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[Senate Hearing 107-120]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 107-120

          OVERSIGHT OF THE FOOD SAFETY AND INSPECTION SERVICE

=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 22, 2001

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry

  Available via the World Wide Web: http://www.agriculture.senate.gov

                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
75-012 PDF                  WASHINGTON : 2001

For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone (202) 512-1800  Fax: (202) 512-2250
              Mail: Stop SSOP, Washington, DC 20402-0001

           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

                  RICHARD G. LUGAR, Indiana, Chairman

JESSE HELMS, North Carolina          TOM HARKIN, Iowa
THAD COCHRAN, Mississippi            PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky            KENT CONRAD, North Dakota
PAT ROBERTS, Kansas                  THOMAS A. DASCHLE, South Dakota
PETER G. FITZGERALD, Illinois        BLANCHE L. LINCOLN, Arkansas
CRAIG THOMAS, Wyoming                ZELL MILLER, Georgia
WAYNE ALLARD, Colorado               DEBBIE STABENOW, Michigan
HUTCHINSON, TIM, Arkansas            MARK DAYTON, Minnesota
MIKE CRAPO, Indiana                  BENJAMIN E. NELSON, Nebraska

                       Keith Luse, Staff Director

                    David L. Johnson, Chief Counsel

                      Robert E. Sturm, Chief Clerk

            Mark Halverson, Staff Director for the Minority

                                  (ii)

                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing:

Thursday, March 22, 2001, Oversight of the Food Safety and 
  Inspection Service.............................................     1

Appendix:

Thursday, March 22, 2001.........................................    23

Document(s) submitted for the record:

Thursday, March 22, 2001.........................................    39

                              ----------                              

                        Thursday, March 2, 2001
                    STATEMENTS PRESENTED BY SENATORS

Lugar, Hon. Richard G., a U.S. Senator from Indiana, Chairman, 
  Committee on Agriculture, Nutrition, and Forestry..............     1
Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member, 
  Committee on Agriculture, Nutrition, and Forestry..............     5
Allard, Hon. Wayne, a U.S. Senator from Colorado.................     5
Nelson, Hon. Benjamin E., a U.S. Senator from Nebraska...........    18
                              ----------                              

                               WITNESSES

Billy, Thomas....................................................     6
Viadero, Roger C.................................................     2
                              ----------                              

                                APPENDIX

Prepared Statements:

    Lugar, Hon. Richard G........................................    24
    Harkin, Hon. Tom.............................................    25
    Billy, Thomas................................................    33
    Viadero, Roger C.............................................    26

Document(s) submitted for the record:

    Article from The New York Times: U.S. Officials Investigate 
      Meat Safety in New York and New Jersey.....................    40

 
          OVERSIGHT OF THE FOOD SAFETY AND INSPECTION SERVICE

                              ----------                              

                      THURSDAY, FEBRUARY 28, 2001

                                        U.S. Senate
          Committee on Agriculture, Nutrition, and Forestry
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:00 a.m. in room 
328, Senate Russell Building, Hon. Richard Lugar (Chairman of 
the Committee) presiding.
    Present: Senators Lugar, Harkin, Allard, and Nelson.

OPENING STATEMENT OF HON. RICHARD G. LUGAR, A U.S. SENATOR FROM 
  INDIANA, CHAIRMAN, COMMITTEE ON AGRICULTURE, NUTRITION, AND 
                            FORESTRY

    The Chairman. This session of the Senate Agriculture 
Committee will come to order.
    The Chair would mention at the outset, we've begun promptly 
because we'll have a Senate vote at 9:30, it's a single vote, 
and so we'll take a recess at or about that time. I've informed 
both of the witnesses of that.
    My procedure will be to start with the opening statement 
that I'll make. If other members, especially our Ranking 
Member, Senator Harkin, appears, of course we'll recognize 
those Senators and then proceed with Mr. Viadero and Mr. Billy.
    The Senate Agriculture Committee meets today on oversight 
of the Food Safety Inspection Service [FSIS] of the United 
States Department of Agriculture. For several months, the 
Committee has been receiving and investigating a wide range of 
allegations from present and former USDA employees in the New 
York metropolitan area. These allegations have also been 
forwarded to the Office of the Inspector General of USDA for 
appropriate action.
    Among other matters, the Committee is concerned by reports 
of retaliation against Federal employees who reported or 
pursued allegations of mismanagement or corruption that may 
have led to widespread abuse of the meat inspection system. We 
will hear from Mr. Roger Viadero, Inspector General of USDA, 
and Mr. Thomas Billy, the FSIS Administrator. Mr. Viadero will 
comment on the status of the review by his office, and Mr. 
Billy will then have an opportunity to respond.
    It's important to note that some of the matters at hand are 
the subject of an ongoing legal investigation. If either 
witness believes his testimony or response to a question from 
any Senator might enter into an area of sensitivity that 
precludes the ability of the witness to respond, please advise 
the Chair.
    USDA officials have repeatedly testified to this Committee 
that the United States has the safest food supply in the world, 
and I do not doubt that. But I am deeply troubled by these 
reports from New York.
    If charges are accurate, mismanagement and alleged illegal 
activity may have increased food poisoning risks. The USDA must 
fix these problems before food safety confidence is lost.
    Today's hearing is not a conclusion on the part of the 
Senate Agriculture, Nutrition and Forestry Committee, but 
rather an important component of a continuing, vigorous, 
ongoing oversight on behalf of consumers. We want answers 
quickly. We will be anticipating to your testimony today. We 
will anticipate awaiting your progress reports.
    [The prepared statement of Chairman Lugar can be found in 
the appendix on page 24.]
    Senator Lugar. I'd like to call now upon Mr. Roger Viadero 
for his testimony.

    STATEMENT OF ROGER C. VIADERO, INSPECTOR GENERAL, U. S. 
  DEPARTMENT OF AGRICULTURE, ACCOMPANIED BY: GREGORY SEYBOLD, 
 ASSISTANT INSPECTOR GENERAL FOR INVESTIGATIONS, JAMES EBBIT, 
             ASSISTANT INSPECTOR GENERAL FOR AUDIT

