Five years after the fatal Blue Bell listeria outbreak, the criminal case against the Texas ice cream company’s former chief executive has put it all back in the news. Three people from Kansas died in the outbreak.
The normal two-day story that ordinarily might follow from such a criminal indictment and first court appearance has been a very strung out affair. The May 1 indictment process of former Blue Bell chief Paul Kruse isn’t getting to the finish line until this Tuesday, June 9. Only then will he get his “not guilty” plea formerly recorded. It should be the final step in these preliminaries.
All the normal steps for the start of a criminal prosecution are occurring, but very slowly because all the parties involved have agreed to avoid using the federal courtrooms in Austin because of coronavirus fears. Instead, it has inched along, using computers and telephone conferences to avoid physical contact.
But with little niceties in the Constitution about rights to a speedy trial and all those discovery deadlines, it is going to be interesting to see just how the United States v. Paul Kruse will proceed after the week ahead.
Kruse was indicted on May 1 of 7 federal felonies associated with the outbreak and the Blue Bell corporation plead guilty to two misdemeanors for distributing contaminated ice cream across state lines. The deadly and ground-breaking 2015 listeria outbreak has Blue paying a near-record for fines and penalties, totaling $19.35 million to settle its two food safety violations.
The Blue Blue saga back then and now remains a story with many layers that all deserve to be told. Tragic deaths, laboratory advancements for food safety, the demise and comeback of an iconic brand, and now federal felonies. There is a lot involved and we’ve reported on much of it over the last five years. What we need to discuss today, however, is the likelihood of Mr. Kruse being convicted by an Austin, TX federal jury later this year.
In other words, what’s the case against Kruse?
There are really two places to go for answers to that question. One is the 20-page federal indictment itself. The indictment is thorough and to the point. It charges Kruse with conspiracy to make money and with making statements that others in Blue Bell employment, in turn, made to help deceive Blue Bell many customers and the public.
Did his actions add up to a conspiracy and did those statements make six counts of wire fraud?
The other place to go for answers to those questions is to others who’ve come up with a narrative that explains what happened when listeria struck Blue Bell. Texas business writers came up with the “come-back” story around when Kruse retired three years. The savior of the iconic Texas ice cream that was served on Air Force
Other Texas writers, however, see the events that transpired before, during, and after 2015 as being criminal with Kruse at the helm. What Kruse did not know during 2014– as in before February 2015 when two Blue Bell ice cream flavors produced in Brenham, TX tested positive for Listeria monocytogenes–was that Blue Bell ice cream had already killed three Kansas hospital patients.
The Blue Bell ice cream served by the Kansas hospital to patients in 2014 was produced at Blue Bell’s Broken Arrow, OK plant. But before he knew that fact, Kruse decided not to recall the ice cream that tested positive in February 2015. Instead, Blue Bell drivers were just ordered to remove what remained from store shelves.
Nothing more was said to the public about the contaminated product that was likely lurking in some home freezers.
By then, the federal Centers for Disease Control and Prevention was on the case, with early whole-genome sequencing (WGS) being deployed in the Blue Bell investigation for one of the first times ever in a multistate foodborne illness investigation. WGS is the tool that gives CDC the ability to search for and link outbreak stains from the past, present, and future.
CDC shortly identified six more outbreak strains in patients going back to 2010, including four who were hospitalized in Texas. And Blue Bell’s Texas and Oklahoma production facilities were subsequently linked to two clusters of Listeria victims by April 8, 2015.
Under Kruse’s direction, Blue Bell remained silent, telling the public nothing about the outbreak or the positive test results. By then, U.S, Food and Drug Administration (FDA) inspectors had arrived at the ice cream factories, finding evidence of poor sanitation and deteriorating plant and equipment that was not being sufficiently cared for or cleaned. Those FDA reports forced Blue Bell to shutdown. It was even making ice cream without sufficient hot water in its plants.
