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67–815 2012

THE SALMONELLA OUTBREAK: THE ROLE OF 

INDUSTRY IN PROTECTING THE NATION’S 

FOOD SUPPLY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

MARCH 19, 2009 

Serial No. 111–18 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 


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COMMITTEE ON ENERGY AND COMMERCE 

HENRY A. WAXMAN, California, Chairman 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

CHRISTOPHER MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

BETTY SUTTON, Ohio 

BRUCE BRALEY, Iowa 

PETER WELCH, Vermont 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

PARKER GRIFFITH, Alabama 

ROBERT E. LATTA, Ohio 

(II)


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(III) 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

BART STUPAK, Michigan, Chairman 

BRUCE L. BRALEY, Iowa 

Vice Chairman 

EDWARD J. MARKEY, Massachusetts 

DIANA DEGETTE, Colorado 

MIKE DOYLE, Pennsylvania 

JAN SCHAKOWSKY, Illinois 

MIKE ROSS, Arkansas 

DONNA M. CHRISTENSEN, Virgin Islands 

PETER WELCH, Vermont 

GENE GREEN, Texas 

BETTY SUTTON, Ohio 

JOHN D. DINGELL, Michigan (ex officio) 

GREG WALDEN, Oregon 

Ranking Member 

ED WHITFIELD, Kentucky 

MIKE FERGUSON, New Jersey 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 


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C O N T E N T S 

Page 

Hon. Bart Stupak, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 4 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

opening statement ................................................................................................ 7 

Prepared statement .......................................................................................... 9 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 12 

Prepared statement .......................................................................................... 14 

Hon. Nathan Deal, a Representative in Congress from the State of Georgia, 

opening statement ................................................................................................ 16 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 16 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 18 

Hon. Diana DeGette, a Representative in Congress from the State of Colorado, opening statement ...................................................................................... 19 

Hon. Phil Gingrey, a Representative in Congress from the State of Georgia, 

opening statement ................................................................................................ 20 

Hon. Bruce L. Braley, a Representative in Congress from the State of Iowa, 

opening statement ................................................................................................ 21 

Hon. Betty Sutton, a Representative in Congress from the State of Ohio, 

opening statement ................................................................................................ 22 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 22 

Hon. John Sullivan, a Representative in Congress from the State of Oklahoma, prepared statement ................................................................................... 86 

WITNESSES

Martin Kanan, President and Chief Executive Officer, King Nut Company ...... 25 

Prepared statement .......................................................................................... 27 

David Mackay, Chief Executive Officer, Kellogg Company ................................. 32 

Prepared statement .......................................................................................... 34 

Heather Isely, Co-Owner, Vitamin Cottage Natural Food Markets, Inc. ........... 44 

Prepared statement .......................................................................................... 45 


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(1) 

THE SALMONELLA OUTBREAK: THE ROLE OF 

INDUSTRY IN PROTECTING THE NATION’S 

FOOD SUPPLY 

THURSDAY, MARCH 19, 2009 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:04 a.m., in room 

2123, Rayburn House Office Building, Hon. Bart Stupak (chairman 

of the subcommittee) presiding. 

Present: Representatives Stupak, Braley, DeGette, Schakowsky, 

Christensen, Sutton, Dingell (ex officio), Waxman (ex officio), Walden, Deal, Burgess, and Gingrey. 

Also Present: Representative Schauer. 

OPENING STATEMENT OF HON. BART STUPAK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. STUPAK. This meeting will come to order. Today we have a 

hearing titled ‘‘The Salmonella Outbreak: The Role of Industry in 

Protecting the Nation’s Food Supply.’’ The Chairman, Ranking 

Member and the Chairman Emeritus will be recognized for a 5- 

minute opening statement. Other members of the subcommittee 

will be recognized for 3 minutes. I will begin. 

As reports state, mold was observed growing on the ceiling and 

walls. Rainwater was observed dripping into the plant’s peanut 

butter processing areas; six dead mice. Air filters were littered with 

feathers. A live roach and several dead roaches were observed in 

the firm’s wash room. REPs, rodent extra pellets, were too numerous to count where observed. 

The pictures you are seeing and the quotes I am reading come 

from Federal inspections of the facilities in Georgia and Texas, operated by the Peanut Corporation of America. At the subcommittee’s first hearing on February 11, 2009, we heard testimony about 

filthy conditions and at least a dozen positive salmonella tests that 

PCA received in 2007 and 2008. Today the subcommittee will continue its investigation by hearing from representatives of three 

companies that bought products from these polluted PCA facilities, 

Kellogg Company, the King Nut Company and the Vitamin Cottage 

Natural Food Markets. 

We will ask a series of questions today. First, we will ask why 

their food safety procedures failed to prevent the contamination of 

their products. The written testimony submitted for today’s hearing 


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suggests that some of the companies believe PCA was entirely at 

fault, and that they should not be held responsible for the safety 

of ingredients they bought from a disreputable supplier. PCA certainly deserves its share of the blame, and there are ongoing criminal investigations of its actions, but all three of these companies 

put their own labels on these products. They put their names on 

them. They represented to the public that these products were safe 

to eat, and they sold them to consumers, who became ill and in 

some cases died. Placing all the blame on PCA would mean that 

food processors have no responsibility for ensuring the safety of 

their ingredients, and I simply can’t agree with that. I cannot agree 

with that. 

Second, we will ask whether these companies should have known 

or suspected problems with PCA before the outbreak. In written 

testimony submitted today, Martin Kanan, the president and CEO 

of King Nut, states that PCA’s president Stewart Parnell informed 

King Nut on January 7, 2009, that he had no knowledge of any salmonella issues with his products. The documents tell a different 

story. On the same day, January 7, Mr. Parnell sent an e-mail to 

King Nut’s vice president for finance and administration, Joe 

Valenza. In this e-mail PCA’s president Mr. Parnell forwarded a 

news account of the emerging outbreak to King Nut’s vice president 

and said, Joe, I am sure it is something we did. Eleven minutes 

later, King Nut vice president replied, I am recalling everything. 

Four minutes later Mr. Parnell replied, now my heart is really in 

my throat. I think I am going to church tonight. 

Third, we will ask why none of these companies ever asked PCA 

officials to disclose their positive tests for salmonella. If your supplier tests positive, this is something definitely you should find out, 

and it is certainly something your customers deserve to know. Even 

industry insiders recognize this. 

In an e-mail on February 5, 2009, an official at a private food 

safety auditing firm wrote to a coworker, the biggest problem was 

with the positive micro data that they ignored. This data was not 

initially available for the FDA either. They had to really pry into 

their documentation before uncovering the additional test results. 

Fourth, we will ask why these companies relied on audits by 

AIB, a firm that was selected and paid by PCA. There is an obvious 

and inherent conflict of interest when an auditor works for the 

same supplier it is evaluating. And several documents show evidence of this cozy relationship. On December 22, 2008, PCA’s auditor e-mailed Sammy Lightsey, the manager of PCA’s Georgia plant, 

to give him advanced notice of an upcoming inspection. He stated, 

you lucky guy. I am your AIB auditor, so we need to get your plant 

set for any audit. The result of that audit was a superior rating. 

The conclusions were completely different when the auditors were 

not paid by PCA. 

Today we will release several audits that have yet to be made 

public. They were concluded not by a PCA auditor hired by PCA, 

but by internal auditors working for Nestle USA. In 2002, Nestle 

auditors found that PCA’s Georgia facility had no plan to address 

microbiological hazards like salmonella. Their audit found, quote, 

potential for microbiological cross-contamination, and concluded 

that PCA was not in compliance with housekeeping, sanitation and 


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pest control standards. The audit noted rodent droppings in the 

break room cabinets, live flour beetle in the blancher room, four 

dead beetles found in storage screens in the bleacher room, dead 

insects found on the interior perimeters. The audit warned that it 

is critical that these deficiencies are addressed, but its findings in 

2002 were similar to the Federal investigation several years later. 

Nestle USA also conducted an audit of Nestle’s Texas in 2006 

and came to similar results. As a result, Nestle USA rejected PCA 

as a supplier. We will ask the other companies here today, why did 

they not do the same? If they had, perhaps some of the illnesses 

and deaths would have been avoided. 

In conclusion, I ask unanimous consent that the documents, my 

opening statement and the binder prepared by staff be entered into 

the official record. Without objection, so ordered. 

[The information follows:] 


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Mr. STUPAK. I next turn to my friend and colleague, Mr. Walden 

of Oregon, for an opening statement, please. 

OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON 

Mr. WALDEN. Thank you very much, Chairman Stupak. 

Since our last hearing of February 11, more facts have surfaced, 

and more people have been sickened by salmonella-contaminated 

products from the Peanut Corporation of America, including 13 

cases in my home State of Oregon. The American public and the 

industries remain angry, they remain confused, and they are saddened by the outbreak and subsequent recall. This frustration is 

clearly understandable. 

Now people want to assign blame. I want to go even further. Let 

us assign some blame and address the weak points in our food 

safety regulations that allowed this to happen. Let us make this 

the last time we have to have a hearing to examine what went 

wrong and finally fix the problems at hand. 

The current reactive system of random samples has failed time 

and again, which brings to mind the famous saying by Albert Einstein, the definition of insanity is doing the same thing over and 

over again and expecting different results. We need to shift from 

the current reactive food safety system that depends heavily on 

product testing to a proactive and preventive strategy that relies 

on modern scientific standards and safety controls that detect and 

eliminate food-borne contamination as far up the chain as possible. 

I bring to your attention H.R. 1332, the Safe FEAST Act, a bipartisan bill that has been introduced by our colleagues Congressman 

Jim Costa of California and Adam Putnam of Florida. It does just 

that. It is my understanding that a similar measure will be introduced in the Senate by Durbin and Gregg. 

Our best chance for achieving our goal is for every participant in 

every step of the production, from the farm to the retail store, to 

take a hard look at the way they are doing things now and ask 

themselves, how can I improve? Then we need to hold their feet to 

the fire in implementing those improvements, farmers, retailers, 

the Food and Drug Administration, the State health service, and 

hospitals. The companies before us today who purchased products 

from PCA and private third-party firms who visited PCA and certified them each have a role in improving this process. 

Peanut Corporation of America is an extreme case of bad actors 

who I believe recklessly endangered consumers, and the majority 

of the blame rests on their shoulders. PCA allegedly knowingly released contaminated product to consumers and companies, falsified 

test results and violated countless good manufacturing product 

practices. All of us are disgusted by the continuous horrid actions 

taken by the company. 

Now, the food processors that I have spoken with in Oregon, 

some large, others smaller, have told me they do not produce or sell 

items that they would not feed their own children or their grandchildren. They have extensive vendor certification processes. They 

go through third-party audits, and each of them know it is in their 

company’s best interest and their consumers’, because without that, 


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it is impossible to stay in business. PCA did not operate by these 

standards. 

I want to pull up a couple of pictures as well. On the screen are 

pictures taken of PCA’s plant in Plainview, Texas, where contaminated products were produced and shipped into commerce. This is 

a picture—you really need to understand, this is the intake screen 

over the air that goes in to where the food has already been processed. Now, it is hard to really see clearly what is on this screen, 

but it doesn’t take much imagination to believe there is at least one 

rotting rodent on that screen. These two pictures that follow are 

also of dead rodents. And what is especially disgusting is these are 

rodents that, again, are around the air intake that brought air in, 

in theory pure air, brought it in and put it over the processed product. 

How does this go undetected in initial screenings? How do auditors go in and not spot this in the beginning? How did this company get a clean third-party audit? Something is wrong with the 

system. These are dead rodents and other contaminants that were 

present on and around PCA’s air-handling equipment that, as I 

said, blows fresh air onto clean peanut products. 

Media outlets report that this PCA plant had not been inspected 

by Texas health regulators or the FDA. That is because PCA violated the law by failing to register and apply for a food-manufacturing license from the State, another example of PCA’s abhorrent 

behavior. 

Hopefully the companies here today can help us understand what 

they do to ensure the quality and safety of their products and identify potential places for improvement. What are their supplier 

qualifications, and should more be required? What enhancements 

can be made? These three companies represent a variety of food 

manufacturers, including large establishment companies that have 

been in business for decades to small family-run companies that 

were all negatively impacted by PCA’s recall. 

We need your help in designing a process that works for the safety of food in America. The testimony today may be useful to enhance our legislative efforts, but the subcommittee should keep this 

case study in context because the deaths and illnesses from this 

outbreak were caused by one bad actor who clearly, in my opinion, 

violated the law. So the best way to protect young children, like 3- 

year-old Jake Hurley from my home State of Oregon, is to prevent 

it by stopping the bad apples like PCA, build in food safety measures at firms, and increase the strength of regulatory inspections 

by giving FDA access to all test results, especially those that are 

positive for contaminants during inspections, and expose and deter 

the bad actors. 

Thank you, Mr. Chairman. 

Mr. STUPAK. Thank you, Mr. Walden. 

[The prepared statement of Mr. Walden follows:] 


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Mr. STUPAK. Mr. Waxman for an opening statement, please, sir. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you, Mr. Chairman. I want to commend you 

for the tenacious way that you have held hearings and tried to expose what is going on in the food safety area, especially the glaring 

holes at all levels of our food safety network. 

This is the third hearing our committee has held in the committee of food safety. At our first hearing in February, it was clear 

that Peanut Corporation of America was more interested in its financial well-being than the health and safety of its customers. 

Rather than expressing regrets or sorrow for the illnesses the company caused, we saw internal communications where the company 

was more concerned about the fact they were losing money, more 

concerned about their financial bottom line. 

At that hearing we also heard from the Food and Drug Administration about the authorities it lacks. The FDA doesn’t even have 

the authority to routinely access records documenting the steps 

manufacturers take to assure safety. FDA can’t even order a company to recall dangerous food products. It can only make a request 

and then hope the company complies. 

Well, then in March we held our committee’s second hearing before the Subcommittee on Health where the legislation will be considered. At that hearing witnesses explained that FDA cannot solve 

these critical problems alone. We rely on FDA, but there are over 

300,000 registered food facilities throughout the U.S. and abroad, 

so we can’t expect the FDA to prevent food-borne illnesses through 

inspections or post hoc investigations, so we rely on the companies. 

And today we are going to examine the role of industry in protecting our Nation’s food supply. 

We have got three companies that we are going to hear from 

today. They purchased peanut products from PCA despite the filthy 

conditions at PCA’s plants in Georgia and Texas. These companies 

relied on PCA’s review of the salmonella problem. They included 

them in their—they bought the products from PCA, and then they 

took these purchases and put it under their own label, and then 

they sold it to the public. 

Well, when we heard from Dr. Stephen Sundlof, FDA’s Director 

of Food Safety and Applied Nutrition, he said each company in the 

chain of manufacturing has an obligation to ensure that the ingredients they are using as well as their final products are safe for 

Americans to consume, and I wholeheartedly agree. 

Nestle was going to buy products from PCA, but Nestle sent its 

own auditors out, their own inspectors, and they found that the 

place was filthy, and they realized that it was going to be a danger 

to their customers, so they didn’t buy the products. 

Kellogg realized that there may be a problem, but they insisted 

that PCA get its own inspection done, which PCA did by hiring a 

third-party auditor to inspect the facilities, and what they found 

was that under this third-party system, there was a for-profit auditing firm called AIB, and they gave PCA glowing reviews. This 

company was selected by PCA, it was paid by PCA, it reported to 


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PCA, and it realized that if they didn’t give a good review, they 

weren’t going to be hired again. So they did an audit, and then 

they gave PCA a certificate of achievement. Peanut Corporation of 

America was considered superior. That is what the auditors said 

about the Peanut Corporation of America. At the same time we 

have these horrible pictures of what was going on with rats and infestations in these plants. 

Now, the question I think we want to know is how is it possible 

for a company that looks like this, with pictures of rodents, to receive an award like this where they are called superior? I think it 

raises a serious question of the flaw of these third-party inspections 

where there is a clear conflict of interest by the third-party inspector. And when you add to that what might be happening internationally, where foreign third parties are inspecting foods that we 

import into this country, it really has to make you think that there 

is something wrong, and we have got to clarify the situation. We 

have got to correct it. 

Our goal now is to develop commonsense legislation to improve 

preventive services at the front end of this process before one more 

person dies from tainted food. 

Thank you, Mr. Chairman. 

Mr. STUPAK. Thank you, Mr. Chairman. 

[The prepared statement of Mr. Waxman follows:] 


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Mr. STUPAK. Mr. Deal from Georgia, opening statement, 3 minutes, please. 

OPENING STATEMENT OF HON. NATHAN DEAL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA 

Mr. DEAL. Thank you, Mr. Chairman. Thank you for holding the 

hearing. Thanks to our witnesses for being here. 

