The
AGRIBUSINESS EXAMINER
Monitoring Corporate Agribusiness From a Public Interest Perspective
A.V. Krebs  Editor\Publisher
 
Issue #147                                                                     March 11, 2002
 

CARGILL TO PAY $1 MILLION FINE AND COSTS
FOR POLLUTING CENTRAL MISSOURI RIVER
WITH ILLEGAL DUMPINGS OF HOG WASTES

ASSOCIATED PRESS: Cargill Pork Inc. has agreed to pay a $1 million fine and costs associated with the illegal dumping of hog waste that contaminated five miles of a central Missouri river. The dumping at the Cargill hog farm near Martinsburg spoiled part of the Loutre River and killed 53,000 fish, U.S. Attorney Ray Gruender said.

"Companies involved in operations with significant inherent environmental risks, such as pig farms, have an important duty to operate their facilities in a safe manner," Gruender said.

Minnetonka, Minnesota-based Cargill said it would pay the fine and $51,000 in restitution for its violation of the federal Clean Water Act. Meanwhile, a federal indictment made public  . . . accuses Duane W. Connor, 40, a former manager of the Martinsburg hog farm, of violating the Clean Water Act and of making a false statement. There was no phone listing for Connor in the Martinsburg area.

In July 2000, the company dumped hog waste illegally from its 17,000-pig farm, the U.S. attorney's office said. Waste entered the Loutre, a tributary of the Missouri River. As a result of improper operation of equipment, hog waste was discharged through valves and holding ponds into the Loutre. The company did not report the discharges to the Missouri Department of Natural Resources. The U.S. attorney's office said Cargill has spent $500,000 in "remediation costs" associated with the dumping.

"We're pleased to settle the matter and are satisfied with the terms of the settlement," Cargill spokesman Mark Klein said. "The incident clearly concerned us and was not characteristic of Cargill Pork's environmental record. We can now move ahead and put this matter behind us." Cargill's restitution, due within 45 days to the DNR, the Department of Conservation and the Missouri attorney general's office, is for the state's cost of investigating and coping with the illegal dumping. Martinsburg is about 75 miles northwest of St. Louis.
 

SMITHFIELD FOODS IN VIOLATION
OF KLU KLUX KLAN ACT OF 1871
MUST PAY $755,000 FOR BEATING AND ARRESTS
OF TWO UNION SUPPORTERS IN 1997

UNITED FOOD AND COMMERCIAL WORKERS UNION: In a throw back to an era of hooded night-riders, brutal beatings and false arrests, a jury in federal district court in Raleigh, North Carolina . . . . found Smithfield Packing in violation of the federal civil rights law originally known as the Ku Klux Klan Act of 1871.

The jury verdict directed Smithfield and the company's former security chief, Danny Priest, to pay $755,000 in compensation and punitive damages as the result of the beating and arrests of two union supporters at the company's Tar Heel, North Carolina facility in 1997.

The two union supporters, Rayshawn Ward and John Rene Rodriguez, were beaten, arrested and jailed by the company's security force during the 1997 workers' campaign to organize for a voice on the job with the United Food and Commercial Workers Union (UFCW). Smithfield had waged a vicious anti-worker campaign and created an atmosphere of racial hostility that included racial epithets being sprayed painted on the union's Tar Heel office.

Under federal law, workers have an absolute right to support and vote for a union in a secret ballot election without fear, intimidation or coercion. At the Smithfield plant, shotgun-wielding deputy sheriffs were ever present during the two days of balloting in a union representation election. Following the vote count on the final day of balloting, company personnel stormed the counting area and, in the resulting confrontation, the two union supporters were subject to physical violence and arrest at the direction of Danny Priest, who was acting on behalf of the company.

At the trial, jurors heard testimony on the company's actions and the role of Danny Priest. Many were stunned to learn that in today's world, workers could be subject to such abuse and violence. The jury ordered Smithfield and Danny Priest, the Chief of Security to pay a total of $755,000 in damages to the two UFCW activists --- $75,000 to Ward and $25,000 to Rodriguez in compensatory damages for the injuries both suffered at the hands of the company security force.

