Washington Insider -- Monday

Blue Bell Investigated

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

TPP Unlikely to Be Approved Before End of Obama’s Term

Congressional approval of the Trans-Pacific Partnership (TPP) pact is unlikely to occur before President Barack Obama leaves office, with Japanese watchers closely following the matter as it has become an increasingly politically polarizing going into the 2016 US presidential election.

Other TPP parties are watching U.S. moves on the pact closely, as well as those of Japan, with the two nations together representing 80% of the total size of economies covered by the deal. “Everybody is looking to Japan and the U.S. for ratification,” Pham Quang Vinh, Vietnamese ambassador to the United States, said recently at a TPP-related event in Washington.

Complicating passage of the TPP is opposition to the deal from presidential candidates in both parties, including Hillary Clinton, Bernie Sanders and Donald Trump. Noting the political landscape at another recent event, Senate Majority Leader Mitch McConnell, R-Ky., said “If the president wants to succeed, he ought to take into account the reality of the political situation.”

The TPP is seen as vital to U.S.-Japan relations. “The consequences of U.S. killing the agreement are almost inconceivable,” Ira Shapiro, a former senior official at the Office of the U.S. Trade Representative said. Japan’s government has indicated that it will attempt to get parliamentary approval for the TPP after it passes budgetary bills, in part as a means to encourage the US Congress to follow suit.

Speaking to potential U.S. rejection of the TPP deal, the Japanese minister in charge of TPP issues, Akira Amari said in such a situation Japan would “make a judgment on impacts from the deal as a whole in a comprehensive manner, without dwelling on pluses and minuses over individual issues.”


Sage Grouse Habitat Litigation Moves Forward

Deadlines have been set for briefs on a legal challenge to federal land use restrictions seeking to protect sage grouse habitat of April 1 for the plaintiff brief and May 13 for the federal defendants’ brief by the US District Court for the District of Nevada.

The legal challenge is being brought by mining companies and Nevada counties which are opposed to the federal land use restrictions announced earlier this year, aimed at preserving habitat of the greater sage grouse. The regulations potentially impact a variety of industrial and commercial activity in parts of Nevada, Utah, California, Idaho and Montana, which are home to a vast amount of federal land holdings.

Defending the regulations are the Interior Department’s Bureau of Land Management (BLM) and USDA’s Forest Service – both agencies have been involved in the formulation and implementation of the new rules. A Dec. 28 order by the U.S. District Court requires the Forest Service to submit a complete administrative record by Jan. 29 and the BLM to submit its record by Feb. 15.

Another challenge to the sage grouse habitat regulations brought by Idaho is working its way through the US District Court for the District of Columbia. The briefing schedule announced in that case calls for the submission of the administrative record by Jan. 22, plaintiff motion for summary judgment by Feb. 22 and defendants’ opposition brief and cross-motion for summary judgment by March 23.


Washington Insider: Blue Bell Investigated

The Wall Street Journal reported last week that the U.S. Justice Department has launched a criminal investigation into Blue Bell Creameries LP over listeria contamination of its ice cream that was linked to three deaths and multiple other illnesses last year.

The Brenham, Texas, company, one of the biggest U.S. ice cream brands, recalled all of its products in April in response to the listeria contamination, which affected ice cream produced at all three of its main plants. The company started shipping ice cream again in August, with regulators’ approval, after what it called a comprehensive review of its operations that led to enhanced procedures and equipment.

The company is being quiet about the recent DOJ investigation, but the Journal cited “persons close to the investigation,” and also that CBS News had previously reported it.

Blue Bell previously said it had “a practice of cleaning surfaces in its factories that tested positive for listeria, but that in hindsight its processes weren’t adequate.” The company said earlier this year it conducted a comprehensive review of its operations and put in place enhanced procedures and equipment designed to ensure its products are safe.

Still, the new federal investigation is sending shock waves through the food industry, WSJ said. This was especially true since Blue Bell’s listeria problem were one of several high-profile food-safety scares last year involving well-known brands that had been pursued by DOJ investigators.

“It’s no longer unusual for the Justice Department to take an interest in an outbreak of this magnitude,” said James Neale, a Virginia attorney who represents companies in foodborne-illness cases but isn’t involved in the Blue Bell case. In several recent cases, the agency has undertaken high-profile criminal prosecutions.

In the most prominent example, Stewart Parnell, the former owner of Peanut Corp. of America, was sentenced in September to 28 years in prison a year after being convicted of presiding over a cover-up that led to a deadly salmonella outbreak. Also, last May, a ConAgra Foods Inc., unit agreed to pay a fine of $11.2 million and to plead guilty to a federal misdemeanor charge to resolve allegations that the company shipped peanut butter contaminated with salmonella in an outbreak that sickened more than 700 people.

Most recently, sales at Chipotle Mexican Grill Inc. have been hit amid a series of foodborne disease outbreaks, including a multistate E. coli episode. Chipotle says it has since strengthened its food-safety practices.

Blue Bell’s recall last year has already threatened to ruin the 108-year-old company. It was forced to lay off or furlough much of its workforce and agree to an emergency investment from Texas billionaire Sid Bass. U.S. Food and Drug Administration records made public after the recall showed that the company had failed to follow practices recommended by government and industry groups that might have prevented contamination, including having a comprehensive food-safety program.

In addition, the Food and Drug Administration now is in the process of implementing much tougher rules under the new Food Safety Modernization Act. In the future, companies are required to detail in writing their safety programs.

In the meantime, Blue Bell told the Journal it is working to complete an ambitious, five-phase program to revive its sales and said last week that the fifth phase in January with shipments to parts of the Southeast, including Florida and Georgia. It said that after completing that phase, all of the workers it had furloughed after the recall will have returned to work.

It is clear that the whole food industry is awaiting anxiously to see what the Justice Department concludes about Blue Bell and whether criminal charges will be levied. Clearly, there is strong political pressure to show that a new “get tough” FDA and Justice policy is in place, and that the FDA policy of using heavy criminal threats to force firms to implement effective safety policies is having positive impacts.

The alternative, some experts say, is to require much more federal inspection, perhaps along the lines of USDA’s federal meat and poultry programs, which would be much, much more expensive.

So, the U.S. food industry in now in the midst of a crucial struggle to define the future shape of its safety programs, and Blue Bell likely will be only the first instance of this effort. This fight has more or less been underway since 1906 but is expected to intensify as the new programs are implemented. Certainly, food company executives should be on their toes, especially those who are offering new-age, raw, locally procured products that many experts think have higher built-in risks, Washington Insider believes.

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