Obviously all of us, regardless of which side of the aisle we sit 

on, are very concerned about keeping the food supply of this country safe. That is a function that I see has already been stated is 

a dual function. First of all, it is primarily preventive in nature. 

We must try to make sure that nothing contaminates that food 

supply and, if at all possible, to prevent it. And that, too, is a bifurcated function. It is the function of private industry, those who 

produce, those who process and those who distribute; and then 

there is a function of the Federal Government, and that is, more 

or less, oversight of all of those functions. 

The panel’s makeup today obviously will focus on the industry 

side of the agenda, and there is some important questions I think 

we all need to ask, and that is, what should we legislatively require 

in terms of prevention that we are not doing currently? For example, should there be certification of independent third-party auditors? Should there be certification of independent labs? Should 

there be mandatory testing of product; and if so, how often and at 

what stage of the processes? Should those reports from those tests 

be made available to inspectors, both FDA, USDA and third-party 

inspectors, when they come to look at the facilities that are involved? 

These are all questions that are legitimate, but I think we all understand that a lot can be done on the private side of the ledger, 

and perhaps more should be done on the government side. I hope 

today’s testimony will allow us to make some interaction between 

those two separate private and governmental functions so we know 

and have direction as to how we should approach this issue. 

Thank you, Mr. Chairman. 

Mr. STUPAK. Thank you, Mr. Deal. 

Mr. Dingell for an opening statement, please. 

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. DINGELL. Thank you, Mr. Chairman. I commend you for 

holding this hearing, and for your long-standing effort to fix Food 

and Drug so that they can do their job the way it should be done. 

We have been working on this in this committee for several 

years. As you will recall, last Congress you, Mr. Chairman, and I 

spent considerable time trying to get—the story of Food and Drug’s 

incompetence, inability to carry out its responsibility, lack of resources, and general overall indifference to its responsibility at the 

leadership levels was a source of considerable interest by this subcommittee. 

I would note that we are now talking about dreadful lapses in 

accountability by State and Federal authorities as well as members 

of the industry in ensuring the safety of the Nation’s food supply. 


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This is not a new thing. We had the grapes. We had the jalapeno 

peppers and tomatoes. We had a severe problem with imported 

Chinese seafood and shellfish. We have had terrific problems with 

imported heparin, and now we have got the peanuts. And you, Mr. 

Chairman, and I have found reason to be highly critical of Food 

and Drug for lack of resources and for the basic statute which has 

not really been changed since 1962. 

As I made clear then in the subcommittee’s previous hearings, 

this is not a new problem. Nine hearings were held by this subcommittee in the prior Congress, and we questioned the system designed to protect Americans from dangerous foods and drugs, and 

how it was not working, and how Food and Drug did not have the 

resources, at a cost of 1,600 or 1,700 people, killing 9, costing our 

State of Michigan nearly $1 million to combat, depriving businesses 

of revenues due to recalls. And I note that other businesses have 

been hurt by this as well as American consumers, who unfortunately have been killed and sickened. 

And I would note that the most recent outbreak of salmonella is 

clearly a result of deplorably unsanitary conditions at the Peanut 

Corporation of America’s Georgia and Texas plants, and it clearly 

illustrates that the need for overhaul of our system for protecting 

the Nation’s food and drug supply is long overdue. 

And I would note that when Georgia—well, first of all, Food and 

Drug never got in to look at the place, but finally Georgia went in 

after 8 years of inaction by FDA under delegated authority from 

FDA, and they couldn’t find a thing. Apparently nobody in that 

business of inspection can find anything, including the seat of their 

pants with two hands. 

In any event, last month’s hearing dealt with federal and State 

regulatory faults that contributed to the peanut butter-related salmonella outbreak. What concerns us today is the role of industry 

in protecting the health and safety of consumers. Nestle, for example, refused to contract PCA as a supplier due to the fact that in 

its own due diligence it found unsanitary conditions at PCA’s processing facilities. Georgia Food and Drug couldn’t and didn’t. 

All the same, I understand that diligence is not uniform across 

the industry. I intend to ask our witnesses frank questions about 

their operational protocols ensuring safety of the products supplied 

to them for the final process. It might be noted that they are showing an extraordinary level of trust in a system and an agency that 

do not work. I wish to learn what best practices they have in place 

for protecting consumer health and safety, as well as if they monitor the sanitary conditions at their suppliers’ processing facilities. 

Finally, I would like to ask the witnesses assembled here today if 

they support increased and strengthened authorities for Food and 

Drug, and adequate resources and funding, and whether they are 

willing to pay a registration charge to see to it that Food and Drug 

has the funds and the resources which this skinflint Congress has 

never given them. 

Mr. Chairman, you, Chairman Pallone and I have introduced 

H.R. 759, the Food and Drug Administration Globalization Act of 

2009, which will guarantee a reliable stream of sources through 

registration fees on food manufacturers to support increased inspection of foreign and domestic processing plants by FDA. This 


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bill is predicated on the notion that FDA must be strengthened not 

by replacing it with some new questionable food safety agency, 

bringing new layers of bureaucracy into the system, and whether 

that will come at too great a cost for the taxpayers. 

It is my hope that the witnesses today will recognize the urgency 

of enacting H.R. 759 and offer their support. It is a sensible bill. 

It will protect American consumers from farm to fork. 

Thank you, Mr. Chairman. I yield back the balance of my time. 

Mr. STUPAK. Thank you, Mr. Dingell. 

Mr. Burgess for an opening statement, please. Three minutes. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. Thank you, Mr. Chairman. I appreciate the witnesses being here today. 

This is so important that we get this right going forward because, as Mr. Dingell already pointed out, we have had hearing 

after hearing after hearing, and we have done nothing about the 

problem. It is time for us to move on this, and it is also so important to get the policy right, because we see that if we get the policy 

wrong, people lose lives, not to mention the amount of dollars we 

lost in the recent problem. 

The aftermath of this recent outbreak of salmonella are still 

being felt. I think your sales have dramatically decreased, and the 

recalls are still being issued. None of us are satisfied with the lack 

of answers from the Peanut Corporation of America at our hearing 

earlier in February. 

We hold this hearing now to determine how the industry should 

move forward. And the problems are not just with the industry. 

Most companies want to maintain the integrity of their product 

and their trust and the relationship they have with the American 

people, the American consumer. And they have in place good manufacturing procedures. But when that trust is broken by bad actors 

like the Peanut Corporation of America, controls must be in place 

to swiftly address and correct the problem. 

And I am not an expert on food safety, but this is not microbiological rocket science. You heat the peanuts up to a temperature 

that is high enough to kill the bugs for long enough, and if your 

plant isn’t just in violation of every code, your product is going to 

be OK. It is so easy, it doesn’t require anything exotic like radiation or some new procedure. It is as old as peanut preparation has 

always been. It is not that hard to do. That is why it just defies 

logic and defies gravity that PCA wouldn’t take the necessary 

steps. 

The logical path forward; how should Congress address this food 

safety legislation? Well, currently the Food and Drug Administration, in my opinion, is missing three logical controls that would 

allow them to effectively, efficiently and expeditiously clamp down 

on food-borne illness, and the first is access to records. Currently 

the Food and Drug Administration has no power to get the full 

records of a company. Instead, the Federal agency is like children 

requesting from a parent to have something of which they may not 

be entitled. The Food and Drug Administration has to politely ask 


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the company for a position that defies logic when food safety— 

when a food safety crisis is in place. 

The Food and Drug Administration should not have to ask permission to go in for those records. They should be given the power 

to obtain those records. 

Second, we have got to modernize the traceability of the system 

through greater use of electronics. Now, we in the medical profession are routinely excoriated for the slowness with which we adopt 

electronic medical records. FDA testified more than 95 percent of 

their records are on paper, so when there is a food-related problem, 

the staff at the Food and Drug Administration is digging through 

boxes and boxes in some warehouse to find out who did what to 

whom when. These should be converted to an easily navigable electronic database. 

Also, companies should use the hazard access critical control 

points. The Food and Drug Administration currently requires juice 

companies and poultry companies to use this system, so it seems 

like—all meat and poultry companies to use this system, so it 

seems like it would be logical to require all domestic food products 

to do so as well. 

Third, the Food and Drug Administration should have the power 

of mandatory recalls. If a company does not voluntarily pull their 

product, and they have been identified to contain food-borne illnesses, the Food and Drug Administration should have the power 

to mandatorily recall its product. Unfortunately, with food safety, 

when questions arise, the product is guilty unless proven innocent, 

and that is the legacy that we are going to be left with because of 

bad actors in the business. 

Mr. Chairman, thank you. I will yield back the balance of my 

time. 

Mr. STUPAK. Thank you. 

Ms. DeGette for an opening statement please, 3 minutes. 

OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO 

Ms. DEGETTE. Thank you very much, Mr. Chairman. 

We have had a series of hearings. I think this is about the thirteenth now. I am always sorry to be here because what that means 

is we haven’t solved the problem yet. This salmonella with Peanut 

Corporation of America situation reminded me of a case I studied 

in law school. It is all there. All things are present here. We need 

to have the third-party inspections. We need to have the mandatory record provision. We need to have mandatory recall authority, 

and we need to have traceability. And all of these companies who 

are here today will talk to us about how having bad suppliers, having bad actors can affect all of the food industry. 

I particularly want to welcome Ms. Isely here today from Colorado and for Vitamin Cottage, a well-known business that I have 

known for years, ever since I was a young girl growing up in Denver. I think Vitamin Cottage is a good example of sort of the collateral damage that can happen when you have bad actors in the food 

system, because this is a small, family-run, organic foods grocer 

which gets its food and its provisions from a lot of different suppliers. It is all good to say that it is their responsibility at Vitamin 


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Cottage to inspect all of the people that provide them food, but in 

truth it is virtually impossible for a small business to do that. And 

in this case—I will be interested to hear Ms. Isely talk about this— 

is they actually received assurances from Peanut Corporation of 

America that these peanuts were being produced in a healthful 

way. And frankly, if you are a small natural foods grocer, the last 

thing that you want to do is be making people sick, because that 

is going to affect your ability to do business, and it is going to affect 

your bottom line. 

And so instead, I think what we need to look at in this committee is how we can ensure that the whole food chain, the whole 

food supply chain, is safe. That means the things that I talked 

about a few minutes ago, and that everybody on both sides of the 

aisle in this committee are talking about. 

And finally I will say, I think that the Vitamin Cottage experience is a good example of how traceability can actually work well, 

because once these patients were identified by the Colorado Department of Health as having been sickened by salmonella, we 

were able to trace rather quickly back to where these peanuts came 

from. And so I think that if we could institute traceability throughout the whole system, we may well have identified this problem 

much sooner. We may have been able to recall the peanuts much 

sooner. Many hundreds—fewer people would have been sickened, 

and we might even have been able to save some lives. 

So I am eager to hear from our witnesses, too. I think they will 

add a very valuable perspective into putting all the puzzle pieces 

together to solve this broken system. 

Mr. STUPAK. Thank you. 

Mr. Gingrey, opening statement, please, sir. 

OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA 

Dr. GINGREY. Mr. Chairman, thank you. 

I want to say to Mr. Kanan and Ms. Isely that I agree with Congresswoman DeGette with regard to the collateral damage. I want 

to admit also that I am a physician Member almost addicted to 

peanut butter, and also am at the age where I have to take a number of medications on a regular basis. And let me assure you, when 

it says don’t take on an empty stomach, with a little bit of peanut 

butter, the medicine goes down in the most delightful way. And 

that is what I generally do with a number of my pills and capsules. 

Now I have to worry about whether or not salmonella is going 

down with them, which is a shame. 

And, of course, we are talking about one very bad actor whose 

headquarters is not in Georgia, but certainly the plant was in 

Georgia. 

There is no question but that the safety of the American people 

is first and foremost the responsibility of government at every 

level, from providing for our national defense, indeed to protecting 

our Nation’s food supply. 

Our responsibility today is to get to the bottom of this most recent salmonella outbreak, knowing that what we learn will inform 

the legislative work not just of this subcommittee, but the other 

subcommittees and the full committee. However, we must all, I 


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think, keep in perspective that we live in a world of almost infinite 

needs, but definitely finite resources. Of course, I am talking about 

money. We also should not lose sight that at the core of this particular outbreak is an individual company, PCA, and ownership 

that acted, in my opinion, criminally. 

As I stated at the last oversight hearing, regardless of how high 

a regulatory wall we erect, there is always going to be someone 

brazen enough or stupid enough or greedy enough to try to climb 

over it. So let us remember that we should also review the penalties for folks who knowingly, knowingly, circumvent our food 

safety system. 

Mr. Chairman, with that, I will yield back. 

Mr. STUPAK. Thank you. 

Mr. Braley for an opening statement, please. 

OPENING STATEMENT OF HON. BRUCE L. BRALEY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF IOWA 

Mr. BRALEY. Thank you, Mr. Chairman and Ranking Member, 

for this hearing. 

Last year I spent a lot of time in my district visiting elementary 

schools, sitting in, about the importance of food safety. And if you 

have any doubt about the importance of this hearing today, I would 

urge you all to go visit an elementary school in your district during 

lunchtime and sit down and talk to kids about what impact food 

safety has on their lives. 

This hearing is particularly timely for me because as a Member 

of Congress from Iowa, at least 27 confirmed cases of salmonella 

traced to alfalfa sprouts have been identified in my State in the recent weeks. The infected sprouts were sold by an Omaha company 

to food distributors in Iowa and Nebraska, and further sold the 

product to grocery stores and restaurants. And while the outbreak 

of salmonella linked to PCA peanuts has received much more attention on a national basis because of the sheer number of illnesses 

and products recalled, this more recent outbreak, which has led to 

70 confirmed salmonella outbreaks in 4 States, provides evidence 

that the PCA salmonella outbreak was not just an isolated incident, and reminds us all of the urgency of fixing our food safety 

system. 

This outbreak in Iowa also emphasizes something that was abundantly clear at last month’s hearing. We need to enact comprehensive reforms to our food safety system that will necessarily encompass the entire food industry. As you all know, we heard troubling 

testimony about the unsanitary and unsafe conditions at PCA last 

month, and that led to hundreds of illnesses and as many as nine 

deaths nationwide. We also learned about the failure of the FDA 

in State investigations to identify problems at PCA and about the 

FDA’s limited remedies under current law. That is why this hearing is so important. 

As Ms. DeGette pointed out, we are going to keep visiting this 

subject until we get it right and until there is no longer a need to 

hold these repeated follow-up hearings. And that is why I want to 

thank the Chairman and Ranking Member for their interest in getting this information out to the public in such a timely manner. 

And I yield back the balance of my time. 


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Mr. STUPAK. Thank you, Mr. Braley. 

Ms. Sutton, please, for an opening statement. 

OPENING STATEMENT OF HON. BETTY SUTTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO 

Ms. SUTTON. Thank you, Mr. Chairman. And thank you for holding the second hearing on the salmonella outbreak and FDA oversight. 

At the last hearing it became very, very apparent that the safety 

of our food supply is not as it should be. The salmonella outbreak 

that originated from Peanut Corporation of America has taken a 

disproportionate toll on Ohio. I have mentioned it before. But since 

October 2008, Ohio has reported 100 cases, including 2 deaths, due 

to salmonella. This is far more than any other State. What is perhaps even more alarming is that there are still cases being reported. 

I would like to draw your attention to a news article from March 

13 titled ‘‘Salmonella Cases: Half Still Come from Crackers. Recalled Food Continues to Sicken Consumers.’’ The article states 

that nearly 2 months after the initial recall, and despite massive 

publicity, Federal health officials are still worried that some consumers have not gotten the message. There are families who keep 

peanut butter crackers in their cupboards and may not realize that 

they were recalled; worse yet, reports that some stores have not 

pulled the contaminated products from their shelves. 

The bottom line, Mr. Chairman, even though these products were 

recalled, the execution of the recall was flawed. That is why it is 

so important for Congress to fix our food safety system, and I applaud your willingness to take on this task. 

Currently the FDA lacks the authority to issue mandatory recalls 

of tainted products. Furthermore, the FDA does not require proof 

that recalled products have been destroyed. I introduced the Protect Consumers Act, which gives the FDA mandatory recall authority. I also support other legislation sponsored by many in this committee that call for better reporting for contaminated products and 

tracing products once they are recalled. 

I am interested in hearing from our panel today that represents 

companies affected by the outbreak. I am especially eager to hear 

from Mr. Kanan and from King Nut Company, which is in northeast Ohio. And, Mr. Chairman, I look forward to working with you 

and all of our colleagues to fix our broken food inspection system. 