    Mr. Viadero. Thank you, Mr. Chairman. And good morning to 
you and members of the Committee.
    As requested, I am here today to update you on the 
activities of the Office of Inspector General regarding 
allegations of widespread corruption in the meat inspection 
program in the New York City metropolitan area. Before I begin 
though, I'd like to introduce the members of my staff who are 
with me today. Mr. Gregory Seybold, Assistant Inspector General 
for Investigations, and Mr. James Ebbit, Assistant Inspector 
General for audit.
    As you are well aware, on August 22, 2000, you requested 
that our office conduct an investigation of possible widespread 
corruption in the meat inspection program in the New York City 
area, based on broad allegations raised by several sources to 
the Committee. We added those allegations to one of our many 
ongoing investigations into alleged criminal activity in the 
meat inspection program in the New York City area.
    Also about that time, our office received other similar 
allegations of inadequacies in the Food Safety Inspection 
Service Federal meat inspection program in New York City and 
New Jersey. Members of my staff or I personally met with each 
of the complainants who were willing to talk with us in order 
to obtain more specific information regarding the allegations 
they were raising.
    After careful analysis of their statements to us, we added 
those allegations of criminality to our ongoing investigative 
inquiry into the meat inspection program. Since receipt of the 
initial allegations, we have completed numerous interviews, 
record reviews and physical surveillances of FSIS inspectors. 
Our investigation of the criminal aspects is continuing and 
ongoing, and therefore, I cannot provide details to the 
Committee without jeopardizing our efforts to date. As soon as 
our inquiry is complete, though, we can provide the Committee 
with a report of our investigative activities.
    As the law enforcement arm for the U.S. Department of 
Agriculture, our principal focus as always is on those 
allegations that are criminal in nature. However, as the second 
set of eyes and ears for the Department and the Congress, we 
did not disregard those allegations brought to us which were of 
a non-criminal nature and required a vigorous regulatory 
program response by the Food Safety and Inspection Service of 
USDA.
    Therefore, we coordinated with senior FSIS management 
officials to ensure that a thorough and independent intensive 
administrative review of the inspection program in the New York 
City metropolitan area is conducted promptly. In fact, Sir, 
intensive review began on Tuesday, March 20, 2001, and is 
ongoing as I am testifying before you today.
    This review is being conducted by the FSIS Technical 
Services Review Staff from Omaha, Nebraska. The review includes 
physical visits to meat plants, record reviews and interviews 
with meat plant personnel. Our office has numerous special 
agents from New York and from other parts of the country in 
place assisting the FSIS review teams. My agents are prepared 
to respond immediately to any criminal activity uncovered 
during the review process and to insure the FSIS review teams 
can complete their mission safely. Any details regarding this 
regulatory review can best be addressed by FSIS.
    In addition to our investigation of the issues brought to 
the attention of this Committee, we currently have many other 
investigations regarding the meat inspection program ongoing in 
the New York metropolitan area. These cases encompass FSIS 
employee misconduct, assaults against FSIS inspection staff, 
and criminal allegations against meat processors. We received 
the allegations for these cases from FSIS, our own hotline as 
well as other sources.
    In June 2000, OIG completed a series of audits to determine 
if FSIS had successfully implemented the science-based Hazard 
Analysis and Critical Control Point, or HACCP system, for 
inspection of meat and poultry. This series of audits included 
the implementation of HACCP, laboratory analyses, foreign 
imports and FSIS' compliance program that carried over from the 
previous inspection system. We made a series of recommendations 
to FSIS in each of these areas to strengthen FSIS' oversight of 
the meat supply.
    To meet its responsibility of ensuring that meat and 
poultry entering consumer channels is wholesome, FSIS performs 
compliance reviews of non-Federally inspected firms, such as 
warehouses, processors, distributors, transporters and 
retailers. FSIS may initiate a compliance review to respond to 
a consumer complaint, to carry out its random reviews of forms, 
or to follow up its review of previous violators. Our review 
looked at 5 of 17 FSIS districts then in operation. Generally 
we found compliance needs to: assure that all firms subject to 
compliance reviews are identified; target its resources to 
metropolitan and geographic areas or at firms regarded as high 
risk; and act more aggressively against repeat violators, 
including obtaining authority to impose civil penalties where 
violations do not warrant criminal prosecution.
    The FSIS Albany, New York district was one of five 
districts included in my office's review of FSIS' compliance 
program. The results of the Office of Inspector General's work 
in the Albany district was considered in formulating 
conclusions about FSIS' compliance operations and whether 
weaknesses and problems existed that FSIS needed to address 
across the board.
    FSIS had not implemented operating instructions to 
establish documentation requirements for compliance random 
reviews. For example, at the Albany district we reviewed 1,022 
random reviews conducted by two compliance officers during the 
6 month period September 1998 through February 1999. We were 
unable to identify the review steps performed by the two 
compliance officers, including meat and/or poultry inventory 
observations and record reviews. The compliance officers did 
not document whether assessments were made of controls on 
product storage and handling, pest management or housekeeping. 
Without such documentation, there was no record that key 
components of the review were indeed performed.
    We also noted inconsistencies in how reviews were conducted 
among the districts visited and what were reported as random 
reviews. For example, a random review in the Albany district at 
a sandwich retail shop was counted as a review even though the 
owner did not allow the officer to perform the review. Until we 
brought it to the district's attention, one compliance officer 
had counted visits to a police station as a random review. In 
this case, the compliance officer was following up on a call 
that the police department was looking for someone with a badge 
who was going into restaurants.
    OIG found that FSIS should target its resources to major 
metropolitan areas and to those firms judged to be at high 
risk. For example, 2 of 5 compliance officers located in Albany 
made 1,167 random reviews during that same 6 month period and 
found 20 firms with violations, or about 2 percent. In 
contrast, 2 of 6 compliance officers in the Jamaica, New York 
FSIS office which has the responsibility for the New York City 
metropolitan area, performed 89 random reviews during the same 
period and found violations at 22 firms, or 25 percent.
    New York City has a high concentration of custom exempt 
slaughter facilities, and the evidence suggests that resources 
need to be shifted to the New York City metropolitan area where 
more problems are being identified.
    FSIS did not have an effective system to monitor consumer 
complaints so that the number, status and disposition could be 
tracked. This was also the case in the Albany district. FSIS' 
Office of Public Health and Science referred 11 complaints to 
the Albany district, but the office had a record of 2. Albany 
had recorded 143 consumer complaints, but the documentation 
indicated these were only the number where actual followup was 
performed. My office could not determine how many initial 
complaints were made, or how many where no followup was 
undertaken at all.
    We reported that FSIS' enforcement actions were not 
sufficient to deter repeat violators where the violations did 
not lend themselves to criminal prosecution. For example, a 
firm in Atlantic City, part of the Albany district, was cited 
by FSIS for five separate violations between October, 1997 and 
September 1999, but FSIS could only issue letters of warning to 
the company. Another firm had 5 violations, and 6 other firms 
had 5 violations, each within a 24 month period. But again, 
letters of warning were the only option, since criminal 
prosecution did not appear warranted.
    We believe these examples support the Department's effort 
to seek legislative authority to assess civil monetary 
penalties against firms that commit repeated violations.
    I would point out that what we found and observed at the 
Albany district was not the only support for our conclusions 
and recommendations. Similar conditions were found at the other 
four districts we visited.
    In conclusion, I will continue to endeavor to respond as my 
office's first priority to insure the health and safety of the 
citizens of this great country against unscrupulous criminal 
meat processing businesses and malfeasant employees.
    This concludes my statement, Mr. Chairman. I do appreciate 
the opportunity to appear before you today and would be pleased 
to respond to any questions you or the Committee may have.
    [The prepared statement of Mr. Viadero can be found in the 
appendix on page 26.]
    The Chairman. Thank you very much, Mr. Viadero.
    As I mentioned at the beginning of the hearing, I want to 
recognize the distinguished Ranking Member for his opening 
comment, and I do so at this time.
    Senator Harkin. Thank you, Mr. Chairman.

STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA, RANKING 
   MEMBER, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

    I would just ask that my comment be put in the record. I 
thank you for holding this hearing. As Mr. Viadero just said, I 
caught most of his statement when I came in, we just can't 
afford to lose the confidence in this system. Once lost, it's 
hard to get back. So if things are happening out there that are 
starting to nibble away at that confidence, it's better we get 
at it right now than to wait until it really gets terrible.
    So I congratulate you on your investigation. I have some 
questions I'd like to ask a little bit later, Mr. Chairman.
    [The prepared statement of Senator Harkin can be found in 
the appendix on page 25.]
    The Chairman. Very good. We'll have in just a moment Mr. 
Billy's response. We have a vote at 9:30, and my intent would 
be to recess the Committee at that point, so we could all be 
here for the questions and to hear both of these gentlemen.
    Senator Allard, do you have any opening comment or 
statement?

