Peanut Corporation of America
Encyclopedia
Peanut Corporation of America (PCA) was a peanut
-process
ing business founded in 1977 and headquartered in Lynchburg, Virginia
. The company was forced out of business after being found to be the source of a massive salmonella
outbreak in the United States during 2008 and 2009.
PCA operated processing facilities in Blakely, Georgia
; Suffolk, Virginia
; and Plainview, Texas
. The company supplied peanuts, peanut butter, peanut meal, and peanut paste to institutional users such as schools and nursing home
s, to food processors who used them in a wide range of products from cookies and snacks to dog treats and ice cream, and to retail outlets such as dollar store
s.
Peanut Corporation of America had 90 employees and did $25 million in sales in 2008. The company manufactured roughly 2.5 percent of the nation’s processed peanuts.
The company was sued by American Candy Company
after the FDA discovered in 1990 that PCA's peanut butter exceeded the FDA tolerance level
for aflatoxin
, a toxic mold. American Candy had turned the peanut butter into 8,000 cases of "kisses" for Wal-Mart
, which were not shipped. Another lawsuit was brought by Zachary Confections Inc. of Frankfort, Indiana
, in 1991 after a 40,020-pound shipment of nuts from PCA was found to have an unacceptably high level of aflatoxin. There had been concerns about sanitation at the company since at least the mid-1980s.
On February 13, 2009, Peanut Corporation of America filed for Chapter 7 bankruptcy
liquidation. At least a dozen civil lawsuits have been filed while the federal criminal investigation continues.
The Peanut Corporation of America is unrelated to the Peanut Company of Australia, which is also known as PCA.
(CDC). Among persons with available information, 23% reported being hospitalized. The real numbers were believed to be much higher, since for every reported case of salmonella, another 38 cases go unreported, according to the CDC. A combination of epidemiological analysis and laboratory testing by state officials in Minnesota
and Connecticut
, the Food and Drug Administration
(FDA), and the CDC enabled the FDA to confirm that the sources of the outbreak of illnesses caused by Salmonella typhimurium were peanut butter, peanut paste, and peanut meal produced by the Peanut Corporation of America (PCA) at its Blakely, Georgia processing plant.
This infection triggered the most extensive food recall ever in US history. As of April 22, 2009, it involved at least 361 companies and 3,913 different products manufactured using PCA ingredients. The recall included everything produced at the Blakely plant since January 1, 2007. as well as everything ever produced at the Plainview, Texas plant. Products supplied for some school lunches were pulled, and the Federal Emergency Management Agency
(FEMA) even recalled emergency meals sent after a massive ice storm
. (Since the storm left many without power, the United States Postal Service
went door-to-door in Kentucky
to warn residents and hand out 600,000 flyers from FEMA.) Food banks nationwide had to discard thousands of pounds of food in time of high demand from millions of US families in need.
The recall did not involve major-brand peanut butters, but many consumers reacted by avoiding peanut products altogether, driving down the sales of all brands of peanut butter by nearly 25 percent.
This caused great harm to the industry and farmers, already suffering from low prices due to the 2008 bumper crop
and the deepening economic crisis. Early estimated of losses to the US peanut industry because of this outbreak would be on the order of $1 billion.
On February 7, 2009, Oregon
officials confirmed the first case of salmonellosis
in a dog which had eaten biscuits contaminated with the PCA outbreak strain of salmonella.
The Post reported on February 15 that it had been an open secret among peanut insiders in Georgia, Virginia and Texas that PCA had serious sanitation issues. David Brooks, a buyer for a snack company, said that it was well known PCA was "a time bomb waiting to go off."
(FDA) inspectors reported, following a two-week inspection of the Blakely, Georgia
, plant in January 2009, that the company had information that its peanut-butter products were tainted with salmonella but shipped them anyway after "re-testing" them. This occurred at least 12 times in 2007 and 2008. FDA inspectors also found mold growing on the plant's ceiling and walls, foot-long gaps in its roof, dead insects near peanuts, and holes in the plant big enough for rodents to enter. Inspectors found that the company also did not clean its equipment after finding contamination, and did not properly segregate raw and finished products. In 2007 the company shipped chopped peanuts on two occasions even after salmonella was confirmed by private lab tests. The company had previously refused to divulge production test records until federal officials invoked the food safety provisions of a federal anti-terrorism law (the 2002 Public Health Security and Bioterrorism Preparedness Response Act
). As a result of this refusal and the incident in general, the Georgia State Senate passed a bill requiring peanut product manufacturers to report any contamination within 24 hours, failing which felony charges would result.
On February 6, 2009, the FDA reported that the company shipped tainted products under three conditions: (1) without retesting, (2) before the re-test results came back from an outside company, and (3) after a second test showed no bacterial contamination. In all three cases, the initial positive result means that the product should have been destroyed. Food safety experts say salmonella can live in pockets of peanut butter, so that one batch could test both negative and positive. In that case, it should have been destroyed, they said.
Additionally, an FDA report dated September 15, 2008, stated that an export shipment to Canada originating from the Blakely plant was found to be contaminated; the FDA blocked it from being reimported into the US because the peanuts contained a "filthy, putrid or decomposed substance", as well as metal fragments.
Former employees interviewed by the Chicago Tribune
stated that conditions in the plant were "filthy and nasty," and that they would never eat the peanut butter or allow their children to eat it. One employee remembered seeing a family of baby mice in a tote of peanuts, and others recalled having to step over standing water inside the building after heavy rain. Another former employee told CBS News
that he saw a rat dry-roasting in a peanut area. Another told ABC News
that workers had no idea the company had positive salmonella tests because "that information is not for the average employee to see."
