Unprotected and alone

When competing against his fellow chicken growers for Piedmont Poultry, farmer Lloyd West played by the rules, and for years it did nothing but cost him money.

Eventually he found out why. Some of the other farmers were cheating - falsely reporting lower costs to make themselves look more efficient. Their paychecks rose while his went down - and Piedmont was looking the other way. So, West and other honest farmers secretly called in investigators from the U.S. Department of Agriculture.

Had the farmers been Piedmont employees complaining about unfair wages, they could have taken their grievances to the Department of Labor. Had they been consumers worried about price-fixing, the Department of Justice might have stepped in. If the farmers had been growing cattle instead of chickens, USDA would have had the power to punish company wrongdoing.

Instead, West and his friends soon found out how alone a chicken farmer is in the wilderness of government regulation. From the moment he signs a contract, he is virtually unprotected.

In West's case, investigators confirmed that farmers were cheating. But Piedmont avoided punishment by promising that the practice would stop.

Meanwhile, in the time it took to complete the investigation, West's farm continued to do so poorly that he lost his contract and, with it, the career he loved. He eventually sold the Ramseur, N.C., farm. For all that, he couldn't find out the results of the investigation until his congressman intervened.

"Now what kind of justice is that?" he asked, still provoked to violent sobs by memories of the experience. "I loved growing those damn chickens."

What happened to West is a familiar story across 13 states, where contract chicken farmers have found it largely futile to seek redress for industry practices they say have cost them hard-earned pay and imperiled their farms.

In an eight-month investigation, The Sun found that federal investigators nearly always leave chicken growers like West to fight their battles alone.

Among the findings:

* USDA's Grain Inspection, Packers and Stockyards Administration, charged with overseeing the chicken industry's relationship with contract farmers, lacks the manpower and money to investigate allegations of cheating and other unfairness. Even after a recent expansion, it has only about seven full-time investigators to cover the nation's 30,000 chicken farmers.

* The agency lacks legal authority. It must refer cases of potential law-breaking to the Justice Department and persuade lawyers preoccupied with other crimes to look into farming infractions. That's not the case in the beef or pork industries, where the agency can take the initiative in levying fines and halting industry misconduct.

* USDA has overlooked evidence of overt cheating by large companies such as ConAgra - evidence unearthed in private lawsuits brought by growers. In the few cases when USDA has documented wrongdoing and pursued penalties, punishment has been minor. In 1996, an investigation of a South Carolina poultry company accused of cheating at the scales and trying to cover it up resulted in the company paying $477 in court costs while admitting no misconduct.

The situation is frustrating not only to the chicken farmers, but also to the watchdogs.

"We're still trying to get administrative authority over the poultry companies," said James R. Baker, the Stetson-wearing chief of Packers and Stockyards and a former poultry lender from the heart of Arkansas chicken country. "We have the responsibility and not the authority."

That means his investigators must find another way to accomplish their mission. They call it "voluntary compliance," a policy that leaves good corporate behavior up to the companies.

That, in turn, leaves the growers virtually at the mercy of a shrinking number of large corporations that set the rules for the ways farmers compete for pay.

In presiding over this competition, the companies control the quality of the chicks the farmers receive, their feed, what equipment farmers use and the scales on which the birds are weighed.

The companies also write the nonnegotiable contracts that strictly control every level of a farmer's operation. And, as West found out, the companies can cancel the contracts at almost any time.

Packers and Stockyards is investigating the way Salisbury-based Perdue Farms pays its growers - in some cases, excluding some poor performers from the rankings in a way that can cost others money.

But the USDA agency rarely intervenes in this one-sided relationship as long as poultry companies can demonstrate that their actions are guided by "business decisions," fairly applied. The only exception is if a company is late with a paycheck.

In 1996, for example, Tyson canceled contracts for all its Eastern Shore growers north of U.S. 50. A Packers and Stockyards investigator acknowledged that some of those farms were efficient performers but said he was powerless to help because the company had argued that affected farmers were too far from the processing plant.

