C-suite in the hot seat

by Jay Sjerven
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The U.S. Department of Justice in recent weeks initiated criminal investigations in connection with foodborne illness outbreaks involving Chipotle Mexican Grill, Denver, and Blue Bell Creameries L.P., Brenham, Texas. The investigations reflected a more aggressive stance taken by the D.O.J. aimed at holding executives accountable should it be determined they defrauded the public in responding to a foodborne illness outbreak or even knowingly distributed contaminated products.

Blue Bell Creameries in April 2015 recalled all of its ice cream products because of Listeria contamination that led to three deaths and multiple illnesses across several states. The company began to manufacture and ship ice cream again in August 2015 after receiving an okay from regulators and since has been gradually shipping ice cream into other former markets.

Chipotle was linked to an E. coli outbreak that started in the Pacific Northwest in mid-October to early November and sickened 53 people in nine states. More recently more than 150 customers fell ill with norovirus after eating at Chipotle restaurants in the Boston area (See related story on Page 16).

Blue Bell ice cream and a Chipotle burrito, food safety
How executives react to a food safety incident may prompt a criminal investigation.

These investigations came on the heels of convictions of five executives of the Peanut Corp. of America in September and October 2015. P.C.A. was linked to a 2009 Salmonella outbreak that resulted in nine deaths and 700 illnesses across 46 states. In the P.C.A. case, the government proved executives knowingly marketed contaminated product and covered up their misdeeds. Stewart Parnell, the former owner and president of P.C.A., was sentenced to 28 years in prison, and his brother, Michael Parnell, was sentenced to serve 20 years. Other sentences ranged from three to six years.

The more aggressive stance of the D.O.J. in prosecuting possible wrongdoings of corporate executives was explained by Jonathan Olin, U.S. Deputy Assistant Attorney General, who addressed the Food and Drug Law Institute’s Enforcement, Litigation and Compliance Conference on Dec. 9, 2015.

Jonathan Olin, U.S. Deputy Assistant Attorney General

“Americans should be able to trust that the food we buy for our families is safe to eat,” Mr. Olin said. “And of course, the overwhelming majority of it is. But practically every week, another case comes across my desk detailing shoddy practices by a food manufacturing or processing company.”

Mr. Olin said the D.O.J., working closely with the Food and Drug Administration, “will bring civil cases seeking to stop unsafe practices and to require appropriate compliance procedures. And, depending on the facts of each case, we have and will continue to bring criminal prosecutions.”

Mr. Olin pointed to the case of a subsidiary of ConAgra Foods that earlier in 2015 pled guilty to a misdemeanor charge in connection with a Salmonella outbreak traced to contaminated peanut butter and agreed to pay $11.2 million in fines and forfeiture, which was the largest criminal amount ever in a food safety case.

“And where the conduct we uncover goes beyond unsanitary conditions or other Food, Drug and Cosmetic Act violations to outright fraud, we will not hesitate to use every available tool to hold accountable those who put their own profits over the safety of the American consumer,” he said.

ConAgra Foods in 2015 pled guilty to a misdemeanor charge in connection with a Salmonella outbreak traced to contaminated Peter Pan brand peanut butter.

Mr. Olin explained, “Under a new policy announced a few months ago by Deputy Attorney General Sally Quillian Yates, individual accountability is at the heart of our corporate enforcement strategy. We have long known that one of the most effective ways to ensure corporate accountability and deter future misconduct is by pursuing the individuals through which corporations act … The new policy reinforces the importance of individual prosecutions and has caused us and others across the department to look more critically at every corporate case and ensure that those responsible for the wrongdoing are identified early and pursued.

“We bristle at the notion that our prosecutions represent nothing more than the cost of doing business, and so a financial penalty, no matter how big, is unlikely to be enough. You should be prepared at an early stage to discuss individuals, to discuss compliance and to discuss a fulsome accounting of the specific facts uncovered by our investigation.”

David Acheson, founder and c.e.o. of The Acheson Group

David Acheson, founder and chief executive officer of The Acheson Group, in a recent blog said, “What I have learned from the various D.O.J. actions is that when individuals get sick, and especially if there are deaths, the D.O.J. is asking the key question: ‘Should that company have known more, and should they have acted differently?’

“I put P.C.A. in a compartment of its own in this space, but as we have seen with Jensen Farms and ConAgra, D.O.J. and F.D.A. felt that those firms should have acted differently, should have known better, and should have taken a different approach. As a result, there were consequences that impacted both Jensen Farms and ConAgra.

“If you knowingly ship contaminated food, then you deserve all that you get. But the key lessons are that you need to track and make appropriate changes when you know something is creating a potential risk. Because if you don’t, and people get sick, you may well find you are spending time with both the F.D.A. Office of Criminal Investigation and the Department of Justice — neither of which is something anyone in the food industry wants to do. Not looking for problems is no excuse, either. Remember, as so strongly promoted in Food Safety Modernization Act, today’s food safety is all about prevention. And not implementing all preventive controls needed to ensure safe food will put you at risk — you personally, as well as your business as a whole.”
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