Both received punitive damages as well. Smithfield must pay Ward, who was knocked unconscious during his assault and arrest, $500,000 and Priest must pay Ward $25,000. The jury ordered Smithfield to pay Rodriguez $125,000 and Priest to pay $5,000. U.S. District Court Judge Earl Britt rejected the company's request to set aside the verdict and validated the jury by entering the judgment into the public record.

During the campaign, Danny Priest used the company's security force to instill fear in the 4,500 Smithfield employees. Deputies --- in riot gear and heavily armed --- stationed themselves at the entrance to the plant on days that civil rights leader Reverend Jesse Jackson and other religious leaders handed out literature with workers.

On August 21, 1997, the final day of the election, the company used the power delegated to it by the Bladen County Sheriff's Department to handcuff, mace, and jail Mr. Ward, a Smithfield meatpacking worker whose only crime was that he supported the union. Mr. Rodriguez, a union organizer, tried to help Mr. Ward as the Company's Chief of Security was assaulting him. For that, he found himself in handcuffs, jailed and facing criminal charges. Their arrests occurred in the context of a Company-initiated "riot" following the vote count.

During the union drive, the company held forced meetings to intimidate and threaten workers for supporting the union. Smithfield held separate meetings for black and Latino workers to pit worker against worker based on race. On the day of the election, deputy sheriffs, dressed in battle gear, lined the long driveway leading to the Bladen County plant.

The sheriff's menacing presence created a violent mood for the workers who were merely trying to exercise their right to vote for a voice on the job. As workers passed the lines of police in riot gear, they saw company management standing with the head of the Bladen County Sheriff's department near the entrance to the plant. The company's message was clear to workers: if you vote for a union, the law and law enforcement will not be on your side.

This is the second independent verdict against Smithfield's actions during the union campaign at the Tar Heel plant. In December, 2000, an Administrative Law Judge of the National Labor Relations Board issued a monumental 400-plus page ruling against Smithfield for massive violations of federal law. The NLRB judge found that Smithfield conspired with law enforcement to instigate the violence at the vote count.

The NLRB Judge's decision contains some of the strongest language in recent labor history against a company's flagrant disregard for the law. The Judge found that Smithfield attorneys suborned perjury during the NLRB trial. The Judge also ruled that company witnesses "lied under oath" throughout the decision and that Smithfield managers conspired with the local Sheriff Department to physically intimidate and assault union supporters.

In the recent civil rights lawsuit, U.S. District Court Judge Britt did not allow testimony from any part of the NLRB trial. Independent of one another, Smithfield has been ruled against in two legal cases for its shameful and illegal assault on its workers in Tar Heel.

John Rene Rodriguez, a victim of Smithfield's violence against its workers, died unexpectedly in December, 2001. His father, Johnny Rodriguez, testified on behalf of his son's estate. The UFCW is profoundly saddened that John Rene did not live to see justice delivered against the giant packing company.

Smithfield Foods is the world's largest pork processor and hog producer with expected 1999 production of more than 5.3 billion pounds. Its Bladen County plant is the largest hog processing plant in the world.

The UFCW is the largest organization of meat packing workers in North America, with 1.4 million members. UFCW represents a sizable number of Smithfield Packing employees, including workers at its subsidiaries John Morrell, Patrick Cudahy, Smithfield Packing-Landover, Lykes Meat Group and Northside Foods. Workers at other meat packing companies like IBP, Excel, Swift, Monfort, and Hormel are members of the UFCW.
 

CIRCUIT COURT OF APPEALS REJECTS
IBP EFFORTS TO DENY 30,000 CATTLE PRODUCERS
CLASS ACTION STATUS IN PRICE FIXING SUIT

ASSOCIATED PRESS: The 11th Circuit Court of Appeals has declined to review an appeal of a ruling against the nation's largest meat packer, IBP Inc., that granted the lawsuit class-action status. The 11th Circuit Court did not release a written decision Friday explaining the ruling. But pending dismissal motions filed by IBP, the class-action status of a suit by cattlemen who sold cattle to IBP since February 1994 will stand.

As many as 30,000 cattlemen from across the country could join in the suit against IBP, which was acquired by poultry giant Tyson Foods Inc. in September.

