind the source as you read. Reuters is a good source the others just seem to be going over the same content. If you click on the links you can get the entire articles.

The last link is to the Tribune's, light-weight, piece on the issue published a few days ago. It looks like a press release, pretty much intact, they have published from JBS Swift. I could be wrong. I am not very objective about the Tribune's "reporting" right now. I'll get over it. Eventually.

CORRECTED - UPDATE 2-Brazil beef giant JBS under police probe | Reuters
CORRECTED - UPDATE 2-Brazil beef giant JBS under police probe
Tue Jun 16, 2009 7:38pm EDT

(Corrects to show that Margen, not JBS, filed for bankruptcy protection, paragraph 11)

SAO PAULO, June 16 (Reuters) - The world's biggest beef processor JBS (JBSS3.SA) is under investigation by Brazil's federal prosecutor's office in a widespread corruption case that has targeted several companies in the beef industry.

Brazil is the world's largest producer and exporter of beef, and its cattle industry has come under increasing criticism from environmentalists at home and abroad for its role in the deforestation of the Amazon rainforest.

Other meatpackers and leather companies including Bihl, Margen and Curtume Nossa Senhora Aparecida are also part of the investigation into the bribing of public officials, racketeering, corruption, fraud and collusion, a representative at the federal prosecutor's office told Reuters on Tuesday.

In an statement released earlier on Tuesday, the prosecutor said several people from the beef, dairy and leather industries were being rounded up and held in police custody in a broad-reaching sting operation spanning several states.
Big Meat to seize rancher’s home: Tyson vs. Herman Schumacher « Food Freedom
The Packers and Stockyards Act of 1921 (PSA) was established to protect family farmers and ranchers against unfair and deceptive practices by the highly concentrated meatpackers. In 2006, both the Office of Inspector General (OIG) and the U.S. Government Accountability Office (GAO) found that USDA had failed for nearly a decade to properly enforce the PSA. As a result, anticompetitive practices and anti-trust actions by the concentrated meatpackers have gone unrestrained, causing hundreds of thousands of cattle producers to exit the industry.

During the prolonged non-enforcement of the PSA, USDA implemented a new price reporting requirement, but made a horrendous mistake. Over a six-week period, from April 2, 2001, to May 11, 2001, USDA miscalculated beef values and underreported those values to the public. It was widely believed that Tyson and the other two largest meatpackers – Cargill Meat Solutions, d/b/a Excel Corporation (Excel), and Swift & Co. (Swift), now JBS Swift – knew that beef values were being underreported and were purposely underbidding the actual value of cattle. Prices paid for Schumacher’s and other cattle feeders’ cattle were forced lower during this period, causing producers to lose millions of dollars in income. USDA refused to take any action to correct this injustice.
JBS under investigation in Brazil | - Industry News
JBS S.A., along with a handful of other Brazilian companies, is under investigation by that country’s federal prosecutor in what is described as a widespread corruption case. Officials said Tuesday that 22 people have been arrested, and charges may include bribing public officials, racketeering, corruption, fraud and collusion.

In a statement issued Wednesday, JBS officials said the company is not involved in crimes associated with the Brazilian government's probe of alleged corruption among meatpackers. The company said it does not yet know the full details of the probe but is cooperating with federal authorities.

The investigation began about a year ago and developed into a broad-reaching sting operation called “operation slaughter” that spanned several Brazilian states. The prosecutor’s office said that officials at the Banco da Amazonia bank, and local and federal officials of several government offices and ministries are also involved. The prosecutor said companies under investigation had paid inspectors and public servants to approve projects and clear products such as meats for consumption.

JBS S.A. became the world’s largest beef processor last year and a major player in the U.S. market when it purchased Swift & Co. and Smithfield Beef Group. It also purchased Five Rivers Cattle Feeding, which owns 10 feedlots with a capacity of 1.5 million head. JBS also made a bid for National Beef, the fourth-largest U.S. beef packer, but that acquisition was terminated last February.

JBS S.A. is currently the world's largest beef producer and exporter, with a daily slaughtering capacity of 65,200 head, and the largest global exporter of processed beef. The company's operations include 22 plants located in nine Brazilian states and six plants located in four Argentine provinces, in addition to 16 plants in the United States, 10 in Australia and 10 in Italy. Additionally, JBS S.A. is the third-largest pork producer in the United States, with a slaughtering capacity of 47,900 head per day.
JBS S.A. denies involvement in government probe | Greeley Tribune
JBS S.A. has said the company is not involved in crimes associated with the Brazilian government's probe of alleged corruption among meatpackers.

JBS S.A. is the parent company of JBS USA which has headquarters in Greeley.

The Sao Paulo-based beef giant said federal police visited a JBS plant in Porto Velho, a city in the state of Rondonia, with a warrant to search and collect certain documents, according to

JBS said it cooperated with the police, which collected documents including audit reports and copies of plant operations licenses. No electronic data storage devices, computer or any other kind of equipment was seized, the company said, "due to a lack of evidences that any crime was committed."

In a statement released Wednesday by the company it "affirms that it does not have any involvement in crimes associated with this Federal Superintendence of Agriculture investigation in the state of Rondonia, or in any other state.”

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