California shippers and packers have hired a private investigator to find evidence of corrupt buying practices in the state’s grape and stone fruit industries.
Scott Nelson, owner of Fresno-based S.K. Nelson & Co, wouldn’t say how many shippers and packers in California’s Central Valley have hired him to investigate possible kickback schemes.
But he did say “the concern is significant within the industry.”
And it’s not new.
“Our position is this is something that’s been going on for some time,” Nelson said.
Shippers and packers became aware of buying practices that put them at a competitive disadvantage, Nelson said.
In some cases, Nelson said, buyers were bribed with cash to make deals. In other cases, they were given gifts.
Nelson compared the allegations to the Scott Salyer case. In 2010, Salyer, a former SK Foods executive, was charged with conspiring to fix prices or rig bids for processed tomato products. He is awaiting trial.
In July, Nelson & Co. launched a media campaign, taking out advertisements in The Packer and other industry publications. Nelson also launched a website, http://www.fruitbuyingkickbacks.com.
Barry Bedwell, president of the Fresno-based California Grape and Tree Fruit League, said he had not heard any rumors of corruption in the California table grape or stone fruit industries.
While Bedwell said his organization is not involved in the day-to-day marketing of fruit, the fact that he hadn’t heard any industry buzz before Nelson’s ad campaign is still surprising.
“I called a couple of folks and said, ‘Can you help me out?’ and I didn’t get any remarks about who (is behind the allegations) and why,” Bedwell said. “I have not heard a word.”
Bedwell fears the ad campaign could have negative effects on the industry.
“Anytime you have ‘corruption’ and ‘table grapes,’ ‘stone fruit’ and ‘SK Foods’ in the same sentence, it’s not a good thing,” he said. “I think there are better ways to vet this issue than taking out a full-page ad.”
Because of fears of retaliation, the shippers and packers who hired Nelson are remaining anonymous, Nelson said.
Nelson would not say when his investigation started or when it might end. He would not say whether the U.S. Department of Agriculture had been contacted.
The aim of the media campaign is two-fold, Nelson said: to encourage other people in the industry with knowledge of potentially illegal activities to come forward; and to convince participants in illegal activities to stop.
People who provide tips that lead to convictions are eligible for rewards of up to $50,000, according to Nelson’s website.