  STATEMENT OF HON. WAYNE ALLARD, A U.S. SENATOR FROM COLORADO

    Senator Allard. Mr. Chairman, no, I'm new to the Committee 
and new to this issue. I understand the Committee's been 
following it since August. So I'm interested in hearing what 
the testimony is.
    I can't say how important it is to make sure that we 
maintain integrity in the Food Service Inspection Service. As a 
veterinarian, I appreciate the value of a healthy food supply.
    The Chairman. Thank you very much, Senator.
    Now we will hear from Mr. Thomas Billy, Administrator of 
the Food Safety and Inspection Service, U. S. Department of 
Agriculture.
    Mr. Billy.

 STATEMENT OF THOMAS J. BILLY, ADMINISTRATOR, FOOD SAFETY AND 
INSPECTION SERVICE, U.S. DEPARTMENT OF AGRICULTURE, ACCOMPANIED 
BY: MARGARET GLAVIN, ASSOCIATE ADMINISTRATOR, DONALD MUSACCHIO, 
         ASSISTANT DEPUTY ADMINISTRATOR FOR MANAGEMENT

    Mr. Billy. Thank you, Mr. Chairman, and members of the 
Committee. I thank you for the invitation to appear before you 
to discuss information from the Office of the Inspector General 
regarding the Food Safety and Inspection Service, and in 
particular our operations in the Albany district, New York City 
metropolitan area.
    I have not been informed of the specific allegations made 
by the OIG in this area, so I'm going to address this matter in 
a general way. But obviously, I'm prepared to answer your 
questions.
    With me today is FSIS Associate Administrator Margaret 
Glavin and FSIS Assistant Deputy Administrator for Management, 
Don Musacchio.
    FSIS is a public health regulatory agency. And as the 
Administrator, I am proud to say that over the past 7 years, 
FSIS has taken bold and dramatic steps to modernize its food 
safety programs. And it's done so with great success. The 
prevalence of salmonella has declined for all categories of 
meat and poultry products. Even more significant, the incidence 
of food-borne illness has declined each year since 1996. The 
Centers for Disease Control and Prevention have attributed a 
portion of this decline to improvements made by FSIS. The 
latest data for 2000 are expected to be released soon.
    This success has occurred despite numerous challenges 
facing us, including emerging pathogens, new products in the 
marketplace that pose unique food safety concerns, and a 
growing segment of the population that is particularly 
susceptible to food-borne illness. There is still room for 
improvement, and I am optimistic that FSIS is well positioned 
to meet these challenges as well.
    I believe this is the case because the changes we have made 
are not superficial, but deeply rooted. For example, all 
Federal and State inspected meat and poultry plants are now 
operating under both sanitation standard operating procedures 
and hazard analysis and critical control point (HACCP) systems, 
a massive task indeed, but one well worth the effort. The 
pathogen reduction and HACCP rule is not simply a new 
regulation, but a new way of doing business that enables FSIS 
to focus its attention on the most significant food safety 
hazards.
    It serves to prevent food safety hazards, rather than 
catching them after the fact. And HACCP never goes out of date, 
because it can be adapted as new scientific information comes 
along.
    Thus HACCP serves as the foundation for continual 
improvement. Despite concerns that it might jeopardize some 
small businesses, new data are emerging showing that businesses 
of all sizes are benefiting financially from HACCP.
    These changes and many others have been carried out in a 
transparent manner with numerous opportunities for public 
input. FSIS has held countless public meetings to receive input 
from the public on its planned and ongoing food safety 
improvements. We have provided more information to the public 
on problems we have encountered during day to day activities as 
well. This openness has been extremely important to the success 
of our food safety initiatives.
    Now that initial HACCP implementation is complete, it is 
time to take the next steps to improve its effectiveness. To 
prepare for these next steps, our agency is reviewing 
information from a variety of sources, including reports from 
GAO, from the Office of the Inspector General, and input from 
internal working groups and our two advisory committees. One 
major area for improvement is to strengthen the FSIS 
infrastructure and resources to better support HACCP.
    As you know, FSIS is a large agency with approximately 
10,000 employees. This includes more than 7,600 inspection 
personnel stationed in meat and poultry plants nationwide who 
inspect more than 8.5 billion birds and 133 million head of 
livestock annually. It includes a staff of 167 compliance 
officers who address situations where unsafe, unwholesome or 
inaccurately labeled products have been produced and marketed.
    Last year, these compliance officers conducted nearly 
50,000 compliance reviews nationwide, an 11 percent increase 
over fiscal 1999. And FSIS includes a host of veterinarians, 
microbiologists, chemists, physicians and others who provide 
valuable scientific and technical expertise and support.
    Many changes are underway. For example, FSIS is redesigning 
the system it uses to assign field personnel to make these 
field personnel assignments more risk based, as recommended by 
the Office of the Inspector General. We have implemented 
revised job descriptions and performance standards to make 
field supervisors and managers more accountable for oversight 
of FSIS regulatory activities within their jurisdiction.
    FSIS also has underway its work force of the future 
initiative, which involves upgrading the education, expertise 
and skills of our employees. This is necessary to ensure that 
the Agency's work force can support an increasingly complex 
food safety system. And we're committed to improving the work 
place environment for our employees as well.
    Having said that, we also recognize that there's room for 
improvement. For example, as mentioned by Mr. Viadero in his 
testimony, in June 2000, they released a series of audit 
reports on FSIS activities.
    One of these reports focused on District Enforcement 
Operations and that office's compliance activities in non-
Federally inspected establishments. In the report, the OIG 
cited deficiencies in FSIS' ability to meet its compliance 
obligations in over 1 million establishments in this category. 
The release of that report coincided with our plans to consider 
the next steps under the HACCP framework. We are looking at 
ways to strengthen our coverage of distribution channels and to 
assure timely and appropriate action in response to violations. 
The OIG report offered useful advice for meeting our goals and 
objectives. We agreed with every one of the key recommendations 
and the eight specific recommendations the OIG presented in 
this report, and we have made good progress in addressing them.
    In addition, in cooperation with the OIG, FSIS has begun 
reviews of several Federally inspected establishments in the 
New York-New Jersey area to support an ongoing investigation by 
the Office of the Inspector General. The reviews will involve 
an examination of HACCP systems for safety and SSOPs for 
sanitation, to determine that each facility has an effective 
system in place to ensure the production of safe, wholesome 
food for consumers.
    Modernizing an inspection program that is almost 100 years 
old is a challenge. Because of the importance of protecting the 
public's health, we have worked hard to accomplish quite a bit 
in recent years. But it remains a work in progress. We are 
committed to working with Congress, with industry and the 
public to make further progress in the next several years.
    Mr. Chairman, this concludes my prepared statement. Thank 
you again for the Committee's continued support in helping FSIS 
meet its responsibilities to improve the safety of meat and 
poultry and egg products. Thank you.
    [The prepared statement of Mr. Billy can be found in the 
appendix on page 33.]
