Agriprocessors

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Agriprocessors, Inc.
Industry Meat packing
Founded 1987
Founders Aaron Rubashkin
Headquarters Postville, Iowa, USA
Area served North America, Israel
Products Iowa Best Beef
Owners Aaron Rubashkin
Website The company websites were www.agriprocessors.com and www.rubashkin.com.[1]
Agriprocessors plant in Postville, Iowa

Agriprocessors was the corporate identity of a slaughterhouse and meat-packaging factory based in Postville, Iowa, best known as a facility for the glatt kosher processing of cattle, as well as chicken, turkey, duck, and lamb. Agriprocessors' meat and poultry products were marketed under the brand Iowa Best Beef. Its kosher products were marketed under various labels, including Aaron’s Best, Shor Habor, Supreme Kosher and Rubashkins.

The firm was founded and owned by Aaron Rubashkin, who purchased the meat-packing facility in 1987, and managed by two of his sons, Sholom Rubashkin and Heshy Rubashkin. Eventually it became the largest kosher meat-packing plant in the United States.

Agriprocessors faced accusations of mistreatment of cattle, pollution, and a series of alleged violations of labor law. In May 2008, the U.S. Immigration and Customs Enforcement (ICE) staged a raid of the plant, and arrested nearly 400 illegal immigrant workers. Agriprocessors plants stopped operating in October 2008, and the firm filed for bankruptcy on November 5 of the same year. Sholom Rubashkin as the highest ranking day-to-day corporate officer was charged with federal financial fraud and sentenced to 27 years in prison in June 2010.

The Agriprocessors plant was bought at auction in July 2009 by SHF Industries and has resumed production under the new name Agri Star.

History[edit]

In the 1980s Aaron Rubashkin, a Lubavitcher Hasidic butcher from Brooklyn, decided to take advantage of economic structural changes to bring mass-production to the kosher meat production business. In 1987 he bought an abandoned slaughterhouse outside Postville, a town undergoing a major employment crisis in northeastern Iowa and opened a processing plant creating some 350 jobs. Two of his sons were put in charge, Sholom Rubashkin, the second youngest as CEO,[2] and Heshy Rubashkin, the youngest, as vice president of marketing and sales. In 1992, Agriprocessors added poultry to its offerings. At its peak the plant employed over 800 people, killing more than 500 head of cattle each day in kosher production. The sales, according to numbers given to Cattle Buyers Weekly, rose from $80 million in 1997 to $180 million in 2002 and may have reached $250 million or more.[3]

Rubashkin brought modern industrial methods to what has historically been a small, almost boutique craft, developing retail-ready glatt kosher products being sold both in supermarkets and in small, local grocery stores and meat markets around the United States. Agriprocessors was the largest (glatt) kosher meat producer in the United States and the only one authorized by Israel's Orthodox rabbinate to export beef to Israel.[4]

In the 20 years it operated in Postville, Agriprocessors had a major impact on the town, creating new jobs, attracting immigrants from many different countries, and bringing an influx of Orthodox Jews to a part of the United States where Jews had been practically unknown.

The Rubashkin family opened another processing plant for bison, cattle and lamb called Local Pride Plant in conjunction with the Oglala Lakota native-American tribe of the Pine Ridge Indian Reservation in Gordon, Nebraska in 2006 employing some 100 locals. The presence of the plant near an Indian reservation provided considerable tax breaks for Rubashkin. Governor Dave Heineman presented a $505,000 gratuity check to Rubashkin on behalf of the city of Gordon, as part of an incentive package that brought the factory to the town.[5]

Agriprocessors had two distribution sites, one in Brooklyn, New York, and one in Miami, Florida, both managed by members of the Rubashkin family. It also operated slaughter facilities in South America.[3]

Controversies[edit]

Agriprocessors plant, backside

The Agriprocessors plants have often been controversial because of frequent citations for illegal practices such as animal abuse, food safety violations,[6] violations of environmental laws, child labor laws, and the recruitment of illegal immigrants and inducing them to work in often dangerous conditions at illegal wages.[7]

