Wednesday, April 23, 2014
Ryan J. Foley, The Associated Press
IOWA CITY, Iowa — A ruthless businessman who built one of the nation's largest egg production operations from scratch even as he racked up environmental and labor violations is getting out of the business in disgrace after one scandal was too much to overcome: a nationwide salmonella outbreak caused by his products.
In this June 2010 photo, Austin "Jack" DeCoster appears in a Lewiston, Maine, court on animal cruelty charges related to Turner egg farm. DeCoster also owns Wright County Egg, an Iowa egg farm linked to a massive salmonella recall in 2010. Dozens of people sickened last year after eating salmonella-tainted eggs from Wright County Egg will receive compensation, including six-figure checks for two children, under the first wave of legal settlements with the disgraced egg magnate.
Austin "Jack" DeCoster and his son, Peter, said in a statement they have given up control of egg operations in Iowa, Maine and Ohio, including the farms that produced salmonella-tainted eggs that sickened an estimated 1,900 people and led to a recall of 550 million eggs. Federal inspectors later discovered filthy conditions at the farms, including dead rodents and towers of manure.
Steve Boomsma, chief operating officer for Centrum Valley Farms in Alden, Iowa, said in a telephone interview today his firm had signed a nine-year lease with an option to purchase six DeCoster operations in Iowa, including the Wright County Egg farms responsible for the outbreak. A division of Minnesota-based Land O' Lakes announced earlier this month it is taking over DeCoster's Maine egg farms. And Boomsma said a deal could be announced this week involving Iowa investors' takeover of DeCoster's egg operations in Ohio.
The salmonella outbreak caused big retailers like Wal-Mart to drop DeCoster products, a Congressional hearing where DeCoster struggled to defend his record, and a bitter legal feud with DeCoster's longtime top associate, John Glessner, in which each is accusing the other of mismanagement. The DeCosters recently reached financial settlements with about 40 people who were sickened during the outbreak, and attorneys involved in the litigation say they are seeking compensation for more than 100 others.
"While we are committed to working to address outstanding issues related to the outbreak, it is important to note we no longer operate any of the farms involved and are no longer in the business of egg production," the DeCoster family said in a statement sent to The Associated Press.
Iowa Gov. Terry Branstad, a Republican who has often been critical of DeCoster's tactics, welcomed the news.
"The DeCosters should have been out of business a long time ago. This is good news for the entire state of Iowa," he said. "The DeCosters have been consistent and habitual violators who have given Iowa egg producers a bad name."
Iowa produces more eggs than any other state.
Boomsma agreed the personnel change was good for the industry. He said Centrum Valley is owned by three families who have a good track record and have been in the business for generations.
"I think the egg industry has taken a black eye on some of this stuff and we need to just really help the consumers realize that their eggs are safe," Boomsma said.
He said more maintenance, cleaning and testing was being done at two of the six Iowa operations before his company seeks approval from the Food and Drug Administration to reopen them, while the others are back in business. To win back customers, Boomsma said the company would have to "step up our food safety program and our environmental testing programs."
DeCoster, 77, was a child in Maine when his father died, leaving him 200 hens. He built a vast egg empire with hard work and ruthless tactics. He continued and even expanded his egg farms even as they were cited and charged with immigration, safety, environmental and labor violations. As he clashed with regulators, he won over others by generously donating his money for local municipal projects.
The business survived raids that led to the arrests of dozens of workers, DeCoster's 2003 conviction for knowingly hiring illegal immigrants and fines totaling millions of dollars for everything from animal cruelty to workplace discrimination. A member of former President Bill Clinton's cabinet once compared one of DeCoster's farms' working conditions to a sweatshop, and Iowa labeled DeCoster the one and only "habitual violator" of its environmental laws as part of its unsuccessful effort to stop his company's expansion.
After the salmonella outbreak, federal agents descended on DeCoster farms in Iowa. No charges have been filed, and a spokesman for the U.S. Attorney's Office in Cedar Rapids declined comment today on whether a federal investigation continued.
A spokeswoman said neither Jack nor Peter DeCoster would be granting interviews. At the Congressional hearing last year, Jack DeCoster said he was horrified to learn his eggs were the source of the outbreak and his farms' conditions bothered him "a lot."
Peter DeCoster, who ran their day-to-day operations, promised Congress the company would make "sweeping biosecurity and food safety changes" after the recall.