Egg recall not first problem for DeCoster operations

Reporting from Washington —  Long before Austin “Jack” DeCoster became a central figure in one of the largest egg recalls in history, he had paid more than $10 million in fines and suit settlements, his eggs were banned in one state and quarantined in another, and he was almost single-handedly responsible for new restrictions on child labor in his native Maine.

He also was embraced by local governments in two states eager to reap the economic benefits of a large egg farm — even a rule-breaking one.

Earlier this month, DeCoster’s Wright County Egg farms in Iowa recalled 380 million eggs. A second Iowa egg producer, partly supplied by a DeCoster-owned firm, pulled another 170 million eggs off the shelves.

On Thursday, federal authorities confirmed that the two operations are contaminated with the same strain of salmonella that has sickened at least 1,500 people. The outbreak is one of the largest salmonella outbreaks ever, according to the Food and Drug Administration.

Political pressure has built, with at least one congressional investigation underway and a hearing on egg safety slated for the middle of next month.

A spokeswoman for DeCoster said he is working with the FDA on issues related to the eggs recall, but she declined to comment on the various past allegations.

The half-billion egg recall is on one level, a stunning regulatory failure: The FDA, which is responsible for the safety of whole eggs, has acknowledged that it had never inspected either set of Iowa facilities.

But it’s also a testament to the willingness of communities to accept a trade-off between filled tax coffers and a business shadowed by pollution, civil rights and safety issues.

“Please note that while this man has very poor business practices and a history of violations of environmental laws, he has contributed a great deal to Wright County, not only in the form of property taxes, but also by increased numbers of students in our school system which leads to more state aid for education, and also through donations to community projects,” Barb Mussman, publisher of the Wright County Monitor, said in an e-mail.

In the late 1970s in Maine, DeCoster, already an established egg producer, was battling opponents on multiple fronts.

He’d been sued by his neighbors for a beetle infestation, was fending off union organizing drives and was under scrutiny by the Labor Department for an array of wage and workplace violations.

Perhaps most significantly, the Maine Legislature passed a law prohibiting children younger than 16 from working in proximity to “hazardous machinery or hazardous substances” because of accidents involving teenage workers at DeCoster’s facilities.

“There’s no question that DeCoster’s egg farm was a major law enforcement problem in my time in the legislature and as attorney general,” said James Tierney, a former Maine attorney general who voted, as a state representative, in favor of the measure.

But three months after Maine legislators approved the changes in the state’s child labor laws, DeCoster sealed a lucrative deal in another state.

Commissioners in Kent County, Md., approved an $8.5-million industrial revenue bond to help DeCoster finance a large egg farm that soon became one the county’s largest taxpayers and purchasers of locally grown feed.

“We grow a lot of corn and soybeans around here. We needed a steady outlet so we didn’t have to haul so far. Prices probably increased a nickel a bushel when [DeCoster] started buying,” said William Manlove, a farmer and former commissioner in neighboring Cecil County, where some of DeCoster’s facilities, housing two million birds, were located.

But, Manlove said, “we found out we hadn’t gotten the whole story from Maine. We had constant problems with him.”

In the summer of 1988, New York state health officials banned eggs from DeCoster’s Maryland operation after linking them to outbreaks of gastrointestinal illness in the state, including salmonella.

Maryland’s agriculture secretary criticized the New York ban as “a drastic measure,” but less than three years later, Maryland regulators found salmonella in some of DeCoster’s hens and imposed a quarantine.

DeCoster sued, arguing that the quarantine prevented him from selling eggs outside Maryland, something the state was not empowered to do.

A federal court agreed that Maryland had overstepped its authority, but DeCoster later was convicted in state court of selling eggs from one of his quarantined facilities to a Maryland grocer. He was fined $500, which was suspended, and placed on unsupervised probation. He subsequently sold his Maryland operations.

DeCoster’s run-ins with regulators are a result of being a hard-charging businessman who doesn’t have the resources of corporate farm interests, said C. Daniel Saunders, his attorney at the time.

“I know Jack pushes the envelope, because he’s growth-oriented,” said Saunders, adding that DeCoster, who is in his mid-70s, has a single-mindedness common to many entrepreneurs.

“They push their people. They want results. They don’t want excuses. I don’t mean that he cuts corners,” Saunders said.

Even as DeCoster feuded with Maryland officials, he was expanding his operations into Iowa, which in his view “was a state that understood farming,” Saunders said.

By the early 1990s, DeCoster had established chicken and hog operations in Iowa, but labor and environmental problems trailed him.

Over the years, DeCoster has been fined a total of $202,000 for environmental violations by the Iowa Department of Natural Resources, and in 2000, he became the first and so far only person deemed a “habitual violator” of environmental regulations by the Iowa Supreme Court. The designation, imposed mostly for mishandling hog waste, prohibited expansion of his hog operation for five years.

In 2002, DeCoster Farms agreed to pay $1.53 million to settle an Equal Employment Opportunity Commission suit alleging rape by supervisors and other sexual violence against female workers at his Iowa egg operations. The company did not admit wrongdoing.

Things weren’t much better back in Maine.

In 1997, DeCoster Egg Farms agreed to pay a $2-million fine — $1.6 million less than the U.S. Department of Labor proposed — to settle “numerous egregious safety and health violations” at its facilities in Turner, Maine.

The company also paid $143,000 in fines for state environmental violations that year.

In 1999, the DeCoster firm reportedly paid $5 million to settle a class-action suit involving unpaid overtime. Some workers were paid straight time for working 80 hours per week, according to the suit.

In 2002, DeCoster paid $3.2 million to settle a discrimination case brought by Mexican workers who alleged they were forced to endure harsher living and working conditions than white employees.

DeCoster “is kind of an enigma,” said Karen Wolf, who represented the Mexican workers in their discrimination case. “He’s very charming. He’s been able to develop a lot of businesses…. He flies under the radar a lot of the time.

“He gets fined and things happen to him, but he comes back. He always bounces back.”

azajac@latimes.com