The controversies have also split the Jewish communities,[8] raised questions of Jewish ethics,[7] and brought about a new consciousness for a Jewish way of eating beyond fulfilling the technical requirements of kashrut.[9]

Animal abuse[edit]

In late 2004, People for the Ethical Treatment of Animals (PETA) released a video filmed undercover at Agriprocessors, showing gory details of cattle having their tracheas and esophagi being ripped out of their necks and surviving for minutes after shechita (ritual slaughter).[10] Noted animal welfare expert and meat scientist Dr. Temple Grandin called Agriprocessors procedures an "atrocious abomination" and worse than anything she had ever seen in over 30 kosher abattoirs.[11]

Jewish authorities were split, with former Chief Rabbi of Ireland, David Rosen,[12] and Shechita UK, along with many non-Orthodox rabbis from the Conservative movement, criticizing Agriprocessors, while Orthodox kashrut organizations continued to stand by the kashrut of the meat. Under pressure from the Agriculture Department, the Orthodox Union kosher certification authority and Israel's chief rabbinate, the plant changed its practices.[13]

In 2005 an internal report from the USDA not only held that Agriprocessors engaged in acts of inhumane slaughter, but that USDA inspectors were sleeping on the job, playing computer games, and had accepted bribes of free meat to ignore violations at the plant.[13]

On June 27, 2006, at the suggestion of Rabbi Menachem Genack of the Orthodox Union, Dr. Grandin toured the facility. According to the Orthodox Union, Dr. Grandin was satisfied with what she saw.[14] In 2008, though, Grandin reported that Agriprocessors had again become "sloppy" in their slaughter operation and was "in the bottom 10%" of slaughterhouses.[15]

Another PETA undercover video, reportedly taken on August 13, 2008, showed violations of the Humane Methods of Livestock Slaughter Act, including the use of saw-like, multiple, hacking cuts in the necks of still-conscious animals. Dr. Grandin said the second cuts would “definitely cause the animal pain.”[16] The episode led Grandin to state that slaughterhouse visits were useless for determining proper animal treatment. Grandin suggested that Agriprocessors install internet video cams on the killing floor for constant, independent, oversight.[17]

Pollution[edit]

In 2004, city authorities started an investigation against Agriprocessors due to complaints from local residents that the firm routinely deposited untreated effluent into local rivers in breach of regulations. On August 31, 2006, Agriprocessors signed a consent decree where they essentially admitted discharging untreated slaughtering wastewater into the Postville sewer system, in violation of Federal and Iowa State law and paid a $600,000 fine for violating waste-water regulations.[18] Untreated wastewater from abattoirs is a heavy burden on wastewater treatment plants because of its high biochemical oxygen demand and high concentration of FOG (Fats, oils, and grease) which can form insoluble plaques in sewage pipes.

Labor relations[edit]

In September 2005, workers at Agriprocessors’ distribution site in Brooklyn voted to join the United Food and Commercial Workers union. The company did not recognize the vote, arguing that it was invalid because management had discovered that many of the workers who participated were in the US illegally, making their votes invalid despite protection granted undocumented workers in the National Labor Relations Act. A National Labor Relations Board judge decided against the company and ordered it to recognize the vote. Workers alleged that Agriprocessors paid low wages, failed to pay overtime and immediately terminated employment of workers who complained about conditions or wages.[19]

On August 20, 2008, Jewish employees at Agriprocessors were reported to have staged a 30-minute walkout over delayed payment of wages and other compensation issues.[20]

In October 2008, the Iowa Labor Commission fined Agriprocessors $9.99 million for various violations of state labor law, including illegally deducting money from employees for safety equipment and failing to pay employees.[21]

Anti-competitive practices[edit]

A December 2008 story in the Village Voice featured allegations of sharp business practices by the Rubashkins: intimidating rivals (with threats of physical violence), manipulation of the kosher certification system, collusion with suppliers to withhold supplies from competitors, etc.[22]

Federal immigration raid[edit]

