By RICARDO ALONSO-ZALDIVAR
Associated Press Writer

WASHINGTON (AP) — The mortgage meltdown exposed the weakness of self-regulation in financial markets. Now the salmonella outbreak is doing the same for the food industry.

A House subcommittee Thursday released new documents that showed how private inspectors contracted by Peanut Corp. of America failed to find long-standing sanitary problems at company facilities. Peanut Corp. is at the center of a nationwide outbreak that has sickened nearly 700 people and is blamed for at least nine deaths.

Lawmakers said the food industry’s private inspection system failed to catch filthy conditions because the company itself hired the inspectors.

“There is an obvious and inherent conflict of interest when an auditor works for the same supplier it is evaluating,” said Rep. Bart Stupak, D-Mich., chairman of the House Energy and Commerce investigations subcommittee. He termed it a “cozy relationship.”

Last summer, Peanut Corp.’s private inspector, a company called AIB, awarded the peanut processor a certificate in 2008 for “superior” quality at its Plainview, Texas, plant. This year, salmonella was discovered there.

The outbreak was initially traced to a Peanut Corp. facility in Blakely, Ga. Later, contamination was found at the Texas plant. Peanut Corp. is under criminal investigation for allegedly shipping products it knew to be tainted.

Owner Stewart Parnell has refused to answer questions from lawmakers, citing constitutional protections against self-incrimination. On Thursday, Parnell told The Associated Press he couldn’t comment on the allegations and referred questions to his attorney, who was not immediately available.

Federal law does not require food companies to pay for their own inspections of suppliers. Nor are industry labs and inspectors required to tell the government about any problems they find.

At least one food company that used its own inspectors, Nestle USA, ultimately decided not to do business with Peanut Corp. Nestle USA had no recalls. But a Nestle affiliate in Puerto Rico recalled some ice cream products, and Nestle HealthCare Nutrition — another affiliate — recalled a nutritional bar.

The committee released a 2002 Nestle USA inspection report of Peanut Corp.’s Blakely plant. “They found that the place was filthy,” said Rep. Henry Waxman, D-Calif.

A second audit by Nestle USA of Peanut Corp.’s Texas facility in 2006 also found major pest control and other problems. The audit said that would disqualify the plant from supplying chopped peanut pieces to sprinkle atop Drumstick ice-cream cones.

Auditors found at least 50 mouse carcasses in and around the plant and also a dead pigeon “lying on the ground near the peanut-receiving door.”

The audit also said the plant had no pathogen-monitoring plan and noted that one needed to be developed for the plant to be in compliance with audit standards.

Companies that bought ingredients from Peanut Corp. said they had no way of defending themselves against a supplier they accuse of deliberately breaking the rules and covering up.

“I think we did everything we could do,” Kellogg Co. chief executive David Mackay told the committee.

“The issue was that (Peanut Corp.) acted in a dishonest and unethical way,” he added.

Lawmakers and the Obama administration say the problem goes beyond a rogue company, and major reforms are needed. Legislation has been introduced in Congress to take food safety oversight away from the Food and Drug Administration and give it to a new agency with stronger legal powers and more funding.

Peanut Corp. produced not only peanut butter, but peanut paste, an ingredient found in foods from granola bars and dog biscuits to ice cream and cake. More than 3,490 products have been recalled, including some millions of Kellogg’s Austin and Keebler peanut butter sandwich crackers.

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On the Net:

FDA salmonella page: http://tinyurl.com/8srctw

Copyright 2009 The Associated Press.

BY SETH BORENSTEIN and BRETT J. BLACKLEDGE
Associated Press Writers

WASHINGTON (AP) — The U.S. government has increasingly relied on food-safety inspections performed by states, where budgets for inspections in many cases have remained stagnant and where overburdened officials are trained less than their federal counterparts and perform skimpier reviews, an Associated Press investigation has found.

The thoroughness of inspections performed by states has emerged as a key issue in the investigation of the national salmonella outbreak traced to a peanut processing plant in Blakely, Ga. The outbreak, which has highlighted weaknesses in the nation’s food-safety system, is blamed for 600 illnesses and at least eight deaths in 44 states.

The House Energy and Commerce investigations subcommittee, which is to hold a hearing Wednesday on food safety, scheduled a meeting Tuesday to issue a subpoena for Peanut Corp. of America President Stewart Parnell, said a senior aide to a member of the panel. The aide, who spoke on condition of anonymity because panel members were still being notified, said Parnell was otherwise refusing to appear at the hearing.

State investigators performed more than half the Food and Drug Administration’s food inspections in 2007, according to an AP analysis of FDA data. That represents a dramatic rise from a decade ago, when FDA investigators performed three out of four of the federal government’s inspections. The Agriculture Department is responsible for meat and dairy safety.

Increased inspection responsibilities have not been accompanied by big spending increases in many states responsible for the bulk of the nation’s food production.

