The food manufacturer, Peanut Corp. of America, has just a few plants scattered across the South, but it may be responsible for one of the nation's largest food recalls in history.
Federal investigators on Friday said the Lynchburg, Va.-based company knowingly shipped salmonella-laced products from its Blakely, Ga., plant after tests showed the products were contaminated. Federal law forbids producing or shipping foods under conditions that could make it harmful to consumers' health.
So far, the salmonella outbreak has sickened about 575 people in 43 states and may have contributed to at least eight deaths. The Justice Department has opened a criminal investigation and more than 1,550 products have been recalled.
The company has denied any wrongdoing, but said it is investigating.
Before the scandal, Peanut Corp. was a little-known but ambitious company that began in the 1970s as a family catering operation.
"We started this business working out of our house in Virginia with my mom doing all the accounting," company president Stewart Parnell had been quoted on the company's Web site.
The peanut processing business grew over the years. The company bought a plant in Georgia in 2001, opened another in Texas four years later, and was also running a plant in Virginia.
Friends and business associates said Parnell was dedicated.
"He certainly has gone out and done some things on his own — he didn't just lay around. He's been aggressive," said Eddie Marks, who runs a Virginia storage company and has known Parnell for 15 years.
But even as the company expanded and began to process millions of pounds of peanuts per month, its headquarters was still a two-story building behind Parnell's house. He even had his own brand of peanut products: "Parnell's Pride."
Belying the ambition, there were problems.
About nine months after Parnell bought the Georgia plant in 2001, potential insecticide contamination and dead insects were found near peanuts inspected by the Food and Drug Administration.
More recently, state inspections in 2006 and 2007 found some sanitary problems. After another inspection in October, state officials discovered only relatively minor violations.
But less than three months later, a federal investigation found roaches, mold and other unsanitary conditions.
The potential repercussions began to emerge. The Agriculture Department said it may have shipped possibly contaminated peanut butter and other foods to free school lunch programs in California, Minnesota and Idaho in 2007. The Federal Emergency Management Agency acknowledged that it distributed meals to disaster victims that may have included the potentially tainted peanut butter.
And it was discovered that the company's Plainview, Texas, plant didn't register with state health officials there after opening in March 2005 and only recently was discovered and inspected.
However, the most serious issue surfaced in inspection records released Friday by the Food and Drug Administration. The reports showed that in 2007 the company shipped chopped peanuts on July 18 and 24 after salmonella was confirmed by private lab tests.
FDA officials earlier had said Peanut Corp. waited for a second test to clear peanut butter and peanuts that initially tested positive for salmonella. But the agency amended its report, noting that the Georgia plant actually shipped some products before receiving the second test and sold others even after confirming salmonella.
A Peanut Corp. lawyer said the company is investigating and had no comment on the latest FDA findings. The company previously said it "categorically denies any allegations" that it sought lab results that would put its products in a favorable light.
Details of the privately held company have been slow to turn up, and what has come out hasn't been from Parnell. He has repeatedly declined to speak to reporters.
Parnell's friends and business partners described him as a hardworking, soft-spoken man who had a good rapport with the dozens of contacts he made over the years.
"He had a good reputation," said Jeffrey Pope, a peanut farmer who has done business with Parnell's Virginia plant. "People respected him. He's been in the industry for more than 30 years and he's been a mainstay."
Southwest Georgia peanut industry officials say Parnell didn't spend much time in the state, instead leaving the day-to-day dealings to others.
His reputation earned him a vaunted spot on the U.S. Department of Agriculture's Peanut Standards Board, which is charged with helping the government establish quality and handling standards for the nation's peanuts.
But several board members said they were unaware Parnell was on the panel, and some said the board rarely met. When they did, it was often by teleconference.
Parnell was removed from the board Thursday by Agriculture Secretary Tom Vilsack and Peanut Corp. was suspended from participating in government contract programs for at least a year.
The company has said in statements that it is deeply concerned.
"The product recalls issued by our company continue to expeditiously remove all potentially harmful products from the marketplace, in the best interest of the public's health and safety," a statement midweek said.(AP)
At the beginning of this session, Governor Sonny Perdue said drug companies that make Food and Drug Administration approved products should be immune from civil lawsuits. Perdue believes that would help foster drug and bio tech business in the state at a time when the economic slowdown is crunching most budgets around the nation.
A proposal modeled on Perdue's vision was introduced earlier this week. SB 101 reads, in part:
"A manufacturer or seller shall be immune from civil liability for any claim based on strict liability for a defect in the design of a drug or device if the drug or device was approved for safety and efficacy by the FDA."
Supporters say it will help spur growth in the sector.
But consumer advocate group Georgia Watch disagrees with that claim. They cite a Michigan law that, according to an aide of Sen. John Gleason, has driven business away. “This bill was touted in Michigan as a job creator,” said John LaMacchia in a Georgia Watch statement. “However, since its enactment, the presence of pharmaceutical companies has shrunk. The large Pfizer facility in Ann Arbor down-sized and no new companies are moving in,” he said.
Of course, business all across Michigan has diminished. The state's unemployment rate is in the double digits.
