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R-CALF USA: Investigate JBS

R-CALF USA: Investigate JBS

6/7/2017 3:10:00 PM/Categories: General News, Today's Top 5, Livestock, Grains

WASHINGTON (DTN) -- The cattlemen's group R-CALF USA is calling on U.S. authorities to investigate how Brazilian meatpacker JBS SA acquired its U.S. meatpacking businesses as the company is embroiled in a corruption scandal in its home country.

Last week, J&F Investments, the firm that controls JBS SA, agreed to pay a fine of $3.2 billion (10.3 billion reals) for its role in a bribery scandal that involved Brazilian President Michel Temer, as well as past presidents in the country. Reuters reported JBS will have 25 years to pay off the fine.

Stemming from the deal reached in Brazil, at least some U.S. authorities are now involved in the investigation. A spokesman for JBS in the U.S. responded to DTN that "J&F is now cooperating with U.S. authorities regarding the matters disclosed as part of the leniency agreement with the Brazilian authorities." The spokesman declined to further elaborate on which authorities are looking into the meatpacking company's dealings in Brazil.

The Department of Justice did not respond to an email asking whether JBS is under investigation in the U.S.

R-CALF USA -- the Ranchers-Cattlemen's Action Legal Fund, United Stockgrowers of America -- sent an 11-page letter Tuesday to President Donald Trump, Attorney General Jeff Sessions, Agriculture Secretary Sonny Perdue and Senate Judiciary Committee Chairman Charles Grassley, R-Iowa. R-CALF wants a thorough investigation into JBS and the influence the company now has on U.S. beef policy and trade.

R-CALF is the first U.S.-based livestock group to call for an investigation into JBS' business ties to the U.S. The group, however, also has repeatedly sought to block JBS' investments in the U.S. over the past decade.

JBS announced late Monday the company is selling its stake in beef operations in Argentina, Paraguay and Uruguay for $300 million to rival Brazilian packer Minerva, Dow Jones reported.

In early May, Brazilian law enforcement executed search warrants against JBS in a criminal investigation involving billions of dollars of loans made by a subsidiary of the National Economic and Social Development Bank to JBS dating back to 2005. JBS issued a "notice to the market" declaring that all of the loans made by the bank to JBS "were fully compliant with the Brazilian capital markets legislation and devoid of preferential treatment or benefits to JBS."

Since 2007, JBS and the Batista family which controls it have bought processors Swift & Co., Smithfield Beef Group, a pair of packing plants formerly owned by XL Four Star Beef and the poultry company Pilgrim's Pride. JBS also has become one of the largest cattle feeders in the country by purchasing Five Rivers Cattle Feeding and the McElhaney Cattle Co.

According to JBS' annual report, the meatpacker generated more than half its revenue from its operations in the U.S. and Canada.

R-CALF cited the ongoing scandals with JBS to make the argument that a thorough investigation is needed in the U.S. as well.

"A full and complete investigation is needed to determine the full scope of JBS' potentially unlawful activities in the United States and the impact that any such unlawful activities have had on the single largest segment of American agriculture -- the U.S. live cattle industry," R-CALF stated.

R-CALF and other groups have repeatedly pushed back against JBS' acquisitions in the U.S. The Department of Justice's Antitrust Division blocked JBS' attempt to buy National Beef Packing Company.

R-CALF stated that if it is found JBS created its U.S. businesses through unlawful means, then the U.S. government should force the company to divest.

R-CALF's letter to federal officials: https://www.r-calfusa.com/…

Source: DTN

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