Protest against raid and crackdown on illegal employees
Protest against raid and crackdown on illegal employees
Main article: Postville Raid

On 12 May 2008, U.S. Immigration and Customs Enforcement (ICE) staged a raid that was described as “largest criminal worksite enforcement operation in U.S. history”. Federal authorities arrested 389 immigrant workers during the raid, 305 of them on criminal charges, 297 were sentenced on federal felony charges for fraud-related offenses.[23] ICE spokesman Tim Counts said that “the raid was aimed at seeking evidence of identity theft, stolen Social Security numbers and for people who are in the country illegally”. According to the U.S. attorney's office for the Northern District of Iowa, those arrested “include 290 Guatemalans, 93 Mexicans, 2 Israelis and 4 Ukrainians”.[24]

Sources quoted in the affidavit and application for search warrant alleged the existence of a methamphetamine laboratory at the slaughterhouse, and that employees carried weapons to work.[25] However, later press reports do not indicate that a methamphetamine laboratory was found during the search.

In late July, members of the Congressional Hispanic Caucus met with workers and community leaders, after a United States House of Representatives' subcommittee had heard testimony about the raid and its impact on the families and the town,[26] and a rally with some 1,500 participants, organized by the Jewish Council on Urban Affairs, Jewish Community Action and St. Bridget's Roman Catholic Church was held in Postville in support of the detained Agriprocessors workers and their families.[27]

The Rubashkin family was reported to have denied any criminal activity; Aaron Rubashkin said that “he had no idea that his workers were illegal and that they had produced what appeared to be legitimate work documents”.[28] Nevertheless he announced shortly after the raid that he intends to replace his son as the company's CEO. Sholom Rubashkin remained in charge though. He was finally replaced as CEO in September 2008 by Bernard Feldman, a New York attorney who had worked as counsel for the family, after child labor charges against Aaron and Sholom Rubashkin had been announced, and the Orthodox Union had threatened to withdraw their kosher certification.[29]

The ICE raid left the company lacking employees, and it hired Labor Ready to supply "about 150 workers", but these workers stopped working because of alleged safety issues.[30] The Jacobson Staffing company took the job of staffing the plant shortly thereafter. In June 2008, Agriprocessors began hiring workers from homeless shelters in Texas to replace employees detained in the federal immigration raid.[31]

Public relations[edit]

In May 2008, following the federal immigration raid, PostvilleVoices.com, a site that claimed to be "a blog by people who live and work in Postville" and defended the firm's hiring practices, saying that "the people that run Agriprocessors are good, decent, honest people". After Postville residents suspected that this was a case of “astroturfing”, Getzel Rubashkin, son of Sholom Rubashkin, admitted he and two friends created the site.[32]

In June 2008, Agriprocessors retained Jim Martin, a former U.S. Attorney, as the company's outside CCO,[33] hired 5W Public Relations to repair its public image, and Lubicom, a kosher consulting and PR firm headed by Menachem Lubinsky, to present its case to the New York Jewish community. Lubinsky was quoted as saying he “expected 5W to deal with negative publicity and blogs”.[34] Shortly thereafter, suspicious posts defending the company appeared on Jewish blogs critical of the company. Shmarya Rosenberg, author of the Failed Messiah blog, uncovered that two posts under the name of Rabbi Morris Allen of Hechsher Tzedek, a critic of Agriprocessors, were part of a sockpuppeting scheme.[35] Similar comments impersonating Rabbi Allen were found on the websites of the Jewish Telegraphic Agency (JTA) and Vos Iz Neias.[36] Ronn Torossian, CEO of 5W, admitted that a “senior staff member failed to be transparent in dealing with client matters.”[37]

Comments by Iowa Governor[edit]

In August 2008, Iowa Governor Chet Culver commented on Agriprocessors:

He also directed Iowa state agencies to prohibit Agriprocessors from listing their jobs on state job lists, and ordered his Attorney General to prosecute all violations backed by sufficient evidence.[38]

Criminal charges and trials[edit]

On July 3, 2008, Juan Carlos Guerrero-Espinoza, supervisor of the beef kill department and three other departments,[39] and Martin De La Rosa-Loera, supervisor of the poultry kill department and three other departments,[40] were arrested at the Agriprocessors plant. They were charged with aiding and abetting the possession and use of fraudulent identity documents, and encouraging aliens to illegally reside in the United States. Guerrero-Espinoza was also charged with aiding and abetting aggravated identity theft.

