Three months & fines
SIOUX CITY, Iowa––U.S. District Judge Mark Bennett on April 13, 2015 sentenced egg and pork barons Austin “Jack” DeCoster, 81, of Turner, Maine, and his son Peter DeCoster, 51, of Clarion, Iowa, to serve three months each in prison and pay fines of $100,000 each for selling salmonella-contaminated eggs from their Iowa farms in 2010.
Salmonella typically infects laying hens via rodent droppings contaminating feed. The 2010 salmonella outbreak afflicted at least 1,939 people, according to the Centers for Disease Control, and may have sickened more than 56,000 more people whose infections were not officially confirmed by testing.
The DeCoster-owned company Quality Egg in 2014 was fined $6.79 million, after pleading guilty to charges in connection with the salmonella outbreak and other offenses including bribing a federal inspector.
“We didn’t know nothing”
The DeCosters in their personal plea bargain did not admit to having knowledge of the salmonella contamination.
“Investigators found no evidence that the DeCosters knew they were selling tainted products in 2010,” wrote Ryan J. Foley of Associated Press in June 2014, when the plea bargains were filed. “But as corporate officers, they were in positions to ‘detect, prevent and correct the sale of the contaminated eggs’ had they known, the plea agreements say. The investigation also found no evidence that the DeCosters knew that Quality Egg deliberately mislabeled eggs from 2006 to 2010 to fool regulators.
“In that scheme,” continued Foley, “company manager Tony Wasmund directed and approved a practice of putting false processing and expiration dates on eggs …The practice allowed Quality Egg to avoid having to sell surplus eggs for half price to a breaker facility,” which would turn the eggs into a much less lucrative liquid product.
Wasmund, 62, of Willmar, Minnesota, pleaded guilty to related federal charges in September 2012.
The three-month sentences given to the DeCosters “are noteworthy because only a handful of cases of corporate misconduct end with executives behind bars,” wrote Josh Funk of Associated Press. “The extent of harm caused by the outbreak and the pattern of problems led to the decision for jail time.”
The DeCosters could have been sentenced to up to a year in prison each on misdemeanor charges for shipping adulterated food.
Chinese offenders are shot
In China, by comparison, where lax safety standards have repeatedly led to global food product recalls, at least three people have been executed since 2007 for offenses involving tainted food, including Zheng Xiaoyu, 62, convicted of taking bribes while heading the State Food and Drug Administration from 1997 to 2006, and two men who sold the coal byproduct melamine to makers of dairy products, including baby formula. Melamine powder was substituted for milk protein, resulting in at least six infant deaths.
The DeCosters remain free while appealing their sentences, raising the question often raised before as to whether they have at last been brought to even a semblance of justice, or will continue to prosper as apparently the most often fined corporate offenders in agribusiness.
The case bringing the DeCosters before Judge Bennett in Sioux city originated after more than half a billion eggs laid between April and August 2010 were recalled in mid-August 2010 from stores in 14 states due to salmonella enteritidis outbreaks that afflicted more than 2,000 people.
Wright County Eggs, of Galt, Iowa, recalled 380 million eggs. Another Iowa producer, Hillandale Farms, recalled more than 170 million eggs several days later. Both Wright County Eggs and Hillandale Farms were under DeCoster control.
The DeCosters had also acquired a long controversial egg farm in Croton, Ohio, which was initially called AgriGeneral Co., and later became Buckeye Egg Farm.
Sold in 2004 to investors funded by Austin DeCoster, the facility was doing business as Ohio Fresh Eggs when in November 2010 it recalled 280,000 eggs due to salmonella contamination.
“Maine’s most infamous businessman”
Identifying Austin DeCoster as “Maine’s most infamous businessman,” Portland Press Herald staff writer Colin Woodard recalled that, “The DeCosters previously owned egg farms in the Maine towns of Turner, Leeds, and Winthrop, but sold them in late 2011. They now lease their Iowa facilities to another company.Austin DeCoster “started his empire in 1949 at age 14 with 100 laying chickens inherited on the death of his father,” Woodard continued. “By the time he graduated from high school, he had 2,500, and by 1977 he had more than 2.8 million, making him one of the country’s largest egg producers. But he was already in trouble with the law. In 1976 he pleaded guilty to 75 counts of having forced his [truck] drivers to falsify their logs, concealing that they were working long hours; he paid a $14,000 fine.
