Abuse, Health & Safety, OSHA, Regulations & Compliance, Working Conditions

Bad Egg

From DownEast.com, “Bad Egg” by Colin Woodward, 24 May 2011.

Photo credit: Egg image ©IStockPhoto.com/bluestocking

Photo credit: Egg image ©IStockPhoto.com/bluestocking

Austin “Jack” DeCoster is quite possibly the wickedest businessman Maine has ever produced.

The Turner-based egg magnate gained national notoriety last summer, when a salmonella outbreak, which sickened 1,939 people nationwide and triggered the recall of half a billion eggs, was traced to his Iowa operations. At his farms there, inspectors from the Food and Drug Administration found hen barns infested with rodents, maggots, and wild birds, exterior doors burst apart by the weight of an eight-foot deep heap of chicken feces, and oozing pools of liquid manure that had been tracked far and wide by escaped chickens. Not only did samples in the barns test positive for salmonella, congressional investigators discovered the company had itself detected the most dangerous form of the virus dozens of times over the previous three years, but chose not to report it.

The scandal was by no means an aberration. Over the past forty years, DeCoster’s companies have paid millions in fines and court damages for everything from faking trucking logs and knowingly hiring illegal immigrants to gross environmental contamination, animal cruelty, workplace safety lapses, and exploitation of workers, including alleged rapes by supervisors against female employees, and terrorizing workers housed in squalid company-owned trailers. He settled for $3.2 million after being sued by the government of Mexico (for discriminating against its citizens in Maine) and settled with the United States for $2 million for what the U.S. Labor Secretary at the time, Robert Reich, called conditions that were “as dangerous and oppressive as any sweatshop we have seen.”

“DeCoster is an equal opportunity offender,” says Sarah Klein, staff attorney at the Center for Science in the Public Interest in Washington, D.C. “There is really no type of safety violation that he hasn’t brushed up against at some point in his illustrious career.”

DeCoster has been run out of Maryland (after violating a salmonella quarantine), has resorted to hiding his controlling interest in egg farms in Ohio (where he was already unwelcome), and has been named an “habitual offender” by the State of Iowa, where he has been caught employing illegal immigrants at least five times since 2001.

“He’s been a bad egg since he got here and we’ve had a lot of problems related to him in our state,” Iowa Governor Terry Branstad told me. “He’s cheated the people who built his buildings, purposefully didn’t pay his bills, hired illegal immigrants, and has had numerous environmental violations.

“I’m a very pro-business and pro-growth governor, but we are the leading egg- and pork-producing state, and he’s given both industries a black eye in the way he operates and treats people,” the Republican governor continued. “He seems to think he has enough money and connections to do things his way, and that’s just not how things operate in Iowa.”

Given DeCoster’s infamous reputation, it was with considerable surprise that we learned in April that Maine legislators were considering a bill to help his companies out.

The original measure, sponsored by Representative Dale Crafts (R-Lisbon), aimed to relieve DeCoster of having to pay minimum wage or overtime to his workers, or to worry that they might one day unionize. The requirements — most imposed unanimously by the state legislature in 1975 in response to DeCoster’s already notorious reputation — applied to any chicken farm containing more than three hundred thousand hens, of which his farms are the only examples.

“It bothers me that a government can just pick a business out and write a law. I think that has a resemblance to what a communist type of nation would do,” Representative Crafts told me, noting that Maine is the only state that doesn’t exempt large chicken farms from these entanglements. “That doesn’t attract businesses to Maine; it keeps them away.”

“In Maine we have certain regulations that aren’t very business friendly, and that’s what’s driven business outside the state,” explained another supporter, Representative Jeffery Timberlake (R-Turner). “And DeCoster has done a 180-degree turn from where they were back when they got in all that trouble.”

The labor committee ultimately stripped the wage provisions from the bill, but endorsed the ban on collective bargaining on a 7-6 party line vote, citing DeCoster’s recent record. “There’s been over ten years without any complaints,” the chair of the committee, Senator Chris Rector (R-Thomaston) explained, adding that testimony given before the committee had indicated that inspectors for the federal Occupational Safety and Health Administration (OSHA) “haven’t seen any violations.”

