It’s no secret that over the years Big Meat has had significant dust ups with the law. Before 1921, Big Meat pretty much did whatever it wanted whenever it wanted to whomever it wanted. It wasn’t pretty. A 1919 Federal Trade Commission report concluded that Swift, Armour, Morris, Cudahy, and Wilson – the nation’s five largest meat packers of the day – used its collective muscle to:
“Manipulate live-stock markets; Restrict interstate and international supplies of foods; Control the prices of dressed meats and other foods; Defraud both the producers of food and consumers; Crush effective competition; Secure special privileges from railroads, stockyard companies, and municipalities; and Profiteer…”
Out of such lawlessness was born the Packers and Stockyards Act intended to put an end to ripping off everyone.
For a while the act worked, but Big Meat didn’t like it one bit and over the years did everything it could to erode PSA’s intentions. All kinds of “you just can’t believe what you just heard” was the norm.
As an aside: Pilgrim’s Pride founder Lonnie “Bo” Pilgrim in 1989 famously handed out 10-thousand dollar “political contribution checks” to at least eight Texas state senators on the senate floor in an attempt to weaken workers’ compensation laws. When the media reported out the story, the senators gave the money back and ultimately passed changes in Texas’ ethics law.
Regardless, Big Meat has successfully defanged much of the PSA. Today the 1921 Big Five has become a Big Four, creating even less competition and greater likelihood of law breaking.
All this to say that the DNA of Big Meat – their preference built out of corporate history – is to be left alone to their own devices with the minimum amount of what it would call governmental intervention and meddling.
Which brings us to the current state of affairs; an active, long-running civil suit filed by food distribution company Maplevale Farms and other consumers, retailers, and grocers accuses (surprise, surprise) Pilgrim’s Pride, Tyson and other poultry packers of conspiring to inflate chicken prices.
The lawsuit eventually came to the attention of the Department of Justice, which successfully convinced Northern District of Illinois Eastern Division judge Thomas Durkin to pump the breaks on discovery in the case so the DOJ’s Antitrust Division’s grand jury investigation could uncover which Big Meat executives might be breaking laws.
I blogged last August the pending DOJ action could result in the indictment of Big Poultry CEOs.
Well that shoe has dropped. The DOJ thinks Pilgrim’s Pride (notice what’s becoming a running thread here) and Claxton Poultry Farms have been very naughty. To wit: Pilgrim’s Pride CEO Jason Penn, former Pilgrim’s Pride vice president Roger Austin, Claxton Poultry Farms president Mikell Fries and Claxton vice president Scott Brady participated in a “network of suppliers and co-conspirators” in order to fix prices and rig bids for chicken sales to restaurants and groceries.
The indictment is damning. The DOJ has numerous text and email messages from 2012 to 2017 showing the four men communicated among themselves to seemingly break the Packers and Stockyard Act. All have pleaded their innocence and a trial is set for next month.
For their part Pilgrim’s Pride said it would cooperate with the Justice Department and noted Penn has taken a leave of absence to defend himself. Claxton had nothing to say. That’s tepid at best.
Meanwhile, Tyson, perhaps seeing the writing on the wall for Pilgrim’s Pride and Claxton, has asked to be put in a DOJ Corporate Leniency Program to head off potential price fixing charges after being served with a grand jury subpoena. If DOJ grants the request neither Tyson or its employees will face criminal fines, jail time, or prosecution.
Well.
If the DOJ is as industrious as it should be, a whole lot more indictments will be forthcoming. And not just for the chicken industry. The beef industry finds itself in potential legal peril for the same sort of shenanigans the DOJ has uncovered at Pilgrim’s Pride and Claxton. A Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (RCALF USA) lawsuit is working its way through the courts, accusing JBS, Cargill, National Beef Packing Company, and wait for it…Tyson of manipulating the cash market. And Tyson won’t have a get-out-of-jail-free card if convicted in that lawsuit. Got to wonder if DOJ is paying attention.
All this is to say Big Meat isn’t the rosy, wholesome, family oriented, public-loving industry it carefully crafts in its advertisements and public relations materials. It’s hard to purge one’s DNA.
About Dave Dickey
Dickey spent nearly 30 years at University of Illinois at Urbana-Champaign’s NPR member station WILL-AM 580 where he won a dozen Associated Press awards for his reporting. For 13 years, he directed Illinois Public Media’s agriculture programming. His weekly column for the Midwest Center covers agriculture and related issues including politics, government, environment and labor. His opinions are his own and do not reflect the Midwest Center for Investigative Reporting. Email him at dave.dickey@investigatemidwest.org.