In 2001, FDA inspectors also found that products were potentially exposed to insecticides, according to a report obtained by The Associated Press.
Documents released February 11 by the US House Energy and Commerce Committee
showed that the company shipped products to customers even before receiving results of salmonella tests, and the company stopped using a private laboratory because too many tests done there showed contamination. A lab tester told the House panel that the company discovered salmonella at its Blakely plant as far back as 2006.
The company issued a statement categorically denying the allegations; however, it shut down production and laid off 50 employees at the Blakely plant.
, which opened in March 2005 and employed 30 people, was never licensed in that state as a food manufacturing facility; the state had not done any inspections until the problems with the Georgia plant became news. The Texas plant blanches, dry-roasts, oil-roasts, and chops peanuts, then ships them to food companies across the country. The Texas inspection in January 2009 found some unsanitary conditions, such as unclean sections of a peanut-roasting line. It also reported that several internal company laboratory tests dating back to November had found no salmonella or other contaminants. However, on February 10, 2009, company officials announced that the Texas plant has been shut down, after samples taken on February 4 tested positive for salmonella. Former workers at the Texas plant interviewed by the New York Times said that the facility was "disgusting". It said the plant shared many of the problems found in the plant in Georgia, including a badly leaking roof and rodent infestation. A former plant manager told Good Morning America
that he had repeatedly complained to the company owner, Stewart Parnell, about unsanitary conditions, including "water leaking off a roof and bird feces washing in", but Parnell would not authorise money for necessary repairs.
On February 12, Texas health officials ordered an unprecedented recall of all products ever shipped from the Texas plant since it opened in 2005, after discovering that the plant's air handling system was drawing in debris from a crawl space containing "dead rodents, rodent excrement and bird feathers" into production areas. State health officials said they issued the sweeping recall because they did not know how long the unsanitary conditions had existed at the plant.
The plant had been certified for organic production in November 2005, based on what state officials later called incomplete information obtained by an inspector with the Texas Department of Agriculture
. However, the company failed to apply for a Texas health certificate, which would have triggered a visit by state inspectors. State health officials were not aware the plant existed until the company released a list of its plants around the country.
The company had previously operated a plant in Gorman
, where the company originally started in 1977. David Brooks, the snack food company buyer, said that he inspected this plant three times in the mid-1980s to determine whether to buy peanuts from PCA. The plant flunked each time for what he called "just filthy" conditions, including dusty beams, leaky roofs, and birds flying through the building. The Gorman operations transferred to Plainview when Hale County
officials issued $2 million in tax-free revenue bonds to help the company convert a long vacant Jimmy Dean
sausage factory in into a peanut plant. Local officials, including a county health inspector, toured the new plant and approved its opening, although the state said it never knew the plant existed. The plant was located along a major highway, across from a large Wal-Mart distribution center; it had four highly visible signs in the front and a billboard bearing a picture of a peanut. A state inspector who drove by the plant "a few times" on his way to other inspections never stopped because it was not on his list. State officials said the company was solely to blame for failing to obtain the food manufacturer's license when the Plainview plant opened.
, had some of the same food safety problems found in the company’s Georgia plant. Inspectors in 2008 found mold on "totes" holding peanuts, counted 43 mouse droppings on the floor, and saw a live bird walking and flying inside the warehouse.
The Virginia plant employed 13 workers and was shut down the day PCA filed for bankruptcy.
, commissioner of the Georgia Department of Agriculture (GDA), requested criminal investigation of the Georgia Bureau of Investigation
(GBI) as the organ responsible for inspections contracted by the FDA. GDA and GBI officials had said they would consider pursuing manslaughter
charges if federal authorities did not take up the case. On January 30, 2009 federal health officials announced that a criminal investigation had been launched by the US Justice Department for possible prosecution under provisions of the 1938 Federal Food, Drug, and Cosmetic Act
.
On February 4, Georgia officials said they would not prosecute the company, because the two state laws under consideration (reckless conduct, and adulteration of food) were only misdemeanors and would only allow for minor penalties. Vernon Keenan
, director of the Georgia Bureau of Investigation, said: "Any potential prosecution is most appropriately handled at the federal level" .
On February 9, the Federal Bureau of Investigation
(FBI) announced that it had joined the criminal investigation of the company. Search warrants were executed on the Blakely plant as well as PCA's corporate headquarters in Lynchburg. Following a raid by its agents, the FBI has sealed off the Blakely plant.
, but decided to go into liquidation because all three of its plants had been closed down and there was no way it could carry on business. Consumers Union
criticised the move, saying that the bankruptcy filing would shield the company from liability suits. although in reality, the bankruptcy filing merely delays any claims against the company. The "automatic stay" provisions of Section 362 of the United States Bankruptcy Code do not apply to any individual who does not file for bankruptcy. Thus, to the extent that misconduct by a non-debtor individual can be shown, persons injured by the company's practices will be able to pursue that relief. Criminal actions may still be brought against those responsible. Additionally, suppliers faced claims from consumers for products purchased from PCA.
to the position in 2005, and was reappointed for another term that would have expired in 2011, however, on February 5, 2009 the USDA announced that the new Agriculture Secretary Tom Vilsack
had removed Parnell from the board.
Parnell started in the peanut business with his father and two younger brothers in 1977. They took a struggling, $50,000-a-year peanut roasting operation and turned it into a $30 million business before selling in 1995. Parnell continued working as a consultant to the business after the family sold it, and in 2000 he left to buy his own peanut plant again in Texas. In 2001, he bought the Blakely, Georgia operation, when its operations consisted only of roasting and blanching peanuts. Parnell tripled revenue at the Blakely plant by 2004, turning its first profit in 15 years, with production regularly surpassing 2.5 million pounds of peanuts per month. However, the FDA did not know that the plant manufactured peanut butter until the current outbreak.
