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JBS Meatpackers Fined $280 Million Over Bribery to Fund US Expansion

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JBS Meatpackers Fined 0 Million Over Bribery to Fund US Expansion

The world’s largest meat processor, Brazil’s J&F Investimentos SA (J&F), pleaded guilty to bribery in a U.S. federal court Wednesday after paying almost $180 million in bribes to Brazilian government officials. According to a statement from the U.S. Department of Justice, J&F employees and agents paid the massive bribes through bank accounts based in New York, with the aim of obtaining Brazilian government financing to expand its operations in the United States.

J&F is a vast holding company that is the majority shareholder in JBS, a meat-processing giant that claims to be the largest protein-producing company in the world. JBS has extensive beef, pork, poultry, and other meat processing operations across the United States. At the Federal Court in Brooklyn on Wednesday, J&F agreed to pay a criminal fine of over $256 million.

“With today’s guilty plea, J&F has admitted to engaging in a long-running pattern of paying bribes to corrupt officials in Brazil to obtain financing and other benefits,” stated Acting Assistant Attorney General, Brian C. Rabbitt in the statement. “J&F’s corrupt conduct involved executives at the highest levels of the company using New York banks and real estate to carry out a scheme to pay millions of dollars in bribes to government officials in Brazil.”

The Court found that between 2005 and 2017, J&F paid tens of millions of dollars in bribes to obtain financing from two Brazilian state-controlled banks and to obtain approval for a merger from a Brazilian pension fund. J&F then used the New York bank accounts of shell companies to make the corrupt payments.

“In addition, between approximately 2011 and 2017, J&F caused approximately $4.6 million in corrupt payments to be made, and items of value to be transferred, for the benefit of a high-ranking executive at Petrobras de Seguridade Social (Petros), a Brazilian state-owned pension fund,” according to the statement from the U.S. Attorney’s Office. “The bribes were paid through, among other things, the purchase of an apartment in New York for the high-ranking Petros executive. The bribe payments were made to ensure that Petros approved a merger involving a J&F-related entity.”

In a related case, JBS subsidiary Pilgrim’s Pride agreed to pay over $110 million to the U.S. Department of Justice Antitrust Division following its investigation into the sales of broiler chicken products in the United States.

JBS Meatpackers Fined 0 Million Over Bribery to Fund US Expansion A statue of Pilgrim’s Pride founder Bo Pilgrim is displayed outside the company’s distribution center near Pittsburg, Texas on Dec. 2, 2008. Brazilian beef producer JBS SA said it would buy a majority stake in Pilgrim’s Pride for $800 million. (LM Otero/AP Photo, file)

“Pilgrim’s is committed to fair and honest competition in compliance with U.S. antitrust laws,” said Pilgrim’s Pride CEO, Fabio Sandri, in a statement. “We are encouraged that today’s agreement concludes the Antitrust Division’s investigation into Pilgrim’s, providing certainty regarding this matter to our team members, suppliers, customers, and shareholders.”

Request to Investigate JBS

In October of last year, Sens. Marco Rubio (R-Fla.) and Bob Menendez (D-N.J.) wrote a letter to Treasury Secretary Steve Mnuchin, asking that the Committee on Foreign Investment in the United States (CFIUS) review JBS’ business transactions.

“Given its admitted criminal conduct to secure loans that were used for investment in the United States and the group’s business relationships with Venezuela’s Maduro regime, as well as its growing reliance on financing from entities aligned with the Chinese government, we ask that CFIUS conduct a review of JBS S.A.’s acquisition of U.S. companies,” Rubio and Menendez wrote. “The growing trend of foreign investment in our food system demands increased attention and scrutiny in order to safeguard our nation’s food supply.”

The senators also outlined the enormous scale of JBS’ acquisitions in the United States, suggesting that the company’s illicit activities could present issues for American national security.

“In 2007, JBS S.A. established a U.S. subsidiary—JBS USA—that purchased the American beef and pork processing company Swift Foods Co.,” the senators told Mnuchin. “Through a deal in 2008, JBS USA acquired the beef processing operations of Smithfield Foods. In 2009, JBS USA obtained the majority of the poultry processing operations of Pilgrim’s Pride. Additionally, JBS USA purchased Cargill’s pork processing operations in 2015. Today, JBS S.A. is the world’s largest meat-processing company and has major holdings across the U.S. food sector. These acquisitions have serious implications for the security, safety, and resiliency of our food system.”

JBS Meatpackers Fined 0 Million Over Bribery to Fund US Expansion A woman shops in the chicken and meat section at a grocery store in Washington, on April 28, 2020. (Drew Angerer/Getty Images)

In June, 2020, Sens. Elizabeth Warren (D-Mass.) and Corey Booker (D-N.J.) put the spotlight on JBS USA and other meat processors such as Tyson Foods, Cargill, and Smithfield Foods regarding meat shortages on the American market. Warren and Booker expressing their concern about “reports that your companies sent massive amounts of pork and other meats to consumers in China while threatening the American public with an impending shortage of beef, pork, and chicken.”

In a letter to the meat processors (pdf), the senators said they wanted to find out how many tons of pork, beef, and poultry had been exported to China in April, 2020, at a time when U.S. consumers were being warned of broken supply chains and possible shortages of meat products.

According to USDA trade statistics, U.S. meatpackers shipped over 115,000 tons of pork products to China in April of 2020 alone—a figure 465 percent higher than in April 2019.

Focus News: JBS Meatpackers Fined $280 Million Over Bribery to Fund US Expansion

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