And I yield back. 

Mr. STUPAK. Thank you. 

Ms. Schakowsky, opening statement, please. 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman, for this important 

hearing. Ensuring food safety is a critical issue for this committee 

and Congress, and I am happy we are moving forward on this legislation. 

I began my career as a consumer product safety advocate as a 

very young housewife in Illinois—I won’t give you the year—who 


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just wanted to pick something off a grocery shelf and know how 

long it had been sitting there, a day, a week and a year. And along 

with a small group of other similarly minded young housewives, 

and with a tremendous amount of perseverance, we succeeded in 

getting freshness dates on food packages. There was never any regulation, but the freshness dating, which is now ubiquitous, began 

to roll like a snowball. We never thought another label would be 

needed, ‘‘salmonella free.’’ 

This is the second hearing we have had by the Subcommittee on 

Oversight and Investigations linked to the Peanut Corporation of 

America. According to the Illinois Department of Health, to date 10 

individuals in my State have been made ill by that strain of salmonella. As of March 1, CDC has documented 67 illnesses nationwide with 1 in 4 people hospitalized, and you know about the 

deaths. This outbreak has disproportionately affected the young, a 

population even more likely than adults to consume peanut butter 

and peanut butter products. Half of those made sick were children 

under the age of 16, and 1 in 5 were children under the age of 5. 

In February, we heard testimony from Peter Hurley, whose 

young son was made ill from eating Austin Peanut Butter Crackers. Those crackers were made by the Kellogg Company using peanut paste sold by Peanut Corporation of America. I, along with 

many others, was shocked with documents presented in the February hearing that showed that PCA knew that their products were 

tainted, and yet released them into the food supply anyway. This 

recklessness and negligence have caused the deaths of nine people. 

There are many places where the system broke down. One, the 

Peanut Corporation of America was not required to report to anyone, not the FDA, not the companies buying their peanuts, when 

their products tested positive for salmonella. Two, the private companies that audited PCA were not subject to uniform standards or 

apparently strong enough standards as the FDA found many violations not reported in the private company’s earlier audits. Three, 

the FDA had to use its authority under the Bioterrorism Act just 

to gain access to PCA’s files showing their product had tested positive for salmonella. 

We can and we must do better than that. And I hope today’s 

hearing and testimony from companies that purchased products 

from PCA will help us identify how we can improve our food safety 

system. 

Thank you, Mr. Chairman. I yield back. 

Mr. STUPAK. Thank you. 

That concludes the opening statements by all members of the 

subcommittee. 

I should point out Mr. Schauer is here from Michigan. He has 

talked to the Members individually throughout the course of this. 

You have Kellogg’s in your district, right? 

Mr. SCHAUER. Yes. 

Mr. STUPAK. Mr. LaTourette, who I thought would be stopping 

by, but I know he is talking to a number of people in his office, he 

has got a number of people sick in his district, and King Nut is in 

his district; and, of course, Ms. DeGette has Vitamin Cottage Natural Food Markets. I would not be surprised to see other Members 


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coming back and forth. There are other hearings and other panels 

going on. I will recognize them as they come in. 

Let us call our first panel of witnesses to the table. I would like 

to welcome these witnesses and thank them for testifying today. I 

want to make one thing clear: While your companies are those that 

have been directly linked to the illnesses, that CDC acknowledges 

that their products, your products, do not explain all of the illnesses associated with the salmonella outbreak. There are many 

other companies that purchased products from PCA and have contributed to the salmonella outbreak. These companies have been 

cooperative, have voluntarily come forward and have worked with 

the CDC, FDA and others to try to get our hands around this salmonella outbreak, the largest food outbreak of food-borne illness in 

our country. 

So I would like to welcome our panel. First we have Mr. Martin 

Kanan, who is president and chief executive officer of the King Nut 

Company based in Ohio. We have Mr. David Mackay, who is the 

chief executive officer of the Kellogg Company based in Michigan. 

We have Ms. Heather Isely, who is the co-owner of the Vitamin 

Cottage Natural Food Markets, Incorporated, based in Colorado. I 

welcome you all. 

It is the policy of this subcommittee to take our testimony under 

oath. Please be advised that under the rules of the House, you have 

the right to have and be advised by counsel during your testimony. 

Do any of you wish to have counsel with you and wish to be advised by counsel during your testimony? 

Mr. Kanan, would you just identify who they are for the record? 

Mr. KANAN. I have Valoria Hoover and Anne Corrigan. 

Mr. STUPAK. OK. Mr. Mackay. 

Mr. MACKAY. I have Charles Sklarsky. 

Mr. STUPAK. Ms. Isely. 

Ms. ISELY. I have with me Mr. Barnette from Steptoe & Johnson. 

Mr. STUPAK. During testimony if you want to consult with them 

or be advised by them, that is great, but you would be the one who 

would answer questions. 

I will ask you to rise and please raise your right hand to take 

the oath. 

[Witnesses sworn.] 

Mr. STUPAK. OK. Let the record reflect the witnesses have replied in the affirmative. They are now under oath. 

We will hear a 5-minute opening statement. We have your longer 

statements you have submitted for the record. I and others, I am 

sure, of the committee have read your opening statements. So if 

you want to give us 5 minutes, please, we would appreciate it. 

Mr. Kanan, let us start with you. 


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TESTIMONY OF MARTIN KANAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, KING NUT COMPANY; DAVID MACKAY, 

CHIEF EXECUTIVE OFFICER, KELLOGG COMPANY; AND 

HEATHER ISELY, CO-OWNER, VITAMIN COTTAGE NATURAL 

FOOD MARKETS, INC. 

TESTIMONY OF MARTIN KANAN 

Mr. KANAN. Good morning, Mr. Chairman and members of the 

subcommittee. My name is Martin Kanan, and I am the president 

and CEO of Kanan Enterprises, better known as King Nut. We are 

a family-owned and -operated business and are a leading national 

supplier of snack nuts and other snack foods. 

Let me begin by saying something you have heard many times: 

The health and safety of those who consume our products is our 

first priority. Kanan has always reviewed its processes to identify 

lessons learned. Such continuous improvement is how we grew 

from 25 employees in 1989 to almost 200 today. Our union-run facilities by the Teamsters produce nearly 500 million bags of products per year, none of which is associated with this outbreak. 

We began selling peanut butter because our customers asked us 

for it; however, we are not a peanut butter manufacturer. In early 

2004, PCA started as King Nut’s private labeler of peanut butter. 

This means they supplied us finished product in a sealed container, 

packed by them, with our label put on it by them, in a closed and 

finished case. Throughout the 5 years of doing business with PCA, 

we received spec sheets for their products, highlighting that no salmonella be present. We also received several continuing pure food 

guarantees that stated any product shipped to us would be unadulterated, safe and free from any substance which would harm the 

consumer. They also gave us certificates of assurance; a total quality systems audit summary report; a letter from Stewart Parnell, 

PCA’s president, extolling a superior rating from AIB; and assurances that PCA had a HACCP plan in place. Late in the relationship we received COAs that showed negative results for salmonella. 

By the end of 2008, we distributed the PCA peanut butter to 

seven food service distributors. We did not suspect any health 

issues existed with the PCA product until we were contacted by the 

Minnesota Department of Agriculture. We were the very first in 

the United States to do the voluntary recall for any product associated with this salmonella outbreak. 

On Wednesday, January 7, we received a call from the MDA informing us they were investigating the salmonella incidents. They 

wanted to know who manufactured the King Nut peanut butter. 

We told them it was PCA. When we contacted PCA, Stewart Parnell, their president, informed us he had no knowledge of a salmonella issue. 

On the next day, FDA investigators came to our facilities. We 

produced bills of lading and COAs from PCA. We asked the FDA 

to take samples of the peanut butter to test, but they declined. 

Therefore, on the same day we sent samples ourselves of the lots 

of peanut butter we had in house to be tested. Also on the same 

day we received a second call from the MDA informing us that the 

peanut butter was a possible suspect, and that samples from an 

open container had been sent out for testing. 


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The next day, Friday, January 9, the FDA investigators again returned to our facility. We informed them we did not use any peanut butter in any of the products we manufactured. Several hours 

later the FDA investigators then took samples of the peanut butter 

we had for testing. At 4:30 that Friday afternoon, we received news 

from the MDA that sampling from the open container of peanut 

butter had a presumptive positive for salmonella, and that the 

subtype would not be confirmed until the following week. 

Now, even though it was a single container, and even though it 

was only a presumptive positive, we decided to do the recall. We 

did not want to wait for PCA. Our biggest concern was for the 

health and safety of our customers. So prior to noon that Saturday, 

January 10, over the weekend, we initiated the first product recall 

associated with the salmonella outbreak. We recalled all of the 

PCA peanut butter that King Nut distributed in 2008. All of our 

seven food service distributors were aware of the recall that same 

afternoon. That day we also issued a nationwide press release as 

we did not know who might the ultimate customer or consumer be. 

On Monday, January 12, the FDA investigators again came to 

gather more information. We were also called and informed that 4 

of the 13 samples from that opened container had tested positive 

for salmonella typhimurium. That confirmed that our quick reaction to the presumptive positive was the right thing to do. 

Three days after we initiated the recall, PCA did it. As this subcommittee is aware, PCA’s recall has been expanded many times. 

We, along with those in our industry and the consumers, were 

shocked and dismayed at findings that PCA knowingly released 

product with potential salmonella contamination into the food supply. 

The test results from our January 8 in-house samples were negative. To this day FDA has not told us the results of those January 

9 samples they took from our warehouse. 

Now, while I believe that the American food supply is one of the 

safest in the world, Kanan Enterprises continues to be committed 

to working at rebuilding public confidence in the American food 

safety system. I want to be a part of making things better for our 

country’s food supply. 

In this specific case of PCA, I must reiterate that we did not 

have control over the production nor the processing of this product. 

While most food manufacturers practice safe production, storage 

and handling of food ingredients, it is apparent that if someone 

lacks the integrity and honesty, they will always be able to find 

ways to bypass any quality assurance or food safety program. 

We need to let the American public know that we have better 

systems in place to react quickly to correct our problems and punish the wrongdoer. This is a tragedy for all of those involved, the 

victims, the families, our industry. 

I thank you for this opportunity to discuss these issues with you, 

and I am happy to answer any questions you have. 

Mr. STUPAK. Thank you. 

[The statement of Mr. Kanan follows:] 


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Mr. STUPAK. Mr. Mackay, your opening statement, please. 

STATEMENT OF DAVID MACKAY 

Mr. MACKAY. Good morning, Mr. Chairman and members of the 

subcommittee. I am David Mackay, president and CEO of the Kellogg Company. We sell our products here and in more than 180 

countries and employ more than 32,000 people. 

First and foremost, we deeply regret that the recent salmonella 

recall situation occurred and that it involved Kellogg products. We 

apologize to our customers and consumers, especially those who 

have become ill from one of our products. 

We, just like members of this subcommittee, Federal and State 

regulators, medical professionals, and the general public, are deeply disturbed by the events we have learned of over the past few 

months with respect to Peanut Corporation of America. 

We thank the subcommittee for the opportunity to discuss these 

important issues, in particular, how we can work together to 

strengthen the safety of the U.S. food supply. 

PCA has essentially poisoned the well for an industry in which 

most companies are honest and trustworthy and pride themselves 

on delivering safe, wholesome products that consumers expect and 

deserve. The PCA situation has shown that, if a company chooses 

to ignore even basic food safety principles, food safety systems and 

protections can be compromised. 

One of our governing values is to have the humility and hunger 

to learn. With that focus, our food safety program operates on the 

principle that food safety is a process of continuous improvement. 

And, in that spirit and as a result of what we have learned from 

this unfortunate situation, we have taken several immediate actions to enhance our food safety efforts. 

We have established new Kellogg cross-functional teams, including quality, food safety, and engineering groups, to audit supplies 

of high-risk ingredients, and have completed these on-site audits of 

our peanut and peanut paste ingredient suppliers. We are also requiring these suppliers to conduct environmental testing and monitoring in their plants, which we believe from our own practices is 

pivotal in identifying, assessing, and correcting potential contamination before it becomes a major food safety problem. And we are 

strengthening our internal food safety training and education 

across our supply chain. 

In the U.S. food safety system, we believe the key to enhancement is a renewed focus on prevention so that potential sources of 

contamination are identified and properly addressed before they become actual food safety problems. My written statement outlines 

our recommendations. However, I would like to provide highlights 

of our proposals. 

We support the following nine industry and government enhancements: one, establish a single food safety authority under Health 

and Human Services, supported by a food safety advisory council, 

to strengthen and maximize the efficiency of regulatory oversight; 

two, establish an international food protection training institute to 

train government and industry inspectors; three, improve current 

good manufacturing practices, or GMPs, which have not been updated for over 22 years; four, develop food safety plans for every 


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food facility that are based on a thorough risk assessment and contain verification systems and preventative controls; five, require 

annual FDA inspections of facilities that produce high-risk foods; 

six, require test results and corrective actions to be disclosed to 

FDA at their annual inspection; seven, develop consistent food 

manufacturing audit standards and accredit auditors and the audit 

firms; eight, provide FDA with mandatory recall authority to expedite necessary recalls; and finally, nine, review possibilities for enhancing traceability standards. 

Kellogg is firmly committed to working together with Congress, 

industry, and other stakeholders to evaluate and advance these 

recommendations. I look forward to discussing them with you 

today, and I want to thank you on behalf of the company and our 

employees for this opportunity to discuss these important issues. I 

am happy to answer any questions you may have. 

[The prepared statement of Mr. Mackay follows:] 


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Mr. STUPAK. Thank you, Mr. Mackay. 

Ms. Isely, your opening statement, please. 

STATEMENT OF HEATHER ISELY 

Ms. ISELY. Good morning, Chairman Stupak, Ranking Member 

Walden, and members of the subcommittee. My name is Heather 

C. Isely, and I am executive vice president and part-owner of Vitamin Cottage Natural Food Markets, Inc. 

We very much appreciate the opportunity to provide our input to 

the subcommittee on our involvement with the Peanut Corporation 

of America and to provide insight on how outbreaks like this one 

are dealt with by small-chain retailers. 

Vitamin Cottage was established in 1955 by my parents. They 

started the business by going door to door in Golden, Colorado, selling whole grain bread and sharing nutrition information with people they met. I started working for my parents at the store when 

I was 9 years old. 

Our goals have always been the same: providing exceptional customer service, extensive nutrition education, and the highest quality products at affordable prices. 

For over 30 years, Natural Grocers has offered fresh-ground peanut butter. Our employees make peanut butter in the store by running dry-roasted peanuts through a small grinder. For the past few 

years, the dry-roasted peanuts for this product have been purchased from PCA from its Plainview, Texas, facility. Until the PCA 

outbreak, Natural Grocers has never had any adverse health issues 

associated with its peanut butter. 

The timeline with respect to developments related to PCA-supplied products is well-known. For our part, despite continuing quality assurances from personnel at the PCA Texas plant, Natural 

Grocers quarantined its inventory of PCA peanut products on January 28th. On January 30th, Natural Grocers preemptively and 

voluntarily recalled all related products and began notifying customers to return all previously purchased fresh-ground peanut butter. We have detailed how we subsequently worked with the government authorities in our written testimony. 

As a family-owned retailer, we are deeply concerned about the 

obvious breakdown in the regulatory system that brought about the 

PCA-based outbreak. We need effective laws and regulations that 

ensure we and our customers can buy food with confidence in its 

safety. 

Again, I appreciate the opportunity to testify before the subcommittee and welcome any questions you may have. 

[The prepared statement of Ms. Isely follows:] 


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Mr. STUPAK. Thank you. 

And thank you all for being here today and assisting us with this 

investigation. 

We are giving you a document book there because I am going to 

ask about document number 48 and 49 in my first question. 

You know, we have seen the photos and I think the chairman 

and Mr. Walden and others, we have all had the photos of the dead 

rodents and other filthy conditions at PCA. And you have heard 

what government investigators found when they went in to shut 

down these facilities: roaches, salmonella, contamination, and so 

much rodent excrement that they couldn’t really quantify how 

much there was. 

And I have read your statements, and I have listened to you here 

closely this morning. Essentially what you all are saying is that 

you didn’t know about these problems at PCA. But my question is, 

why didn’t you know? 

I mean, I understand there was the audit firm AIB that inspected PCA and gave it very high ratings of ‘‘Excellent’’ or ‘‘Superior,’’ but yet, in our investigation, we find AIB gives 98 percent of 

everyone they inspect ‘‘Superior’’ or ‘‘Excellent’’ ratings. But the 

companies—you didn’t do your own inspections, like Nestle did, 

and therefore, you didn’t find the problem. 