Brooks said the Parnells ran PCA on a very tight budget, buying the cheapest peanuts they could find. The company operated a bare-bones front office from a converted garage behind Parnell's home outside Lynchburg, and relied almost exclusively on minimum-wage labor.
Despite more than 12 tests between 2007 and 2008 that showed salmonella contamination in his company’s products, Parnell wrote an e-mail to company employees on Jan 12, 2009, that stated, "we have never found any salmonella at all. No salmonella has been found anywhere in our products or in our plants." Parnell ordered products identified with salmonella to be shipped and complained that tests discovering the contaminated food were "costing us huge $$$$$." In a June 2008 e-mail exchange, Parnell complained to a worker after being notified that salmonella had been found in more products. "I go thru this about once a week," he wrote. "I will hold my breath ... again." After the company was identified as the source of the outbreak, Parnell pressed federal regulators to allow him to continue using peanuts from the tainted plant. He wrote that company executives "desperately at least need to turn the raw peanuts on our floor into money."
Under Congressional subpoena
, Parnell on Feb 11 appeared with his plant manager before a House Energy and Commerce
subcommittee but repeatedly refused to testify, citing their Fifth Amendment
protection against self-incrimination. Among the questions they refused to answer was one from Rep. Greg Walden
(R-Ore.): "In this container, are products that have your ingredients in them, some of which are on the recall list, some of which are probably contaminated. It seems like from what we've read you were willing to send out that peanut base that went into these ingredients. I just wonder, would either of you be willing to take the lid off and eat any of these products now like the people on the panel ahead of you, their relatives, their loved ones did?" Walden revealed an e-mail from Parnell, who, referring to products that had tested positive for salmonella, wrote: "Let's turn them loose."
Stewart and Gloria Parnell live outside Lynchburg, Virginia
, with a second home in Nags Head, North Carolina
. Stewart Parnell is a member of the Oakwood Country Club in Lynchburg and flies his own airplane.
According to the Wall Street Journal, Parnell's lawyer is William O’Reilly, who is the former chief counsel and staff director for the House Ethics Committee. Parnell's plant manager is represented by Jim Parkman who defended HealthSouth
founder Richard Scrushy and former Detroit mayor Kwame Kilpatrick
.
Parnell attended the Florida Institute of Technology
and majored in oceanography
but did not graduate. Parnell's younger sister, Beth, is married to Jimmy Falwell, a cousin of the late Rev. Jerry Falwell
.
Peanut
The peanut, or groundnut , is a species in the legume or "bean" family , so it is not a nut. The peanut was probably first cultivated in the valleys of Peru. It is an annual herbaceous plant growing tall...
-process
Industrial process
Industrial processes are procedures involving chemical or mechanical steps to aid in the manufacture of an item or items, usually carried out on a very large scale. Industrial processes are the key components of heavy industry....
ing business founded in 1977 and headquartered in Lynchburg, Virginia
Lynchburg, Virginia
Lynchburg is an independent city in the Commonwealth of Virginia. The population was 75,568 as of 2010. Located in the foothills of the Blue Ridge Mountains along the banks of the James River, Lynchburg is known as the "City of Seven Hills" or "The Hill City." Lynchburg was the only major city in...
. The company was forced out of business after being found to be the source of a massive salmonella
Salmonella
Salmonella is a genus of rod-shaped, Gram-negative, non-spore-forming, predominantly motile enterobacteria with diameters around 0.7 to 1.5 µm, lengths from 2 to 5 µm, and flagella which grade in all directions . They are chemoorganotrophs, obtaining their energy from oxidation and reduction...
outbreak in the United States during 2008 and 2009.
PCA operated processing facilities in Blakely, Georgia
Blakely, Georgia
Blakely is a town in Early County, Georgia. As of the 2010 census, the city had a population of 5,068. This town is the county seat of Early County.-Geography:Blakely is located at ....
; Suffolk, Virginia
Suffolk, Virginia
Suffolk is the largest city by area in Virginia, United States, and is located in the Hampton Roads metropolitan area. As of the 2010 census, the city had a total population of 84,585. Its median household income was $57,546.-History:...
; and Plainview, Texas
Plainview, Texas
Plainview is a city in and the county seat of Hale County, Texas, United States. The population was 22,336 at the 2000 census.-Geography:Plainview is located at ....
. The company supplied peanuts, peanut butter, peanut meal, and peanut paste to institutional users such as schools and nursing home
Nursing home
A nursing home, convalescent home, skilled nursing unit , care home, rest home, or old people's home provides a type of care of residents: it is a place of residence for people who require constant nursing care and have significant deficiencies with activities of daily living...
s, to food processors who used them in a wide range of products from cookies and snacks to dog treats and ice cream, and to retail outlets such as dollar store
Dollar store
A variety store or price-point retailer is a retail store that sells inexpensive items, often with a single price for all items in the store...
s.
Peanut Corporation of America had 90 employees and did $25 million in sales in 2008. The company manufactured roughly 2.5 percent of the nation’s processed peanuts.
