March 28, 2017
On the heels of last month’s expansion of the Odebrecht investigation to the wider community of Latin American nations, Brazil has been moving ahead to solidify its status as one of the world’s most active investigators of corruption. Recent news reports have presented us with vivid images of Brazilian police in a large-scale crackdown on bribery in the meat industry—a scheme that allegedly included payoffs to politicians and meatpacking inspectors to overlook unsanitary practices in export production. The operation was dubbed “Operação Carne Fraca,” evoking both tainted beef and the weakness of the flesh.
This isn’t Latin America’s first encounter with meat-industry corruption. In the early 2000’s, a Tyson Foods subsidiary in Mexico paid two employees of Mexico’s agriculture and livestock authority (SAGARPA)—both veterinarians, as it happens—more than MXN 2,000,000 (roughly USD 100,000) to certify its chicken plant in Mexico. The payments were either deposited directly into the veterinarians’ accounts or into accounts held by the veterinarians’ wives—who, it turned out, were listed on the company’s payroll.
According to U.S. authorities, a Tyson manager in Mexico discovered the wives’ names in June 2004 and reported the situation to the U.S. parent company. The reaction was surprising: instead of investigating and sanctioning the responsible individuals, Tyson executives simply had the wives removed from the payroll, and payments continued to be made directly to one of the veterinarians.
The Tyson Foods case was discussed in a recent TRACE webinar: “Instead of sanctioning, the executives decided to continue the scheme,” said Martha Mallory, TRACE’s Regional Manager for Latin America. The payments continued—even doubling in size—for years following the initial discovery. It wasn’t until much later that the company’s lawyers recommended canceling the transactions. In 2011, the SEC filed charges against Tyson Foods, alleging that its payments to the government veterinarians violated the Foreign Corrupt Practices Act.
It’s too early to say just how Brazil’s “Weak Beef” ring was exposed, and whether there was any way—short of government raids—that responsible officers of the companies involved could have detected and removed the corruption. But as the Tyson Foods case demonstrates, whether it comes from a cow or a chicken, the color of the meat doesn’t matter if a company ignores the red flags.
FOR MORE ON THIS TOPIC, PLEASE SEE THE FOLLOWING RESOURCES:
Brazil police raid BRF and JBS meat plants in bribery probe
‘Operation Flesh Is Weak’: Brazilian police launch biggest search-and-raid operation ever in hunt for corruption
TRACE Compendium: Tyson Foods, Inc.
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