At press time, this legislation was awaiting a roll call vote in the House. But whatever its final disposition, the episode exposed two reasons DeCoster’s companies have been able to transcend their reputation: their own willingness to misrepresent their past, and public officials’ failure to check up on what they were being told by doing a Google search or two of their own.

At the hearing, lawmakers were presented testimony from DeCoster interests alleging a sterling record. Daniel W. Bates, a labor attorney who had been hired by the DeCoster companies to “investigate” their track record in Maine, testified that the farms had “demonstrated their respect and fairness for workers” for the past fifteen years and that they “have never fired any employee for other than a legal, non-discriminatory reason.” Since 2001, he claimed, OSHA and other regulators had established “an exemplary record of clean, safe, and pleasant workplaces.” The real problem, he went on, were “falsehoods in the press.” DeCoster’s safety officer, Robert Leclerc, suggested OSHA inspectors had found only trivial issues since his arrival at the company in 1998, while Representative Crafts testified that “if there were violations in the past fifteen years, we would have heard about them.”

In reality, DeCoster’s in-state track record has been far from clean. OSHA fined his Maine companies $344,810 in June 2002 for improperly installed roof trusses, exposed asbestos, unsanitary shower facilities, hazardous electrical equipment, and other violations. Later that year, twenty-five of DeCoster’s neighbors sued him for not addressing the stench allegedly emitting from storage sheds filled with manure and decomposing chickens. OSHA returned in 2004, fining the companies $108,500 for “willful, repeat and/or serious violations.”

In August 2008, OSHA levied a $150,000 fine after workers in Turner were forced to work on and under the roof of a building that had collapsed in a snowstorm. “This disregard for basic, common-sense safety procedures and employee protections is as astonishing as it is unacceptable,” OSHA’s area director for Maine, William Coffin, said at the time. The following spring, DeCoster agreed in Maine court to pay over $125,000 in penalties and fees after undercover animal cruelty activists videotaped live hens being tossed into trash cans to slowly suffocate under dead birds, hens suffering from thirst, infections, broken bones, and open wounds, and dead birds decomposing in cages.

“We even documented Jay DeCoster [DeCoster’s son] in one of the sheds, approving of throwing live birds into trash cans,” says Nathan Runkle, executive director of the Chicago-based Mercy for Animals, which conducted the investigation. “It showed that a lot of the abuse was a top-down issue.”

When we contacted Bates to ask about the discrepancies, he deferred to the company, but said that we had been “listening to stuff that’s essentially not true.” He also asserted that the August 2010 salmonella outbreak had sickened six people, and seemed surprised to learn that the official estimate from the U.S. Centers for Disease Control is more than 1,900 people.

DeCoster spokesman Chris Grimbilas acknowledged the OSHA and animal cruelty violations in Maine, but said “our safety record is better than average” and that “there have been procedural changes within our barn and indeed within our hiring process that would hopefully preclude any future occurrences” of animal cruelty.

“The salmonella outbreak caught our Iowa farms off guard,” he continued, “but it must be noted that all of the houses and barns were operating within established guidelines.” But when we quoted specific violations from the FDA inspectors’ report, Grimbilas changed his stance. “There probably were some issues, but I’m not from Iowa and can’t speak to that,” he said, before referring us to DeCoster’s son, Peter, manager of the Iowa operations, who didn’t respond to an interview request.

As for the animal cruelty case, Grimbilas said the firm was being treated unfairly by Maine authorities, but not because the violations did not occur. Rather, he claimed that when Mercy for Animals conducted a similar undercover investigation of a competitor in Texas, state officials there arrested the activists for misrepresenting themselves when they were hired. “This is just another disparity in the way DeCoster farms are treated and the way other businesses are treated,” he said. “It always seems like we come out on the short end of the stick.”