The company was sued by American Candy Company
American Candy Company
The American Candy Company is a confectioner specializing in old-fashioned hard candies. They are best known as the inventor of wax lips, though their wax candy division was sold to Concord Confections in 2002...
after the FDA discovered in 1990 that PCA's peanut butter exceeded the FDA tolerance level
The Food Defect Action Levels
The Food Defect Action Levels: Levels of natural or unavoidable defects in foods that present no health hazards for humans is a publication of the United States Food and Drug Administration's Center for Food Safety and Applied Nutrition detailing acceptable levels of food contamination from sources...
for aflatoxin
Aflatoxin
Aflatoxins are naturally occurring mycotoxins that are produced by many species of Aspergillus, a fungus, the most notable ones being Aspergillus flavus and Aspergillus parasiticus. Aflatoxins are toxic and among the most carcinogenic substances known...
, a toxic mold. American Candy had turned the peanut butter into 8,000 cases of "kisses" for Wal-Mart
Wal-Mart
Wal-Mart Stores, Inc. , branded as Walmart since 2008 and Wal-Mart before then, is an American public multinational corporation that runs chains of large discount department stores and warehouse stores. The company is the world's 18th largest public corporation, according to the Forbes Global 2000...
, which were not shipped. Another lawsuit was brought by Zachary Confections Inc. of Frankfort, Indiana
Frankfort, Indiana
As of the census of 2000, there were 16,662 people, 6,279 households, and 4,175 families residing in the city. The population density was 3,240.5 people per square mile . There were 6,682 housing units at an average density of 1,299.6 per square mile...
, in 1991 after a 40,020-pound shipment of nuts from PCA was found to have an unacceptably high level of aflatoxin. There had been concerns about sanitation at the company since at least the mid-1980s.
On February 13, 2009, Peanut Corporation of America filed for Chapter 7 bankruptcy
Chapter 7, Title 11, United States Code
Chapter 7 of the Title 11 of the United States Code governs the process of liquidation under the bankruptcy laws of the United States...
liquidation. At least a dozen civil lawsuits have been filed while the federal criminal investigation continues.
The Peanut Corporation of America is unrelated to the Peanut Company of Australia, which is also known as PCA.
Extent
In late 2008 and early 2009, nine people died and at least 691 people in 46 states, half of them children, fell ill due to food poisoning from eating products containing peanuts, according to the Centers for Disease Control and PreventionCenters for Disease Control and Prevention
The Centers for Disease Control and Prevention are a United States federal agency under the Department of Health and Human Services headquartered in Druid Hills, unincorporated DeKalb County, Georgia, in Greater Atlanta...
(CDC). Among persons with available information, 23% reported being hospitalized. The real numbers were believed to be much higher, since for every reported case of salmonella, another 38 cases go unreported, according to the CDC. A combination of epidemiological analysis and laboratory testing by state officials in Minnesota
Minnesota
Minnesota is a U.S. state located in the Midwestern United States. The twelfth largest state of the U.S., it is the twenty-first most populous, with 5.3 million residents. Minnesota was carved out of the eastern half of the Minnesota Territory and admitted to the Union as the thirty-second state...
and Connecticut
Connecticut
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...
, the Food and Drug Administration
Food and Drug Administration
The Food and Drug Administration is an agency of the United States Department of Health and Human Services, one of the United States federal executive departments...
(FDA), and the CDC enabled the FDA to confirm that the sources of the outbreak of illnesses caused by Salmonella typhimurium were peanut butter, peanut paste, and peanut meal produced by the Peanut Corporation of America (PCA) at its Blakely, Georgia processing plant.
This infection triggered the most extensive food recall ever in US history. As of April 22, 2009, it involved at least 361 companies and 3,913 different products manufactured using PCA ingredients. The recall included everything produced at the Blakely plant since January 1, 2007. as well as everything ever produced at the Plainview, Texas plant. Products supplied for some school lunches were pulled, and the Federal Emergency Management Agency
Federal Emergency Management Agency
The Federal Emergency Management Agency is an agency of the United States Department of Homeland Security, initially created by Presidential Reorganization Plan No. 1 of 1978 and implemented by two Executive Orders...
(FEMA) even recalled emergency meals sent after a massive ice storm
January 2009 Central Plains and Midwest ice storm
The January 2009 ice storm was a major ice storm that occurred over parts of Oklahoma, Arkansas, Missouri, Illinois, Indiana, West Virginia, and Kentucky. The storm produced widespread power outages for over 2 million people due to heavy ice accumulation...
. (Since the storm left many without power, the United States Postal Service
United States Postal Service
The United States Postal Service is an independent agency of the United States government responsible for providing postal service in the United States...
went door-to-door in Kentucky
Kentucky
The Commonwealth of Kentucky is a state located in the East Central United States of America. As classified by the United States Census Bureau, Kentucky is a Southern state, more specifically in the East South Central region. Kentucky is one of four U.S. states constituted as a commonwealth...
to warn residents and hand out 600,000 flyers from FEMA.) Food banks nationwide had to discard thousands of pounds of food in time of high demand from millions of US families in need.
The recall did not involve major-brand peanut butters, but many consumers reacted by avoiding peanut products altogether, driving down the sales of all brands of peanut butter by nearly 25 percent.
This caused great harm to the industry and farmers, already suffering from low prices due to the 2008 bumper crop
Bumper crop
In agriculture, a bumper crop refers to a particularly productive harvest yielded for a particular crop.Example: "With all the rain we've had over the last few months, we are expecting a bumper crop this year."...
and the deepening economic crisis. Early estimated of losses to the US peanut industry because of this outbreak would be on the order of $1 billion.
On February 7, 2009, Oregon
Oregon
Oregon is a state in the Pacific Northwest region of the United States. It is located on the Pacific coast, with Washington to the north, California to the south, Nevada on the southeast and Idaho to the east. The Columbia and Snake rivers delineate much of Oregon's northern and eastern...
officials confirmed the first case of salmonellosis
Salmonellosis
Salmonellosis is an infection with Salmonella bacteria. Most people infected with Salmonella develop diarrhea, fever, vomiting, and abdominal cramps 12 to 72 hours after infection. In most cases, the illness lasts four to seven days, and most people recover without treatment...
in a dog which had eaten biscuits contaminated with the PCA outbreak strain of salmonella.
