New Brazilian Class Action Targets Corrupt JBS in the Name of Democracy

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  • Brazilian class action lawsuit against corrupt meatpacking behemoth JBS lays out the undisputed evidence that through bribing over 1,800 Brazilian politicians, JBS was able to take over U.S. Swift Food, U.S. Smithfield beef group, and Pilgrim’s Pride, launching their takeover of the U.S. meat processing industry and becoming the world’s leading meat processor. 
  • The lawsuit demands JBS restore to the Brazilian public nearly a billion U.S. dollars of its ill-gotten gain.
  • Meanwhile, U.S. officials have forked over yet another $10.8 million in taxpayer funds to the shady foreign firm. JBS has now received a whopping $100 million+ in taxpayer cash meant for struggling American farmers.

The people of Brazil have taken a stand for justice against corrupt meatpacker JBS and its principal owners, the Batista brothers, by filing legal action in the Brazilian court. A discovery application has also been approved which seeks documents located in the U.S. for use in the legal proceeding in Brazil.

This class action lawsuit, filed on December 20, 2019, comes on the heels of a recent action brought by Brazilian prosecutors evidencing similar claims.

The litigation lays out the undisputed evidence that through bribing over 1,800 Brazilian politicians, the Batista brothers were able to take over U.S. Swift Food, U.S. Smithfield beef group, and Pilgrim’s Pride, launching their takeover of the U.S. meat processing industry and becoming the world’s leading meat processor. 

The lawsuit demands the Batista brothers, JBS SA, J&F Investimentos, the Batista family’s holding company, restore to the public nearly a billion U.S. dollars of the Batista family’s ill-gotten gain.

Meanwhile, U.S. officials have forked over yet another $10.8 million in U.S. taxpayer funds to the shady foreign firm. JBS has now received a whopping $100 million+ in taxpayer cash meant for struggling American farmers.

The Brazilian citizens responsible for bringing the cause of action outlined the basis for their litigation in the following statement: “The grounds for the citizen lawsuit: Democratic means of protection of the Res Publica…

Taking a stand for our U.S. Democracy, Senators Rubio and Menendez issued a letter to Secretary Mnuchin calling on the Treasury Department to investigate JBS. The Senators stated, “Given its admitted criminal conduct to secure loans that were used to for investment in the United States and the group’s business relationship 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…”

Like the Brazilians, it is time for U.S. citizens to take a stand for our country and our democracy. Sign the petition calling on members of the U.S., Senate to join Senators Rubio and Menendez in demanding an investigation of JBS’s illicit activity that led to the takeover of the U.S. meat market.

 

JBS Used Illegal Activity to Profit and Take Over the U.S. Beef Market

From a small butcher shop in Brazil, JBS has become the world’s largest meat processing company and a dominant force in America’s food industry, and much of its growth is the result of illegal activity.

JBS Bribed Brazilian Officials for Government-Backed Loans to Fuel Growth
In a decade-long scheme, the meat processor bribed more than 1,800 Brazilian politicians to secure Brazilian government development loans, which JBS admitted helped it take over the U.S. beef market. With these funds, JBS was able to acquire more than 40 rivals on four continents between 2007 and 2017.

JBS’ Owners Defrauded Four Brazilian Pension Funds Out of $2.5 Billion
The Batista family of Brazil owns JBS and several other Brazilian companies. The Batista brothers, Josely and Wesley, led a stock fraud scheme that defrauded four Brazilan pension funds out of $2.5 billion.

JBS Was Caught Bribing Meat Inspectors
In 2017, JBS was caught exporting rotten meat worldwide and trying to cover up the stench using cancer-causing acid products.

JBS Ripped off U.S. Cattle Farmers and Ranchers
In 2018, USDA found JBS had ripped off U.S. cattle producers at three separate slaughter facilities by shorting them on payments for their cattle. While the JBS abuses were extensive, USDA settled the claims for a mere $50,000 penalty.

Impact on Farmers

Excessive Market Concentration

Economists have shown that abuses are likely whenever four companies control more than 40% of a certain market sector. Four companies control over 80% of the U.S. beef processing market. JBS is the largest of those companies, having gained its position through illegal activity. Today, in many regions of the U.S., a cattle farmer has only one buyer for his or her cattle, so the farmer has no negotiating power when it comes to price.

The cattle farmers’ share of the retail price of beef has been as high as 70%, but today it is just 38.5%. This autumn, cattle producers were losing over $200 per head while the monopoly meatpackers like JBS were making over $400. Farmers and ranchers own and care for their cattle 365 days a year and are going broke, while the Big Four meatpackers own the cattle for about a week and get rich.

Abusive Trade Practices

JBS has brought its abusive trade practices to the U.S. With cattle producers often times only having JBS to sell their cattle to, they find JBS taking advantage of them by paying below market value for their cattle. In 2018, JBS was found to have defrauded cattle producers by claiming the cattle that they bought weighed less than they actually did, thus short paying the producers. Fearful of retaliation from JBS if they speak out, cattle producers too often have to accept these abuses or simply go out of business.

Impact on Consumers

JBS’s historic pattern of corruption and underhanded dealings has not only allowed them to take over the beef industry but has resulted in putting U.S. consumers’ health and safety at risk. With JBS being a dominant force in the meat industry, it has the ability to artificially inflate the price consumers pay at the retail store, leaving consumers vulnerable to price gouging. Because the U.S. no longer requires mandatory Country-of-Origin Labeling on beef, and the USDA allows imported meat to be falsely labeled “Product of the U.S.A.,” consumers are not able to choose to purchase from American farmers and ranchers instead.

2017 Rotten Meat Scandal
JBS has demonstrated a pattern of cutting corners on food safety and outright bribing inspectors, allowing it to sell rotten meat to the consumer. In 2017, JBS was caught exporting rotten meat worldwide and trying to cover up the stench using cancer-causing acid products.

2018 Ground Beef Recall
In 2018, 12 million pounds of JBS ground beef were recalled and 246 people were sickened in the U.S. due to salmonella poisoning. Evidence shows the salmonella outbreak was caused by JBS’ standard practice of allowing sick dairy cows into the beef supply.

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