990717 South Korea Bans Montort USA Bids

New York - The South Korean Government has suspended ConAgra's Monfort USA beef company from bidding on government purchases of beef. The Livestock Products Marketing Organization (LPMO), the South Korean Government agency which purchases foreign beef, issued the ban as part of its July requests for bids. The suspension extends a previous two month ban running from April 20 to June 20 and could run as long as another year at the agency's discretion. The ban includes all beef products shipped from ConAgra's Monfort plants.

According to reports in the Korean press, the ban is the result of LPMO's discovery earlier this year of illegally altered USDA certificates accompanying a shipment of 313 tons of ConAgra's Monfort USA brand beef. The alleged alterations involved changing the grade of the beef shipments from “No Grade” to the more preferable and more expensive “Choice” grade.

In a federal civil court lawsuit filed in the Central District of California, one of ConAgra's beef distributors to Korea, PT Prime Trading Corp., has charged that ConAgra personnel have engaged in a pattern and practice of altering USDA certificates without authorization since 1991. According to the Complaint, USDA certificates were altered by “whiting out” entries and retyping amended information. The alleged alterations included changes to grade, net weight, box count, slaughter date and shipping mark.

According to the Complaint, during the normal course of PT Prime's business with ConAgra, PT Prime would receive by mail from ConAgra the original USDA certificate pertaining to each shipment of beef bound for Korea and exported by PT Prime. On occasion, PT Prime would first receive from ConAgra a facsimile copy of the USDA certificate at or about the same day the shipment was inspected and after the USDA certificate was signed by the inspector. After PT Prime learned of the mislabeling on the LPMO shipment, PT Prime began reviewing the USDA certificates it had received from ConAgra. During the review, PT Prime compared the facsimile copies of the USDA certificates it had received shortly after the inspection with the original copies it would later receive form ConAgra. PT Prime discovered instances in which discrepancies existed between the facsimile and mail copies of the same USDA certificates.

According to the Complaint, these discrepancies indicate that unauthorized changes had been made to USDA certificates after the inspector signed the documents and while certificates were still in ConAgra's possession. Attorneys for PT Prime have indicated that the evidence has been turned over to the Food Safety and Inspection Service of the United States Department of Agriculture.

Under the Federal Meat Inspection Act, 21 U.S.C. Section 601, et seq., once a USDA certificate is signed, no modifications or alterations of the information on the USDA certificate are permitted without the express written authorization of a USDA inspector. Violation of any provision of the Federal Meat Inspection Act with the intent to defraud is a felony. 21 U.S.C. d 676.

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