The suit, originally filed by 10 cattlemen in 1996, claims IBP illegally cornered the beef market and conspired to fix prices paid on the open market. The cattlemen claim IBP violated antitrust laws by buying mostly packer-owned cattle and cattle committed to packers under long-term contracts --- rather than bidding on auction markets --- to unfairly depress prices paid to producers. . . .
 

TYSON "DISAPPOINTED" WITH APPEALS COURT DECISION
REMAINS "CONFIDENT" IT WILL ULTIMATELY PREVAIL

DOW JONES NEWSWIRES:  Tyson Foods Inc. is "disappointed" that the 11th Circuit Court declined to review its appeal of the latest class certification ruling in an Alabama lawsuit filed against IBP Inc. in 1996. In a press release Friday, Tyson said it believes the court's decision involves "a question of procedure on class certification and has nothing to do with the validity of the claims made against (the) company."

As reported by the Associated Press, the Alabama lawsuit claims that beef  and pork processing giant IBP Inc.--- which Tyson finished acquiring in September 2001 --- used improper methods to keep cattle prices low.

Tyson said, "Numerous studies have proven changes in cattle prices are due to basic supply and demand, not the consolidation of the packing industry or the use of livestock marketing arrangements," adding that, "IBP relies on independent cattle producers to provide a steady supply of livestock to keep the company's plants running efficiently. We have no reason to do anything that would be detrimental to cattle producers."

Tyson currently has motions before the judge presiding over the case requesting that the claims against the company be dismissed; however, a trial date hasn't been set. Tyson said it remains confident it will ultimately prevail in the case.
 

GENERAL ACCOUNTING OFFICE (GAO) QUESTIONS
EFFECTIVENESS OF OVERSEAS LUNCH PROGRAM,
URGES REGULAR CONGRESSIONAL OVERSIGHT

JULIET EILPERIN, WASHINGTON POST: Shortly before leaving office, President Bill Clinton decreed the government should spend $300 million in the coming year on a laudable goal --- providing school lunches to poor children overseas.

Lawmakers, farmers' groups and anti-hunger advocates embraced the initiative, saying it would reduce hunger and promote education abroad. Legislators now hope to expand the one-year pilot program by writing it into a $172 billion farm bill poised for House-Senate negotiations. But according to government auditors, the Global Food for Education Initiative has failed to achieve several key objectives, rushing to provide
costly benefits in 38 nations without gaining immediate, concrete results.

In a report by the General Accounting Office, the watchdog arm of Congress, auditors questioned the wisdom of funding the project through a little-known government entity, the Commodity Credit Corp., which draws money directly from the Treasury without regular congressional oversight.

But with strong bipartisan support, the project is moving forward. The campaign to continue the program testifies to the farm industry's clout, and shows how difficult it is to dismantle federal programs once they are in place.

By offering to buy and distribute surplus agricultural products, the lunch program drew support from industry giant Archer Daniels Midland Co., farm groups and soybean and rice trade associations. After former senators George McGovern (Dem.-South Dakota) and Bob Dole (Rep.-Kansas) promoted the project, lawmakers from across the ideological spectrum endorsed it.

McGovern said in an interview . . . .  that while there are "legitimate questions" about the program, "the basic idea comes down to, `Why not one decent meal every day for every kid in the world?' How can you be against that?"

Many aid experts say providing lunches to children overseas will boost school attendance and make students more attentive in class. Rep. Jim McGovern (Dem.-Massachusetts.), who authored legislation along with Rep. Jo Ann Emerson (Rep.-Missouri) to make the program permanent, said U.S. officials already have evidence that U.S.-supplied lunches have boosted school attendance. "We're seeing this work," he said.

But the GAO report, released [February 27] questions the program's success. "While [the Agriculture Department] expects more than 8 million children to benefit from the pilot," the report says, "we found that the pilot's structure, planning and management thus far do not reasonably ensure that the program's objectives of increasing enrollment, attendance and learning will be attained." The report said Agriculture Department officials were pressured to implement the project quickly and the program lacked resources to provide other, critical educational aid.