    The Chairman. Thank you very much, Mr. Billy.
    Let me commence the questions by asking you, Mr. Viadero, 
in the testimony that Mr. Billy just gave, he states he has not 
been informed of specific allegations made by OIG related to 
FSIS operations in the Albany district. Did you not meet with 
Mr. Billy on or about March 7 and provide some specifics, 
including reference to the 14th Street Market situation? Please 
elaborate on that if you will.
    Mr. Viadero. In answer to your immediate question, Senator, 
yes, we met with Mr. Billy in my office on the 7th of this 
month and informed him of the violations and the nature of the 
violations that we had. So far as specifics go, we mentioned no 
names of the inspectors that we had the surveillances on, other 
than to give him the broad details of what we found. The 
purpose of that is, again, we have two issues here. Number one, 
the ongoing criminal investigation and the second part, and 
this does not apply to Ms. Glavin or Mr. Billy, their 
trustworthiness or their credulity in this matter, but of other 
ranking management people within FSIS as to how much we could 
trust them. We didn't know how far up the ladder this was going 
to go.
    But we were most concerned, the special agent in charge of 
the North Atlantic Region, the New York area, she requested 
that the refrigeration units which apparently went out on or 
about the 7th of July, servicing some 39 plants, we requested a 
report from the area supervisor. We didn't receive a copy of 
the report, she had called several times asking him where the 
report was.
    That sort of lent itself to us somewhat scratching our 
heads and saying, this is just a report on 39 plants, where is 
it. Then we find out that other organizations, as well as OIG, 
requested a report. We didn't get a copy of a report until Mr. 
Billy provided it, I believe it was dated March 14th. So we 
have about a 9 month break from when the refrigeration units 
went down.
    We'd be happy at another time to go over the time line with 
you, if you wish.
    The Chairman. Mr. Billy, you provided a written response to 
a Committee inquiry on the 14th Street Market situation last 
July. Please provide the Committee now with a summary of this 
matter. It would be helpful if you could clarify this timing 
issue.
    I would just say for reference in your report you stated 
that nine Federally inspected facilities were affected by the 
refrigeration outages at the start of their business operations 
on Monday, July 10. Did the outages not occur earlier, for 
instance, on July 6th or 7th?
    Mr. Billy. Mr. Chairman, once it was brought to my 
attention by Mr. Viadero that they wanted a report on this 
incident that occurred last July, we proceeded to have a review 
done of all of our records and information related to this 
incident and to provide that report.
    What it indicated was that one of three refrigeration 
companies that supply refrigeration to a series of markets in 
the 14th Street area decided to shut down its refrigeration 
system on or about the 7th of July, and that was a Friday. We 
were not informed of their decision. The plants where we 
provide inspection don't operate over the weekend.
    On Monday morning when our inspectors arrived, a couple of 
them immediately noticed that there were problems with 
refrigeration. They notified their Circuit Supervisor. He 
organized a meeting of all the inspectors. They first 
determined that, as you indicated, nine plants were affected by 
this. The supervisor then established a procedure for closely 
monitoring each of these nine plants to make sure that no 
adulterated product was shipped from the plants.
    As a result of that effort, we issued 6 Non-compliance 
Reports [NRs] related to the refrigeration problem or product 
that we found that should not go out to consumers. Most of the 
plants either shut down temporarily until they could identify a 
source for alternative refrigeration or, in a couple of cases, 
shut down permanently and relocated. We were able to conclude 
from our records that no adulterated product had been shipped 
from those 9 plants.
    On the 12th of July, which was the date we were contacted 
by the Office of the Inspector General in New York, our 
Compliance Officer proceeded to carry out reviews of 10 non-
Federally inspected plants in the area. Our compliance officer 
also notified the State Department of Agriculture and 
Marketing, because they also have jurisdiction over non-
Federally inspected plants. They were actively involved as 
well, during the refrigeration problems.
    So our bottom line is that our inspectors detected the 
refrigeration problem, they took appropriate action and they 
documented deficiencies. The plants responded appropriately and 
no adulterated product, based on our record review, was shipped 
into commerce.
    The Chairman. Mr. Viadero, you received a copy of the FSIS 
response to the 14th Street Market situation we've just been 
discussing. What is your perspective on this matter, related to 
timing and FSIS followup action?
    Mr. Viadero. We have a different time lines that we have 
documented on our side. Let me start by saying that we think 
there was no notification of management here. None. I mean, if 
we're talking 39 plants that were without refrigeration, 9 
Federally inspected plants, and we have inspectors in this 
market, it's a very small area, Mr. Chairman, it's about 3 
square blocks we're talking about. And we have a good number of 
inspectors there.
    Why nobody knew about this, we have received documentation 
both independently as well as supplied by Mr. Billy that the 
Gainesvoort Market Refrigeration Company gave notice on June 
26th last year that they had problems in paying the bills and 
repairing the system. They wanted the equivalent of 4-months 
rent from each user in order to maintain the system. It's a 
very old system. And if they were not going to be given that, 
they were going to terminate the refrigeration to these plants 
on July 6th. July 6th was a Thursday.
    On July 7th, FSIS, as of the date right now, we can't 
determine a status of plant operations on July 7th. We see 
nothing in there for the 7th of July, and again, it's rather 
critical, because we're thinking of July, it's a hot time in 
New York City. It's always a hot time, but temperature wise, it 
seems to be warm, it's seasonal.
    On July 8th and July 9th, the best we can determine is that 
the plants were not in operation. That was a Saturday and 
Sunday. On the 10th, we have information provided by FSIS that 
indicates a USDA inspector, compliance officer, assigned to an 
affected plant, was shown a copy of the Gainesvoort notice from 
the refrigeration company that the refrigeration was terminated 
at close of business July 6th, the prior Thursday.
    So right now, we have a 4 day lapse here, actually a 5 day 
lapse from the beginning of the 6th, or from the end of the 6th 
when the service was terminated, to now the 10th. Then all was 
listed, a non-compliance report was issued to one company, in 
fact, that company was issued three non-compliance reports for 
refrigeration issues.
    Now, here's the key. July 12th, which is a Tuesday, my 
office received a call from a source that called one of my 
agents and said, ``There's no refrigeration down here. You guys 
got to get down here and find out what happened.''
    We responded. We had to call some time after noon. We 
responded there between about 2:30 and 3:00. We found no 
inspectors, other than one apparently drunk inspector. And by 
then, my special agent in charge reported that to the area 
supervisor, the district supervisor, who was in the State of 
Maine at that time on business. She requested that he respond. 
He drove all night back to New York City to meet with OIG. 
That's now the 13th. And that's the first he's hearing about 
it, is the afternoon of the 12th.
    That's just--see, and I know everybody's going to say, 
well, if the temperatures are right, why notify anybody? This 
is a major metropolitan area without proper refrigeration at a 
