From a Peanut Corporation of America 2009 e-mail from owner, Stewart Parnell, as reflected in a February 2013 Department of Justice  indictment charging executives and managers with knowingly shipping tainted product. The DOJ filed a 76-page indictment against three former managers and employees and a food broker of Peanut Corporation of America (now bankrupt) with charges of criminal fraud.
Peanut Corporation produced the peanut base used in peanut butter, cookies, and crackers, and in 2009, salmonella was discovered in the company’s product. Once you find salmonella at a food production plant, here’s a safety tip: close the place down and hose it out just a bit. Instead, the indictment alleges that the company continued to ship its product as well as produce new product despite tests indicating the presence of salmonella.
The result was a deadly outbreak of salmonella (700 became ill and 9 died) that resulted in the recall of more than 2,000 products and the bankruptcy of Peanut Corporation. The indictment names Mr. Parnell, the former owner of Peanut Corporation, his brother, a former supervisor at the company, Samuel Lightsey, a plant operator at the company, and the company’s former quality-assurance manager, Mary Wilkerson. A separate information charges a food broker, Daniel Kilgore, with similar crimes for his role in brokering the tainted product. The indictment and information allege that the four employees and the broker engaged in a conspiracy to hide the fact that tests showed the presence of salmonella in the peanut meal or peanut base, the company’s product.  The indictment makes the stunning allegation that the group worked together to fabricate test results to show salmonella-free product when salmonella was present.
Experts note that criminal charges in food-poisoning cases are rare because the proof of intent or mens rea is difficult or impossible when there is a one-time problem. However, as the indictment notes, Mr. Parnell was being notified by customers that his company’s product was testing positive and yet still continued production without cleaning up the plant. The indictment also alleges that the four who are charged misled FDA inspectors in January 2009, conduct that added obstruction of justice to the charges in the indictment.
Mr. Parnell’s lawyer vows to fight the charges and to demonstrate that Mr. Parnell and the others never intentionally shipped tainted product. However, one portion of the indictment includes an e-mail from an employee that indicted the peanut meal containers at the plant (in 2007) were covered with dust and rat feces. Mr. Parnell responded to the employee, “Clean ’em all up and ship them.”    Tis a tall order for his lawyer to explain that one and stick with his story on lack of  intent.
Mr. Parnell was right in 2009 when he wrote about huge costs — it did indeed cost everyone huge — from those who lost to their lives to those who lives are changed forever because of an outbreak of contamination it looks as if they might have stopped. Pressure processing decisions in business results in irrational and self-destructive behavior. The company is gone. Now its managers face potential criminal consequences.
You can find more information about the indictment here: http://www.justice.gov/opa/pr/2013/February/13-civ-220.html
About mmjdiary
Professor Marianne Jennings is an emeritus professor of legal and ethical studies from the W.P. Carey School of Business at Arizona State University, retiring in 2011 after 35 years of teaching undergraduate and graduate courses in ethics and the legal environment of business. During her tenure at ASU, she served as director of the Joan and David Lincoln Center for Applied Ethics from 1995-1999. In 2006, she was appointed faculty director for the W.P. Carey Executive MBA Program. She has done consulting work for businesses and professional groups including AICPA, Boeing, Dial Corporation, Edward Jones, Mattel, Motorola, CFA Institute, Southern California Edison, the Institute of Internal Auditors, AIMR, DuPont, AES, Blue Cross Blue Shield, Motorola, Hy-Vee Foods, IBM, Bell Helicopter, Amgen, Raytheon, and VIAD.
The sixth edition of her textbook, Case Studies in Business Ethics, was published in February 2011. The ninth edition of her textbook, Business: lts Legal, Ethical and Global Environment was published in January 2011. The 23rd edition of her book, Business Law: Principles and Cases, will be published in January 2013. The tenth edition of her book, Real Estate Law, will also be published in January 2013. Her book, A Business Tale: A Story of Ethics, Choices, Success, and a Very Large Rabbit, a fable about business ethics, was chosen by Library Journal in 2004 as its business book of the year. A Business Tale was also a finalist for two other literary awards for 2004. In 2000 her book on corporate governance was published by the New York Times MBA Pocket Series. Her book on long-term success, Building a Business Through Good Times and Bad: Lessons from Fifteen Companies, Each With a Century of Dividends, was published in October 2002 and has been used by Booz, Allen, Hamilton for its work on business longevity. Her latest book, The Seven Signs of Ethical Collapse was published by St. Martin’s Press in July 2006 and has been a finalist for two book awards.
Her weekly columns are syndicated around the country, and her work has appeared in the Wall Street Journal, the Chicago Tribune, the New York Times, Washington Post, and the Reader's Digest. A collection of her essays, Nobody Fixes Real Carrot Sticks Anymore, first published in 1994 is still being published. She has been a commentator on business issues on All Things Considered for National Public Radio.
She has served on four boards of directors, including Arizona Public Service (1987-2000), Zealous Capital Corporation, and the Center for Children with Chronic Illness and Disability at the University of Minnesota. She was appointed to the board of advisors for the Institute of Nuclear Power Operators in 2004 and served on the board of trustees for Think Arizona, a public policy think tank. She has appeared on CNBC, CBS This Morning, the Today Show, and CBS Evening News.
In 2010 she was named one of the Top 100 Thought Leaders in Business Ethics by Trust Across America. Her books have been translated into four different languages. She received the British Emerald award for authoring one of their top 50 articles in management publications, chosen from over 15,000 articles.
Personal: Married since 1976 to Terry H. Jennings, Maricopa County Attorney’s Office Deputy County Attorney; five children: Sarah, Sam, and John, and the late Claire and Hannah Jennings.
