A successful meat industry lobby

Basford asked to schedule a meeting with Koch Foods’ executives to present his findings. The company’s lawyer, Scott Pedigo, of the firm Baker Donelson in Jackson, called Basford to suggest meeting with local managers instead, according to emails included in the case file. Basford insisted on speaking with the top executives “due to the potential gravity of the situation.”

In July 2017, Basford and two colleagues from the USDA met in Birmingham, Alabama, with Koch Foods’ chief operating officer, Mark Kaminsky, along with two other executives and Pedigo. Grendys, Koch Foods’ billionaire owner, did not attend, but Basford sent Grendys a copy of his slides.

In the presentation, Basford said Koch Foods’ actions toward Sanders, combined with its treatment of Ingrum and the other black farmers, was “evidence of unjust discrimination.” Chicken companies are prohibited from engaging in “unfair, unjustly discriminatory or deceptive” business practices under the Packers and Stockyards Act of 1921. The Obama administration tried to tighten enforcement of this law by proposing new regulations to spell out what those prohibited practices are. But the meat industry lobbied Congress to block the proposed rules by withholding funding from the USDA. When the Trump administration came in, it swiftly prevented the rules from taking effect.

So when Basford presented his findings to the Koch Foods executives in July 2017, he included all the evidence of discrimination, but he alleged a narrower violation: that Koch Foods failed to notify Sanders of why it stopped delivering chickens to his farm. In response, Pedigo argued that the notification nine months earlier about the new ventilation requirement was enough.

The notice requirement had been strengthened by the Obama administration, but Congress reversed the change in 2015. That made it harder for Basford’s case to stick.

In response to questions from Propublica about Ingrum and Sanders, Pedigo declined to comment on the specific allegations in Basford’s investigation. In a statement, he said, “Koch Foods applies its standards and expectations to all growers uniformly without regard to race or any other protected status and has never discriminated against any grower on such basis.”

Kaminsky, the Koch Foods COO who attended Basford’s presentation, last October became chairman of the National Chicken Council, the industry’s trade group.

Koch Foods and other top chicken companies — Tyson Foods, Pilgrim’s Pride, Sanderson Farms and Perdue Farms — are fighting multiple lawsuits from retailers, distributors and farmers accusing them of conspiring to fix prices. The companies have denied the allegations. In one of the cases, the Justice Department’s Antitrust Division asked the judge on June 21 to freeze discovery in order to protect an ongoing criminal investigation.

The USDA is now doing fewer investigations like Basford’s. His office finished 1,873 investigations in 2017, the most recent data available, down from 2,588 in 2012. Penalties for violating the Packers and Stockyards Act dropped from $3.2 million in 2013 to as little as $243,850 in 2018, according to preliminary case data on the USDA’S website.