So, in the audits there, if you look at number 48 and 49, if you 

would like, there in the document binder, the first one, 48, is, 2002, 

Nestle USA sent auditors to the PCA facility in Georgia where they 

found, quote, ‘‘the potential for microbiological cross-contamination’’ 

because of raw peanuts being handled in the peanut-roasting area. 

They found rodent droppings in the breakroom cabinets, live flower 

beetle activity, and dead insects. 

Ultimately, they concluded in 2002, Nestle did, PCA was not in 

compliance with critical standards for housekeeping, sanitation, 

pest control, and they found PCA had no plan to address salmonella. 

Nestle USA then went, in 2006, at the invite to go to PCA in 

Texas, in 2006, and found a failure to comply with pathogen monitoring and pest control standards. According to tab 49, the 2006 report, the auditors counted over 50 mouse or rat carcasses, concluding that the facility had, quote, ‘‘a serious ongoing problem 

with rodents.’’ 

As a result of these deficiencies, Nestle said no in 2002. In 2006, 

again they said no, and rejected PCA as a supplier, that they 

wouldn’t buy peanut products from them. 

The difference, it seems that Nestle didn’t rely solely on an auditor that was selected by PCA and paid by PCA, which is an obvious 

conflict of interest. They conducted its own audits with its own experienced staff. 

So I am going to ask each of you today, why didn’t you do the 

same? You all talked about safety is the number-one concern, family-owned companies, you are doing everything you can to assure 

the safety, but it seems like you passed that responsibility to somebody else. So why wouldn’t you have done the same thing? If this 

is your supplier of a critical ingredient, why wouldn’t you go check 

it? 

Mr. Kanan, do you want to start? 


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Mr. KANAN. Thank you, Congressman. 

First, when we start out with a relationship, we require spec 

sheets from them. We rely on the FDA, that is supposed to be 

doing that. They certainly come visit us. We run a very clean shop 

and organization. They are very well-known in the industry. We 

had a continuing pure food guarantee from them. Throughout the 

relationship, we continued to ask for more things, like HACCP 

plans. We believed they had a HACCP plan in place. And we had 

COA showing negative results for salmonella by the end. 

We were outraged—— 

Mr. STUPAK. No, I know, but why didn’t you guys go check? If 

this is your main supplier to provide your peanut butter, you are 

putting your name on this, what, 5-pound pail and then up to 35 

pounds, and goes to, like, nursing homes and that, why didn’t you 

go check? 

Mr. KANAN. We were distributor of this. I understand our name 

was on it, but we bought a closed container. And that is what we 

have to look at today. We have to start with the manufacturers. 

The distributors, the retailers down the line—— 

Mr. STUPAK. I will follow that up with a question. 

Kellogg, you are a big company like Nestle. I am surprised you 

guys didn’t at least have someone there with internal audits. 

Mr. MACKAY. Yes, I think as we said in our written, but I will 

go through it, we use a multistep process. The—— 

Mr. STUPAK. Can you pull your mike up a little bit. 

Mr. MACKAY. —third-party audit is one step in that. We also do 

risk analysis of ingredients. We bring the product into our labs to 

run it through our facilities, make sure it works, so we get firsthand experience with that. And we do get certificates of analysis. 

Mr. STUPAK. Yes, but do you send people out to these plants? 

Mr. MACKAY. Some we do, some we don’t. The practicalities, 

when you look at—Kellogg is a big company. 

Mr. STUPAK. Sure. 

Mr. MACKAY. We have 3,000 ingredients, 1,000 suppliers. I think 

it is common industry practice to use a third party. 

If you look at the situation here, AIB is the most commonly used 

auditor in the U.S. The AIB, as one of the many factors we use, 

is meaningful. The AIB audit confirmed several important food 

safety measures were in place at PCA. They had an environmental 

testing program. They did all microbiological—— 

Mr. STUPAK. Sure, but you didn’t send anyone down like Nestle, 

like, to check PCA? You didn’t send anyone down from Kellogg 

then? 

Mr. MACKAY. We didn’t at that point. But we have since, as of 

learning coming after, changed that—— 

Mr. STUPAK. After, yes. 

OK, I am going to follow that up with a question, because you 

all have different standards here now on what you are doing. That 

is my next question. 

Ms. Isely, any comment on that? You guys didn’t send anyone? 

You are the family-owned one, that health is your concern. Did you 

guys send anyone to PCA in Texas or—— 

Ms. ISELY. We did not send anyone—sorry, Chairman. 

Mr. STUPAK. That is all right. 


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Ms. ISELY. I am not used to this. I am from a small, family-run 

business. Sorry. I am a little bit nervous today. 

Mr. Chairman, we did not send anyone to PCA. One of the things 

that, as a small, family-run business of a chain of retail stores, we 

have 1,300 suppliers of products to our stores for the 25,000 products that we sell in our stores. 

Mr. STUPAK. Sure, but some of your products, like how animals 

are being treated and that, you said in your testimony you guys go 

send inspectors out. So I thought maybe you would go to PCA. 

Ms. ISELY. Yes, we do, and I can comment on that now to explain 

the difference for us, is that we rely upon the government system 

and the good manufacturing practices—— 

Mr. STUPAK. Well, did you ever check with the government on 

Texas? Because you were getting it from Plainview, Texas, and 

Texas wasn’t even registered. So did you check with Texas or the 

FDA to see if the place was even on anyone’s radar screen, registered with anyone to produce food? 

Ms. ISELY. No, we did not. We tried to rely upon the system in 

the United States. We purposely source our products from companies that manufacture in the United States because of the gold 

standard of manufacturing practices that do exist in this country. 

What I was trying to say about the inspections for humane treatment of animals is, when there is not a government system in 

place, we do go out of our way to make sure that we inspect that 

what is on those labels is accurate and true. 

Mr. STUPAK. Sure, but, with all due respect, in this case, because 

you got yours from Plainview, Texas, you didn’t even check to see 

if it was even registered, the operation. So even if the government 

was doing its job, if you would have checked, you would have found 

that this Plainview, Texas place, which has all the dead rodents in 

it, wasn’t even registered, was never registered or inspected by 

Texas or the FDA. 

Let me ask this question. This is a June 2000 audit report from 

the Inspector General to Health and Human Services. And I have 

been on this committee now 15 years. I am sure Mr. Dingell and 

Mr. Waxman have been on longer than this. You know, how many 

years we have been trying to get standards. 

You all have talked about all the things you are going to do now, 

and I compliment you on trying to do some things. But we can’t 

have Kellogg doing one thing, Mr. Kanan doing something else, Ms. 

Isely, your company doing something else. Don’t you think it is 

about time we have some standards as to what we look for when 

we go to these plants. 

We were baffled last time that the State inspectors didn’t pick 

up some things in the Georgia plant that were structurally wrong 

that encouraged, not discouraged, cross-contamination. Don’t you 

think it is about time we had either Federal standards, international standards, since a lot of our food comes overseas, or at 

least CDC, NIH, some kind of standards that we all have to play 

by for inspections, testing of food and food processing places? Because you are all doing something different, and they are not going 

to mesh. 


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Mr. MACKAY. Congressman, I think one of the recommendations 

we made was that we actually developed consistent food manufacturing audit standards. 

Mr. STUPAK. Yes, number seven, that was sort of like your standard number seven. But who should be in charge of that? 

Mr. MACKAY. You know, I think if you start with the first recommendation we made, which was forming a single food safety authority within HHS and then having an advisory group that actually works for them on a scientific base, the reason for that is there 

are so many moving parts here that we need to bring the science 

to bear. Industry can work with that group to ensure that we are 

looking at the right standards for varying food facilities. 

Mr. STUPAK. Sure. And it claims they have been doing that for 

years, since way back to June of 2002, and it never gets done. Either in industry or someone doesn’t want to cooperate—— 

Mr. MACKAY. I think we are all here to try and work with you 

to encourage that we do move forward and make that change and 

we establish those standards. And I think there are a number of 

things we need to do consistent with that. 

The other recommendation we have in here is that on high-risk 

foods that the FDA actually does an annual audit. And, within the 

context of that annual audit, all of the testing done by that facility 

is shared with the FDA when they go in and do that annual audit. 

It doesn’t fix this unfortunate situation, but it certainly should enhance the food safety in the U.S. going forward. 

Mr. STUPAK. Sure, I mean, on high-risk, we did the same thing 

in 1997; now here we are again in 2007. We had one in Georgia, 

and here we are 2 years later, same thing. 

Mr. Walden, for questions, please. 

Mr. WALDEN. Thank you very much, Mr. Chairman. 

And I am glad you raised that issue of the IG report. Mr. Barton 

and I sent a letter to the FDA last week requesting documents and 

information on whether FDA has implemented the Inspector General’s recommendations and how the FDA is implementing them. 

And, again, this goes back to June of 2000. 

So we have some work to do on our end to make sure that the 

FDA is looking at these State controls on inspections and what is 

happening out there when they do delegate it out. So I hope you 

will help us in trying to get answers out of the FDA, Mr. Chairman, because I concur with your analysis on its lack of implementation. 

I have a couple of just, sort of, ‘‘yes’’ and ‘‘no’’ questions for you 

initially and then a couple that will go into a little more depth. 

Do you support uniform standards for third-party auditors, including standardized questions and formats, and government accreditation of these third-party audit firms? 

Mr. KANAN. Yes. 

Mr. MACKAY. Yes. 

Ms. ISELY. Yes. 

Mr. WALDEN. Thank you. 

One of the things that has concerned me is—and it came out in 

some of the testimony today—when I was in the broadcast business, I was regulated by the Federal Communications Commission. 

The inspector chose when he or she was going to show up to look 


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at my public file, go out and look at my tower, review my equipment, have my operator show they could do an emergency alert 

test. They didn’t call ahead of time to say, ‘‘A week from Thursday, 

I am going to come out.’’ 

Do you support third-party audits being announced or unannounced? 

Mr. KANAN. I support them being unannounced. 

Mr. WALDEN. Mr. Mackay? 

Mr. MACKAY. I think as long as the logistics can work for unannounced, because there are so many audits that are going to be 

conducted, at some point maybe you have to give at least a day’s 

notice or some notice, but if it helps the system by just going in 

unannounced, then we would support that. 

Mr. WALDEN. Ms. Isely? 

Ms. ISELY. We support unannounced. 

Mr. WALDEN. OK. Thank you. I appreciate your answers to those 

questions. They are helpful. 

Did your company receive a certificate of analysis or some representation from PCA that the peanut products sold by Peanut 

Corporation of America to your company were safe? 

Mr. KANAN. We have in the past, yes. 

Mr. MACKAY. Yes. In every batch we got in, we had a certificate 

of analysis, and all of them were negative. 

Ms. ISELY. No, we did not. 

Mr. WALDEN. You did not. OK. And did you seek those certificates or—— 

Ms. ISELY. Not—we did not seek those certificates. As a retailer—— 

Mr. WALDEN. You are more of a retailer. You are buying product 

to resell. 

Ms. ISELY. We are buying product to resell, and so we don’t seek 

those certificates of analysis on the food side. We really try to work 

with the system that exists. 

Mr. WALDEN. Mr. Mackay, I have before me in—do you know 

what tab that is in? I guess it is not in the document book. 

Mr. Chairman, without objection, I would ask that this document 

be put in the record, as well. 

Mr. STUPAK. That is the certificate of analysis? No objection. 

[The information was unavailable at the time of printing.] 

Mr. WALDEN. And this is the one dated July 12th of 2007 from 

Peanut Corporation of America to Kellogg regarding coarse natural 

peanut paste, lot number 7192CNPB, as in ‘‘boy.’’ And under the 

microbiological data, it shows results as negative for salmonella. 

My understanding is that this certificate says negative, and yet 

this is one of the lots that showed positive on salmonella. 

Mr. MACKAY. I am unconfirmed on the lot, but I know that 

every—we went back and checked every certificate of analysis we 

had received from PCA. Every certificate of analysis was negative. 

And I think that just highlights how extremely difficult it is 

when you have an unethical and dishonest supplier to actually 

manage for this. 

Mr. WALDEN. And do you think that the records from these independent labs that do the analysis to see if there is a problem with 


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the product, do you think those records, A, should be available 

upon inspection by the FDA? 

Mr. MACKAY. I think any finished food records that show a positive, it could be helpful to actually present those to the FDA. 

Mr. WALDEN. Ms. Isely? 

Ms. ISELY. We would agree with that. 

Mr. KANAN. Yes. 

Mr. WALDEN. Because in one of our hearings it came out that I 

guess they have to go through the Bioterrorism Act in order to get 

access to these records. And that just seems preposterous to me. I 

don’t understand it. 

Do you think these ought to be electronically reported to the FDA 

when there is a positive hit? 

Mr. KANAN. That would be very helpful. 

Mr. MACKAY. Yes, I think that would be the best course. 

Ms. ISELY. Yes, it would help us, as well. 

Mr. WALDEN. And do you think there ought to be a requirement 

for this kind of testing to occur and for audits to occur? 

Mr. KANAN. Let me understand your question again, Congressman. You are asking, do you think that mandatory testing should 

be required? On what kind of testing, salmonella? 

Mr. WALDEN. You know, I am not an expert in the field. I would 

seek your counsel. 

Mr. KANAN. Yes, absolutely—I agree with you, I think that would 

be very helpful to have mandatory testing on requirements that 

somebody says should be, you know, peanut butter, salmonella, for 

example. 

Mr. MACKAY. I would clearly support, if a lab finds a positive test 

on finished food, they give that to the FDA. 

One of the things that I think is critical when you understand 

the system is that prevention is really the key—— 

Mr. WALDEN. Right. 

Mr. MACKAY [continuing]. To very strong food safety. And to prevent, environmental testing becomes one of the key steps in that, 

which is done much further upstream. Most companies that do environmental testing, as we do in all of our facilities, if we were to 

find any issue, we would take preventable action to prevent it actually leaking into the food stream. 

So the only reason I worry is that, Congressman, the complexity, 

if you ask for every test, environmental as well as finished food, 

you potentially could overwhelm the safety and the FDA, and it 

may be impractical. I am not trying to be defensive, but it is—— 

Mr. WALDEN. No, no, that is fair. I am seeking your input, because we don’t want to shut down the food chain; we want it to be 

safe. 

Which you really lead into my next point, these very dramatic 

and disgusting photos that we have came about not from the thirdparty auditors, it is my understanding. And this is out of the Texas 

plant for PCA that show the dead rodents and the feathers and 

God only knows what else. This came about because of an inspection and—excuse me, an investigation. 

My understanding is that, in your industry, when there is an 

audit, it is maybe a day long. And the company picks the auditor, 

and they can preannounce that they are coming. So they don’t get, 


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potentially, into the detail level that an investigation that can go 

3 or 4 days might actually get into. And it was the result of an investigation that found this. 

So should audits be longer? Should they be more on the investigative side? 

Mr. KANAN. With third-party audits, Congressman, they are at 

least a day or more at our facilities. FDA is a couple hours, 2 or 

3 hours. 

Mr. WALDEN. And that is FDA inspection, but what about investigation? Have you ever had one of those? 

Mr. KANAN. An actual investigation? 

Mr. WALDEN. Right. 

Mr. KANAN. Not that I am aware of. 

Mr. WALDEN. All right. 

Mr. Mackay? 

Mr. MACKAY. I think it is, rather than—one of the differentials 

here is our inspections, I think—if you have a high-risk facility or 

food ingredient, our recommendation—and we have already made 

this change internally—is to have a multifunctional team. Typically, they would take longer than a day, but even if it is a day, 

you have three, four people versus one person, and you have experts in a variety of different areas so they are actually doing as 

good a scan as possible. 

We have said in one of the recommendations we have made that 

we believe that food safety plans should be developed for all facilities in the U.S. 

Mr. WALDEN. And I have one more question. And I appreciate 

the chairman’s indulgence. 

Ms. Isely here is a retailer; could be any store in America. If she 

came to your company, Mr. Mackay, and said, ‘‘I need to see tests, 

I need to see all these things before I will sell your product,’’ how 

would that work? Is that even—do retailers come to you and demand that? 

Mr. MACKAY. Yes, they do. And sometimes retailers will demand 

a specific type of audit. 

Mr. WALDEN. And how do you respond if it is Walmart or a big 

chain—I am not picking on Walmart—but a pretty big buyer with 

a lot of horsepower versus a small, independent? 

Mr. MACKAY. For us, it wouldn’t matter. Within the context of 

our facilities, we have standardized audits that comply with almost 

every criteria that retailers would ask for. 

Mr. WALDEN. Is that the same, Mr. Kanan, for you? 

