USDA takes heat as Democrats seek probe into trade aid

The top watchdog at the United States Department of Agriculture (USDA) took heat Tuesday from Democrats who are demanding an internal probe into trade-related aid payments to the subsidiary of a Brazilian corporation under criminal investigation.

Democrats on a House Appropriations subcommittee urged USDA Inspector General (IG) Phyllis Fong to investigate whether the department should continue funding meatpacking company JBS USA with aid designed to support farmers hindered by President Trump’s trade battles.

Fong declined to say whether her office would probe JBS USA’s parent company while it is being investigated by the Department of Justice and Securities and Exchange Commission, but noted that she is required to coordinate with federal law enforcement.

Fong’s answer did little to appease Democrats who have called on the USDA to take its own action after they were rebuffed by Agriculture Secretary Sonny Perdue, who declined in January to investigate the company during the DOJ probe.

“I’m making an assumption that the Secretary condones the use of taxpayer dollars. In order to subsidize a corrupt foreign-owned corporation and engaged in illegal activity,” said Rep. Rosa DeLauro (D-Conn.), who asked USDA in a November letter to investigate and halt payments to JBS.

“You are independent. That’s what makes the IG so critically important to all of us here.”

In a Jan. 31 response to DeLauro made public Tuesday, Perdue said the USDA “will not take any action” that could interfere with the DOJ and SEC investigations “unless requested” by those agencies.

Rep. Mark Pocan (D-Wis.) bemoaned the fact that JBS USA received more aid than all of Wisconsin’s dairy farmers as his state reels from a string of farm bankruptcies.

“I think they deserve some bigger answers,” Pocan said. “If we could do that in the Inspector General report I know it would be appreciated.”

JBS USA, the second-largest U.S. meat processing company, has received roughly $67 million in USDA grants intended to go to pork farmers who lost sales to China and Europe due to response to Trump’s tariffs. But the payments to JBS USA have provoked bipartisan backlash over the company’s foreign ownership and connections to a Brazilian bribery scandal.

JBS USA is the American subsidiary of JBS S.A., a Brazilian meat conglomerate owned by brothers Joesely and Wesely Batista. The Batistas admitted to spending roughly $150 million to bribe more than 1,800 Brazilian government officials to secure $1.3 billion in loans from the Brazilian Development Bank (BNDES) and federal pension funds. 

The DOJ and SEC are investigating whether JBS S.A. violated federal anti-corruption laws and financial disclosure laws by using illegally obtained domestic grants to expand into the U.S. meat industry.

Sens. Bob Menendez (D-N.J.) and Marco Rubio (R-Fla.) also asked Treasury Secretary Steven Mnuchin to conduct an investigation into JBS through the Committee on Foreign Investment in the U.S., a secretive Treasury panel with expansive power over foreign business operations in the U.S.

JBS USA spokesman Cameron Bruett said in a statement at the time that the company “has fully cooperated with all relevant authorities in a transparent manner regarding past events in Brazil.”

“The company will continue to cooperate and respond to any subsequent inquiries,” Bruett said.