very crucial time of the year. Perhaps if it had been last week 
with the ice storm, it may not have been noticed.
    But we have evidence from the logs that Mr. Billy provided 
that product on certain dates was brought into the plant, when 
the product was received, it was received at 41 degrees, some 
product at 42 degrees, yet the cooling room was at 61 degrees. 
And there was evidence of condensation. As we learned from our 
Sara Lee investigation, the condensation was the carrier of the 
listeria monocytogenes.
    So we're finding it a bit incredible and a little hard to 
believe that FSIS management did not know about this at the 
district level until we told them. We have no evidence to the 
contrary, based upon our system of records at this time.
    The Chairman. Mr. Billy, do you have a response to that?
    Mr. Billy. Perhaps I could add a little bit in terms of the 
nature of this refrigeration that would help. It is a very old 
refrigeration system, it's brine based. There are long coils in 
these refrigeration units and there's ice buildup on them. So 
even if the refrigeration was shut off on the 6th, the evening 
of the 6th or the 7th, whenever that occurred, you would 
maintain temperature for some time. In fact, what we found when 
our inspectors discovered the situation Monday, was that a 
number of the plants in fact had maintained proper temperatures 
up to that time.
    But we closely monitored it, and our local inspection 
personnel continued to deal with the situation as I described 
earlier.
    The Chairman. What about the 61 degrees?
    Mr. Billy. When that occurred, that kind of situation, 
that's when we would issue an NR documenting it. Most of the 
plants stopped processing or shifted their processing to 
another facility when those kinds of situations occurred. So we 
stayed on top of it, we monitored both the temperature in the 
processing area and the temperature of the product. There are 
several instances where we did not allow product to be used 
because of the temperature abuse.
    Our full report is available, and it lays what I have 
described out in a day by day sequence so you can see the 
situation as it unfolded.
    The Chairman. I'll have additional questions, but I would 
like now to call upon Senator Harkin for his questions.
    Senator Harkin. Thank you, Mr. Chairman.
    I think I should probably continue to yield to you, you're 
on a good line of questioning here. The only thing I would say 
is, it seems to me in all my reading of this, that we have in 
the Albany district something going back 20 some years of 
complaints and things happening. What I don't know is, is this 
unusual in the United States? It seems like this is going back 
a long way.
    I don't know how many districts we're talking about.
    Mr. Viadero. Seventeen.
    The Chairman. Well, I've been here 20 some years, and I 
think I've paid fairly decent attention to FSIS and food 
inspection services. I was involved in the development of the 
HACCP program here, in both the House and the Senate. I can't 
remember hearing in any testimony, at least I can't recall, of 
this many complaints coming from a district over that length of 
time.
    So I guess I'm just wondering aloud whether or not FSIS has 
acted even before your time, Mr. Billy, to do something about 
the Albany district. It just seems like there are some real 
problems there that need to be addressed.
    Mr. Billy. This has become an area of concern to us now, 
once we had the meeting with Mr. Viadero. We are cooperating 
with Mr. Viadero in his open investigation. In addition FSIS 
will look at that aspect as well as a number of other aspects 
in terms of the management of that district.
    But one thing I can share with you is I did have folks look 
at these kinds of complaints and see how this district compared 
to others. I can't go back 20 years, but I have data back to 
March 1, 1999. In terms of the Albany district from March 1st 
to the present, nine districts had more inspector complaints, 
seven had fewer. In terms of complaints related to compliance 
officers, 10 districts had more, 6 had fewer.
    My point being that just from looking at the nature of our 
business and the kinds of complaints that come in, measured in 
that way, the Albany district didn't stick out in terms of 
having an unusual number. I will acknowledge that what Mr. 
Viadero has shared generally with us is of great concern. I 
agree with both of your statements earlier that nothing is more 
important than the integrity of our inspection system. We will 
vigorously follow up with Mr. Viadero and take appropriate 
action as warranted.
    Senator Harkin. I'm glad to hear that. Of course, again, 
the number of complaints, I mean, you have to look at what kind 
of complaints, too, and how serious they are. It seems to me 
the ones from Albany are pretty serious. I don't know about the 
other ones, whether they're serious or not.
    Mr. Viadero, I don't know whether you can answer this 
question, but it seems like there's enough allegations of 
criminal activity here. Do you have other Federal law 
enforcement agencies assisting you in this endeavor?
    Mr. Viadero. Yes, Sir, we have one investigation we're 
working jointly with my former employee, the FBI. If we go back 
to your question you just gave Mr. Billy, when we review our 
hotline, and again, people don't call us to tell us what a 
great job is going on out there, by nature of the work, the 
type of complaints we get on the Albany district are about 180 
degrees from the complaints we get from the rest of the 
country.
    I'll give you an example. The vast majority of the country, 
we get complaints on over-zealous inspection. The inspector is 
being too hard, the inspector, he cuts me no slack, and it's a 
terrible thing to be a processor and have these inspectors 
here, and he's working with me, he's giving me an NR on my 
HACCP plan or my SSOP that he finds, and I don't think I 
deserve it.
    As opposed to the New York district, where the vast 
majority of the complaints come in from FSIS employees about 
the management of the district. We don't get that type of 
complaint in other districts. So we don't get the complaints 
from the processors in the Albany district, in fact, we get no 
complaints from the processors in the Albany district about 
over-zealous enforcement, as we do in the rest of the country. 
So there's something missing there, regardless of what the true 
numbers just say on complaints. It's the type complaint we're 
getting.
    Senator Harkin. Very good, Mr. Viadero.
    Thank you very much, Mr. Chairman. I'll leave most of the 
questions up to you.
    The Chairman. Well, I have some more, but we will recess 
now, and Senator Harkin and I will vote. We will be back 
promptly and look forward to continuing our dialogue.
    [Recess.]
    The Committee is called to order again.
    Let me continue exploration, just for a few more moments, 
of the New York and Albany situation. In your testimony, Mr. 
Viadero, you pointed out that three of the five compliance 
officers located in Albany made 1,167 random reviews from 
September 1998 through February 1999, found 20 firms in 
violations, 2-percent, as you pointed out. In contrast, 2 of 6 
compliance officers in Jamaica, New York, FSIS officers that 
have responsibility for the New York City metropolitan area, 
performed only 89 random reviews during the same period, with 
violations at 22 firms.
    On the face of it, this is an extraordinary statistic in 
terms of allocation of resources. Have you inquired, as a part 
of your work, as to why this was so? I'll ask the same question 
of Mr. Billy in a moment, because I'm simply curious as to the 
administration of this office. I'll start with you, because 
you've cited this in your testimony, you've found it 
significant. Have you followed up further, or do you know any 
more than simply the recitation of the figures?
    Mr. Viadero. Mr. Chairman, we recently received a response 
back from FSIS. This goes back to our four part audit that was 
issued in June. Again, if we look at that whole audit, all 474 