House Majority Leader Richard K. Armey (Rep.-Texas) said lawmakers will scrutinize the lunch program now that it is part of the farm bill negotiations. "We don't like taxpayer money going to programs that don't work," he said. The Senate has called for $150 million in annual mandatory spending for five years; the House has asked for "such sums as may be necessary" until 2011.

The Clinton administration sidestepped Congress by funding the pilot program through USDA's Commodity Credit Corp., which can draw as much as $30 billion directly from the Treasury. Senators now hope to use that same strategy, which could insulate the school lunch program from future congressional attacks. Administration officials said they are evaluating the pilot, which they describe as promising, before deciding to make it permanent.

Joe Thiessen, executive director of Taxpayers for Common Sense, said "Members should think long and hard about making permanent a program that has questions out there about its effectiveness and focus." Rep. McGovern said he and others are addressing the GAO's concerns, adding money for educational tools and promoting parental and community involvement.
 

NICHOLAS E. HOLLIS:
QUESTIONS OVERSEAS LUNCH PROGRAM
SUBSIDY, DUMPING GROUND FOR ADM SURPLUSES

NICHOLAS E. HOLLIS, AGRIBUSINESS COUNCIL (ABC): ADM's "Old War Horse," former Senator "Viagra" Bob Dole hasn't stopped doing Dwayne's bidding . In the recently passed, budget-busting farm legislation, Dole managed to slip a provision in which would greatly expand a failed pilot program which uses USDA surpluses for a new variation of taxpayer paid food dumping abroad --- this time for so-called "school lunches."

Dole manipulated former Senator George McGovern --- until recently the U.S. Ambassador to the [U.N. Food and Agricultural Organization] FAO in Rome --- and Rep. Jim McGovern (Dem.-Massachusetts 3rd District) to co-sponsor the bill.

While school lunches and providing "nutrition" to needy overseas kids has some emotional appeal, there are serious questions about this legislation -- particularly when you look at who is pushing it. Not only has the General Accounting Office (GAO) challenged the effectiveness of the pilot program, but real questions arise when the use of surplus, stockpiled commodities are used for such programs.

Reports of vermin infested food --- stored too long in ADM warehouses (yep, USDA is paying for that too!), and transported on ADM owned hopper cars and barges -- have been aired in the foreign press when the stuff lands on the docks --- but rarely do reports reach back to the U.S..

As an offshoot of the "Food for Peace" program --- which has been rife with scandal and corruption --- and responsible for toppling governments ---- this latest use of surplus generated commodities should be carefully investigated before needy kids are targeted abroad for ADM-led largess.

House Majority Leader Dick Armey (Rep.-Texas) has vowed to scrutinize the school lunch, stating "We don't like taxpayer money going to programs that don't work." Well, how about taxpayer programs that infuriate other countries and corrupt governments, turning agriculture and health ministers against transport officials --- all in the name of helping destitute kids --- who have virtually no protection in those countries?

In the Clinton Administration's waning hours, President Clinton decreed that $300 million should be spent on providing school lunches to poor kids abroad. Earlier his administration had sidestepped potential critics in Congress by funding the pilot through USDA's Commodity Credit Corporation. The current proposal would attempt to insulate the school lunches from normal oversight using the same strategy. CCC is reportedly stocked with former Dole staffers and others loyal to the Ag Mafia.

American farmers and honest processors of food products would be shocked by reports of what is landed on foreign docks in their name. Some of this rotten, aging "food" they wouldn't even feed to a dog. It is high time we cleaned out the Supermarkup to the World. They are probably just trying to find another way to dump U.S. taxpayer product into Cuba, and further corrupt that pathetic country, before seizing the low cost sugar and turning the "ethanol cannons" back on the U.S. mainland.
 

MEXICAN ANTI-TRUST COMMISSION
FINDS COKE ABUSING ITS DOMINANT
SOFT-DRINK MARKET SHARE POSITION

BETSY MCKAY & DAVID LUHNOW, THE WALL STREET JOURNAL: Mexico's antitrust commission found Coca-Cola Co. and its bottlers guilty of abusing their dominant position in Coke's biggest market outside the U.S., and ordered them to suspend certain marketing and sales practices.
 
The agency said Coke had illegally prevented thousands of mom-and-pop stores from selling rival products, and ordered it to cease its so-called exclusivity contracts. But it didn't impose a fine on the company or its bottlers.
 
