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Bribes Let Tomato Vendor Sell Tainted Food

Business Strategy – Robert Watson, a top ingredient buyer for Kraft Foods, needed $20,000 to pay his taxes. So he called a broker for a California tomato processor that for years had been paying him bribes to get its products into Kraft’s plants.

Bribes Let Tomato Vendor Sell Tainted Food, myhusbandstolemyblog.comThe check would soon be in the mail, the broker promised. “We’ll have to deduct it out of your commissions as we move forward,” he said, using a euphemism for bribes.

Days later, federal agents descended on Kraft’s offices near Chicago and confronted Mr. Watson. He admitted his role in a bribery scheme that has laid bare a startling vein of corruption in the food industry. And because the scheme also involved millions of pounds of tomato products with high levels of mold or other defects, the case has raised serious questions about how well food manufacturers safeguard the quality of their ingredients.

Over the last 14 months, Mr. Watson and three other purchasing managers, at Frito-Lay, Safeway and B&G Foods, have pleaded guilty to taking bribes. Five people connected to one of the nation’s largest tomato processors, SK Foods, have also admitted taking part in the scheme.

Now, federal prosecutors in California have taken aim at the owner of SK Foods, who they say spearheaded the far-reaching plot. The man, Frederick Scott Salyer, was arrested at Kennedy Airport in New York City on Feb. 4 after getting off a flight from Switzerland. He was indicted last week on racketeering, fraud and obstruction of justice charges.

The scheme, as laid out by federal prosecutors, has two parts. Officials say that Mr. Salyer and others at SK Foods greased the palms of a handful of corporate buyers in exchange for lucrative contracts and confidential information on bids submitted by competitors. This most likely drove up ingredient prices for the big food companies.

In addition, prosecutors say that for years, SK Foods shipped its customers millions of pounds of bulk tomato paste and puree that fell short of basic quality standards — with falsified documentation to mask the problems. Often that meant mold counts so high the sale should have been prohibited under federal law; at other times it involved breaching specifications in the sales contracts, such as acidity levels or the age of the product.

The scope of the tainted shipments was much broader than the bribery scheme, touching more than 55 companies. In some cases, companies detected problems and sent the products back — but in many cases, according to prosecutors, they did not, and the tainted ingredients wound up in food sold to consumers. Read more »

A Small Price for a Large Benefit

Business Strategy – Forecasts involving climate change are highly uncertain, denialists assert — a point that climate researchers themselves readily concede. The denialists view the uncertainty as strengthening their case for inaction, yet a careful weighing of the relevant costs and benefits supports taking exactly the opposite course.

A Small Price for a Large Benefit, myhusbandstolemyblog.com

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Organizers of the recent climate conference in Copenhagen sought, unsuccessfully, to forge agreements to limit global warming to 3.6 degrees Fahrenheit by the end of the century. But even an increase that small would cause deadly harm. And far greater damage is likely if we do nothing.

The numbers — and there are many to choose from — paint a grim picture. According to recent estimates from the Integrated Global Systems Model at the Massachusetts Institute of Technology, the median forecast is for a climb of 9 degrees Fahrenheit by century’s end, in the absence of effective countermeasures.

That forecast, however, may underestimate the increase. According to the same M.I.T. model, there is a 10 percent chance that the average global temperature will rise more than 12.4 degrees by 2100, and a 3 percent chance it will climb more than 14.4 degrees. Warming on that scale would be truly catastrophic.

Scientists say that even the 3.6-degree increase would spell widespread loss of life, so it’s hardly alarmist to view the risk of inaction as frightening.

In contrast, the risk of taking action should frighten no one. Essentially, the risk is that if current estimates turn out to be wildly pessimistic, the money spent to curb greenhouse gases wouldn’t have been needed to save the planet. And yet that money would still have prevented substantial damage. (The M.I.T. model estimates a zero probability of the temperature rising by less than 3.6 degrees by 2100.)

Moreover, taking action won’t cost much. According to estimates by the Intergovernmental Panel on Climate Change, a tax of $80 a metric ton on carbon dioxide — or a cap-and-trade system with similar charges — would stabilize temperatures by midcentury.

This figure was determined, however, before the arrival of more pessimistic estimates on the pace of global warming. So let’s assume a tax of $300 a ton, just to be safe.

Under such a tax, the prices of goods would rise in proportion to their carbon footprints — in the case of gasoline, for example, by roughly $2.60 a gallon.

A sudden price increase of that magnitude could indeed be painful. But if phased in, it would cause much less harm. Facing steadily increasing fuel prices, for example, manufacturers would scramble to develop more efficient vehicles. Read more »

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