pages of it, there's one underlying issue--management. 
Actually, lack of management, particularly at the district 
levels. That's a glaring deficiency, and as I understand, it's 
up to the district manager to move people around or assign 
people.
    I'd also like to add that on certain of those cases, if the 
individuals that were working in Albany, the compliance 
officers that went to the sandwich shop and police station also 
listed a commercial laundry as a compliance visit. People 
scratch their head and say, why a commercial laundry. Well, 
before it was a commercial laundry, it was an establishment 
subject to compliance review. Which leads me to believe, 
they're not even going out and looking at these things. That's 
the issue. Nobody's watching them. It's sort of who watches the 
hens in the henhouse.
    For instance, in Manhattan alone, there are more than 500 
establishments subject to inspection and compliance. You don't 
have that many plants throughout the rest of New York State, so 
why would you just have such a few number of compliance 
officers in a major metropolitan area? That's what we're 
referring to so far as allocation of resources.
    Also, we'd like to stress that for the recidivist violators 
that FSIS work with the Committee and get it legislatively done 
or however we can do this, maybe through regulation, and allow 
them to levy fines, monetary fines where we don't have criminal 
activity, but where we have repeat offenders on significant 
health issues.
    The Chairman. Mr. Billy, how do you explain this situation, 
that is, the extraordinary surveillance of the agents in Albany 
as opposed to New York City? And this occurred over a period of 
time, in your reporting system, granted you would not be 
personally involved with all of these situations, but surely 
somebody reports how many inspections are occurring or some 
abnormality that might have been noticed.
    Do you have a comment about this?
    Mr. Billy. I think that the audit that was done by the 
Inspector General's office did in fact identify some weaknesses 
in terms of how we set priorities for the non-Federal plant 
oversight. We agreed with that audit observation. In response, 
we've designed a new priority setting system that is based on 
risk. And that has been completed and implemented.
    In addition, the OIG recommended and we agreed that we put 
a greater priority to the large metropolitan areas. So that 
factor is built into our policy criteria and our strategy of 
setting priorities. We think these changes we've made will 
solve the problem.
    As I indicated in my testimony, we agree with all eight of 
the OIG recommendations in the District Enforcement Operations 
Report. We are well along implementing changes regarding all 
eight. We'll complete that work this summer. So there's good 
progress there.
    One other thing I'd like to point out is that, these 
establishment reviews that are done by our Compliance Officers 
are driven by consumer complaints and other information that 
comes from a variety of sources. So to some degree, the number 
preformed can be influenced by the type of information coming 
into us. That could well impact those District numbers 
somewhat. However, I agree with you that they seem to be out of 
balance. The changes we made, I believe, will correct that for 
the future across the country.
    The Chairman. So you have two new criteria, metropolitan 
areas, specifically, would receive a great deal more attention. 
And then this risk factor, now, how would the New York City 
situation rank in the risk business, as you look at that 
criteria?
    Mr. Billy. Well, it would result in a much higher ranking 
in terms of targeting our reviews by our compliance officers, 
based on our new system.
    The Chairman. So on both criteria, New York City would 
anticipate, because it's a very large metropolitan area and 
because there is risk evaluation----
    Mr. Billy. That's right.
    The Chairman.--a great deal more attention would be paid, 
you'd have a lot more inspections.
    Mr. Billy. As I indicated in my testimony, when you're 
talking about non-Federal establishments, you're talking about 
well over one million such establishments that are involved in 
the distribution of meat and poultry products. It's not 
possible for 167 compliance officers spread throughout the 
country to significantly impact over one million 
establishments.
    It is incumbent on us to leverage those resources. We have 
initiated several new approaches to do so. We've been working 
with the Food Protection Conference, which is an organization 
of the State officials responsible for the retail area. We are 
now an active participant in that. We've made changes in what's 
called the Model Food Code to improve regulatory requirements 
that the State and local authorities are enforcing. Also, we're 
entering into new types of cooperative agreements with States, 
so that they do a better job in distribution as well.
    I think this approach, plus the changes I indicated 
earlier, based on the recommendations from the OIG, will make a 
big difference as we look to the future.
    The Chairman. Mr. Billy, a New York Times story this 
morning states that Mr. George J. Puchta, the inspection 
services northeast district manager, has been temporarily 
reassigned as the Nebraska group comes out to take a look at 
this situation. The story goes on to indicate that, in his 
managerial role, he may have been responsible for either as 
many inspections or as few as were involved.
    Do you have any comment about that situation?
    [The information referred to can be found in the appendix 
on page 40.]
    Mr. Billy. Given the information that the Office of 
Inspector General was able to share with us, we decided that it 
was in the Agency's best interest to temporarily reassign Mr. 
Puchta from his job as district manager to other duties while 
we continue to work cooperatively with the Office of Inspector 
General, and looking into this matter further. Depending on 
what is found, we will take appropriate action regarding the 
district manager or any other employee that may be found not to 
be carrying out their responsibilities as appropriate.
    The Chairman. Have any other administrative actions been 
taken thus far in addition to this reassignment?
    Mr. Billy. We have moved another District Manager into 
Albany to manage that district while the investigation is 
continuing.
    The Chairman. As a result of the audit, let me just follow 
up, have any facilities been shut down?
    Mr. Billy. We started the reviews this Tuesday. It is my 
understanding that we have withheld the marks of inspection in 
three out of 15 facilities that have been reviewed to date. 
That status could change any time, depending on the completion 
of our work there.
    It's really a little early to say much about the results. 
We've conducting reviews of, a statistically based sample of 
plants. We're focusing on completing that work as quickly as 
possible and sharing the results with Mr. Viadero. We will act 
immediately if we find any kind of a situation that's 
unacceptable.
    The Chairman. You say maybe early, but you have temporarily 
reassigned the chief management officer?
    Mr. Billy. That's correct.
    The Chairman. There's somebody else there?
    Mr. Billy. Yes.
    The Chairman. So in any event, you are in touch with the 
investigation, and it is working.
    Mr. Billy. Yes. Our part of it if moving forward. In other 
words, we're reviewing the targeted plants now. We will make 
sure that the plants are functioning properly, are sanitary, 
and have effective HACCP plans. We're doing that in cooperation 
with the Office of Inspector General, and we're sharing the 
information. And we will take immediate action as necessary if 
we find any unacceptable situation in any of the plants we 
review.
    Depending on the results of the overall review, we'll take 
followup management action. To be perfectly honest, I'm 
outraged that this has even occurred. We will do whatever is 