The decision follows a broad investigation opened in August 2000 in response to a complaint from PepsiCo Inc. and two local companies. Analysts said Coke can appeal the ruling, in effect delaying the decision nearly three more months, and then tie the matter up in courts for another few years if it chooses to do so. Companies have challenged many of the agency's other rulings in court.
 
A Coke spokeswoman in Atlanta said the company would review the decision. "We respect the decision of the competition commission, and will take time to review it before determining next steps," said the spokeswoman, Sonya Soutus.

Mexico is the second biggest market for Coke after the U.S., and the first in per-capita consumption. Coke has a 72% share of the carbonated-soft-drink market, and most of its sales come from nearly a million bodegas, the mom-and-pop shops found throughout the country. Coke offers the shops, usually the size of a small room, a free refrigerator or a Coke sign if they promise to sell only its products.
 
The commission asked Coke to stop signing new exclusivity deals last year, but the company and its bottlers refused and got temporary court injunctions. Pepsi also uses exclusivity deals, but the ruling doesn't apply to it because it doesn't have a dominant market share. A Pepsi spokesman in Purchase, New York, said the company welcomes the decision. "This decision represents a victory for Mexican consumers and fair competition in the Mexican soft-drink market," said the spokesman, Charles Nicolas.
 

COKE ARGUES WASN'T DOING ANYTHING UNUSUAL
EXERCISING ITS 72% MARKET SHARE IN MEXICO
WITH EXCLUSIVITY CONTRACTS
AND HEAVY HANDED PROMOTIONS

AMY GUTHRIE, DOW JONES NEWSWIRES: Coca-Cola Co. wasn't really doing anything unusual in its marketing strategy in Mexico, where exclusivity contracts and heavy-handed promotions are routine.

But Mexico's anti-trust commission says what makes Coke's sales practices unacceptable is that the company already holds 72% of the local soft-drink market, the world's second-largest. The commission has asked Coke to ease up on its special offers to mom-and-pop stores, which are the bulk of Mexican retailers.

Coca-Cola officials say they respect the opinion issued by the commission  . . . and have sent the resolution to affiliated Mexican bottlers. But the company hopes to overturn the verdict. "We have a reconsideration period of 60 days. What is important is to use this time to convince the commission that our commercial practices are in line with the law," said Rodrigo Calderon, vice president of communications for Coca-Cola Mexico.

He added that Coke has not yet decided that an appeal against the CFC ruling is necessary, a move that would tie up the issue in Mexican courts for years. Calderon pointed to the fact that several other charges filed by its chief competitor, PepsiCo Inc., were dropped, including accusations of price depreciation, sales bundling and blocking competitors in every channel of the market.

Regulators appear to be digging in their heels on the other points, though.        "If we allowed Coke to do this, they would eat up the other 30% of the market in a short time," said Manuel Sandoval, spokesman for Mexico's Federal Competition Commission, or CFC. . . .

Beer makers Grupo Modelo and Fomento Economico Mexicano SA offer taco shops a fridge in exchange for exclusive sales. However, the CFC has not stepped in because the companies split market share nearly equally between them. The CFC also has not moved against Pepsi, which holds about 20% of the Mexican soft drink market, and other smaller soft drink companies forging further exclusivity pacts with small grocers.

The CFC's ruling  . . . against 89 companies affiliated with Coca-Cola was the second major blow the agency has dealt Mexico's top-selling soda brand in recent years. In 1999, when Coca-Cola held just 64.6% of the market, the commission vetoed a proposed merger with Cadbury-Schweppes PLC , saying the combination would dominate the Mexican soft drink market. Together Cadbury and Coke would have reaped 71% of Mexican soda sales, or slightly less than what Coke brands are raking in today.

Cadbury retreated back to its roughly 4% Mexican market share until last week, when it announced plans to purchase the Squirt brand in Mexico. The grapefruit-flavored soda is a popular mixer for tequila and Mexico's eighth-largest carbonated soft drink brand. That should take Cadbury up to 6% of the market. Cadbury is also reportedly in talks to join forces with Jugos del Valle, Mexico's second-largest juice company. The juice maker rejected a buyout offer from Pepsi in January and has reportedly scoffed at a similar proposal from Coke.
 