The Post reported on February 15 that it had been an open secret among peanut insiders in Georgia, Virginia and Texas that PCA had serious sanitation issues. David Brooks, a buyer for a snack company, said that it was well known PCA was "a time bomb waiting to go off."
Georgia
Food and Drug AdministrationFood and Drug Administration
The Food and Drug Administration is an agency of the United States Department of Health and Human Services, one of the United States federal executive departments...
(FDA) inspectors reported, following a two-week inspection of the Blakely, Georgia
Blakely, Georgia
Blakely is a town in Early County, Georgia. As of the 2010 census, the city had a population of 5,068. This town is the county seat of Early County.-Geography:Blakely is located at ....
, plant in January 2009, that the company had information that its peanut-butter products were tainted with salmonella but shipped them anyway after "re-testing" them. This occurred at least 12 times in 2007 and 2008. FDA inspectors also found mold growing on the plant's ceiling and walls, foot-long gaps in its roof, dead insects near peanuts, and holes in the plant big enough for rodents to enter. Inspectors found that the company also did not clean its equipment after finding contamination, and did not properly segregate raw and finished products. In 2007 the company shipped chopped peanuts on two occasions even after salmonella was confirmed by private lab tests. The company had previously refused to divulge production test records until federal officials invoked the food safety provisions of a federal anti-terrorism law (the 2002 Public Health Security and Bioterrorism Preparedness Response Act
Public Health Security and Bioterrorism Preparedness Response Act
Signed into effect on 12 June 2002, the Public Health Security and Bioterrorism Preparedness Response Act, was signed by the President, the Department of Health and Human Services DHHS and the U.S...
). As a result of this refusal and the incident in general, the Georgia State Senate passed a bill requiring peanut product manufacturers to report any contamination within 24 hours, failing which felony charges would result.
On February 6, 2009, the FDA reported that the company shipped tainted products under three conditions: (1) without retesting, (2) before the re-test results came back from an outside company, and (3) after a second test showed no bacterial contamination. In all three cases, the initial positive result means that the product should have been destroyed. Food safety experts say salmonella can live in pockets of peanut butter, so that one batch could test both negative and positive. In that case, it should have been destroyed, they said.
Additionally, an FDA report dated September 15, 2008, stated that an export shipment to Canada originating from the Blakely plant was found to be contaminated; the FDA blocked it from being reimported into the US because the peanuts contained a "filthy, putrid or decomposed substance", as well as metal fragments.
Former employees interviewed by the Chicago Tribune
Chicago Tribune
The Chicago Tribune is a major daily newspaper based in Chicago, Illinois, and the flagship publication of the Tribune Company. Formerly self-styled as the "World's Greatest Newspaper" , it remains the most read daily newspaper of the Chicago metropolitan area and the Great Lakes region and is...
stated that conditions in the plant were "filthy and nasty," and that they would never eat the peanut butter or allow their children to eat it. One employee remembered seeing a family of baby mice in a tote of peanuts, and others recalled having to step over standing water inside the building after heavy rain. Another former employee told CBS News
CBS News
CBS News is the news division of American television and radio network CBS. The current chairman is Jeff Fager who is also the executive producer of 60 Minutes, while the current president of CBS News is David Rhodes. CBS News' flagship program is the CBS Evening News, hosted by the network's main...
that he saw a rat dry-roasting in a peanut area. Another told ABC News
ABC News
ABC News is the news gathering and broadcasting division of American broadcast television network ABC, a subsidiary of The Walt Disney Company...
that workers had no idea the company had positive salmonella tests because "that information is not for the average employee to see."
In 2001, FDA inspectors also found that products were potentially exposed to insecticides, according to a report obtained by The Associated Press.
Documents released February 11 by the US House Energy and Commerce Committee
United States House Committee on Energy and Commerce
The Committee on Energy and Commerce is one of the oldest standing committees of the United States House of Representatives. Established in 1795, it has operated continuously—with various name changes and jurisdictional changes—for more than 200 years...
showed that the company shipped products to customers even before receiving results of salmonella tests, and the company stopped using a private laboratory because too many tests done there showed contamination. A lab tester told the House panel that the company discovered salmonella at its Blakely plant as far back as 2006.
The company issued a statement categorically denying the allegations; however, it shut down production and laid off 50 employees at the Blakely plant.
Texas
The company's plant in Plainview, TexasPlainview, Texas
Plainview is a city in and the county seat of Hale County, Texas, United States. The population was 22,336 at the 2000 census.-Geography:Plainview is located at ....
, which opened in March 2005 and employed 30 people, was never licensed in that state as a food manufacturing facility; the state had not done any inspections until the problems with the Georgia plant became news. The Texas plant blanches, dry-roasts, oil-roasts, and chops peanuts, then ships them to food companies across the country. The Texas inspection in January 2009 found some unsanitary conditions, such as unclean sections of a peanut-roasting line. It also reported that several internal company laboratory tests dating back to November had found no salmonella or other contaminants. However, on February 10, 2009, company officials announced that the Texas plant has been shut down, after samples taken on February 4 tested positive for salmonella. Former workers at the Texas plant interviewed by the New York Times said that the facility was "disgusting". It said the plant shared many of the problems found in the plant in Georgia, including a badly leaking roof and rodent infestation. A former plant manager told Good Morning America
Good Morning America
Good Morning America is an American morning news and talk show that is broadcast on the ABC television network; it debuted on November 3, 1975. The weekday program airs for two hours; a third hour aired between 2007 and 2008 exclusively on ABC News Now...
that he had repeatedly complained to the company owner, Stewart Parnell, about unsanitary conditions, including "water leaking off a roof and bird feces washing in", but Parnell would not authorise money for necessary repairs.
