America’s farmers and ranchers are applauding a bipartisan push to formally review a meat-processing conglomerate's apparent illicit dealings and whether its products are helping support Venezuela’s Socialist regime.
Senators Marco Rubio, R-Fla. and Bob Menendez, D-N.J., are spearheading a push to investigate Joesley and Wesley Batista. The senators sent a letter to Secretary of Treasury Steven Mnuchin on Oct. 8 requesting a formal review of the transactions of Brazilian meat-processing conglomerate, JBS S.A.
The Batistas are the controlling shareholders of two prominent U.S. companies, JBS USA and Pilgrim’s Pride. JBS USA is one of the four largest meat protein producers in the U.S. JBS USA purchased the American beef and pork processing company Swift Foods Co. in 2007 and in 2015 it purchased Cargill’s pork processing operations.
Operation Car Wash, a sweeping investigation by Brazilian authorities into corruption in the country, exposed the Batista brothers’ role in orchestrating a vast corruption and bribery scandal. The Batista brothers entered into a plea bargain and admitted to bribing over 1,800 politicians, including former Brazilian presidents Michel Temer, Luiz Inácio Lula da Silva, and Dilma Rousseff.
The Batista brothers have grown parallel business interests in Venezuela, a country deemed to be a geopolitical adversary by the Trump administration. They are reportedly closely connected to Diosdado Cabello, the president of the Nicolás Maduro-backed Venezuelan National Assembly, through a $2.1 billion meat and poultry contract negotiated in person at Joesley Batista’s home in 2015. Further, it was reported that Cabello put out an assassination order against Rubio, according to U.S. intelligence
Senators Rubio and Menendez highlighted these national security concerns in their letter to Mnuchin.
“JBS S.A. globally has conducted business with a range of dubious partners, including the Venezuelan Corporation of Foreign Trade (CORPOVEX), which was identified by the Financial Crimes Enforcement Network (FinCEN) in September 2017 for its involvement in public corruption,” wrote Rubio and Menendez. “Investigative reporting has documented that Venezuela’s food procurement practices are rife with bribery. The Batista brothers’ personal relationship with sanctioned Venezuelan official Diosdado Cabello only raises further concerns.”
Joesley (left) and Wesley Batista are the controlling shareholders of two prominent U.S. companies, JBS USA and Pilgrim’s Pride. (Andre Coelho: Bloomberg /Getty Images)
In a statement to Fox News in response to the senators' letter to Mnuchin, JBS US maintained that it is a positive force in U.S. agriculture, and that it has been transparent with U.S. investigators.
"JBS has fully cooperated with all the relevant authorities in the United States regarding events that took place in Brazil in the past," its statement to Fox News said. "The company will continue to cooperate and respond to any subsequent inquiries.
"JBS USA is an important American employer, providing over 62,000 jobs, the majority of which are unionized, and partnering with more than 11,800 farmers, ranchers and poultry producers. The company plays a critical role in U.S. agricultural communities, creating opportunities for rural farmers and ranchers who depend on our business to transform their livestock and poultry into products that consumers trust and enjoy."
Angela Huffman, the Communications and Research Director for the Organization for Competitive Markets (OCM), in an exclusive interview with Fox News, echoed the senators’ concern regarding Venezuela. Large American brands like Costco, Walmart, KFC, and Publix continue to carry and use their products, while large investors like BlackRock and Capital hold major stakes in these companies.
“Americans could be inadvertently supporting JBS' dealings in Venezuela,” Huffman said. “That's the problem with these global giants. You're supporting a foreign corporation and its influence around the world when you're buying JBS products.”
Rubio and Menendez also accused the Batista brothers of building their U.S. empire and harming American farmers through bribery and corruption in their letter.
“We are troubled that JBS S.A. used the ill-gotten financing that it received from BNDES, which totaled more than $1.3 billion, to acquire American companies,” wrote Rubio and Menendez. “It has been reported that the Department of Justice has opened an investigation on J&F Investimentos for potential violations of the Foreign Corrupt Practices Act, which only underscores our concerns that the questionable nature of JBS S.A.’s financial practices poses significant risks for its American subsidiaries and the U.S. food system.”
Huffman lauded the bipartisan effort, and reinforced the concerns raised by the senators’ letter on how JBS is harming the health of American citizens and the financial security of American farmers and ranchers.
"Senators Rubio and Menendez are urging the Trump Administration to investigate. JBS, and we applaud them for this effort,” said Huffman. “In 2017, JBS was caught exporting rotten meat worldwide, and covering up the stench, using cancer-causing acid products. They again used bribery to get this meat past food safety officials, and just last year, JBS admitted to cheating America's farmers and ranchers by paying them less than the real value for their cattle at three separate beef processing plants. This amounted to hundreds of thousands of dollars in losses per farmer. And this is just when they've gotten caught.”
Back in 2017, Brazilian investigators charged that health inspectors were bribed to overlook the sale of expired meats. Police also allege that the appearance and smell of expired meats was improved by using chemicals and cheaper products like water and manioc flour.
Huffman underscored the potential danger the Batista’s monopoly on meat posed to national security.
“More than 80 percent of the beef industry in the United States is controlled by just four corporations and two of those are Brazilian corporations,” explained Huffman. “So the growing trend of foreign investment in our food system really demands increased attention and scrutiny in order to safeguard our nation's food supply.”
JBS responded to the criticism by touting its role as “an important American employer, providing more than 60,000 jobs and partnering with more than 11,000 U.S. farmers, ranchers and poultry producers.”
However, a review of court records finds that JBS USA and Pilgrim’s Pride have numerous lawsuits and complaints pending against them filed by American ranchers as well as their own employees.
The lawsuits range from accusations including violations of federal laws and workplace ordinances to anti-competitive behavior, such as price-fixing and employer misconduct. Huffman argued that the JBS meat monopoly leaves American farmers with little choice. Jonathan Buttram, the president of the Alabama Contract Poultry Growers Association and OCM board member, echoed Huffman’s sentiments.
"JBS’ Pilgrim’s Pride is the worse of the worst,” said Buttram. “They act like terrorists with their abusive tactics. When I became President of the Alabama Contract Poultry Growers Association, JBS began a process of harassment that ultimately led to their terminating my contracts and putting my family in near bankruptcy. Since then I have counseled numerous farmers who have considered suicide because of JBS’ continued harassment and abuses."
Steve Krajicek is a small, independent cattle feeder living in Nebraska. He is among the ranchers impacted by JBS’ business practices.
“It’s a monopoly, we’ve got all the disadvantages,” said Krajicek. “The farmer is forced to bear all the risk, and the packer controls all the process. Farmers are at their mercy. JBS’ track record is to do everything they can to get everything they can.”
For the full interview with Communications and Research Director for the Organization for Competitive Markets Angela Huffman, watch the full interview above.
The Associated Press contributed to this report.