The FDA covers some costs for states to perform inspections. But in Pennsylvania and Ohio, for example, each state’s own food safety spending increased only slightly since 2003, less than the rate of inflation; in California and Massachusetts, just barely more than inflation; and in New Jersey, spending has remained about the same. Those are among states with the largest numbers of food-processing plants.

“It clearly is a passing the buck kind of thing and somebody is dropping the buck along the way,” said Cornell University food safety professor Joseph Hotchkiss.

A Georgia health inspector noted only two minor violations at the Peanut Corp. of America plant in October, and inspection reports indicate officials spent no more than a few hours inside the plant during visits there. But after the FDA became suspicious of the plant’s role in the outbreak months later, it found roaches, mold, a leaking roof and other sanitation problems. The federal agents spent days at the plant.

“To say that food safety in this country is a patchwork system is giving it too much credit,” said Sen. Tom Harkin, D-Iowa, chairman of the Agriculture Committee. “Food safety in America has become a hit or miss gamble, and that is truly frightening. It’s time to find the gaps in the system and remedy them.”

The FDA never followed up on the Georgia inspections because the problems discovered by the state “were considered to be somewhat resolved,” Michael Chappell, head of the FDA’s enforcement division, said during a congressional hearing last week.

The FDA relied on Georgia to inspect the Peanut Corp. plant in Blakely between 2006 and 2008, just as it relies on other states. But Georgia failed to identify problems, even as the company’s own internal testing repeatedly found salmonella in its products and Canada rejected a shipment of its peanuts because of metal contamination.

“Many of these state contract inspections are much briefer, much less intensive inspections than the FDA does,” said former FDA deputy commissioner Michael Taylor, who supports contracting to the states.

Taylor said the FDA doesn’t have enough money to perform its own inspections. But he acknowledges problems with state visits and has urged a dramatic overhaul of federal and state food safety.

The number of federal field food inspectors dropped by more than 400 between 2003 and 2007, according to the FDA’s budget. But the number of businesses requiring oversight increased by 7,200 between 2003 and 2007, according to the Government Accountability Office, the investigative arm of Congress.

“What’s happened is the agency can do fewer and fewer (inspections) itself, so if it’s going to do anything it has to use the states,” said Bill Hubbard, a former associate FDA commissioner who now lobbies for increases in FDA funding. “The states can do it much more cheaply, but the states may not do as it thoroughly.”

Some states, such as New York and Florida, earn high praise among food safety experts for conducting professional inspections. And in some cases, state enforcement laws give state officials more authority than the FDA’s inspectors have under federal laws.

Florida’s food safety director, Dr. Marion Aller, said her inspectors are as good as the FDA’s. But even though Florida recently raised fees it charges for inspections, she acknowledged the state’s food safety budget “has not kept pace with the growth in the industry.”

“We are not inspecting 100 percent of the firms at 100 percent of the desired times,” she said.

In the wake of the Georgia case, food-safety inspections are facing new scrutiny from Congress. The FBI said Monday it has joined the criminal investigation involving the owner of the Georgia plant.

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Associated Press writer Jim Drinkard contributed to this report.

Copyright 2009 The Associated Press.
Summary

By KEVIN FREKING
Associated Press Writer

WASHINGTON (AP) _ Prompted by this summer’s salmonella outbreak, the government has begun investigating how to quickly identify the source of contaminated food and stop it from getting to consumers.

At the first public hearing on the issue Thursday, representatives from the produce industry cited progress toward labeling on every case of fruit and vegetables that would make it easier to trace tainted food from the dinner table back to the farm.

Consumer advocates want more: marking individual tomatoes, heads of lettuce and other produce from an industry subject to 900 safety recalls over the past two years.

“We need better information going to the consumer so he can identify fruits and vegetables when it’s in his refrigerator and in his cabinet shelves,” said David Plunkett, senior staff attorney at the Center for Science in the Public Interest.

The salmonella outbreak that sickened at least 1,440 people exposed flaws in the nation’s food safety system. Government investigators found strong evidence to implicate jalapeno and serrano peppers, and a farm in Mexico, in the largest outbreak of foodborne illness in a decade. An earlier warning advised people against eating various kinds of tomatoes.

The Food and Drug Administration has asked companies and consumers to recommend ways to improve the tracing of produce throughout the distribution system. Agency officials said the large number of food recalls and food-borne illnesses of recent years is a sign that health officials are better at finding problems.

“We are going to see more of these (outbreaks) rather than fewer,” said Stephen Sundlof, director of the FDA’s Center for Food Safety and Applied Nutrition. “We just need to respond sooner when they do occur.”

One of the questions the FDA is asking is whether an identifier should be assigned to fresh produce, and if so, at what stage in the supply chain. The industry agrees with that concept, said Kathy Means of the Produce Marketing Association. She said it is in the industry’s best interest to quickly track problems.

“They have every incentive to want to do this,” Means said.