Mr. KANAN. Yes. I mean, if a retailer came to us to ask us for 

our audits, it is all standardized. We would be able to give 

them—— 

Mr. WALDEN. And you do that? Your retailers come to you and 

ask that on a regular basis? 

Mr. KANAN. Some do. 

Mr. WALDEN. OK. 

Mr. KANAN. Many don’t. 

Mr. WALDEN. So, regardless of size, they could ask you for that? 

Mr. KANAN. Yes. 

Mr. WALDEN. All right. Thank you. 

Thank you, Mr. Chairman. 


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Mr. STUPAK. Chairman Waxman, for questions, please. 

Mr. WAXMAN. Thank you, Mr. Chairman. 

Mr. Mackay, you indicated you had a certificate of analysis showing that there was no salmonella in the batch that you were buying 

from Peanut Corporation of America. As I understand, the certificate of analysis is no guarantee that there is no salmonella; it is 

they have tested but it doesn’t—and where they tested there was 

no salmonella, but there could be in the tub, some other place 

where there might be salmonella. And it turned out, to your misfortune, that it was an unscrupulous supplier that was providing this 

batch of peanuts to you. 

But you indicated in your written statement that—you say that, 

‘‘There is an audit finding that reported no concern that the facility 

may have had any pathogen-related issues or any potential contamination.’’ And I am quoting from your written statement. 

I want to direct your attention to a March 2008 AIB audit report 

for PCA’s Georgia facility. And, in this audit report—we know AIB 

is the group that did the audit for PCA. In this audit report, it says 

the following: ‘‘This facility had evaluated the processes and procedures and determined that no critical control points were present 

in the operation.’’ No critical control points. 

Now, that, to me, is—when we talk about a HACCP, there has 

to be a plan. There has to be a plan for preventing salmonella. And 

they are saying there were no critical control points. Now, an obvious critical control point would be the roaster, because the roaster 

can kill the salmonella. 

So, most manufacturers would very much see the peanut-roasting stage as a critical control point. But this audit said to you there 

are no critical control points. This means PCA looked at its peanut 

manufacturing process and looked at all of its procedures, and it 

determined they didn’t have any critical control points, not even for 

killing salmonella. 

Did you have a reaction when you saw that in the audit? Or did 

you even notice it? Don’t you think that PCA should have designated killing salmonella at the roasting stage as a critical control 

point? 

Mr. MACKAY. Firstly, I didn’t see that particular audit. I think 

the audit I referenced, they—when we had gone through as part 

of our multistep process and looked at the third-party audit and 

looked at what AIB had given us in that audit, that they had quantified that they did have a food safety plan in place. 

And my belief is, and one of the recommendations here is, that 

we should codify that all plants should have a food safety plan in 

place, because, really, that is the key to prevention. 

Mr. WAXMAN. Well, we need to do that. You are absolutely right, 

we need to do that for the future. 

But, in this case, you were relying on PCA to have this thirdparty audit. They had a third-party auditor who, in my view, clearly had a conflict of interest. They wanted to give PCA an audit that 

PCA would like. In fact, they even gave PCA an award that they 

knew PCA would like, saying they were superior in their quality, 

even though we know that is not the case. 

So, if the audit was sent to you and said PCA didn’t even have 

critical control points, that audit was telling you at Kellogg that 


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PCA did not have a plan to effectively kill salmonella. Peanuts are 

a high-risk product for salmonella. So I am sure you are aware and 

all of you are aware that there needs to be a clear plan to make 

sure that salmonella is stopped. 

And I think that PCA was a bad company. They did bad things. 

And they were clearly ignorant because they wanted to be ignorant. 

But this indicates to me that Kellogg was pretty sloppy. You were 

just taking things for granted that PCA was going to do the right 

thing. 

They gave you a report of their inspector. They hired the cheapest inspector they could possibly get. I think they paid this inspector maybe $1,500. There are more thorough inspections that would 

have cost more money. The gold standard is a $20,000 inspection. 

Well, I guess everyone should realize they would have been better 

off spending $20,000 than going on the cheap, because it is $70 million, I believe, is the loss for all of this as a result of their going 

on the faith that everything was going to be OK, without making 

sure they could stop salmonella and stop this sort of thing from 

happening. 

Do you think that you were sloppy? 

Mr. MACKAY. Congressman, I think we did everything we could 

do. When we looked at our multistep process, the third-party audit 

was a key part of it, but we did a risk-analysis assessment. We did 

actually take the product in and check it through our labs, and 

then we relied on a certificate of analysis. 

And, as I mentioned, you know, managing for an unethical, dishonest supplier who is prepared to actually put people’s lives at 

risk is something, as we have stepped back and learned from this, 

means that we have already changed our process. And that is why 

we are here trying to work with you to say there are a number of 

things we believe that we need to do. 

Mr. WAXMAN. Well, let me tell you, there were some red flags 

that you should have noticed. I think you should have noticed that 

statement in the audit that said they didn’t have the critical points. 

You didn’t do what Nestle did; you didn’t send your own people to 

the plant and inspect it. You relied on what ordinarily, I guess, 

would have been OK, but you didn’t do that extra step that I hope 

you will now require to make sure that there is a process to prevent salmonella. 

And, in that regard, I must differ with you. I think Kellogg was 

sloppy. I think PCA was bad. And I think the whole thing has resulted in a tragedy that could have been prevented. 

Thank you, Mr. Chairman. 

Mr. STUPAK. Thank you, Mr. Chairman. 

Mr. Dingell for questions, please. We are just starting votes, but 

let’s get some questions in. 

Mr. DINGELL. Ladies and gentlemen of the panel, I am going to 

ask a series of questions that will require only a ‘‘yes’’ or a ‘‘no’’ 

answer. We will start with you, Mr. Kanan, and go across to Mr. 

Mackay and then Ms. Isely. 

First, do your companies have best practices in place to ensure 

the safety of the products you receive from suppliers? Yes or no? 

Mr. KANAN. Yes. 

Mr. DINGELL. Do you, Mr. Mackay? 


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Mr. MACKAY. Yes. 

Mr. DINGELL. Ms. Isely? 

Ms. ISELY. Yes. 

Mr. DINGELL. All right. Do these best practices include on-site 

audits of sanitary conditions and processing techniques of suppliers 

prior to and during your contractual relationship with them? Yes 

or no? 

Mr. KANAN. No. 

Mr. MACKAY. Sometimes. 

Mr. DINGELL. Sometimes. 

Ms. Isely? 

Ms. ISELY. Sometimes. 

Mr. KANAN. Do I get to say ‘‘sometimes,’’ Mr. Dingell? That was 

a ‘‘yes’’ or a ‘‘no.’’ 

Mr. DINGELL. Yes, I have to do it that way because we have a 

very short amount of time. 

Ladies and gentlemen, again, did representatives from your companies inspect sanitary conditions and processing practices of Peanut Company of America prior to your company contracting with 

that company as a supplier? Yes or no? 

Mr. KANAN. I am sorry, I have to hear your question again. 

Mr. DINGELL. Did representatives from your companies inspect 

sanitary conditions and processing techniques of Peanut Company 

of America prior to contracting with PCA as a supplier? Yes or no? 

Mr. KANAN. No. 

Mr. MACKAY. We relied on industry practice. 

Mr. DINGELL. I am sorry? 

Mr. MACKAY. We relied on industry practice. No. 

Mr. DINGELL. OK. 

Ms. Isely? 

Ms. ISELY. No. 

Mr. DINGELL. Did representatives from your companies inspect 

sanitary conditions and processing techniques of PCA while it was 

contracted as a supplier of peanut products to your companies? 

Mr. KANAN. I am just having a hard time hearing you. 

Mr. DINGELL. I am doing my best. Did representatives from your 

companies inspect sanitary conditions and processing techniques 

from PCA while it was contracted as a supplier of peanut products 

to your companies? 

Mr. KANAN. We rely on industry standards, as well. So, no. 

Mr. MACKAY. Likewise, we relied on industry standards and certificate of analysis. 

Mr. DINGELL. Ms. Isely? 

Ms. ISELY. We also relied upon industry standards. And, no, we 

did not inspect. 

Mr. DINGELL. Now, prior to the outbreak of salmonella caused by 

PCA’s products, were your companies aware of the unsanitary conditions present in PCA’s processing facilities? 

Mr. KANAN. No. 

Mr. MACKAY. No, we were not. 

Ms. ISELY. No, we were not informed. 

Mr. DINGELL. So what, in effect, you did was to rely on Food and 

Drug Administration’s inspections and on industry practices to see 


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to it, essentially, that you got safe products, and you were taken 

advantage of. Is that not so? 

Mr. KANAN. That is not so. We required specification sheets. We 

believe the FDA was inspecting it and they were doing their jobs. 

We required continuing pure food guarantees. So I would have to 

disagree with you on that. 

Mr. DINGELL. Mr. Mackay? 

Mr. MACKAY. No. I think as we have talked, third-party audits, 

certificates of analysis—we had an unethical and dishonest supplier. I am perfectly unclear as to how you manage for someone 

who is prepared to put consumers at risk. 

Mr. DINGELL. All right. 

Ms. Isely? 

Ms. ISELY. Mr. Dingell, was the question, did we feel that we 

were taken advantage of? 

Mr. DINGELL. You were taken advantage of by a bunch of sharpshooters who didn’t do a decent job. 

Ms. ISELY. Yes. 

Mr. DINGELL. And you relied on Food and Drug, and you relied 

on industry practices to see to it that you were safe. I don’t find 

fault in you in that. I think you are entitled to do it. But I think 

you have found yourself in a bad position because the law did not 

provide you and the rest of industry and consumers the protections 

they needed. 

Now, would an up-to-date registry of all food facilities operating 

in the U.S. or importing food in the United States have helped 

FDA to identify and respond more quickly to a salmonella outbreak 

caused by PCA’s products? Yes or no? 

Mr. KANAN. Sir, every time you speak, I seem to get interference. 

Was your question the required registration of facilities? 

Mr. DINGELL. Up-to-date registration of all facilities. 

Mr. KANAN. Yes, absolutely. 

Mr. DINGELL. Mr. Mackay? 

Mr. MACKAY. All facilities should be registered. 

Mr. DINGELL. Ms. Isely? 

Ms. ISELY. Yes. 

Mr. DINGELL. Now, I believe food processors should have to notify the FDA when they begin producing products that they have 

not previously registered. Do you agree? In other words, that is a 

part of having an up-to-date registry of processors and the state of 

the processing that comes into your plants. 

Mr. KANAN. The way I understand your question is I believe that 

every food facility should be registered in the country—— 

Mr. DINGELL. And it ought to be registered for all of the products 

that they ship? 

Mr. KANAN. That is correct. 

Mr. DINGELL. Mr. Mackay? 

Mr. MACKAY. Well, I am not sure the system actually exists, so 

I am not sure you can rely—— 

Mr. DINGELL. It doesn’t exist, but I am asking whether you think 

that that would be a protection to you. 

Mr. MACKAY. Well, at the moment we wouldn’t know whether a 

plant was registered or not, because I don’t think it is mandatory. 

Mr. DINGELL. Ms. Isely? 


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Ms. ISELY. Yes, we would support it, because we believe it would 

help protect small businesses like ours, particularly if there was a 

way to communicate whether or not people were in compliance. 

Mr. DINGELL. Do you believe that Food and Drug has the resources and the ability to carry out its responsibilities in ensuring 

that products reaching your places of business and arriving ultimately at the consumers’ doorstep are safe? Yes or no? 

Mr. KANAN. Do I believe they have the resources, is the question? 

Mr. DINGELL. Yes. 

Mr. KANAN. I think they have the resources. They just need to 

refocus. 

Mr. DINGELL. The question is, do they have them? Yes or no? 

Mr. KANAN. I believe I answered your question. 

Mr. DINGELL. I am sorry? 

Mr. KANAN. I believe I answered your question. 

Mr. DINGELL. I would just like you to tell me yes or no; do they 

have the resources to do the job or not? Yes or no? 

Mr. KANAN. Yes. 

Mr. DINGELL. You think they do? 

Mr. MACKAY. No, I don’t believe they do. 

Mr. DINGELL. I am sorry? 

Mr. MACKAY. No, I do not believe they do. I think that is one of 

the reasons why we are here today. 

Mr. DINGELL. Ms. Isely? 

Ms. ISELY. We do not believe that they have the resources necessary. 

Mr. DINGELL. Now, would better trace-back capabilities have 

helped FDA to mitigate or to prevent this salmonella outbreak? 

Mr. KANAN. Yes. 

Mr. DINGELL. Mr. Mackay? 

Mr. MACKAY. It is a difficult one. I believe they could have. 

Mr. DINGELL. OK. 

Ms. Isely? 

Ms. ISELY. Yes. 

Mr. DINGELL. Now, should testing on food products and examination and visits and investigation of plants that are shipping products in interstate commerce be subject to safety requirements and 

be performed only by a laboratory accredited by FDA? Yes or no? 

Mr. KANAN. Yes. 

Mr. DINGELL. Yes or no? 

Mr. MACKAY. Yes, I believe labs should be accredited by the 

FDA. 

Mr. DINGELL. Ms. Isely? 

Ms. ISELY. Yes. 

Mr. DINGELL. Could this crisis have been mitigated if testing laboratories had been required to send their testing results to FDA? 

Mr. KANAN. No. 

Mr. DINGELL. Mr. Mackay? 

Mr. MACKAY. No. I think it is impossible to manage for an unethical and dishonest supplier. 

Mr. DINGELL. Ms. Isely? 

Ms. ISELY. It is difficult to answer the question. I don’t believe 

that it would unless there was some form of communication to 


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businesses that may be in receipt of products that had tested positive. 

Mr. DINGELL. So you all three are of the view that the FDA does 

not need to receive the results of the investigation of the testing 

laboratories. Is that correct? 

Mr. KANAN. No, that is not true, because that was not your question. 

Mr. DINGELL. OK. Should FDA have the authority to issue mandatory recalls of tainted foods? 

Mr. KANAN. Yes, but I have a comment on that, if I may. 

Mr. DINGELL. I don’t have time. 

Mr. Mackay? 

Mr. MACKAY. Yes, we would fully support that. 

Mr. DINGELL. Ms. Isely? 

Ms. ISELY. Yes, we support that. 

Mr. DINGELL. Now, we have agreed that the Food and Drug does 

not have the resources to do the job. Do your companies support 

or oppose mandating registration fees with which to fund increased 

inspections by FDA? Starting with you, Mr. Kanan. 

Mr. KANAN. You are calling me here to ask my opinions, and I 

don’t feel like I am able to—am I here for an opinion or for a yesor-no answer? 

Mr. DINGELL. I just want to hear, do you agree that they should 

have or they should not have? 

Mr. KANAN. I will have you ask me that question again. 

Mr. DINGELL. I am sorry? 

Mr. KANAN. I need to have that question again. 

Mr. DINGELL. Do your companies support or oppose mandating 

registration fees with which to fund increased inspections by FDA? 

Mr. KANAN. We would not be opposed. 

Mr. DINGELL. Mr. Mackay? 

Mr. MACKAY. We would support coming up with the appropriate 

way to improve the U.S. food safety system and finding a way to 

fund it, and I think industry would support that. But a lot more 

discussion would need to take place as to exactly what that might 

mean. 

Mr. DINGELL. Thank you. 

Ms. Isely? 

Ms. ISELY. I think that we would be in support of it. And I agree 

with Mr. Mackay’s comments, that we have to investigate it, particularly to look at its impact on small businesses. 

Mr. DINGELL. Thank you, ladies and gentlemen. 

Thanks, Mr. Chairman. 

Mr. STUPAK. Thank you, Mr. Dingell. 

Ms. DeGette, for questions. We have 4 minutes, if others want 

to go vote. 

Ms. DEGETTE. I just have a couple of questions because I can’t 

come back, and I appreciate your indulgence. 

I would like to ask you, Mr. Kanan, do you support the nine principles that Mr. Mackay said that we should adopt to improve our 

food safety system in this country? 

Mr. KANAN. From what I heard, Ms. DeGette, I do support it 

very much. 

Ms. DEGETTE. Thank you. 


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Ms. Isely? 

Ms. ISELY. Yes, we support that. 

Ms. DEGETTE. And I want to ask both of you—I want to start 

with Mr. Kanan. Have the sales of your company suffered as a result of being tied to PCA? 

Mr. KANAN. We haven’t fully had a chance to analyze it yet. 

Ms. DEGETTE. What about you, Ms. Isely? 

Ms. ISELY. I would say that we have not. The second that there 

was any possible association or problem, we immediately pulled the 

product because we were concerned for the health and welfare of 

our customers. 