On February 12, Texas health officials ordered an unprecedented recall of all products ever shipped from the Texas plant since it opened in 2005, after discovering that the plant's air handling system was drawing in debris from a crawl space containing "dead rodents, rodent excrement and bird feathers" into production areas. State health officials said they issued the sweeping recall because they did not know how long the unsanitary conditions had existed at the plant.
The plant had been certified for organic production in November 2005, based on what state officials later called incomplete information obtained by an inspector with the Texas Department of Agriculture
Texas Department of Agriculture
The Texas Department of Agriculture is a state agency within the state of Texas, which is responsible for matters pertaining to agriculture, rural community affairs, and related matters.TDA was established by the 13th Texas Legislature in 1907...
. However, the company failed to apply for a Texas health certificate, which would have triggered a visit by state inspectors. State health officials were not aware the plant existed until the company released a list of its plants around the country.
The company had previously operated a plant in Gorman
Gorman, Texas
Gorman is a city in Eastland County, Texas, United States. The population was 1,236 at the 2000 census.-Geography:Gorman is located at ....
, where the company originally started in 1977. David Brooks, the snack food company buyer, said that he inspected this plant three times in the mid-1980s to determine whether to buy peanuts from PCA. The plant flunked each time for what he called "just filthy" conditions, including dusty beams, leaky roofs, and birds flying through the building. The Gorman operations transferred to Plainview when Hale County
Hale County, Texas
Hale County is a county located in the U.S. state of Texas. In 2000, its population was 36,602. It was organized in 1888, and is named for Lt. John C. Hale, a hero of the Battle of San Jacinto. The seat of the county is Plainview. It is home of the noted former Hale County Judge, Judge Bill...
officials issued $2 million in tax-free revenue bonds to help the company convert a long vacant Jimmy Dean
Jimmy Dean (brand)
Jimmy Dean Foods is a food company that was founded in 1969 by the late country singer and actor Jimmy Dean who died in the summer of 2010. It was purchased by Consolidated Foods, later renamed Sara Lee Corporation.-History:...
sausage factory in into a peanut plant. Local officials, including a county health inspector, toured the new plant and approved its opening, although the state said it never knew the plant existed. The plant was located along a major highway, across from a large Wal-Mart distribution center; it had four highly visible signs in the front and a billboard bearing a picture of a peanut. A state inspector who drove by the plant "a few times" on his way to other inspections never stopped because it was not on his list. State officials said the company was solely to blame for failing to obtain the food manufacturer's license when the Plainview plant opened.
Virginia
According to state inspection records, the PCA blanching operations in Suffolk, VirginiaSuffolk, Virginia
Suffolk is the largest city by area in Virginia, United States, and is located in the Hampton Roads metropolitan area. As of the 2010 census, the city had a total population of 84,585. Its median household income was $57,546.-History:...
, had some of the same food safety problems found in the company’s Georgia plant. Inspectors in 2008 found mold on "totes" holding peanuts, counted 43 mouse droppings on the floor, and saw a live bird walking and flying inside the warehouse.
The Virginia plant employed 13 workers and was shut down the day PCA filed for bankruptcy.
Criminal investigation
Tommy IrvinTommy Irvin
Tommy Irvin served as Georgia’s Commissioner of Agriculture from 1969 until January 2011. He was elected to his 10th and final four-year term in November 2006. Irvin did not seek re-election in 2010...
, commissioner of the Georgia Department of Agriculture (GDA), requested criminal investigation of the Georgia Bureau of Investigation
Georgia Bureau of Investigation
The Georgia Bureau of Investigation or GBI is an independent, U.S. state of Georgia agency that provides assistance to the state's criminal justice system in the areas of criminal investigations, forensic laboratory services and computerized criminal justice information.-Organization:The agency is...
(GBI) as the organ responsible for inspections contracted by the FDA. GDA and GBI officials had said they would consider pursuing manslaughter
Manslaughter
Manslaughter is a legal term for the killing of a human being, in a manner considered by law as less culpable than murder. The distinction between murder and manslaughter is said to have first been made by the Ancient Athenian lawmaker Dracon in the 7th century BC.The law generally differentiates...
charges if federal authorities did not take up the case. On January 30, 2009 federal health officials announced that a criminal investigation had been launched by the US Justice Department for possible prosecution under provisions of the 1938 Federal Food, Drug, and Cosmetic Act
Federal Food, Drug, and Cosmetic Act
The United States Federal Food, Drug, and Cosmetic Act , is a set of laws passed by Congress in 1938 giving authority to the U.S. Food and Drug Administration to oversee the safety of food, drugs, and cosmetics. A principal author of this law was Royal S. Copeland, a three-term U.S. Senator from...
.
On February 4, Georgia officials said they would not prosecute the company, because the two state laws under consideration (reckless conduct, and adulteration of food) were only misdemeanors and would only allow for minor penalties. Vernon Keenan
Vernon Keenan
Vernon M. Keenan is the director of the Georgia Bureau of Investigation , that state's primary investigation and law enforcement agency.He was voted one of the top 100 most influential Georgians by Georgia Trend magazine. He is a firm supporter of the state's Open Records Act...
, director of the Georgia Bureau of Investigation, said: "Any potential prosecution is most appropriately handled at the federal level" .