Actually, the surprising thing about Jack DeCoster’s life is how he’s been able to thrive, even as he’s been caught breaking all the rules. DeCoster built his empire from the hundred hens left to him upon his father’s death in 1949, which he tended himself. By the time he graduated from Turner’s Leavitt High School, he had 2,500 hens, and by 1977, more than 2.8 million, making him one of the largest egg producers in the nation. He’d also already built a reputation sufficiently unpleasant to cause the Maine Legislature to take action to protect his employees, including the minimum wage and overtime measures recently slated for elimination.

“Even then I was surprised by what a law unto themselves they were, from bending and breaking laws and regulations to just their arbitrariness in dealing with people,” recalls Myron Levin, who investigated DeCoster in 1977 for the Maine Times before going on to a twenty year career with the Los Angeles Times. Levin’s investigation found that DeCoster Egg Farm was habitually deducting penalties and expenses from Vietnamese refugee workers’ paychecks without prior consent or means of appeal; that they had charged workers highly inflated prices to live in company-owned trailers, and attempted to evict them immediately upon their resigning or being fired; that they’d twice pleaded guilty of falsifying truck drivers’ logbooks to conceal the number of hours they had driven without rest.

“Even thirty-four years ago he was already a serial violator of certain things, and from there he’s gone on to bigger scandals,” Levin says.

In 1979, a chain of accidents prompted the Maine Legislature to pass another law, this one banning children under sixteen years of age from working near “hazardous machinery or hazardous substances.” But three months later, DeCoster convinced officials in Kent County, Maryland, to pass an $8.5 million bond to help him build an egg farm there. “We found out we hadn’t gotten the whole story from Maine,” an official from neighboring Cecil County told theLos Angeles Times last year. “We had constant problems with him.” In 1988, New York banned eggs from DeCoster’s Maryland farms after a deadly salmonella outbreak, and he was later convicted of breaching a Maryland salmonella quarantine, prompting him to leave the state.

The biggest damages were yet to come: $2 million from the U.S. Department of Labor for gross workplace safety violations in 1997, prompting Shaws and other supermarket chains to quit buying his eggs; a $3.2 million settlement with the government of Mexico in 1998 for allegedly recruiting Mexican nationals and subjecting them to horrific conditions based on race; a $1.53 million settlement in Iowa in 2002, where his supervisors had allegedly raped female employees, threatening to fire or kill them if they resisted; and a $2.2 million civil fine in 2003 after pleading guilty to knowingly hiring 121 undocumented aliens at his Iowa and Nebraska farms, the largest such fine in either state’s history. In 2006, some thirty suspected illegal aliens were arrested at his Iowa farms, where another fifty-one were found the following year. But his business continued to grow: in 2010 he owned 14 million hens directly, plus more than 20 million more held by companies linked to him.

“This guy has a rap sheet as long as Al Capone’s,” says Matt Schlobohm, executive director of the Maine AFL-CIO, who testified in opposition to the loosening of Maine law this year. “It’s forty years of constant lawbreaking practice.”

When we apprised Senator Rector of some of DeCoster’s undisclosed violations in Maine, he seemed surprised. “No evidence of that came forward,” he said. “I would hesitate to speculate as to what the committee’s reaction would have been.”

Story updates

Submitted by Colin Woodard on Tue, 05/24/2011 – 5:12pm.

Since this story — destined for the upcoming print edition — went to press, there have been a couple of developments related to Rep. Craft’s proposed legislation.

Sen. Rector — who apparently learned during our interview that the testimony his committee received had been less than candid — announced yesterday that he was dropping his support for the bill. As I reported on my World Wide Woodard blog yesterday afternoon, Rector said DeCoster’s allegedly sterling OSHA record had been “critically important” to his committee’s endorsement of the bill. “To discover that that was not really the case have me great pause,” he said. Hours later he told the Sun-Journal’s Steve Mistler that he he planned to vote against the bill in the Senate and speak against it from the floor.

The bill was scheduled for a full House vote today but, last we heard, it appeared to have been pulled from the line up, at least for now.

Source: From DownEast.com, “Bad Egg” by Colin Woodward, 24 May 2011.


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