In late August 2008, Guerrero-Espinoza reached a deal with federal prosecutors and was sentenced to 36 months in federal prison. The plea deal allowed him to avoid deportation and for his wife and children to return to the US following his prison term. The sentence included a two-year mandatory ruling for aggravated identity theft.

In March 2009, De La Rosa-Loera was sentenced to 23 months in federal prison.[41]

After the Flores-Figueroa v. United States ruling of the Supreme Court issued on May 4, 2009, he made a request for the reduction of his sentence.[42] Aggravated identity theft charges had formerly been dismissed against human resources employee Laura Althouse, supervisor Brent Beebe and CEO Sholom Rubashkin, the motion contended.[43]

Both Guerrero-Espinoza and De La Rosa-Loera, after being released from jail, have gone back to work at the meatpacking plant under the new ownership.[44]

Aaron Rubashkin, Sholom Rubashkin, Billmeyer, Althouse, and Freund[edit]

In September 2008 Aaron Rubashkin, his son Sholom Rubashkin, as well as the company's human resources manager, Elizabeth Billmeyer, and two office employees, Laura Althouse and Karina Freund, were charged for child labor violations.[45] State child labor charges against Aaron Rubashkin were dropped, and he was never charged federally.[46]

In October 2008, Althouse pleaded guilty to one count of conspiracy to harbor illegal aliens and one count of aggravated identity theft. She was sentenced to two years federal probation, Freund to one year of probation.[46] Billmeyer was sentenced to one year and one day in prison, to be followed by two years of supervised release for harboring undocumented aliens and accepting counterfeit resident alien cards. After she agreed to plead guilty to state child labor charges under an agreement with the state, her sentence was reduced to eight months.[46] Former human resources assistant Penny Hanson was sentenced to two years probation on January 7, 2010. In 2010, state child law charges were dropped against former Agriprocessors supervisor Jeff Heasley, who had his case separated from the other defendants.[47]

On October 30, 2008, Sholom Rubashkin was arrested and charged with conspiracy to harbor undocumented aliens for profit, aiding and abetting document fraud, and aiding and abetting aggravated identity theft. He was released on conditions that he wear a GPS ankle bracelet, limit his travel to the Northern District of Iowa, surrender his passport and his wife′s passport, and provide a $1 million appearance bond with $500,000 to be secured. On November 14, 2008, he was arrested again on a charge of a $35 million bank fraud.[48]

Beebe[edit]

On November 21, 2008, Sholom Rubashkin, Brent Beebe, one of two operations managers at the Agriprocessors plant, poultry managers Hosam Amara and Zeev Levi, and human resources employee Karina Freund were indicted with charges including conspiracy, harboring illegal aliens, aggravated identity theft, document fraud and bank fraud.[49] Beebe pleaded guilty in January 2010 to conspiracy to commit document fraud as part of a plea agreement with the government.[50] In the plea, Beebe admitted that he conspired with former vice president Sholom Rubashkin and others a week before the May 12, 2008 immigration raid at the plant to buy fake identification documents for 19 employees. He was sentenced to 10 months in prison on May 26, 2010. The charges against Freund were dismissed.[51]

Meltzer[edit]

On May 26, 2010, Mitch Meltzer, the plant′s former head accountant, was sentenced to 41 months in prison after his conviction on a federal conspiracy charge. In late September 2009, he admitted that he conspired with others to make false statements to a bank and that he signed false financial records that were used to mislead the banks. In addition to the prison term, Meltzer was ordered to pay $26.9 million in restitution.[52] Meltzer had been hired by the meat plant′s new owner after having been dismissed by Agriprocessors′ government-appointed trustee, and remained at the company for several months after he pleaded guilty to financial fraud.[53]

