Brazilian Prosecutors Take Aim at JBS. When Will U.S. Do the Same?
Brazilian prosecutors agree with OCM’s position that meatpacking giant JBS is guilty of fraud that led to illegal loans from Brazilian state development bank BNDES. Through bribery, JBS secured the necessary funds to go on a spending spree buying up 40 rivals on four continents, including the U.S. JBS has admitted that but for these fraudulent loans, it wouldn’t have been able to take over the U.S. beef market. Now Brazilian officials are demanding $5 billion in damage compensation and fines.
As reported today in Meatingplace:
Federal Prosecutor Ivan Marx said in a statement that JBS, through its owners and the use of intermediaries, “paid substantial bribes to senior government officials to co-opt the BNDES president and part of his staff,” in order to have access to “larger-than-necessary” loans. He said the company also benefited from the overvaluation of stock prices in financial operations, and by having the payment of interests waived.
While Brazilian prosecutors demand $5 billion from JBS, our own U.S. Department of Agriculture is doling out millions in taxpayer dollars to fuel the company’s growth. Thus far, JBS has received $78 million in pork contracts – that’s 26% of the USDA allocation for pork purchases – through the USDA’s Trade Mitigation Program intended to help U.S. farmers and ranchers hurt by the ongoing trade disputes with China. In August, JBS officials informed the world that it is “at the best moment in its history…to capture market opportunities. Exclusive organic growth is no longer a priority.” JBS will grow by taking over other companies, further strengthening its stranglehold on the market. While Brazilian officials take action against corrupt JBS, U.S. authorities remain silent in response to two prominent U.S. Senators’ call for an investigation into JBS’ activity. In October, U.S. Sens. Marco Rubio (R-Fla.) and Bob Menendez (D-N.J.) sent a letter to Secretary of Treasury Steven Mnuchin requesting that the Committee on Foreign Investment in the United States (CFIUS) formally open a review of JBS’ transactions.
Senators Rubio and Menendez said:
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 to assess the implications for security and safety of America’s food supply and, in turn, our national security.
It’s time to finally strip JBS of its illicit gain. Add your name to our petition calling on members of the U.S. Senate to join Senators Rubio and Menendez in demanding an investigation of JBS’ illicit activity that led to its takeover of the U.S. meat market.
–Organization for Competitive Markets
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A short essay by Justin Tupper, Vice President, United States Cattlemen’s Association