“In 1977 Maine Times reported that DeCoster was habitually deducting penalties and expenses from the paychecks of Vietnamese workers without prior consent or means of appeal. The workers were being charged inflated prices, the Times said, to live in company-owned trailers, from which they would be immediately evicted if they resigned or were fired. DeCoster employed children as young as 9 on his farm, according to federal investigators. In 1979 a series of accidents at the farms involving teenagers prompted Maine lawmakers to pass a law banning children under the age of 16 from working near hazardous machinery and substances,” Woodard summarized.
Looking at relocating, DeCoster persuaded officials in Kent County, Maryland to approve an $8.5 million bond to allow him to build an egg farm there. The farm soon ran into a string of pollution problems.
“In 1988,” continued Woodard, “New York state banned DeCoster’s eggs after a deadly salmonella outbreak. The state health commissioner said 11 people had died and more than 500 had been sickened after eating DeCoster eggs. The ban was lifted after the company agreed to vigorous testing.
“In 1991, such tests revealed a salmonella outbreak at one of DeCoster’s Maryland farms, prompting a statewide ban on his eggs. The following year he was found guilty of violating the ban, but was given only a token fine. By then he was already shifting his operations to Iowa, which didn’t require salmonella testing.
Kept workers from attending Mass
Meanwhile, after being fined $46,250 in 1988 for violations of Maine labor laws, DeCoster tightened security at his Maine facilities, and in 1993 was fined $15,000 for keeping as many as 100 Spanish-speaking workers in virtual slavery, prevented from leaving and from receiving visits from priests, social workers, and truant officers.
Then-U.S. Labor Secretary Robert Reich in July 1996 announced that DeCoster would be fined $3.6 million for continuing violations, including allowing unsafe working conditions that resulted in disfiguring injuries, failing to pay workers, and violations of child labor laws. An evangelical Christian, DeCoster was also fined for allegedly preventing workers from attending Catholic mass.
Pledging to make changes, DeCoster replaced an allegedly abusive egg farm manager with the former manager of one of his 30 Iowa hog farms–who had just been convicted of duct-taping an employee hand and foot, then beating him.
DeCoster’s Iowa egg operation was fined $489,950 in October 1996 for 15 serious safety violations.
Yet, in Maine federal court, DeCoster in 1997 won a reduction of the $3.6 million fine to $2 million, with the balance suspended.
Docked workers for eating “free” dinner
About 100 workers were to divide $21,000 in settlement of unpaid wage claims. Susan Rayfield of the Portland Press Herald reported that DeCoster announced the deal with a “free” chicken banquet for workers, then docked them for the time they spent eating it. Two weeks before Christmas, DeCoster also evicted employees from company housing that had been found to be substandard.Fined repeatedly in both Maine and Iowa during the next several years for wastewater violations and improperly handling pesticides, DeCoster in 2002 paid $1.5 million to 11 female workers at his Iowa facilities in settlement of sexual harassment charges, including rape. In 2003 DeCoster paid $2.1 million in fines and was sentenced to five years on probation for knowingly hiring 121 undocumented workers at his Iowa and Nebraska farms.
Between 2002 and 2008, DeCoster’s Maine farms were fined more than $600,000 by the federal Occupational Safety and Health Administration for repeated and serious violations, including exposed asbestos, unsanitary showers, hazardous equipment and disregard for worker’s safety. DeCoster also ran into repeated trouble in 2006 and 2007 for again hiring undocumented workers.
In 2009, DeCoster agreed to pay more than $125,000 in penalties and fees after undercover animal cruelty activists at the Turner farms videotaped live hens being tossed into trash cans to slowly suffocate under dead birds.
“DeCoster sold his Maine operations to a subsidiary of Land O’Lakes in November 2011,” recounted Woodard, “but his legal problems weren’t over. In October 2013 he settled a discrimination suit by Homero Ramirez, his longtime plant manager, for an undisclosed sum. Ramirez had alleged that he had worked for 22 years in ‘an environment and culture that treats Mexican American workers as ‘stupid’ and virtual slaves whose only value is their willingness to perform dangerous or demeaning tasks for DeCoster,’ according to his civil complaint.”
Concluded former Maine state legislator and attorney general James Tierney, who tried throughout his career to bring DeCoster to justice, “He is a serial law breaker. He seems not even to understand the purposes of the laws. It’s not like he hasn’t been caught and punished, but the problem always comes right back. That’s just who he is.”