Senators ask Treasury to probe Brazilian meatpacker with major US footprint

Senators ask Treasury to probe Brazilian meatpacker with major US footprint


By:  Sylvan Lane
The Hill

 

A bipartisan Senate duo asked the Treasury Department on Tuesday to investigate a scandal-ridden Brazilian corporation’s rapid expansion into the U.S. meat processing industry.

In a Tuesday letter,  Sens. Bob Menendez (D-N.J.) and Marco Rubio (R-Fla.) asked Treasury Secretary Steven Mnuchin to probe whether JBS SA poses a national security and agricultural threat to the U.S.

Menendez and Rubio asked Mnuchin to conduct an investigation through the Committee on Foreign Investment in the U.S. (CFIUS), a secretive Treasury panel with expansive power over foreign business operations in the U.S.

“The activities and operations of JBS S.A. have implications for our national security and the security of the American food system, and we respectfully request that [CFIUS] exercise its authority to review these transactions,” wrote Menendez — the ranking member of the Senate Foreign Relations Committee — and Rubio, a subcommittee chairman.

JBS SA, the largest meat processing company in the world, gained a foothold in the U.S. meat industry with its 2007 purchase of Swift & Co. The Brazilian company’s U.S. subsidiary, JBS USA, grew to be the second-largest U.S. producer of beef, pork and poultry through a string of high-profile acquisitions.

Menendez and Rubio asked Mnuchin to investigate whether JBS SA funded its massive U.S. expansion through an extensive record of bribery, corruption and business with blacklisted Venezuelan officials.

JBS SA owners Joesely and Wesely Batista have admitted to spending roughly $150 million to bribe more than 1,800 Brazilian government officials to secure $1.3 billion in loans from the Brazilian Development Bank (BNDES) and federal pension funds.

While BNDES loans are meant exclusively to fund domestic investments in Brazil, the Batistas are alleged to have used that financing to expand JBS’s U.S. operations. The Department of Justice has also opened an investigation into whether JBS violated federal anti-corruption laws, according to court records obtained by The Hill and other media outlets.

Menendez and Rubio wrote that the DOJ probe “only underscores our concerns that the questionable nature of JBS S.A.’s financial practices poses significant risks for its American subsidiaries and the U.S. food system.”

JBS SA spokesman Cameron Bruett said in a statement that the company is "aware of the letter sent to Secretary Mnuchin," and "has fully cooperated with all relevant authorities in a transparent manner regarding past events in Brazil."

"The company will continue to cooperate and respond to any subsequent inquiries," Bruett said.

JBS has faced bipartisan fire throughout 2019 as the company’s U.S. subsidiary raked in more than $90 million in Agriculture Department aid for American farmers hurt by President Trump’s trade war with China.

Controversy over JBS’s federal aid is one of several issues threatening to derail multiple spending bills from reaching Trump’s desk before the Nov. 22 expiration of a short-term government funding measure.

But Menendez and Rubio have also expressed concerns with the Batista brothers’ close ties to the government of Venezuelan President Nicolás Maduro. The senators cited JBS’s involvement in Venezuela’s food procurement system and the Venezuelan Foreign Trade Corporation, which the Treasury Department has labeled a key player in public corruption.

Menenedez and Rubio additionally singled out the Batistas' relationship with top Maduro ally Diosdado Cabello, a powerful lawmaker who helped cultivate the relationship between JBS and the Venezuelan government.

Rubio, an avid critic of Maduro, received death threats in 2017 that may have come from Cabello, according to the Miami Herald.