necessary to correct the situation and ensure that plants in 
this area of New York City are operating appropriately under 
our laws and regulations.
    The Chairman. I appreciate that comment, that you're 
outraged at what has occurred. Because that's the purpose of 
this hearing, it is an oversight responsibility of this 
Committee to make sure that all of us are in touch with 
something that's very serious.
    Let me just ask, because mention has been made by Mr. 
Viadero and by yourself of sources of information that have 
become available. One of the sources are so-called whistle 
blowers. I simply want to know, what are the provisions in FSIS 
for whistle blower protection? Explain the procedure by which 
you deal with these comments and/or comments from consumers who 
are not employees and not whistle blowers.
    Mr. Billy. The starting point for a whistle blower 
complaint is the whistle blower hotline managed by the Office 
of the Inspector General. As they receive those complaints, 
they make a determination whether it involves a matter that 
warrants an investigation on their part or alternatively, it's 
something that ought to be referred to the Agency.
    If it's referred to the Agency, we then have an internal 
review staff in headquarters that manages our process to look 
at these kinds of complaints. Over 90 percent of the complaints 
that come in through the OIG hotline are anonymous complaints. 
Nonetheless, we follow through and investigate those referred 
to us. If it involves personnel matters, our personnel office 
looks into it. If it involves a matter of impropriety regarding 
an inspector or whatever, we'll follow through as appropriate.
    We then collect the information from our follow-up and 
provide a report back to the Office of the Inspector General. 
My view is that not only is the Office of the Inspector General 
important to an agency like ours, but whistle blowers are as 
well. They provide an important check and balance in terms of 
making sure that our inspection system is working the way it 
should.
    Having said that, it is also important for us to ensure 
that our employees are not involved in misconduct. And when 
they are, we take appropriate action. So we are always trying 
to strike an appropriate balance. That's what we try to do. And 
I think we do a pretty good job at that.
    The Chairman. Mr. Viadero, on the same question, how do you 
handle whistleblowers? That is, as these calls come in or 
inquiries Mr. Billy says most are anonymous, some are not. What 
sort of protection is given to these employees who are making 
these reports, or do you have any other general comments about 
this area?
    Mr. Viadero. Yes, Sir. First of all, we comply with every 
respect of the WhistleBlower Protection Act. As you know, at my 
confirmation hearing, you and I went into great detail as to 
how this inspector general would handle whistleblowers. There 
is no mention, there is no divulging of the whistleblower's 
identity outside my office.
    The issue here is on the anonymous ones, and a large 
majority are anonymous. This is one of the incongruities that 
we find, particularly with FSIS as opposed to many of the other 
29 agencies of USDA.
    The Chairman. In other words, you're receiving these calls 
with all of these agencies?
    Mr. Viadero. Yes, Sir.
    The Chairman. And you have a responsibility to listen to 
all 29 or what have you?
    Mr. Viadero. As a general rule, we get them at intake, 
people call in or they write in. The complaint is analyzed to 
see where it belongs, to see if it is basically of substantive 
nature, because some people will call in and complain that 
today is Thursday, for instance. Those are the happy calls, if 
you will.
    But let's say we get a call, and let's say it's on Richard 
Lugar, district manager of the Albany district. We then forward 
the complaint to FSIS. And this is what we find, in order for 
that complaint to be answered, it's not answered by FSIS 
management. Richard Lugar is sent the complaint to answer, and 
Richard Lugar now prepares the response on his complaint.
    That one just blows my mind. So not only does Richard Lugar 
know about the complaint, he knows the substance of the 
complaint and he even gets to couch his response to that 
complaint. That's what we're finding as we went into FSIS.
    Again, these things, we handle several hundred calls a 
month on the hotline, both complaints, questions, answers, 
whatever. So for me to sit here and say I review every single 
one, I don't. But when we take a look at it, once you see a 
pattern arising or once something comes up which causes us to 
go in and do the analysis, that one just rang like a bell.
    The Chairman. How do the other agencies handle this? You 
described how you believe FSIS does this. But how do they 
handle these complaints?
    Mr. Viadero. The other agencies get it, by the way, we 
always put due caution on there, do not divulge the identity 
and the name of the whistleblower, if it is a person. Not 
anonymous. We always redact from the report. So in other words, 
the complaint is rewritten so as to protect the identity of the 
whistleblower or complainant.
    Most of the other agencies have a process in place where 
they receive the complaint, they investigate the complaint 
through their own offices, and they report back to my office 
with the disposition of it. This is the only office that we've 
found so far where the complaint is responded by the person 
who's being complained about.
    The Chairman. Mr. Billy, why have you adopted that 
procedure?
    Mr. Billy. First off, I don't agree with what the Inspector 
General just said. As I said earlier, we have a separate staff 
in Washington that receives all these types of complaints and 
manages the process of reviewing it. The information available 
to me indicates that the type of practice just described does 
not occur.
    Now, can I sit here and say it's never occurred? No. But 
what I'm told is, we do in fact have a procedure where we use 
people appropriate to the situation to review the complaint and 
take action as appropriate, regarding the problem that's been 
identified. So in this instance, I have to disagree with the 
Inspector General. We have a separate office and staff that 
handles these whistleblower complaints. It's managed by that 
office and I will look in to this further to see if there's any 
validity to what the Inspector General just stated.
    The Chairman. That would be well to do.
    Let me just ask about a comment the Inspector General made 
a while back, that was this extraordinary situation in which 
most of the complaints, in at least the Albany, New York 
situation, seemed to be coming from people who felt it was not 
a sufficient inspection, whereas the bulk of complaints 
frequently come, I gather from other areas, that the inspectors 
have been too arduous in their work. Did that pattern ever rise 
to your attention, or is this news that this is the trend of 
this particular situation?
    Mr. Billy. Since we don't see all of the complaints that 
come in through the OIG hotline, I was not aware of this 
pattern until we met with the Inspector General a couple of 
weeks ago. Since I was made aware of it, we're now looking into 
it to see if in fact that's the case and, if it is the case, 
why we weren't picking up on this pattern earlier. We could 
have reacted sooner if it is true.
    We'll take appropriate action depending on what we find.
    The Chairman. Please do that. It seems to me, as an 
organizational principle, that would be important to know. In 
our Senate office, we have no pretense of it, in any more 
sophistication than you would. But we log in every complaint on 
whatever the subject is. I know every day what people are 
interested in and geographically where they are. That's a very 
important part of my business and yours. So this, I think, 
should be a part of your management situation.
    We've been joined by Senator Nelson. I want to recognize 
the Senator for either comments or questions. We appreciate 
your coming to the hearing.