COKE RETAINS LARGEST
U.S SOFT-DRINK MARKET SHARE (43.7%)
BUT PEPSI "GAINS" AT 31.6%

CATHLEEN EGAN, DOW JONES NEWSWIRES: Coke may be it but Pepsi has got the pop.

Coca-Cola Co. remained the nation's largest soft drink company in 2001, selling nearly 4.4 billion cases of soda, but rival PepsiCo Inc. had a better overall performance, according to data released Thursday by Beverage Digest/Maxwell, which tracks the carbonated industry.

PepsiCo, it said, increased unit volume 1.3% to 3.2 billion cases while market share rose 0.2% to 31.6%. By contrast, Coca-Cola saw unit volume decrease 0.2% and market share drop 0.4% to 43.7%.

Cadbury Schweppes PLC's Dr Pepper/Seven Up business rounded out the top three, raising units 6.4% and market share 0.9% to 15.6%, Beverage Digest said. Austria-based Red Bull made its debut into the top 10, producing some 10.5 million cases of energy drinks.

Overall, the U.S. soft drink industry posted what Beverage Digest called "modest growth," with total volume up 0.6%. While that's an improvement of the 0.2% gain the sector posted in 2000, it is "far below" the 2% to 3% annual growth rate of the 1990s, according to Beverage Digest. As for the top brands? The gold goes to Coke Classic, the silver to Pepsi-Cola and the bronze to Diet Coke.
 

BRITISH COLUMBIA COMMUNITY TO SEEK
VOTING RIGHTS FOR CORPORATIONS
IN MUNICIPAL ELECTIONS

The Town of Lake Cowichan [British Columbia]is proposing a resolution at the upcoming convention of the Association of Vancouver Island and Coastal Communities (AVICC) from March 8th-10th that would give corporations the right to vote in municipal elections.

Resolution #6 calls on the AVICC to petition the provincial government to amend section 49 of the Local Government Act to allow corporations to vote in municipal elections.

The motivation for the proposal is ostensibly to allow non-resident small business owners a say in the affairs of the municipality where they carry on business. "The resolution threatens fundamental democratic principles and goes beyond what is necessary to achieve the municipality's objectives," states Gil Yaron, lawyer and board member of the Aurora Institute. "This proposal violates the Charter of Rights and Freedoms, and the Universal Declaration of Human Rights. Nowhere in the world do corporations have the right to vote."

According to Yaron, "the resolution would make a mockery of B.C's democratic process.  Any individual can create a corporation by paying a fee and filing a few papers with Government.  If the resolution became reality, people could incorporate and vote through as many corporations as they want."

"The resolution is a slap in the face to Canadian men and women who fought for the right to vote," states Kari Hewett, board member of the Aurora Institute. "In an era where corporations have already corrupted the democratic processes in this country through lobbying and campaign financing, we need less not more corporate involvement in our electoral system."

For more information contact:
Gil Yaron, Gil Yaron, Aurora Institute,Vancouver, B.C. Canada, V6A 2S5
Email: info@aurora.ca
http://www.aurora.ca
 

FORMER GOP CONSULTANT NOW SAYS
PARTY IS "THE CORPORATE SKYBOX ELITE"

WASHINGTON WIRE, WALL STREET JOURNAL: McCAIN-ITE GOES DEMOCRAT: John Weaver, veteran GOP consultant, defects.

The well-known strategist for Sen. McCain's 2000 run against Bush says the GOP now is the party of "the corporate skybox elite," recast in the century-old image of "Mark Hanna and his money-men." That recalls the GOP king-maker behind President McKinley, a historical favorite of Bush strategist --- and Weaver rival --- Karl Rove.

Weaver left McCain's payroll last year but still advises him on campaign finance and patients' rights. He meets with advisers to Democratic congressional leaders Daschle and Gephardt; Democratic 2004 presidential aspirants have been in touch. A Texas Democrat until Reagan's rise, Weaver has worked for GOP Sens. Gramm and Sessions, among others, and the first Bush's 1988 Texas presidential campaign.

"I certainly have a lot of penance to do," he quips.
 

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