The shutdown brought layoffs of 1,450 employees and the furloughs of another 1,400. With Blue Bell shut down from late April 2015 to late in the year, the most popular ice cream in Texas was gone from retail freezers.
“The fallout for the company immediately after the scandal broke was nothing short of catastrophic,” according to Thomas Fox, a Texas native, and Houston-based business consultant.
It sure was bad for the business. Kruse took out ” a loan convertible to ownership” for $125 million in the privately held company that was then said to be worth $900 million. In other words, a purchaser picked up a severely depressed asset so Blue Bell could remain alive.
“As a food service company, the highest risk is that your food causes your customers to get sick and die,” Fox says. “That is not simply the basis for U.S. food safety regulations, but the basis for the relationship between food producer and company.”
Fox says corporate CEOs violate that relationship only rarely. But, Kruse may be an example of one of the “worst cases in U.S. food safety history.” Kruse knew as fall back as 2010 that Blue Bell facilities were deteriorating, causing unsanitary conditions. But he did not fix the problem before Blue Bell customers were dying.
In 2011, Blue Bell’s Quality Control (QC) unit put a program in place for testing for Listeria. Kruse met personally with the head of his QC section in April 2011 and ordered him to halt Listeria testing. Kruse is also accused of having all hard copy and electronic records destroyed whenever the product was shipped after positive tests.
By 2015, however, it was all coming apart.
Texas officials told Kruse that in February 2015, that state tests of Blue Bell ice cream came up with positive results three times. In March and April. Then FDA reported more positive test results from swaps it took from inside Blue Bell’s production facilities.
“What was Kruse response?” asks Fox. “He lied, lied, and then lied some more.”
“First, he attested to the FDA that Blue Bell was recalling the tainted products “as quickly as possible,” Fox said. “ Kruse did not order a product recall but only instructed Blue Bell employees to remove the tainted products from customer shelves without telling them about the listeria outbreaks.
“He further instructed company employees not to tell the general ice-cream consuming public about the deadly contamination. Blue Bell products were removed from hospitals, obviously with consumers at high risk as well as elementary schools with the same risks.”
“Apparently, there were Blue Bell employees who wanted to be frank about the situation and meet their legal obligations. However, he rejected “open and honest” communications with customers to continue to lie and hide the truth about the listeria outbreak in Blue Bell facilities”Fox continued. “One customer even noted the unethical conduct of Blue Bell (not knowing at the time just how bad it was). The Information cited in one of the wire fraud counts.
“Specifically, on or about February 20, 2015, a school district official sent an email to PAUL KRUSE and other Blue Bell executives that stated, “the decision made not to inform the school district] of this potential health risk and to try and quietly just pick-up the products gives the impression of deception and lack of integrity. These actions are contrary to our past experiences with Blue Bell Creameries. With open and honest communication, we would have eliminated all potential risks with our guests (our children) and secured the product.”
“Yet Kruse could not even pull off his campaign of lying, cheating, and stealing. Although he ordered Blue Bell employees to surreptitiously remove the tainted products, “multiple customers reported to Blue Bell that some products purported to have been removed remained in their stores or freezers on or after the date of Blue Bell’s statement.” Yet in another example, “Blue Bell employees determined that approximately 1,050 pints of the affected lot were already in customers’ stores in Texas. After receiving direction from PAUL KRUSE and other Blue Bell executives, Blue Bell sales employees were instructed “do not pick anything up in the stores unless we notify you to do so.”
Finally, Fox said “the height of Kruse’s fraud on the public after the three deaths were announced by the Kansas parents. A sales executive wrote: “to date, we have not been made aware by the FDA of any other items that have tested positive for listeria at any of our plants.”
Next up we assume will be a “not guilty” plea from Krause on Tuesday. After the there’s likely to be a little break time for the parties to do their preparatory duties. We will be back then with Fox’s observations about how the Blue Bell Board of Directors also fell down in this whole sad saga.
For more, see the comments below on the Kruse indictment written by Thomas Fox and posted in Food Safety News earlier this week.
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