Ms. DEGETTE. Do you think the confidence of your customers 

would be increased if we improved all of these food safety standards that we have been talking about? 

Ms. ISELY. Oh, absolutely. 

Ms. DEGETTE. What about you, Mr. Kanan? 

Mr. KANAN. Yes, absolutely. 

Ms. DEGETTE. What about you, Mr. Mackay? 

Mr. MACKAY. Yes, absolutely. I think anything we can do to 

strengthen confidence in the food safety system in the U.S. is going 

to be worth doing. 

Ms. DEGETTE. And let me start with you, Mr. Kanan. Now, we 

are hoping and we are intending to pass comprehensive food safety 

legislation this year. But, barring that, you have a financial interest in your company in improving the safety of the food that you 

receive. Are you doing that? 

Mr. KANAN. Are we—— 

Ms. DEGETTE. Are you instituting practices that will improve the 

oversight of the—— 

Mr. KANAN. Yes, we are. 

Ms. DEGETTE. And what about you, Ms. Isely? 

Ms. ISELY. Yes, we are. 

Ms. DEGETTE. Can you delineate for me some of the specific 

things that you are doing? 

Ms. ISELY. On the food side of our business, we have started a 

quality questionnaire that is in accordance with some of the Grocery Manufacturers Association’s food manufacturing practices to 

do audits and make sure that any of our vendors are following 

those good manufacturing practices. 

We are also, particularly in respect to the peanut products, roasted peanuts that we receive, we are testing for salmonella and requiring a certificate of analysis that is free of salmonella. 

Ms. DEGETTE. And do you think you might expand that for other 

types of at-risk products? 

Ms. ISELY. Yes. 

Ms. DEGETTE. Now, you said you have how many suppliers? 

Ms. ISELY. We have 1,300 suppliers. 

Ms. DEGETTE. 1,300 suppliers. And what were your gross revenues last year? 

Ms. ISELY. Our gross revenues last year were close to $200 million. 

Ms. DEGETTE. $200 million. Now, do you have the financial ability to go out and inspect all of those 1,300 suppliers? 

Ms. ISELY. No, we do not. 


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Ms. DEGETTE. And so what percentage of those do you think you 

can inspect? 

Ms. ISELY. What percentage of those? 

Ms. DEGETTE. Yes, because you said you are inspecting some 

meat suppliers and others. 

Ms. ISELY. Yes, we do. We inspect our meat suppliers that make 

our animal supplies for humane treatment of animals, cage-free, 

range, grass-fed, access to pasture—— 

Ms. DEGETTE. Right, I understand that. Do you think it would 

be worthwhile, for business reasons and obviously your consumers’ 

health, to expand that to inspections in some of the more at-risk 

areas like peanuts? 

Ms. ISELY. We would like to see that in the food supply arena 

that the government systems that you are discussing putting in 

place, that they work. If you are asking in the interim period what 

is our intent, yes, we intend to be more vigilant. I don’t know what 

percentage we will be able to visit. 

Ms. DEGETTE. OK. Thank you. 

Thank you, Mr. Chairman. 

Mr. STUPAK. Thanks, Ms. DeGette. 

Our time is up and for votes, too. So I guess we better hustle to 

the floor. We are going to recess till about 12:15. We have three 

votes on the floor. If we get back here at 12:15 promptly, we can 

finish up this panel and finish up this hearing before the next series of votes. 

So we will stand in recess until 12:15. 

[Recess.] 

Mr. STUPAK. I am going to call the committee back to order. 

Before questions from Ms. Sutton, let me just say that Mr. Walden asked that we put this March 11, 2009, letter to Frank Torti, 

Acting Commissioner, concerning the salmonella outbreak, by Mr. 

Barton, and Mr. Walden had signed it. Without objection, it will be 

made a part of the record. 

[The information was unavailable at the time of printing.] 

Mr. STUPAK. Next, turn to Ms. Sutton for questions, please. Ms. 

Sutton for 5 minutes. 

Ms. SUTTON. Thank you, Mr. Chairman. 

I have several questions, but I would like to begin with Mr. 

Kanan. I know that when you answered the question about supporting mandatory recall authority for the FDA that you wanted to 

say something in addition to the fact that you all support that. So 

I am going to give you this opportunity. 

Mr. KANAN. Thank you, Congresswoman Sutton. 

And, you know, I have a special feeling for you because a lot of 

my employees live in your district. So you can imagine how much 

this has affected all of us. So thank you for that question. 

I do support a mandatory recall, but I wanted to express my, at 

least, concern or opinion that, if there was a mandatory recall by 

the FDA, would it have prevented another manufacturer or owner 

of a company like myself from doing what I did, in getting out 3 

days in front of doing a recall on a presumptive positive on an open 

container of peanut butter? Would there have been another business owner like me that perhaps may have said, ‘‘You know what, 

let’s just wait for the FDA to do it, they will get their results on 


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Monday, it is their responsibility,’’ and will everybody do that? 

Now, I don’t think I would. I still would have done it. But I am 

wondering—and I just want to ask this to you all—would that prevent anybody from doing an earlier recall? 

Ms. SUTTON. Thank you, Mr. Kanan. And I appreciate that you 

answered that it would not have affected your decision to do it, because that is what? The responsible thing to do. 

Mr. KANAN. Right. 

Ms. SUTTON. So I appreciate you bringing up that point because 

it may mean that we have to do additional action to make sure 

that those who fail to do it, just because the FDA has that authority, you know, maybe there is some more punishment that needs 

to be put in place. Would you agree with that? 

Mr. KANAN. Correct, I would. 

Ms. SUTTON. I often hear in this committee and in related hearings that one of the reasons that the people are concerned about 

requiring test results to be reported to the FDA—first of all, do you 

all agree that positive test results should have to be reported 

mandatorily to the FDA? 

Mr. Kanan? 

Mr. KANAN. It sounds like that would be a very good idea, depending on the specifics. 

Ms. SUTTON. OK. 

Mr. Mackay? 

Mr. MACKAY. Positive finished food testing should be reported to 

the FDA. 

Ms. SUTTON. And it should be mandatory that it is done? It is 

not just ‘‘should be’’ as in a voluntary nature, but it should be mandatory that they have to report positive results, correct? 

Mr. MACKAY. However it is done, I believe that finished food testing positives should be reported to the FDA. It is also true today 

that it is law that, if it is in commerce, you have to report it, in 

any event. But I do support that. 

Ms. SUTTON. Well, I disagree with the assessment of what the 

status of the law is today, based on some other testimony here. 

Ms. Isely, do you also agree that positive results need to be reported to the FDA and that we need to mandate that that is done? 

Ms. ISELY. We absolutely agree with that. Our desire is that 

small businesses like ours can make decisions based on those tests 

and can have information that they need to make the decisions on 

what vendors they buy from. 

Ms. SUTTON. OK. And the reason why I even bring up that subject—it is actually related to my first point with Mr. Kanan—is 

that I often hear from people in these hearings that we can’t require the reporting of testing to the FDA, for fear that people then 

won’t test. And I guess my response to that, sort of similar to the 

whole mandatory recall authority, is, then we need to take further 

action to make sure that they are required to test and provide 

some sort of accountability for the failure to do so. So, you know, 

this is a big conundrum. 

And, Mr. Mackay, if I could just shift a little bit over to you, because I am struck by some of the testimony you have given here. 

You talked about that high-risk food, that it is your belief that the 

FDA should do an annual audit. Is that correct? 


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Mr. MACKAY. That is correct, yes. 

Ms. SUTTON. OK. And you also testified that sometimes you do 

your own independent audits at Kellogg and sometimes you do not, 

because you have so many products. Is that correct? Was that your 

testimony? 

Mr. MACKAY. Within the context of our own facilities, we do environmental tests, and we have a food safety plan across all of them. 

I was referring to, when we talk about the ingredients or suppliers, 

given that there are 3,000 of those, we have relied on industry 

practice, the third parties and a multistep process. 

Ms. SUTTON. OK. But I am just asking you the question then— 

so you said that sometimes you do a third-party, independent 

audit. Sometimes, though, you send out someone from Kellogg, correct, to do the audit? 

Mr. MACKAY. That is correct, yes. 

Ms. SUTTON. OK. And you think that the FDA should be responsible for doing the high-risk audits, but why don’t you think that 

it would be a good practice for Kellogg—because peanuts, obviously 

high-risk product—for Kellogg to also make that their standard, 

that if you are dealing with a high-risk ingredient, that you 

wouldn’t do your own audit? 

Mr. MACKAY. Congresswoman, it is really a practicality difference. For example, we have undertaken audits of all of the peanut and peanut paste suppliers going forward, and so has almost 

every other company that uses peanut-based products. 

The implication has been that those companies are running so 

many audits for companies, they actually can’t produce the product 

we all want. So, if we could get great standards, if we could have 

an FDA system where on high-risk plants they are actually doing 

an inspection that we can all rely on, it would be better for everyone. Because then they can actually—these audits, the comprehensive ones, can take a fair amount of time, and rather than duplicate those by hundreds of thousands of companies, if there is a set 

standard and an FDA audit of high-risk facilities, we should, I believe, be able to rely on that. 

Ms. SUTTON. OK. 

I would also just like to talk a little bit about that third-party 

audit. And you made a reference to the entity that conducted that 

third-party audit. And is that an entity that you use a lot? 

Mr. MACKAY. If you are referring to AIB—— 

Ms. SUTTON. Yes. 

Mr. MACKAY. I think AIB—and third-party audits, in general, 

are broad across the industry. I think AIB is probably the largest 

auditor in the U.S. 

Ms. SUTTON. My question is, do you use them a lot? 

Mr. MACKAY. I can’t tell you exactly how many audits we use 

from them, but we would use them on a number of our raw material supplies, yes. 

Ms. SUTTON. Would you please provide that information to me 

after the hearing? 

Mr. MACKAY. Yes, I am sure we can get that. 

Ms. SUTTON. OK. And, in light of all the things that have happened, are you still relying on AIB audits? After all of the informaVerDate Mar 15 2010 23:39 Mar 23, 2012 Jkt 067815 PO 00000 Frm 00075 Fmt 6633 Sfmt 6633 E:\HR\OC\A815.XXX A815

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tion that has been presented here today and in the past few 

months that has come out, are you still relying on AIB audits? 

Mr. MACKAY. You know, if you look at the AIB audit, they actually did find the problems. The issue wasn’t with the AIB audit. It 

was with the fact that PCA actually acted in a dishonest and unethical way. The audit by AIB identified the problems, and PCA 

did not act upon them. 

Ms. SUTTON. Well, Mr. Mackay, I would suggest that some of the 

evidence or the information that has been presented here today 

creates great concern about the coziness of these third-party, socalled ‘‘independent’’ audits and the results. 

And so, part of my question, again, was just whether or not you 

continue to rely on the audits by AIB. 

Mr. MACKAY. Well, subsequent to this unfortunate event, we 

have undertaken with high-risk suppliers to conduct our own audits. 

Ms. SUTTON. Thank you. 

Thank you, and I yield back. 

Mr. STUPAK. Thank you. 

Mr. Braley, for questions, please. 

Mr. BRALEY. Mr. Chairman, I want to focus on the costs of inadequate food safety inspections. 

And I will start with you, Mr. Mackay. There are press reports 

that the peanut industry could lose as much as a billion dollars as 

a result of this salmonella outbreak. And that is a lot of money, but 

what strikes me is how little money it would have taken to prevent 

all this from happening. 

We know that the inspections didn’t work when they were conducted by AIB, the third-party auditor that PCA hired. And when 

committee staff interviewed AIB officials, they told us that those 

audits were standard good manufacturing practices audits, which 

are the firm’s most basic audits that cost about $1,000. But AIB 

also told the committee staff that they offer more rigorous audits, 

which they call the gold standard audit, that is much more intensive and costs in the range of $20,000 to $30,000. 

So, Mr. Kanan, let me start with you. Did your firm ever consider acquiring a gold standard audit from AIB? 

Mr. KANAN. We, every year, have done AIB with the good manufacturing practices one. And we have not—nor did I actually know 

about this gold standard $20,000 audit. 

Mr. BRALEY. Mr. Mackay, has Kellogg ever used a gold standard 

audit from AIB? 

Mr. MACKAY. I can’t—I don’t know whether we have. I can tell 

you that, within the context of our own facilities, we are doing 

what you would term ‘‘gold standard’’ audits. 

Mr. BRALEY. Ms. Isely, has your firm ever used a gold standard 

audit from AIB? 

Ms. ISELY. Mr. Braley, I appreciate the question. We are a very 

small retail business—— 

Mr. BRALEY. Can you just answer the question, please? I don’t 

have much time. 

Ms. ISELY. No, we did not. 

Mr. BRALEY. All right. 


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Another option that was available to all of you—and I think you 

alluded to this, Mr. Mackay—is paying your own audit staff to conduct an audit. And earlier in the hearing, we learned that another 

company, Nestle USA, did its own audit of PCA rather than using 

a third-party auditor hired by PCA. Nestle’s audits uncovered serious deficiencies, such as rodent infestation and inadequate pathogen monitoring. And, as a result, they refused to do business with 

PCA. 

Do any of you know how much Nestle paid to conduct its own 

audit of PCA? Just answer ‘‘yes’’ or ‘‘no.’’ 

Mr. KANAN. No. 

Mr. MACKAY. No, but I would reflect that that audit was done 

in 2002. And audits, by default, are at-a-point-in-time inspections. 

Mr. BRALEY. Well, we all know that things go up over time because of inflation. But we are talking about a billion-dollar impact 

on one segment of the food industry. And the numbers we are talking about, in the thousand-dollar range, seem fairly small by comparison. 

Well, we asked Nestle, and here is what they said. They told us 

that they pay cost to their audits that they conduct. And counting 

the employees’ salaries, travel expenses, and other costs, they estimated that their audits of PCA cost $1,800, which seems like nothing compared to the alternative. And both of those audits took 1 

day to conduct. 

Mr. Mackay, can you tell us, based on current figures, how much 

Kellogg calculates that this problem has cost it? 

Mr. MACKAY. Currently, our estimation is between $65 million and $70 million. 

Mr. BRALEY. Mr. Kanan, do you have any estimate of what this 

has cost your company? 

Mr. KANAN. It is around a half a million dollars. 

Mr. BRALEY. Ms. Isely? 

Ms. ISELY. We do not have an estimate. 

Mr. BRALEY. So for approximately $1,800, each of your businesses might have discovered the disastrous conditions at PCA and 

avoided the million of dollars in recall costs and lost sales that you 

are incurring today, which seems like a very small investment in 

food safety up front and part of smart business practices. 

So let me ask you this. Mr. Mackay, does your company have 

plans to change its auditing practices going forward? 

Mr. MACKAY. We have already changed, as a learning from this, 

with high-risk ingredients. We are now conducting our own audits. 

Mr. BRALEY. Mr. Kanan, what about your company? 

Mr. KANAN. Yes, we have already changed, as well. We want to 

do more audits because of this situation that happened with our 

high-risk suppliers, which we have determined. 

Mr. BRALEY. Ms. Isely? 

Ms. ISELY. Yes, we have plans in place to change. Once again, 

we are a small retail chain. Where you say $1,800 is a small 

amount of money, it is not for a business of our size. 

Mr. BRALEY. Well, you also realize that one of the costs—— 

Ms. ISELY. And I agree that one of the primary issues for us is 

to ensure the health and safety of the people who buy food from 

us, and that is our primary concern. 


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But I also want to give input into the committee that is realistic 

when you are talking about small chain retailers and what they 

can and cannot do. Because it would be a disservice to the committee to say that we will go to the point where we would be out 

of business in order to inspect the 1,300 vendors. 

Mr. BRALEY. Well, let’s talk about that. 

Your company has $200 million in gross revenues, operates 30 

stores in three States and employs approximately 1,000 people. Do 

you think it’s worthwhile to risk the employment of those 1,000 

employees by failing to take adequate safeguards up front and having the long-term costs risk bankruptcy for the company? 

Ms. ISELY. No, we do not. But at the same time—— 

Mr. BRALEY. I’m going to reclaim my time because I don’t have 

any time left. I just want to close, Mr. Chairman, by pointing out 

that one of the reasons that I founded the Populist Caucus was to 

emphasize consumer protection and corporate responsibility. And I 

think it’s important at this hearing to acknowledge that we need 

to reward companies like Nestle USA, who do the right thing and 

to set best corporate practices. They operate a facility in my district 

in Waverly, Iowa, and I would like the record to reflect that they 

are a good example of what you do when you do things right. 

And I yield back. 

Mr. STUPAK. Thank you, Mr. Braley. 