   STATEMENT OF HON. BENJAMIN E. NELSON, A U.S. SENATOR FROM 
                            NEBRASKA

    Senator Nelson. Thank you very much, Mr. Chairman. It's a 
pleasure to be here with you today, and I too have scanned the 
New York Times article. There was one bright note about it, and 
that was that a team of Nebraskans was dispatched to New York 
to assist in this difficult situation.
    Obviously, the meat inspection process in food safety is 
one of the most important elements of our economy and certainly 
in terms of public health. As we think about that, and we see 
that the process may not be functioning as we would prefer in 
every instance, I guess my question of you is, Mr. Billy, do 
you have confidence in the HACCP overall and do you think that 
not only can it work, but do you think will it work when fully 
implemented?
    Mr. Billy. I have total confidence in the HACCP system. I 
think it is the most important change we've made since the 
initiation of inspection back at the turn of the 20th century. 
It not only focuses the industry's and the Agency's attention 
on food safety, but it does so on the basis of science. And 
that change that now is in place in all Federal and State 
plants throughout the country is the single most significant 
positive change we have made for decades.
    Is it working perfectly? No. Is there room for improvement? 
Absolutely. That's why the Agency has identified a strategy 
which we refer to as FSIS, The Next Steps. We have two 
objectives. One is to ensure that the plants have the best 
possible HACCP controls in place, and second, our other 
objective is to ensure that we're doing our job as affectively 
as we can.
    We are going to be making further changes and improvements 
to accomplish both of those objectives. People, our employees 
all over this country, are dedicated to food safety and they do 
a good job. Every day they go to work and they care about what 
they do. So obviously, I'm concerned, in fact, as I said 
earlier, I'm outraged at what appears to be going on in New 
York, and we'll deal with that appropriately.
    But I don't think in any way that should denigrate the hard 
work of dedicated people throughout this country.
    Senator Nelson. Thank you. It is encouraging to see the 
food safety standards moved from something that seems to have 
been more subjective to something that's clearly more 
objective. I commend your Agency for working toward that.
    Mr. Viadero, do you have a similar confidence, as the 
Inspector General, looking at complaints and whistle blowing 
information, that the system can and will work?
    Mr. Viadero. Senator, I'm not a scientist. So I'm not going 
to get into the science of this.
    Senator Nelson. I'm thinking of it mostly in terms of the 
process of the information that will come to you so that you 
can critically evaluate the process, not the science.
    Mr. Viadero. Well, based upon our HACCP review that we did, 
and also reported in that same report last June, we have a high 
degree of confidence in HACCP. Our only issue at this juncture, 
and Mr. Billy mentioned it, that we have inspectors there and 
based upon our response to hotline complaints and all, we have 
no reason to believe that in all other districts that the 
inspectors are not there, that they are there, they are doing 
their job, they are dedicated, loyal civil servants.
    The only problem we have in New York is, we have evidence 
where people don't show up to work at all. Now, what kind of an 
inspection system is that, which is one of the causative 
factors, I would assume, based upon my understanding in this 
morning's briefing I received on why the three plants in New 
York, the mark of inspection was withdrawn. If it was working 
there, they wouldn't be withdrawn.
    That's the problem. It's a personnel problem. It's an FSIS 
personnel problem we're faced with, primarily, in this 
district.
    Senator Nelson. The process will work if the people and 
personnel involved in it follow through with the processes that 
are in place?
    Mr. Viadero. Absolutely. And just as part of our review, 
and in support of the statement that HACCP is working, we 
notice that recalls, for instance, are up about four times what 
they were pre-HACCP. So HACCP is indeed working. And the vast 
majority of the plants, whether it be stable to table, 
slaughter to process or just the local delicatessen, if you 
will, they are taking it seriously and it is working. It is 
working.
    Again, with the number of plants that we have and the 
number of employees, I'd be very grateful if it's just limited 
here.
    Senator Nelson. Thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Nelson.
    Let me just ask, you mentioned inadequacies in the meat 
inspection system in the New York City area, and numerous 
investigations underway by OIG. Have these been consolidated, 
or when you say numerous, are they headed on different tracks, 
or how would you describe the course of the work that you're 
doing there?
    Mr. Viadero. Well, Senator, some are exclusively employees, 
Department employees, some involve alleged corruption between 
employees and plant owners, yet others involve exclusively the 
meat processors or transportation providers for that industry.
    The Chairman. So how many of these might be going on? Do 
you have a figure? Are we talking about less than 10 or a 
couple of dozen or do you have any----
    Mr. Viadero. In the area of 10.
    The Chairman. Separate investigations?
    Mr. Viadero. Yes, Sir. And that's a lot of investigations, 
because I don't have that many agents up there.
    The Chairman. Yes. I was just going to ask about the 
allocation of your own personnel. This is quite a 
concentration.
    Mr. Viadero. And this is quite a week, because we have 
quite a few agents moving sheep today across the country, and 
more agents moving sheep tomorrow again from Vermont, they're 
going out to Ames, as well as this investigation. For instance, 
when we did our surveillances, we had up to 40 agents working 
these surveillances. We had to bring them in from other parts 
of the country, because we had reason to believe, and we were 
told that the FSIS people knew who my agents were in New York. 
They had the tag numbers on their cars, they had their 
photographs. So we had to bring in a whole fresh crew.
    But Senator, in the last 5-years, I've lost approximately 
24-percent of my resources due to reduced budgets. I just can't 
sustain an operation much longer. We do need people. Perhaps 
that's why myself and Mr. Seybold, the Assistant Inspector 
General for Investigations, went out and did these interviews 
ourselves, with some of these whistleblowers and sources of 
information that came in.
    The Chairman. On this particular case?
    Mr. Viadero. On this particular case, yes, Sir.
    The Chairman. You have been involved, and Mr. Seybold?
    Mr. Viadero. Yes, Sir. We went out, Mr. Seybold and I, and 
talked to at least two of these people ourselves. And Mr. 
Seybold went out and conducted interviews on the rest of them.
    The Chairman. Well, it indicates, of course, shortage of 
personnel, but likewise, the priority that you and Mr. Seybold 
place on it.
    Mr. Viadero. Well, this is a health and safety issue. That 
above all else, as you know, the bulk of our work comes to food 
stamps and for instance, crop insurance, things like that. This 
is A number one, health and safety issues for the American 
people. So the sheep are, sheep is or sheep are----
    [Laughter.]
    Mr. Viadero.--a priority issue for us, as is the safety of 
the meat supply.
    The Chairman. What are you doing with regard to the sheep?
    Mr. Viadero. Well, basically we're providing escort for the 
sheep, and again, the safety, the safety of APHIS personnel 
that are there. We don't want anybody--they're sheep. We don't 
want anybody getting hurt over sheep. The individual State 
police have been most cooperative with us. They're providing 
escort to us as well.
    But when we get back to focusing exclusively on New York, 
we're looking at the integrity of the inspection system. And 
again, if we compare, Senator Nelson, if we compare the 
integrity of the system in a New York district to what we might 
find in a district that covers Nebraska, it's the difference 
between night and day.
    The Chairman. Mr. Billy, with the work that you're doing 
cooperatively with these inspectors, essentially is it a fair 
statement that people are showing up for work now? In other 
words, if there is an allegation that people have not been 
showing up, that they are now? There's quite a bit of 
management intensity upon performance of the inspectors. And as 
you say, you've already taken some administrative action, may 
take some more, have taken away the marks from three plants, 
but that may be preliminary also.
    In other words, if you were a New Yorker looking in on 
this, even while the investigation is going on, what 
reassurance could you offer that this is getting up to 
standards, as a matter of fact, receiving the same sort of 
priority attention that Inspector Viadero is going with regard 
to even his personal interviews of the people?
    Mr. Billy. Since the briefing a couple of weeks ago by the 
Inspector General, I have spent most of each day addressing 
this area, and will continue to do so until we have a clear 
picture and we've taken the appropriate actions in terms of any 
misconduct by any of our people. We will continue these plant 
reviews and as we take action, will make sure that if there's 
any question about product, we'll deal with the product 
appropriately, even if it might involve a recall or something 
like that.
    So we're going to make sure that our system is working 
properly.
    I might add that my understanding is to date, as our teams 
have visited the 15 plants I mentioned, in each instance, the 
inspector was there and involved in that process. So I agree 
with you that's a good sign.
    The Chairman. It's reassuring in itself.
    Mr. Billy. Yes.
    The Chairman. Somebody on the job.
    Well, let me just repeat some of my thoughts at the 
beginning, and that is that the Committee is holding the 
hearing because we want answers, as you do, very promptly. This 
is a situation of food safety for the people we're talking 
about now, in this particular case, New York City, but it could 
be anywhere else. The importance of FSIS doing the job in all 
the other areas is evident to all of us.
    I've indicated, we were attentive to your testimony today, 
but we anticipate getting answers on things that you both are 
inquiring about. So we want to continue to be in touch with 
you.
    I hope that as you have material, either of you, that you 
will make our staffs in a bipartisan way appraised of this, and 
then the Committee will determine, at least, whether we will 
have further meetings or whether we can make some kind of 
report that offers proper reassurance that in fact the 
situation has changed.
    Let me just ask, Senator Nelson, do you have any further 
questions or comments?
    Senator Nelson. Other than to say that I appreciate the 
fact that you have moved on this and with disclosure not only 
made us aware but made the consuming public aware of it as 
well, because food safety is a prime consideration for the 
future of agriculture, certainly the food part of agriculture. 
And I commend you for that, and want to support in every way 
possible your efforts to do that.
    I think combined with the fear today of hoof and mouth 
disease and other considerations, the last thing we need to 
have is the food safety part of our process collapse on us. I 
think it's important that we give public confidence to it. I 
appreciate the opportunity to help participate in that as you 
move forward.
    The Chairman. I'll express on behalf of the Committee, 
Senator, our appreciation to Nebraskans for the contribution 
they're making to this particular instance of food safety in 
New York, and perhaps they'll help out elsewhere.
    Senator Nelson. If you'll permit me to say it, we certainly 
have a ``steak'' in it.
    [Laughter.]
    The Chairman. On that note, the hearing is adjourned.
    [Whereupon, at 10:37 p.m., the Committee was adjourned, to 
reconvene at the call of the Chair.]
      
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                            A P P E N D I X

                            March 22, 20001

      
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                   DOCUMENTS SUBMITTED FOR THE RECORD

                             March 22, 2001

      
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