On February 9, the Federal Bureau of Investigation
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
(FBI) announced that it had joined the criminal investigation of the company. Search warrants were executed on the Blakely plant as well as PCA's corporate headquarters in Lynchburg. Following a raid by its agents, the FBI has sealed off the Blakely plant.
Bankruptcy
On February 13 - less than 24 hours after the Texas recall - Peanut Corporation of America announced it was filing for Chapter 7 bankruptcy and permanently halted operations. Bankruptcy lawyer Andrew Goldstein said that the company had considered filing for Chapter 11Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
, but decided to go into liquidation because all three of its plants had been closed down and there was no way it could carry on business. Consumers Union
Consumers Union
Consumers Union is a non-profit organization best known as the publisher of Consumer Reports, based in the United States. Its mission is to "test products, inform the public, and protect consumers."...
criticised the move, saying that the bankruptcy filing would shield the company from liability suits. although in reality, the bankruptcy filing merely delays any claims against the company. The "automatic stay" provisions of Section 362 of the United States Bankruptcy Code do not apply to any individual who does not file for bankruptcy. Thus, to the extent that misconduct by a non-debtor individual can be shown, persons injured by the company's practices will be able to pursue that relief. Criminal actions may still be brought against those responsible. Additionally, suppliers faced claims from consumers for products purchased from PCA.
Government contract ban
On February 5, 2009, the US Department of Agriculture (USDA) announced that Peanut Corporation of America and a subsidiary, Tidewater Blanching LLC, were banned from all federal government contracts and subcontracts for one year, saying the company: "lacks business integrity and business honesty, which seriously and directly hinders its ability to do business with the federal government."Owner
Peanut Corporation of America was owned by Stewart Parnell, 54, who was also president and CEO of the company. Parnell served on the US Department of Agriculture's Peanut Standards Board, which sets quality and handling standards for peanuts. He was first appointed by Agriculture Secretary Mike JohannsMike Johanns
Michael Owen "Mike" Johanns is an American Republican politician who has been the junior United States Senator from Nebraska since 2009. Previously he was the 38th Governor of Nebraska from 1999 to 2005 and was U.S. Secretary of Agriculture from 2005 to 2007, becoming the fourth Nebraskan to hold...
to the position in 2005, and was reappointed for another term that would have expired in 2011, however, on February 5, 2009 the USDA announced that the new Agriculture Secretary Tom Vilsack
Tom Vilsack
Thomas James "Tom" Vilsack is an American politician, a member of the Democratic Party, and presently the U.S. Secretary of Agriculture. He served as the 40th Governor of the state of Iowa. He was first elected in 1998 and re-elected to a second four-year term in 2002...
had removed Parnell from the board.
Parnell started in the peanut business with his father and two younger brothers in 1977. They took a struggling, $50,000-a-year peanut roasting operation and turned it into a $30 million business before selling in 1995. Parnell continued working as a consultant to the business after the family sold it, and in 2000 he left to buy his own peanut plant again in Texas. In 2001, he bought the Blakely, Georgia operation, when its operations consisted only of roasting and blanching peanuts. Parnell tripled revenue at the Blakely plant by 2004, turning its first profit in 15 years, with production regularly surpassing 2.5 million pounds of peanuts per month. However, the FDA did not know that the plant manufactured peanut butter until the current outbreak.
Brooks said the Parnells ran PCA on a very tight budget, buying the cheapest peanuts they could find. The company operated a bare-bones front office from a converted garage behind Parnell's home outside Lynchburg, and relied almost exclusively on minimum-wage labor.
Despite more than 12 tests between 2007 and 2008 that showed salmonella contamination in his company’s products, Parnell wrote an e-mail to company employees on Jan 12, 2009, that stated, "we have never found any salmonella at all. No salmonella has been found anywhere in our products or in our plants." Parnell ordered products identified with salmonella to be shipped and complained that tests discovering the contaminated food were "costing us huge $$$$$." In a June 2008 e-mail exchange, Parnell complained to a worker after being notified that salmonella had been found in more products. "I go thru this about once a week," he wrote. "I will hold my breath ... again." After the company was identified as the source of the outbreak, Parnell pressed federal regulators to allow him to continue using peanuts from the tainted plant. He wrote that company executives "desperately at least need to turn the raw peanuts on our floor into money."
Under Congressional subpoena
Subpoena
A subpoena is a writ by a government agency, most often a court, that has authority to compel testimony by a witness or production of evidence under a penalty for failure. There are two common types of subpoena:...
, Parnell on Feb 11 appeared with his plant manager before a House Energy and Commerce
United States House Committee on Energy and Commerce
The Committee on Energy and Commerce is one of the oldest standing committees of the United States House of Representatives. Established in 1795, it has operated continuously—with various name changes and jurisdictional changes—for more than 200 years...
subcommittee but repeatedly refused to testify, citing their Fifth Amendment
Fifth Amendment to the United States Constitution
The Fifth Amendment to the United States Constitution, which is part of the Bill of Rights, protects against abuse of government authority in a legal procedure. Its guarantees stem from English common law which traces back to the Magna Carta in 1215...
protection against self-incrimination. Among the questions they refused to answer was one from Rep. Greg Walden
Greg Walden
Gregory Paul Walden is the U.S. Representative for , serving since 1999. He is a member of the Republican Party.The district covers more than two-thirds of the state . He is the son of Paul E...