Amara and Levi[edit]

ICE Wanted poster Zeev Levi: Wanted for alien harboring and document fraud

Faced with federal charges Amara and Levi fled the USA.[54] Amara was arrested in Israel on March 31, 2011.[55] After unsuccessful appeals to avoid extradition from Israel, Amara was returned to Cedar Rapids, Iowa for trial on May 3, 2013.[56][57] He pleaded not guilty.[58] He faced 25 counts related to harboring workers who were in the country illegally and two counts related to document fraud for conspiring to provide false immigration papers. His trial was set for July 1, 2013, but delayed until August 19 by U.S. Magistrate Jon Scoles.[59] On August 29, 2013, Amara signed a plea deal, admitting that he "conspired with Agriprocessors CEO Sholom Rubashkin and other executives for at least five years before the raid to harbor immigrants 'knowing and in reckless disregard of the fact' they had come to the U.S. illegally." He pleaded guilty to one count of conspiring to harbor undocumented immigrants for profit, which carries a maximum penalty of 10 years in prison, though federal sentencing guidelines will likely call for a shorter term. The other counts in the indictment will be dismissed.[60]

Levi, who supposedly fled to Naharia, Israel, has not been found by authorities to date, and is currently on Homeland Security's "Most Wanted" list.[61]

Sholom Rubashkin[edit]

On November 12, 2009, Sholom Rubashkin was convicted in federal court on 86 charges of financial fraud, including bank fraud, mail and wire fraud and money laundering.[62] On June 22, 2010, he was sentenced to serve 27 years in prison and to make $27 million in restitution.[63]

On November 23, 2009, Sholom Rubashkin′s second federal trial on 72 immigration charges was canceled. After winning the financial fraud conviction, federal prosecutors dismissed all immigration-related charges against him. In its motion to dismiss, the U.S. Attorneys Office said any conviction on the immigration charges would have no impact upon his sentence, writing, "dismissal will avoid an extended and expensive trial, conserve limited resources, and lessen the inconvenience to witnesses."[64] Without that trial, it is unlikely that much of the immigration-related evidence gathered at the Agriprocessors site following the raid, or much of the key witness testimony, will ever be publicly revealed.[42]

On June 7, 2010, Sholom Rubashkin was acquitted in state court of knowingly hiring 29 underage workers at the plant.[65]

Garcia[edit]

On June 30, 2010, Alvaro Julian Garcia Jr., aged 73, was sentenced to 60 days in jail followed by two years of supervised release, for having registered vehicles that were sold to undocumented workers in Postville between 2004 and 2006 as part of a vehicle title scheme.[66]

Bankruptcy[edit]

On November 5, 2008 Agriprocessor filed for Chapter 11 bankruptcy. Factors cited included a loss of most of the workforce due to the May 2008 immigration raid, declining demand for the firm's products, and increased costs in the aftermath of the raid.[67] The Associated Press reported that “Agriprocessors in its bankruptcy filing said the company owed $50 million to $100 million to creditors. The move appears to be an effort to pre-empt foreclosure by a St. Louis bank, which sued Agriprocessors for defaulting on a $35 million loan”.[68]

In December, the bankruptcy court approved a $2.5 million loan for Agriprocessors to allow it to resume poultry processing through at least January 9, 2009 (about 750,000 chickens).[69] The company was run by Chapter 11 bankruptcy trustee Joseph E. Sarachek of Triax Capital Advisors.[70]

Agriprocessor's problems led to a shortage of kosher meat and higher prices nation-wide. Empire Kosher, the largest US producer of kosher poultry, doubled its production capacity in response.[71]

Agriprocessors was bought at auction in July 2009 by SHF Industries, a company formed by Canadian plastics manufacturer Hershey Friedman, an observant Orthodox Jew, and his son-in-law, Daniel Hirsch.[72] The plant has resumed business under the new name Agri Star Meat & Poultry, LLC.[73]

Media[edit]

The town of Postville and Agriprocessors have been widely covered by the media in the USA and Israel, particularly since the ICE raid in May 2008, mostly focusing on the Jewish element.[74] Postville and Agriprocessors are also the subject of two books, a play, documentary films and an episode of American Greed.

