The new Department of Justice’s official guidance for holding individuals responsible for corporate wrongdoing will be honored in the breach tomorrow in a federal courtroom in Albany, GA. Instead, any concern about holding individual responsible for wrongdoing will likely be swept aside with a corporate payment of the largest criminal fine ever in a U.S. food safety case.
That’s when corporate ConAgra alone is expected to enter a guilty plea to a single count of a misdemeanor violation of shipping adulterated food. The guilty plea will be formally entered by ConAgra Grocery Products Co., the ConAgra subsidiary that owns the Sylvester, GA, peanut butter processing plant that makes peanut butter, including the Peter Pan brand.
No corporate executives or company managers were charged in the criminal case brought against ConAgra over a nearly 10-year-old Salmonella outbreak that was traced to the Sylvester facility and the Peter Pan and Great Value brands it was producing. The federal Centers for Disease Control and Prevention first reported the multi-state outbreak in November 2006.
The government’s sentencing recommendations for tomorrow were submitted to the U.S. District Court for the Middle District of Georgia on Dec. 6, but have not been made public. The hearing is expected to conclude the criminal case brought against ConAgra.
In the plea agreement reached more than a year ago by ConAgra and the government, the parties agreed to ask the court to accept the record $8 million fine plus $3.2 million in forfeitures to the federal government.
Those payments, along with any restitution ordered by Judge W. Louis Sands, will end an expensive incident for ConAgra. The outbreak led to ConAgra recalling all its peanut butter production going back to 2004, removing Peter Pan from store shelves for about six months.
ConAgra also invested $275 million to fix the problems that were plaguing its Sylvester plant: leaky roofing, faulty sprinklers and an improper roasting machine. It also put new ongoing testing procedures in place. While some of the fixes were in place at the time of the outbreak, ConAgra knew of two times in 2004 when its products tested positive for Salmonella.
It was apparently on the basis of that knowledge that the government conducted its long criminal investigation. Ironically, the investigation’s existence was periodically reported over the years by ConAgra. The company made those occasional disclosures in its public reports to the Securities and Exchange Commission (SEC).
It was not until May 2015 that the government confirmed it was pursuing a criminal case in relation to the Salmonella outbreak that sickened more than 600 people in 47 states.
After the criminal case was filed, Sands ordered the government to take time to locate victims from the nearly decade old outbreak so that injured parties would have time to file for restitution with the court.
Criminal food safety prosecutions where individuals have been charged were cited last week by a top Department of Justice attorney who said government is committed to individual accountability or executives and other company employees, where possible.
Speaking to a legal conference in Washington D.C. Principal Deputy Assistant Attorney General Benjamin C. Mizer pointed to the successful prosecutions of top company officers in cases like Peanut Corporation of America and Quality Egg as examples of applying the individual accountability doctrine, where it is applicable.
A year ago, a DOJ guidance document made going after individuals in cases of corporate wrongdoing a priority. That document, known as the Yates Memo, came out after DOJ had already reached the plea agreement with ConAgra.
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