Ms. Schakowsky for questions, please. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. 

First, I want to acknowledge that I think we’re at the base of 

this problem. We’re talking about a company that, as far as I am 

concerned, was headed by a murderer, somebody who knew that 

there was a problem and quite deliberately made a decision to send 

that product out. 

I don’t know, Mr. Mackay, if you’ve been here before. I know the 

other two, for sure, haven’t. But we have. We’ve been here before 

with food that has, if not killed, definitely made a lot of people ill— 

spinach and peppers—and every so often we’re here again. And so 

I just want to acknowledge the responsibility that I feel as a Member of Congress, and our responsibility to act. 

But I also do want to take you up on what I have heard of your 

offer. None of us is absolved of some responsibility, and certainly, 

going forward, we have to be. And I did want to—because we had 

a private conversation, Mr. Kanan, and I do want you to tell me 

about that conversation with Mr. Parnell at PCA. 

Mr. KANAN. Yes. I just wanted to clarify that. 

And, Mr. Stupak, you had in your opening statement that—I had 

said in my opening statement that I personally talked to Mr. Parnell and I had asked him, We’re hearing rumors of salmonella— 

when the Minnesota Department of Agriculture called me—we’re 

hearing rumors, they’re testing it, and I want to know from you, 

have you had any other problems with salmonella, have you had 

any other complaints, have you had any problems in the past? And 

he personally told me on the phone, No. 

The e-mail you showed is actually 4 or 5 hours after that; that’s 

when we started talking to him. And we said—that’s when you 

hear about, Well, we’re going to have to do the recall. And that’s 

when he said, I think I’m going to go to church and pray. 


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So we were very up on top of this with him. But when you have 

someone that’s going to act illegal and criminal, I still am just so 

surprised, and I don’t know, bewildered on how to handle somebody 

like that. 

Ms. SCHAKOWSKY. Well, let me just say, that’s why I think we 

absolutely have to have the systems in place both at the FDA—but 

I wanted to talk to you about systems as well. 

Do you think that, as part of your own company’s reporting to 

you, you ask for any positive test results from your suppliers? Let 

me just ask each of you if that is a feasible thing to do going forward. 

Mr. Kanan. 

Mr. KANAN. Yes, that’s feasible to do. 

Ms. SCHAKOWSKY. Well, let me just get that, Mr. Mackay. 

Mr. MACKAY. Anyone who provides us with raw materials, they 

would—normally, if they’re being honest and ethical, give us a response by the third-party lab of the positive. 

Ms. SCHAKOWSKY. Do you request that? Is that routine? 

Mr. MACKAY. We request that as part of the certificate of analysis, yes. 

Ms. SCHAKOWSKY. You do? 

Ms. ISELY. Yes, it would be feasible to request it. Without the 

weight of the law behind it and in a company that is bent on malfeasance, those can be not given or they can also be fabricated. 

Ms. SCHAKOWSKY. If they’re not given, would you not feel that 

maybe this is not a company to do business with? 

Ms. ISELY. I think what I was referring to is—I believe the question you asked, should they be sending you—if they were positive. 

Ms. SCHAKOWSKY. Actually I’m asking, should you be asking for 

that? 

Ms. ISELY. Yes. We can—we did ask for their test results from 

the Plainview, Texas, plant. And yes, we do request that. 

My point was that our requesting it does not mean that they will 

necessarily provide us with the information if they have it, because 

there’s no weight of law behind it. And additionally, if a company 

is bent on malfeasance, they can fabricate the test results and 

show you a negative result. 

Mr. STUPAK. If I may, I don’t mean to interrupt here, but, Ms. 

Isely, you are under oath. And you testified earlier that you never 

even asked for a certificate of analysis. How can you say you asked 

those questions at—— 

Ms. ISELY. Mr. Chairman, we asked it after—when we were talking to the Plainview, Texas, plant. 

Mr. STUPAK. After the recall? 

Ms. ISELY. After the recall, yes, sir. 

Mr. STUPAK. Oh, not before. She was asking about before. 

Ms. SCHAKOWSKY. I was. That it be part of your routine inquiry 

as business owners to ask for the test results in a certificate of 

analysis. 

Mr. MACKAY. And can I just be clear? Because we get that on the 

certificate of analysis. 

We have not, I don’t believe, currently requested, if a supplier 

we’re dealing with had any positives, that they inform us with 

those—even whether they’re for us or someone else. 


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And I think earlier there was a question, should that be mandated to be given to the FDA? And I would support that. 

Ms. SCHAKOWSKY. I’m not talking about the FDA now. 

Mr. MACKAY. I’m with you. I just think I may have not answered 

the question appropriately. 

Ms. SCHAKOWSKY. So—let me understand then. You did ask for 

that information or you did not? 

Mr. MACKAY. We ask for the information on anything that is sent 

to us. We—I don’t believe we’ve asked for it more broadly to say 

if any supplier that we deal with had a positive for anyone else. 

I would have to check that information. 

So, in other words, anything we get that’s coming to a Kellogg 

facility, we have a certificate of analysis, and we get that information. 

In the case of PCA, it appears that they may have manipulated 

that information. But I would have to check whether or not we 

asked for it, if it’s for someone else and just happens to be a positive. 

Ms. SCHAKOWSKY. Did you ask for PCA to disclose positive results before the outbreak? Had you ever asked them previous 

positives? 

Mr. MACKAY. As part of the independent third-party audit and 

the risk analysis that we go through with a supplier—— 

Ms. SCHAKOWSKY. Yes. 

Mr. MACKAY [continuing]. That’s all part of the questioning. And 

typically the third-party auditor will actually do that sort of evaluation; and in fact, I think AIB did identify some issues. And I 

think the issue really at the end of the day was, PCA did not take 

the corrective actions. 

Ms. SCHAKOWSKY. And you didn’t make sure that they did? 

Mr. MACKAY. I believe we did everything we could. But, you 

know, I may be getting into an area where I don’t have actually 

the clarity of data here. 

Ms. SCHAKOWSKY. OK. 

I know I’m over time. I thank you, Mr. Chairman for indulging 

me. 

Mr. STUPAK. Mr. Sullivan for questions, please. 

Mr. SULLIVAN. Thank you, Mr. Chairman. I want to thank the 

panel for being here. This question is for Mr. Kanan and Mr. 

Mackay and, I guess, all panelists. 

Have you heard of the Global Food Safety Initiative and the audits required to be GFSI certified? GFSI audits do analyze HACCP 

plants in greater depth, require a greater length of time to complete, are more expansive and give a more accurate evaluation of 

a company’s food safety controls. 

Would you be willing to, one, be subject to a GFSI audit? And 

two, require them for suppliers of high-risk ingredients? And I 

guess we will just go—— 

Mr. KANAN. Congressman Sullivan, I’ve heard of it. I don’t know 

the details much about it. 

I would most willingly want to look at it and be a part of it. And 

as long as it’s something that we could—that would be feasible for 

us, we absolutely would be a part of it. And if it was something 


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feasible for our suppliers, we absolutely would like to be able to request that of our suppliers as well. That would be great. 

Mr. MACKAY. Congressman, absolutely. It started in 2000, and 

we have been using that in all of our plants, manufacturing facilities, for about 3 years. 

As you look at—there are three reasons why we think GFSI is 

a great standard; and whether we adopt that for the U.S. food safety system, or something equivalent, we think it’s a great benchmark. The standards are accredited, the audit firms are accredited, 

the auditors are certified. And it’s just a much more rigorous process. 

And I think there is a lot of discussion now with industry, even 

talking about how we take GFSI and potentially use it in areas like 

APEC. So I think that would be an excellent place for this committee to look because it actually does address many of the recommendations I’ve said, and they’re already in place and formalized. 

Ms. ISELY. We are unfamiliar with the document that you are referring to. We would be happy to take a look at it. As a retailer 

and not a manufacturer, I’m not sure if we would have the expertise to understand exactly all the requirements in it. 

Mr. SULLIVAN. OK. All right, I’ve got one more. 

The food production chain is very complicated and there are 

many players, including suppliers, processors, distributors and retailers. Should they have different responsibilities and controls for 

ensuring food safety? 

Mr. KANAN. Yes, I believe they all should have different responsibilities and different levels of it. But my personal belief is, it 

should start with the manufacturer or the one who is actually making the product, sealing it, boxing it, casing it. That is where I 

think the emphasis needs to be, is on that portion of it. 

I think there are things distributors can do and retailers can do 

in the supply chain to help. But the greatest emphasis has got to 

come on—with the manufacturer of the product. 

Mr. MACKAY. I think the standards for manufacturers and suppliers should be uniform and consistent. And that’s the only way 

we’re going to ensure the safety of the food supply. 

When you talk to retailers and distributors, I think that’s a different situation there. I think the focus, from their perspective, is 

more on traceability and how quickly they can react if there is a 

problem in the food system. 

But I think with the standards, good manufacturing practices, 

HACCP, et cetera, that really comes back to suppliers and manufacturers. 

Ms. ISELY. We would agree with all the statements that have 

been made. 

Mr. SULLIVAN. Well, thank you very much. 

I yield back. 

Mr. STUPAK. We will go a second round for those members who 

are here, because there are a couple questions I want to follow up 

on. 

Mr. Kanan, you mentioned the e-mail that I had in my opening 

statement. And when Mr. Parnell wrote back and said, I’m sure it 


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is something we did, haven’t heard anything yet, but we will let 

you know; did they get back with you? 

Mr. KANAN. Well, that’s—I mean, after that, that’s when we said, 

We’re doing the recall. And then we had to talk to them the next 

day and over the weekend; and it was a constant—— 

Mr. STUPAK. Right. I recall you are the first company that started the recall on the peanut butter. Did you notify the FDA when 

you got this e-mail? 

Mr. KANAN. The FDA had already been a part of this whole process for the day. I can’t remember the day of that e-mail, if that is 

the Friday—— 

Mr. STUPAK. January 7. Wednesday, January 7. 

Mr. KANAN. Wednesday. Yes, that was upon the first—— 

Mr. STUPAK. Right. Did you ever give them the e-mail? 

Mr. KANAN. I don’t know if we did or not, to be honest with you, 

sir. 

Mr. STUPAK. OK. You said to do independent testing now for food 

safety? You do food testing now of your peanut butter? 

Mr. KANAN. Yes. We are doing—with the new peanut butter suppliers, we are requiring a whole new set of standards for that as 

well. 

Mr. STUPAK. But do you do testing over and above what your 

new suppliers give you? 

Mr. KANAN. I do not know if we have tested the peanut butter 

for salmonella again or not. But we’re—— 

Mr. STUPAK. So you could be basically in the same position you 

are in right now? 

Mr. KANAN. No. 

Mr. STUPAK. Hopefully, not a few years from now, like we have 

been. But why weren’t you? If you are not doing independent testing, why wouldn’t you just end up in the same situation if you are 

relying on third parties? 

Mr. KANAN. Well, no. I mean, we are—I want to make sure I’m 

answering you correctly. 

Mr. STUPAK. Sure. 

Mr. KANAN. So you have to bear with me just for a moment. 

Mr. STUPAK. A little bit. I can’t give you a lot of time because 

we have 5 minutes. 

Mr. KANAN. We are doing our own testing, and we’re reevaluating the suppliers. We’re looking at their AIB audits. 

Mr. STUPAK. You are doing your own testing. So you are dealing 

with peanut butter. The problem is salmonella. Do you test independently from your supplier for salmonella? 

Mr. KANAN. I don’t know if we have yet or not. 

Mr. STUPAK. OK. So technically we could be back to where we 

were 2 years from now. Hopefully not, but we could be underneath 

this scenario. 

If your company comes across—in your independent testing, if 

you come across a positive for salmonella, you’ve indicated PCA 

should have notified the FDA. How about your company? Should 

you then be responsible for notifying the FDA? 

Mr. KANAN. Oh, yes, absolutely. We absolutely would. 

Mr. STUPAK. How about you Mr. Mackay? You do independent 

testing now. If you found positive tests for salmonella or E. coli on 


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spinach or whatever it might be, do you think your company has 

a responsibility to notify the FDA? 

Mr. MACKAY. Yes, I believe so. We have started as a learning on 

this from all high-risk ingredients, doing our own multitask audits. 

But, yes, I would agree that if you find in the finished food a 

positive test, the FDA should be notified. 

Mr. STUPAK. How about you, Ms. Isely? 

Mr. MACKAY. I beg your pardon? 

Mr. STUPAK. I asked Ms. Isely the same question. 

Ms. ISELY. Yes. We have started our own testing on the roasted 

peanuts. And we believe if there is a positive test, we should notify 

the FDA. 

Mr. STUPAK. OK. In this PCA thing, it’s my understanding—and 

we read in your testimony that none of you hired PCA—or I am 

sorry, you hired PCA, but you didn’t hire AIB. Is that correct, Mr. 

Kanan? 

Mr. KANAN. Well, we hire AIB for our own facilities. 

Mr. STUPAK. OK. So how about for Georgia? 

Mr. KANAN. As far as requiring our supplier to have somebody? 

Mr. STUPAK. Right. 

Mr. KANAN. I mean, we ask for their third-party audits. 

Mr. STUPAK. So you use AIB or—— 

Mr. KANAN. We don’t specify currently who to use. 

Mr. STUPAK. Mr. Mackay, how about you? 

Mr. MACKAY. I think there are three or four auditors that we 

would be comfortable with companies and suppliers using, and AIB 

was one of them. Probably—— 

Mr. STUPAK. PCA picked them then? 

Mr. MACKAY. PCA picked them, yes. They worked for PCA. They 

don’t work for us. 

Mr. STUPAK. Are you still comfortable using AIB? 

Mr. MACKAY. You know, as I think we have looked at AIB, they 

actually identified the problems. The issue here is an unethical and 

dishonest company that actually ignored many of the findings that 

AIB highlighted to them. 

Mr. STUPAK. But also, here, my understanding from listening to 

your testimony was, there were different things—like you asked 

AIB to do a GMP, good manufacturing practices. But you could 

have asked them to dig deeper, as I think Mr. Braley and others 

pointed out. 

It would have cost more money, right? It would have cost a high- er test, like $20,000 to do a salmonella testing as opposed to just 

good manufacturing practices, correct? 

Mr. MACKAY. Yes. Well, one of the learnings I think from this 

from our perspective is that with high-risk ingredients—and we are 

now doing our own internal and more significant tests, which are 

more consistent with GFSI. 

Mr. STUPAK. But before the salmonella outbreak, you could have 

asked PCA to—or AIB to do a more extensive testing for salmonella. 

Mr. MACKAY. We could have. And I think you know I would say 

that what—we thought at the time we were using industry best 

practice. We have a multistep process including a third-party audit 

and the CofA and the risk analysis. 


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Mr. STUPAK. Sure. But Georgia plants—— 

Mr. MACKAY. Yes. 

Mr. STUPAK. In 2007, Conagra—was it Peter Pan or Skippy peanut butter? Whatever it was, we had the same thing 2 years ago. 

Wouldn’t that have put you on an alert to ask for more robust testing, not just of what’s going on in the line, but actually the test 

results and do testing for salmonella? 

I mean, this is all in the same spot. Basically 18 months later 

we have the same thing. 

Mr. MACKAY. Yes. It was our understanding, through the AIB 

audit, that they were doing environmental testing. And when you 

look at Conagra, environmental testing was really the key there, 

because the issue was—— 

Mr. STUPAK. Testing is different than food safety testing; is it 

not? 

Mr. MACKAY. There are a combination. Environmental testing is 

something you do at the start of the process to try to mitigate 

against anything actually making it into the food. The final check 

is, you have a certificate of analysis on the final food to make sure 

there is no pathogen in the food before it’s shipped to us. 

So it’s a combination of both of those things that if they had been 

followed appropriately, we believe would have potentially mitigated 

against this. 

Mr. STUPAK. I guess the part that bothers me—Kellogg’s, you are 

a big, big corporation, many products. It unfortunately cost you a 

lot of money because of this recall. But yet you put PCA in the 

driver’s seat. You tell them, Oh, use any one of these people; we 

rely on you. 

You don’t do independent testing. But without you, there is no 

PCA. I mean, you are the guy who—you are the company that is 

the monetary giant here. You could control the suppliers better if 

you wanted to because if you are not buying their product, it’s 

going to be harder for them to stay in business. 

I would think that a large corporation like yourself—you are all 

big corporations, actually—you would have more—you could have 

used your financial leverage to make sure some of these things we 

see now, in hindsight, could have been done to prevent the salmonella, especially since we had peanut butter salmonella as an 

item 2 years earlier. 

I’m baffled by that. 

Mr. MACKAY. I think, in hindsight, you are right. We have 

changed our process and we are doing our own testing. 