Georgia Watch head Allison Wall makes another argument.
“This bill lets drug companies off the hook, plain and simple, even if the product hurts or kills someone. Georgians would have no recourse, no hope of accountability, period.”
It's been argued by proponents of similar proposals that because the FDA approves a drug, liability for the product's safety should rest with the agency.
A report by the U.S. Food and Drug Administration blames managers of the Castleberry's food plant in Augusta for a botulism outbreak last year.
The report says managers failed to correct ongoing deficiencies there.
It says as a result, the botulism toxin made its way into the company's canned chili sauce.
In all, the food sickened eight people, prompting a nationwide recall.
The report also blames limits on federal oversight, according to an article in the newspaper USAToday. It says inspectors from both the FDA and the U.S. Department of Agriculture failed to detect the problems with cooking equipment for five months before the outbreak.
Castleberry's disputes the allegations of poor management and maintenance, blaming the design of the cooking equipment.
Castleberry's has corrected the problems that led to the botulism outbreak.
The company has since re-opened.
An outbreak of Salmonella bacteria has stores pulling tomatoes from their shelves nationwide. Over one hundred people in the US have gotten sick with salmonella bacteria, and the Federal Drug Administration has narrowed the potential source down to three kinds of tomatoes: roma, plum and round tomatoes grown in several states. But Georgia is not one of them. Instead, Georgia is one of twenty states where tomatoes have been cleared.
However, many restaurants and grocery stores are pulling tomatoes from consumption no matter where they’re from. Charles Hall with the trade group, Georgia Fruit and Vegetable Growers, says paranoia is hurting Georgia’s tomato farmers.
“We’re in season as far as shipping out tomatoes and we’re seeing our sales reduce significantly because the concerns of stores about the tomatoes even though we’re shipping safe tomatoes.”Hall says the paranoia should soon be over; the last case of salmonella was reported two weeks ago. Officials still warn consumers to check the origin of the tomatoes they eat.
Kim Coutts, a spokeswoman for the Castleberry's food plant in Augusta, released this statement on Friday afternoon. The FDA has not responded to media requests for a comment.
"Castleberry's has received written notification that the Food and Drug Administration (FDA) and U.S. Department of Agriculture (USDA) have approved the re-opening of the Augusta, Ga., factory. The factory is scheduled to begin production by Monday, March 31, 2008.
"We are beginning the process of notifying employees of the good news and look forward to having everyone back to work soon. We're very grateful for the patience and understanding of our employees and customers during this time."
The Castleberry's food plant in Augusta may re-open on Monday, according to a statement from Castleberry's.
The company has been working with the U.S. Food and Drug Administration and the U.S. Department of Agriculture on several mechanical and engineering upgrades at the plant, according to a spokeswoman for Castleberry's. She says there were no health or safety issues involved with these upgrades.
The FDA revoked Castleberry's operating permit two weeks ago, after they discovered mechanical problems that could have left food underprocessed.
Castleberry's had re-opened in September after a shutdown and massive recall resulting from botulism found in its canned chili sauce. The FDA says that problem was the result of underprocessed food.
No word from the FDA on Castleberry's latest statement.
Castleberry's food company has applied for reinstatement of its operating permit after it was revoked by the U.S. Food and Drug Administration recently.
The FDA had revoked the permit after it found problems with equipment on the plant's production line. That means the company can not ship its products across state lines. The plant has since shut down.
The plant was shut down last summer after botulism was found in some of its canned chili sauce that hadn't been fully processed. The permit had allowed it to re-open last September.
The latest issue does not involve any food recalls.
Plant executives are "working closely with the FDA to answer its questions and hope to resume production as soon as we have addressed them," says Dave Melborne, the company's senior vice president, in a written statement. "We expect to have quick resolution."
"During on-going inspections of vertical still retorts inside the firm, FDA found deviations from how the retorts were required to be operated. The deviations could have caused the food processed to be unsafe. Since under-processing by Castleberry in the past resulted in a botulism outbreak and since Castleberry was operating under an emergency permit, FDA revoked the emergency permit. Castleberry has three business days to appeal."
--Quote from Stephanie Kwisnek, spokeswoman for U.S. Food and Drug Administration, via e-mail
"Castleberry’s Food Company has received notification that the Food and Drug Administration (FDA) suspended the Temporary Emergency Operating Permit that was issued in September 2007. The permit granted permission for the Augusta, Georgia factory to commence production of FDA products, following a July 2007 voluntary product recall.
-- Statement from Castleberry's food company, March 10, 2008
The U.S. Food and Drug Administration has shut down operations at a food plant in Augusta.
The same plant was shut down last year, after a massive recall of tainted chili sauce.
The plant, operated by the Castleberry's food company, produces a variety of canned foods.
The FDA has now revoked its operating permit. This prevents Castleberry's from shipping its products across state lines.
As a result, Castleberry's has shut down its operations.
The FDA says on-going inspections found that some of the equipment on the plant's production line wasn't operating properly.
Castleberry's says the latest incident does not involve a food recall.
Last year, the plant was shut down, after botulism was found in some canned chili sauce that hadn't been fully processed.
The company has three days to appeal the FDA's latest action.