(R-Ore.): "In this container, are products that have your ingredients in them, some of which are on the recall list, some of which are probably contaminated. It seems like from what we've read you were willing to send out that peanut base that went into these ingredients. I just wonder, would either of you be willing to take the lid off and eat any of these products now like the people on the panel ahead of you, their relatives, their loved ones did?" Walden revealed an e-mail from Parnell, who, referring to products that had tested positive for salmonella, wrote: "Let's turn them loose."
Stewart and Gloria Parnell live outside Lynchburg, Virginia
Lynchburg, Virginia
Lynchburg is an independent city in the Commonwealth of Virginia. The population was 75,568 as of 2010. Located in the foothills of the Blue Ridge Mountains along the banks of the James River, Lynchburg is known as the "City of Seven Hills" or "The Hill City." Lynchburg was the only major city in...
, with a second home in Nags Head, North Carolina
Nags Head, North Carolina
Nags Head is a town in Dare County, North Carolina, United States. The population was 2,700 at the 2000 census.-History:Early maps of the area show Nags Head as a promontory of land characterized by high sand dunes visible from miles at sea...
. Stewart Parnell is a member of the Oakwood Country Club in Lynchburg and flies his own airplane.
According to the Wall Street Journal, Parnell's lawyer is William O’Reilly, who is the former chief counsel and staff director for the House Ethics Committee. Parnell's plant manager is represented by Jim Parkman who defended HealthSouth
HealthSouth
HealthSouth Corporation , based in Birmingham, Alabama, is the nation’s largest owner and operator of inpatient rehabilitative hospitals. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals , outpatient...
founder Richard Scrushy and former Detroit mayor Kwame Kilpatrick
Kwame Kilpatrick
Kwame Malik Kilpatrick is a former mayor of Detroit, Michigan. Kilpatrick's mayorship was plagued by numerous scandals and rampant accusations of corruption, with the mayor eventually resigning after being charged with ten felony counts, including perjury and obstruction of justice...
.
Parnell attended the Florida Institute of Technology
Florida Institute of Technology
Florida Institute of Technology, also known as Florida Tech, is an independent private technical research university located in Melbourne, Florida, United States. Founded in 1958 as Brevard Engineering College, the institute has been known by its present name since 1966. Florida Tech's curriculum...
and majored in oceanography
Oceanography
Oceanography , also called oceanology or marine science, is the branch of Earth science that studies the ocean...
but did not graduate. Parnell's younger sister, Beth, is married to Jimmy Falwell, a cousin of the late Rev. Jerry Falwell
Jerry Falwell
Jerry Lamon Falwell, Sr. was an evangelical fundamentalist Southern Baptist pastor, televangelist, and a conservative commentator from the United States. He was the founding pastor of the Thomas Road Baptist Church, a megachurch in Lynchburg, Virginia...
.
Remarks by public officials
- "This company had no conscience in its production practices, sales and distribution. That they would knowingly ship products tainted with salmonella to our nation's children almost defies belief." - US Senate Agriculture Committee Chairman Tom HarkinTom HarkinThomas Richard "Tom" Harkin is the junior United States Senator from Iowa and a member of the Democratic Party. He previously served in the United States House of Representatives ....
(D-Iowa)
- "I'd like to see some people go to jail. This was a company that should have shut things down immediately." - Sen. Patrick LeahyPatrick LeahyPatrick Joseph Leahy is the senior United States Senator from Vermont and member of the Democratic Party. He is the first and only elected Democratic United States Senator in Vermont's history. He is the chairman of the Senate Judiciary Committee. Leahy is the second most senior U.S. Senator,...
(D-Vt.)
- "The actions by the Peanut Corporation of America can only be described as reprehensible and criminal." - Rep. Rosa DeLauroRosa DeLauroRosa L. DeLauro is the U.S. Representative for , serving since 1991. She is a member of the Democratic Party.The district is based in New Haven, and includes most of that city's suburbs.-Early life, education and career:...
(D-Conn.)
- "They tried to hide it so they could sell it. Now they’ve caused a mammoth problem that could destroy their company - and it could destroy the peanut industry." - Georgia Agriculture Commissioner Tommy IrvinTommy IrvinTommy Irvin served as Georgia’s Commissioner of Agriculture from 1969 until January 2011. He was elected to his 10th and final four-year term in November 2006. Irvin did not seek re-election in 2010...
- "We’re going to be doing a complete review of FDA operations. At a bare minimum, we should be able to count on our government keeping our kids safe when they eat peanut butter. That’s what Sasha eats for lunch. Probably three times a week. I don't want to worry about whether she's going to get sick as a consequence of eating her lunch." - President Barack ObamaBarack ObamaBarack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
- "This is a clear and unconscionable act by one manufacturer." - American Peanut Council statement
- "It is unacceptable for corporations to put consumers' health at risk and then simply declare bankruptcy and go out of business when they get caught. PCA's declaration of bankruptcy will, among other things, shield it from liability suits filed by consumers who became sick or whose loved ones died as a result of eating PCA's peanut products." - Jean Halloran, director, Consumers UnionConsumers UnionConsumers Union is a non-profit organization best known as the publisher of Consumer Reports, based in the United States. Its mission is to "test products, inform the public, and protect consumers."...
External links
- Peanut Butter and other Peanut Containing Products Recall List, Food and Drug Administration
- Investigation Update: Outbreak of Salmonella Typhimurium Infections, 2008–2009, Centers for Disease Control and PreventionCenters for Disease Control and PreventionThe Centers for Disease Control and Prevention are a United States federal agency under the Department of Health and Human Services headquartered in Druid Hills, unincorporated DeKalb County, Georgia, in Greater Atlanta...
- Official Peanut Corporation of America website
- Peanut Corporation of America's Blakely, Georgia Plant, Peanut Corporation of America website, retrieved January 28, 2009