I mentioned earlier a potential practicality issue here. When you 

look at the size of the supplier in the context of Kellogg, we bought, 

I think, $5 million to $10 million annually of product from this 

company. We probably spend in excess of, I think, $3 billion or $4 

billion on raw materials. So it was a very small supplier. 

And the industry best practice is to use third-party audits. We 

did supplement that with a risk analysis, and we did mandate certificates of analysis. And unfortunately a company that is not honest and ethical can mitigate against even the best systems. 

Mr. STUPAK. Yes. But my question was industry standard. 

When Nestle goes through and finds the problems—even Mrs. 

Field’s cookies, we have documents in our binder there that they 


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found it, and they’re an even smaller company, with the PCA, and 

just said, Man, these are bad practices; we’re not going to use 

them. 

I hope that’s not the industry standard. 

Mr. MACKAY. I’m not trying to be defensive. 

There are hundreds of companies involved here, so all of us, if 

you like, are partially at fault for potentially relying on a system 

that I’m hoping that Congress will work with industry to actually 

enhance and improve, because that’s the way we’re going to actually make our food system stronger. 

Mr. STUPAK. Well, President Obama has put more money, or pro- posed more money for the Food and Drug Administration, about $1 

billion more, about $200 million new money for food safety. But everyone tells us it’s still not enough; they need at least $350 million 

per year for the next 3 years plus about an 18 percent increase 

every year after that for another 5 years to get up to par for food 

and drug safety. That’s why we have the global food safety bill that 

Mr. Dingell, Mr. Pallone and myself have written. 

Would you be in favor then of those registration fees? Not only 

do you have to register a plant like PCA, whether you are in Plainview, Texas, or in Georgia, but a registration fee to be put on these 

companies so we can finance this rigorous inspection system we’re 

all hoping for and wishing for so we stop the food-borne illnesses? 

Mr. MACKAY. Yes. I think what I would say is, Kellogg—food 

safety is paramount to Kellogg. 

And—I think they are all reputable food companies, and I think 

the industry would embrace, how do we play an active role in ensuring that we can help, whatever the funding dynamics are, to ensure we do enhance the food safety system. I don’t know exactly 

what that might mean. But I know that the industry would, and 

Kellogg would, certainly, be prepared to step up. 

Mr. STUPAK. Including registration or inspection fees? 

Mr. MACKAY. Whatever the final determination might be, whatever makes the most sense. 

Mr. STUPAK. Thank you, Mr. Mackay. 

Mr. Walden for questions. 

Mr. WAXMAN. Thank you, Mr. Chairman. 

Mr. Mackay, let me go to you. How many suppliers does Kellogg’s 

have? 

Mr. MACKAY. We have 3,000 ingredients, about 1,000 suppliers. 

Mr. WALDEN. One thousand suppliers, 3,000 ingredients. And 

you require inspections, audits, from all of those suppliers? 

Mr. MACKAY. Yes. We have a multistep process that we use in 

actually accrediting every supplier, including a third-party audit, 

including an analysis of risk, including certificates of analysis. 

Mr. WALDEN. And have you worked with AIB? They’re one of 

them, I think you said, that is one of the gold standards, right? 

Mr. MACKAY. Well, they are one of three or four, as I understand 

it, accredited auditing firms in the U.S. that we have on our list 

as being acceptable to use by our suppliers to do the independent 

third-party audits. 

Mr. WALDEN. All right. 

Chairman Waxman stated that Kellogg’s relied on procedures 

that are normally OK and did not, in this instance, take extra 


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steps that he felt were necessary to catch or personally inspect 

PCA. 

Is it practical or cost effective to take these extra steps? I think 

that’s one of the things I am struggling with is, where in the food 

chain, literally, is it most effective to step in? And I’m trying to figure out—I have a little company—or I have a number of them in 

my district and State that have been affected. They’re food producers. They have had to do the recalls. 

I think the one out in Union, Oregon, Rock Creek Nut, that, you 

know, used some nuts and put them both in trail mix and chocolate 

clusters. I cannot imagine a company in that tiny little town to 

have the resources to go order inspections at PCA. 

How do we get to the point where, if you are the one producing 

the next step in the product development, you can count on what 

you get to be safe? 

Mr. MACKAY. Yes. I think I’d refer—as I’m looking at the nine 

recommendations we made, each one of them actually builds on the 

other, so it’s not like you can draw on one. 

But I think if I pulled it to the development of food safety plans 

for every food facility as being mandatory; we’re hoping consistent 

manufacturer audit standards as being another—actually having 

the FDA inspect what they would determine through the council as 

high-risk foods and/or ingredients, mandating that when they do 

those annual inspections, that if there are any test results within 

that facility, they’re turned over to the FDA—I’m talking environmental now more than finished food. I think, in combination, all of 

those things, plus mandatory recall and traceability, are going to 

be required to actually improve the food safety system in the U.S. 

Mr. WALDEN. Because—I’m a little sympathetic toward Ms. Isely 

here because, as a retailer, I think it would be almost impossible— 

it’s hard enough running your retail outlet, then to think that 

every product you get in you have to test or something like that. 

Somewhere upstream of that she should be able to know that 

when it comes to her store from your company or your company 

that it’s safe. Otherwise you go next, what? To the parents, You 

have to test it before you eat it? I mean, at some point here it gets 

ridiculous. 

Mr. MACKAY. Congressman, I agree. I think that’s why we have 

a comprehensive overhaul of the current system. And I think the 

steps we’ve put forward—and I know a number of these have already been in what Congress is trying to pass—I think will make 

a significant difference in food safety in the U.S. 

Mr. WALDEN. So what stage in the production process would you 

say is most important? Which one has the greatest likelihood of detecting a problem? I mean, if we had to focus on here are the top 

two places you need to go, what’s the order? 

Mr. MACKAY. Well, I think you’ve got to break it down. The first 

one is, if we’re buying ingredients, then you need a comprehensive 

system that ensures that those ingredients when they come into 

our plant are actually safe. Now to include the last step on that 

is the certificate of analysis. In this case, we had—— 

Mr. WALDEN. You had one—— 

Mr. MACKAY. We had those. But it’s very hard to manage for an 

unethical company. 


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Once we have the raw material and assuming that it is safe, 

then within the manufacturing process, environmental testing at 

the very beginning of that and all the way through food safety 

plans, whether it’s HACCP or an equivalent, is absolutely essential 

because if you detect something early on, you can avoid its getting 

into the finished food. 

Mr. WALDEN. Right. 

Mr. MACKAY. That’s absolutely critical. That’s why companies 

do—and GFSI, these are audits that are so important. 

Once you have the plant running, checking for environmental is 

really critical to make sure you can rectify any issues that might 

happen. 

Mr. WALDEN. And I have a question for both you and Mr. Kanan. 

You tested your products that you got from—the ingredients 

which came from PCA at some point after this was known, right? 

Mr. MACKAY. We relied—— 

Mr. WALDEN. The recalled product. 

Mr. MACKAY. Oh, on the recalled products? 

Mr. WALDEN. Right. 

Mr. MACKAY. I think the FDA has done all sorts of tests. 

In the facility where the sandwich crackers were made—for example, we did over—last year, over 300-plus environmental tests, 

all negative. The FDA has come and done massive amounts of 

tests, all negative. 

Mr. KANAN. All the tests we did on that, Congressman Walden, 

all turned up negative. 

But the interesting thing I’d like to talk about real quick: When 

that open container was tested, they took 13 scoops of peanut butter and tested each one differently, only 4 of the 13 turned up positive. 

All of the products we tested were negative. I never heard what 

FDA found out about—— 

Mr. WALDEN. Did you ask? 

Mr. KANAN. Yes. 

Mr. WALDEN. And they won’t reveal it or what? 

Mr. KANAN. They just haven’t gotten back with us. 

Mr. WALDEN. You don’t know the answer to that? 

The other question that I wanted to get to, and then I will let 

you finish up, because I will forget it otherwise. You said in your 

testimony, when you first got wind that there was a problem, that 

you asked FDA to test the product and they didn’t. Why, did they 

tell you? 

Mr. KANAN. I was baffled at that, honestly. I don’t know what 

their procedures or policies are. I was asking them, please take it 

and test it because I want to know. 

Mr. WALDEN. Sure. 

Mr. KANAN. If not, I’m going to do it anyway. 

Mr. WALDEN. Did they say that’s your responsibility and not 

ours? Or did they have an answer? 

Mr. KANAN. They didn’t have an answer. 

Mr. WALDEN. But then they came back? 

Mr. KANAN. They came back the next day. Maybe they didn’t 

have—weren’t instructed by their superiors at that point. I don’t 


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know. It didn’t make sense to me, but I wasn’t going to, you know, 

be questioning them at that point. 

Mr. WALDEN. Mr. Chairman, it would be a good follow-up I think 

some time with the FDA as to why they didn’t do that. I mean, I 

would think that if you are a distributor or a producer, and you 

think you have a problem—— 

Mr. KANAN. As a distributor, we obviously had the product right 

there. 

Mr. STUPAK. The next day, didn’t they come back? 

Mr. KANAN. The next day they came back. 

Mr. WALDEN. Only after they discovered it in another container, 

right? Or something like that? 

Mr. KANAN. I don’t know why they didn’t—why they didn’t take 

it the first day versus the second day. 

Mr. STUPAK. Did it the second day but not the first day; I know 

it was in your testimony. 

Did you ever find out the results of those? 

Mr. KANAN. Never did. 

Mr. WALDEN. That’s the other issue. He hasn’t been able to get 

the results back from the FDA, which seems odd. 

Mr. KANAN. But it’s going to be interesting because most of that 

was negative. And I think it’s—that’s the thing about salmonella, 

finding that in peanut butter. It lives in pockets, and—— 

Mr. WALDEN. That’s what we’ve learned. And that’s why I think 

so many of us were so offended when PCA got a positive, then they 

sent another sample out and got a negative and then said, Cut 

them loose. 

Mr. KANAN. Somebody earlier had said that PCA was ignorant. 

I think they were very smart and they knew exactly what they 

were doing to try to get around that system. They knew that they 

could probably reblend the peanut butter and retest it because, 

look, 4 out of 13 came back. Odds are you are going to get a negative. 

Mr. WALDEN. That’s one of the great things on this committee, 

you learn a lot about things you never thought you would learn 

about. And that’s one of them, that it’s almost random in peanut 

butter whether you get a positive or a negative sample. That’s why 

the law says, if you get a positive sample, you are done. 

You can go sample again and try to figure out what went wrong 

and where it is in the system, but you do not ship that. 

And we have the e-mail that indicated they—at least from my 

reading of it—knew pretty clearly what they were doing, and 

shipped out peanut butter once they got a negative after they had 

gotten a positive. And that’s absolutely wrong. 

Mr. KANAN. To Mr. Mackay’s point, how do you stop somebody 

from being crooked? 

Mr. WALDEN. And I guess—and then I will quit here because I 

have gone over my time. But that’s what I’m struggling with. 

I don’t want to overreact and regulate to the point where you 

can’t produce food and then what do we do? Have it all imported, 

and we will have no idea what’s in it; we know about that from 

our other hearings. 


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So I want to get a balance here that works, that gives us as 

much security as we can in our food chain, but doesn’t blow up our 

whole system because it has been working pretty well, frankly. 

I realize there are these issues we’ve dealt with, and that’s where 

we’re trying—I think we ought to home in, be careful. 

Your recommendations, Mr. Mackay, are most helpful and all of 

your input has been most helpful for me. We’ve got a separate bill 

that’s bipartisan that would address this, I think, in a constructive 

way, too; and hopefully we can get together on a common strategy 

here. 

So thank you, Mr. Chairman. And thank you to our witnesses. 

Mr. STUPAK. Well, thanks. I guess one thing—how to get to it— 

I think there’s a responsibility of food processors to ask the question. It’s my understanding from the testimony we’ve gone through 

here for the last 3, 4 hours, and no one asked the question, did you 

ever have a positive? No one asked the question of PCA. 

Mr. Mackay, that one document you showed us, the certificate of 

analysis which says no salmonella, in fact that lot did have a positive salmonella. I’m not saying to question every COA, but I would 

think someone would ask the question. 

And the reason why you are here, and I don’t want to confuse 

the record, like Ms. Isely and you, Mr. Kanan, you are processors; 

you are not just strictly retailers. So who has the ultimate or the 

final responsibility? 

Mr. KANAN. We’re the distributor with this product. That’s why 

I kept saying, it’s got to be the manufacturer. 

Mr. STUPAK. You get the peanut butter from PCA. You slap your 

name—— 

Mr. KANAN. No. We didn’t touch it. They put the label on. They 

sealed the case. We just bring it in. 

Mr. STUPAK. It has your name on it. Don’t you have some responsibility to make sure—— 

Mr. KANAN. I didn’t say we don’t have any responsibility. In this 

case, I’m the distributor. And I really think the biggest point in 

common with the manufacturer, we’ve got to help the manufacturers make better products so retailers, like Ms. Isely, and distributors like myself and the thousands of—— 

Mr. STUPAK. I believe Ms. Isely still processes the peanut butter. 

The only problem that you had was in the peanut butter that you 

are grinding in your stores, right? Wasn’t that it? 

Ms. ISELY. That’s not the only problem we had. 

Mr. KANAN. Retailers and the distributors in general, the biggest 

responsibility has got to come with the manufacturer. 

Mr. STUPAK. Really. 

Mr. KANAN. It starts there and ends there. It’s sealed and closed. 

Mr. STUPAK. Don’t you have some responsibility since you put 

your name on it, and you are the one who puts it in the—— 

Mr. KANAN. I’m not saying I don’t have that responsibility. But— 

yes, absolutely, but to help fix the system, Congressman, to help 

fix it, we’ve got to focus mainly on the manufacturer. 

Mr. STUPAK. OK. 

Let me ask this question, Mr. Mackay, if I may. Has Kellogg ever 

told suppliers they do not need to do finished product testing and, 

instead, just need to do environmental testing at facilities? Have 


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you told your suppliers, you don’t have to do the finished product 

testing, just do your environmental testing? 

Mr. MACKAY. I don’t believe so, but I would think not. We can 

get you an absolute answer, because I don’t want to put it on 

record and find that I’m wrong. 

But my belief would be that that would not be the case. 

Mr. STUPAK. OK. We read it or we saw it in some document, and 

we’re just trying to recall. We’ve gone through thousands of documents. We thought some directive in there, a comment made that 

you would just—don’t worry about the final product; just do the environmental testing. 

Mr. MACKAY. I don’t believe so. But we can check. 

I would say, though, that if you have exhaustive environmental 

testing, and you have a food safety plan in place and you are following good manufacturing processes, that the probability of your 

having a problem in the final food is mitigated significantly. 

But—I would have to check that, Congressman, but I don’t believe that would be the case. 

Mr. STUPAK. If you would get back, I would like to see that. Because it bothers us if that is the situation because I think we’ve 

got all responsibility through the whole chain, from the grower all 

the way down to the person who puts it on the shelves, to make 

sure that food is safe. 

Mr. MACKAY. Just to add to your comment, to your question, I 

think everyone has a responsibility in the chain. And I think the 

more comprehensive that we can make the food safety system in 

the U.S. through the supplier, through the manufacturer principally, the more likely we are to really improve the food safety in 

the U.S., which I believe is already very good. But it clearly can 

be improved. 

Mr. STUPAK. Well, from where we sit, this is what, our fifteenth 

hearing in about 18 months or so, just on food safety alone. That’s 

not even counting the drug hearings we’ve had on drug safety. And 

I guess we’re just bothered by no standards and everyone’s doing 

it a little differently. 

We have three witnesses here who are all trying to do the right 

thing. They have three different systems going. We need to have 

some uniformity so we know what to look for. 

And these audits, on tab 23 there, where Sam Lightsey gets notice in December there is going to be an audit. It will take place 

on March 23–24. I have got time to clean up the dead rodents; I 

have time to clean up the flies, the beetles, rodent droppings, the 

feathers, whatever it may be. And that must come to an end. 

I guess we’re looking forward. I know you all gave us suggestions 

on what to do. We appreciate it. We appreciate you all trying to 

help out in this matter and for your testimony today. And I want 

to thank you for being here and thanks for putting up with our 

questions and answering the questions under oath to the best of 

your ability. 

And we look forward to some further answers. All members will 

have 10 days to submit additional questions for the record, so don’t 

be surprised if we contact you and ask for additional information. 


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And with that, I—that concludes our hearing. I want to thank 

once again all the witnesses, the members for their active participation. Thank you. 

Mr. KANAN. Thank you. 

[Whereupon, at 1:13 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 


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