As enforcement time nears for the Food Safety Modernization Act (FSMA), experts such as Repositrak’s Randy Fields are being heard making comparisons between FSMA and the 2002 Sarbanes-Oxley Act. The first major revamp of federal food safety laws since 1938 and the most-far reaching reforms of business practices “since the time of Franklin D. Roosevelt” do have much in common as mega-reforms go. But what Fields and other experts are referring to when they bring up Sarbanes-Oxley is one specific part of the law on business finances: Section 906.

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President Obama signed the Food Safety Modernization Act into law on Jan. 4, 2011.
Sarbanes-Oxley Section 906 is a hammer over the heads of corporate chief executives and chief financial officers. It says that any CEO or CFO who falsely certifies the accuracy of company financial statements could be subject to up to $1 million in fines and 10 years in federal prison. Before Sarbanes-Oxley, corporate CEOs were not required to sign off on their financial statements, nor did they have any meaningful responsibility for the accuracy of such statements. FSMA is taking a page from Sarbanes-Oxley by making food industry executives largely responsible for FSMA compliance. At the company level, the buck for all the monitoring and record-keeping requirements stops with top executives. Playing dumb or shifting the blame to low-level employees is not going to work, FSMA experts are saying. Both Sarbanes-Oxley and FSMA show how Congress does act when it’s being held accountable by voters during a crisis in public confidence. Before Sarbanes-Oxley, financial scandals carrying names such as Enron, Worldcom, and others were eroding public confidence in financial statements that were said to stand behind the value of our businesses and markets. Before FSMA, the public was losing its confidence in food safety because once-trusted products such as fresh bagged spinach, peanut butter and shell eggs were turning up as the sources of major contamination, many illnesses, and even deaths. Enron, which once reported revenues as high a $111 billion before it crashed, practiced “institutionalized, systematic, and creatively planned” accounting fraud. It was the symbol for the financial crisis that Sarbanes-Oxley sought to prevent from happening again. Then there are the four “Enron-class” foodborne illness outbreaks — so named for their role in draining public confidence away from the U.S. food safety system in the four years before Congress passed FSMA in late 2010. They include:

  • The 2006 multi-state outbreak of E. coli O157:H7 infections from fresh spinach which sickened 199 people in 26 states. It damaged public trust, not only in brands such as Earthbound, Dole and Trader Joe’s, but also in the packaging. Consumers had grown very confident about bagged salads, and most thought E. coli O157:H7 was a “hamburger disease.” Three elderly women and a two-year-old from Idaho died from their infections.
  • The 44-state outbreak of Salmonella Tennessee infections linked in 2007 to Peter Pan and Great Value peanut butters made at the same Georgia plant owned by ConAgra. The outbreak, mostly after Dee. 1, 2006, sickened at least 425 people. The iconic Peter Pan brand was among America’s most trusted before the outbreak began, and the U.S. Centers for Disease Control (CDC) called it “an unusual food vehicle.”
  • Ten months after the Peter Pan outbreak ended in 2008, another peanut butter manufacturer found itself at the center of a multi-state outbreak of Salmonella Typhimurium infections. This time it was Peanut Corporation of America (PCA), which sold King Nut and other brands of peanut butter, in addition to providing large shipments of “peanut paste” to other food manufacturers. The Salmonella T. outbreak was deadly, killing nine people among more than 714 infected in 46 states.
  • In 2010, a spike in Salmonella Enteritidis (SE) illnesses was linked to two Iowa egg farms. The outbreak resulted in the largest shell egg recall in U.S history and accounted for at least 1,939 SE illnesses.

During the four-year run-up to passage of FSMA, the Subcommittee on Oversight and Investigations continued work on what would eventually become the new law. The unit of the powerful House Committee on Energy and Commerce was known for summoning CEOs to testify before Congress, unusually while federal agencies were also still investigating. Stewart Parnell, who owned the now-defunct PCA, and Austin “Jack” DeCoster, who owned the Iowa egg farms, were among those who preferred to invoke their right under the Constitution not to testify. Each time congressional investigators tried to obtain CEO testimony, however, they were making it clear that they were going to eventually make CEOs accountable. The U.S. Food and Drug Administration (FDA) signaled its intentions just prior to FSMA passage to use so-called strict liability misdemeanor prosecutions to hold corporate officials accountable. “Strict liability” means the government does not have to prove criminal intent to prove a conviction. And, in 2014 and 2015, the government has successfully pursued “strict liability” in federal district court and is now going through a post-conviction appeal.

  • This is a great article. Thank you on addressing the subject. I know because when making calls day to day on food processors and restaurant chain operations, it does not take long to see who really understands “it starts at the top”. Talking to management about new technology that can make a significant difference in their food safety risk factor, I sadly find from time to time, apathy and lack of responsibility to their Brand. CEO’s and Board members better wake up and become pro active, because when it come to Brand protection and food safety ” it really does start at the top”. This will play out as “strict liability” and “food safety responsibility” will become a buzz phrases in the corporate legal offices.