Means said each container of produce should contain a label with a bar code that would allow businesses and the FDA to immediately identify the owner of that product — from manufacturers to packers to retailers. She said individual companies have their own system for tracking products, but the system is not uniform. She also urged the agency to let the industry enact its plan rather than seek new federal rules. Some companies are ready to put in place the barcode system immediately while others have a long way to go.

“This is going to be hundreds of millions of dollars over a few years,” she said.

Some legal underpinnings for a national tracing system are in place.

A federal bioterrorism law requires food to be traced one step forward and one step back — who supplied it, and where it went — so that, in theory, regulators can follow the trail. Industry officials said they believed that law was sufficient to get companies to enact the kind of record keeping that would keep them in compliance with the law, but so far, they have heard of little enforcement by the government to ensure that companies were complying.

Sundlof said the law authorized the FDA to check whether businesses were complying only when health dangers had surfaced. He said on a few occasions this year when potential health problems were identified, the agency exercised its authority

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On the Net:

Food and Drug Administration: http://www.fda.gov

Produce Marketing Association: http://www.pma.com/

Copyright 2008 The Associated Press.

By TINI TRAN
Associated Press Writer

BEIJING (AP) _ The head of China’s food safety watchdog resigned Monday for failing to stop the widespread contamination of baby formula as the number of children sickened in the scandal soared to nearly 53,000, including four infants who died.

The shake-up came as investigators revealed that China’s biggest producer of powdered milk, Sanlu Group Co., had received complaints as early as December 2007 linking its infant formula to illnesses in babies. Months later, tests revealed the milk was tainted with the industrial chemical melamine, which causes kidney stones and can lead to kidney failure.

“During these eight months, the company did not inform the government and did not take proper measures, therefore making the situation worse,” China Central Television reported, citing an investigation by the State Council, China’s Cabinet.

Melamine, used to make plastics and fertilizer, has been found in infant formula and other milk products from 22 of China’s dairy companies. Suppliers trying to cut costs are believed to have added it to watered-down milk because its high nitrogen content masks the resulting protein deficiency.

The number of sick children reported by the Health Ministry has jumped from 6,200 to nearly 53,000. Of those, 12,892 remain hospitalized, with 104 of them in serious condition. Another 39,965 children have been treated and released.

The ministry did not explain the sudden increase in the number of cases but it suggested health officials were combing through hospital records from May through August to trace the origins of the contamination.

Baby formula and other milk products have been pulled from stores around the country and Chinese dairy products, including baby formula, milk candy and ice cream, have been recalled or banned in Japan, Singapore, Malaysia, Brunei and Hong Kong.

In a reflection of the breakdown in supervision of the dairy industry, Sanlu and several other leading companies embroiled in the scandal had been given inspection-free status by the food safety watchdog.

That privilege has since been rescinded, but the World Health Organization stressed Monday it was only a first step and urged closer monitoring.

Quality issues can crop up at any point in the supply chain, from the farm to the retail outlet, said WHO China representative Hans Troedsson, adding: “It’s clearly something that is not acceptable and needs to be rectified and corrected.”

The resignation of Li Changjiang, who headed the General Administration of Quality Supervision, Inspection and Quarantine since 2001, comes a year after he and the government promised to overhaul the system in response to a series of product safety scares.

New regulations and procedures were introduced in an attempt to restore consumer confidence and preserve export markets after a string of recalls involving tainted toothpaste, faulty tires, contaminated seafood and in March 2007, pet food containing melamine that was blamed for the deaths of dogs and cats in the United States.

A series of improvements were announced from establishing a national food recall system to random inspections to increasing exchanges with quality inspectors in other countries.

In an indication of Beijing’s determination to improve product safety, the government in July 2007 executed the disgraced chief of China’s food and drug agency, who was convicted of accepting bribes in exchange for letting fake medicine into the domestic market.

The official Xinhua News Agency said Li stepped down with the approval of China’s Cabinet.

The agency “failed to conduct a proper inspection in this case, and Li Changjiang bears responsibility for this. The State Council has accepted his resignation,” China Central Television reported.

In addition, the top official from Shijiazhuang, where Sanlu is based, was fired Monday for “failing to deal with the case properly,” the official Xinhua News Agency said. Party secretary Wu Xianguo is the latest in a string of city officials who have been sacked over the scandal.

The discovery of the tainted milk is especially damaging because Sanlu was considered one of the most reputable brands in China, winning an industry award in January and being featured on state television last fall as a domestic company with stringent quality controls.

WHO was having discussions with Chinese officials on how to strengthen its food quality system, said Troedsson, its country representative. Local authorities need increased training to create a “more robust reporting system,” he said.

“It is important to know if information was withheld, where and why it was withheld,” he said. “Was it ignorance by provincial authorities or was it that they neglected to report it? Because if it was ignorance there is a need to have much better training and education … If it is neglect then it is, of course, more serious.”

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Associated Press reporters Anita Chang and Henry Sanderson contributed to this story.

Copyright 2008 The Associated Press.