Ag Subcommittee Reviews Fraud and Bribery at Hunts Point Terminal

Jul 27, 2000

Ag Subcommittee Reviews Fraud and Bribery at Hunts Point Terminal

Washington, DC -- Today, the House Agriculture Subcommittee on Livestock and Horticulture, led by Chairman Richard Pombo (R-CA), held an oversight hearing to review illegal activity occurring at the Hunts Point Terminal Market in New York.

"Bribery and fraud in the USDA inspection program represent a dangerous threat to America's system for grading produce," Pombo said.  "Even more, when public officials fill their pockets with bribes, effectively stealing from the very producers that they are supposed to serve, they undermine and erode every American's confidence and trust in their government."

On October 27th 1999, 21 people, including eight USDA inspectors, were arrested at the Hunts Point Terminal Market, located in the Bronx, New York, and were charged with bribery.  These arrests were the result of a three-year investigation by the USDA's Office of Inspector General code-named "Operation Forbidden Fruit."  The investigation revealed that owners of 12 produce firms at the Hunts Point Market had been routinely paying cash bribes to the USDA inspectors in exchange for lowering the grade of the produce being inspected.  This saved the produce wholesalers a substantial amount of money per load, and at the same time defrauded farmers out of tens of millions of dollars.

Federal prosecutors were able to obtain convictions for all eight of the USDA inspectors.  Seven of the eight convicted inspectors received sentences ranging from 15 to 30 months in prison, as well as fines and forfeitures totaling $169,000, in May of this year.

"I believe it is important that the Administration and Congress continue their efforts to address the serious problems associated with Hunts Point and restore confidence in the inspection system.  Growers and the public deserve no less," said Ranking Subcommittee Member Collin Peterson (D-MN).

Some initial steps to repair the integrity of U.S. produce inspection system have already been taken.  As a member of the conference committee on crop insurance reform (H.R. 2559), Chairman Pombo worked to include over $11.5 million dollars for infrastructure improvements and modernization at the USDA expressly to prevent fraud and corruption in the grading system.  Additional language was included directing the USDA to address economic losses to the produce industry, and to evaluate the suitability of restitution.
"This Subcommittee is determined to fulfill its responsibility by learning the events that occurred at Hunts Point; understanding how these activities proceeded without detection for so long; and determining what can be done to keep it from reoccurring — in short, what went wrong, and how is it being fixed?" Pombo said.