Postville: A Clash of Cultures in Heartland America by journalist Stephen G. Bloom, was published in 2000,[75] the documentary film Postville: When Cultures Collide based on it was released in 2001.[76] Postville U.S.A.: Surviving Diversity in Small-Town America, written by Mark Grey and Michele Devlin, sociologists at the University of Northern Iowa, together with Aaron Goldsmith, a Lubavitcher Hasid and former member of the Postville City Council, came out in 2009,[74] as well as the documentary film on the ICE-raid abUSed.[77] In the same year, seven men who were arrested in the raid wrote a play in Spanish, la Historia de Nuestras Vida (The Story of Our Lives) and performed it at Lutheran churches in Decorah, IA and Minneapolis.[78]

On March 23, 2011 CNBC's American Greed aired an episode related to this story entitled "The Slaughter House".

References[edit]

  1. ^ rubashkin.com at archive.org and agriprocessors.com at archive.org
  2. ^ According to must sources. However, his being formally appointed as CEO is disputed
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  4. ^ Alan Cooperman (December 31, 2004). "USDA Investigating Kosher Meat Plant". Washington Post. Retrieved June 16, 2010. 
  5. ^ Joe Duggan (June 30, 2006). "Tribe, Jewish family open kosher packing plant". Lincoln Journal Star. Retrieved June 16, 2910.  Check date values in: |accessdate= (help)
  6. ^ Noncompliance Records Food Safety and Inspection Service (FSIS)
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  36. ^ Michal Lando (July 12, 2008). "Agriprocessors' PR company accused of identity theft". Jerusalem Post. Retrieved June 18, 2010. 
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  40. ^ "USA vs Martin De La Rosa-Loera". U.S. District Court, Northern District of Iowa. 2008-07-02. Retrieved 2010-07-27. 
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  43. ^ Admin (2009-12-15). "Agriprocessors supervisor asks court to correct his sentence". GazetteOnline.com. Retrieved 2010-07-26. 
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  46. ^ a b c Jeff Reinitz (2010-06-09). "Moral stakes in Rubashkin child labor case were high, both sides say". Waterloo-Cedar Falls Courier. Retrieved 2010-07-26. 
  47. ^ Iowa Courts Online Docket Records
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  60. ^ Foley, Ryan (August 29, 2013). "Former Iowa slaughterhouse manager signs plea deal admitting role in immigration conspiracy". Associated Press. 
  61. ^ "Zeev Levi, Wanted for Alien harboring, document fraud". U.S. Department of Homeland Security. 2008. 
  62. ^ "Slaughterhouse Manager Convicted in Fraud Case". The New York Times. November 13, 2009. Retrieved June 21, 2010. 
  63. ^ Julia Preston (2010-06-21). "27-year sentence for plant manager". The New York Times. Retrieved 2010-07-21. 
  64. ^ "Charges Dismissed: Judge dismisses 72 immigration charges against former Agriprocessors CEO". AP. October 23, 2009. Retrieved June 21, 2010. 
  65. ^ Julia Preston (2010-07-23). "Former Manager of Iowa Slaughterhouse Is Acquitted of Labor Charges". The New York Times. Retrieved 2010-06-08. 
  66. ^ Jeff Reinitz (2010-07-01). "Man sentenced in vehicle title scheme". Waterloo-Cedar Falls Courier. Retrieved 2010-07-26. 
  67. ^ Julia Preston (November 5, 2008). "Large Iowa Meatpacker in Illegal Immigrant Raid Files for Bankruptcy". The New York Times. Archived from the original on 28 May 2010. Retrieved June 17, 2010. 
  68. ^ "Agriprocessors files for bankruptcy protection". JTA. November 5, 2008. Retrieved June 28, 2010. 
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