When the government has proved inattentive to their problems, growers at times have turned to the courthouse, where the discovery powers of a civil lawsuit have uncovered evidence missed by USDA. But that option is rapidly disappearing as more companies require farmers to resolve disputes through arbitration, a process that does not empower them to gather as much information or to pool their complaints.

Admissions of cheating

North Georgia chicken farmers Bud and Bonnie Hill helped awaken the industry to the power of the courthouse - and the impotence of government enforcement - with their 1994 lawsuit, which exposed widespread cheating by ConAgra, the nation's fifth largest poultry processor.

The Hills went into the business in 1989 looking to slow down their stressful lives in an Atlanta suburb. Bud had spent years of long hours running a Shell station, then a used-car dealership. Bonnie was a financial analyst for IBM. The expanding poultry industry was recruiting growers from their walks of life with promises of a more tranquil, rural lifestyle and a guaranteed income that could carry farmers to retirement.

The Hills liked the sound of that, so they decided to build a chicken farm on a lot they'd bought upstate, figuring to settle there for the duration. They signed with ConAgra to grow chickens, and in the beginning their birds were plump and healthy, with paychecks to match.

But after a few years, the money seemed lean by comparison. The reported weight of their birds kept falling short of their expectations. The Hills began to suspect something was going wrong once their flocks reached ConAgra's processing plant in Dalton, Ga. Company officials did little more than shrug, so the Hills decided to get to the bottom of the mystery themselves.

Other area farmers soon grew accustomed to Bud - a tall, slender man in jeans and a flannel shirt - appearing on their doorsteps. Despite little formal education, he became an articulate spokesman for their concerns, and he and Bonnie began building a computer database out of the long columns of figures from weigh-ins and pay settlements.

By 1993 a disturbing pattern had emerged. Their conclusion: The company was cheating farmers by underweighing their birds.

The Hills weren't the only farmers with those suspicions. USDA records show that in the same year another grower for ConAgra's Dalton plant complained to Packers and Stockyards about weight totals that kept coming up short.

Government investigators reached a similar conclusion: Something indeed was going wrong in Dalton. But it took the agency two years to address the problem, and the result was merely a letter warning ConAgra. The agency didn't ask the company to repay a single farmer, and administrators decided there wasn't enough evidence of wrongdoing to refer the case to the Justice Department.

Meanwhile, Bud Hill's concerns had caught the attention of one of his hunting buddies, an attorney named Russ Adkins. Adkins brought Dalton attorney Cynthia Johnson into the case, and they began preparing a lawsuit.

In March 1994, Hill died of cancer, five months before the lawsuit would be filed. That left it to his widow to continue the cause and run the farm.

"Other than our daughters, the one thing my husband left is a farm that he spent the last years, his last years, building," she said. "It is very dear to me. If I have to mortgage that farm to stay in this and if I'm the last person on this lawsuit, I'll be it."

But she wasn't the last. Other growers joined in, and their cases were consolidated into a class action lawsuit. The legal powers of discovery began paying rich dividends.

Former ConAgra employees and supervisors began admitting that they had, in fact, been cheating for years.

One was Tom Henderson, a supervisor who'd quit and taken a lower-paying job elsewhere rather than keep following orders to shave pounds from the weight of farmers' flocks.

Another was Roy Horner, a former ConAgra truck driver who admitted he'd regularly deducted 200 pounds from loads of birds for up to 12 years, under orders from his supervisor.

"It wasn't right. I knowed it wasn't right," Horner said in an interview. "I told them, 'Sooner or later you're going to get caught at it.' "

Eventually the boxes of evidence filled a room in Johnson's Dalton law office. Last year ConAgra settled with the Georgia farmers for $6.75 million, without admitting wrongdoing.

Meanwhile, growers for other ConAgra complexes had similar suspicions confirmed in other lawsuits alleging cheating, leading to multimillion-dollar awards for hundreds of other farmers in Alabama.

In Washington, however, regulators remained unmoved.

When confronted with the damning new allegations, government investigators decided it would take too much time and resources to review the voluminous depositions and other evidence, given that the growers already had taken action.

"There are always going to be limits on how far we are going to be able to go in proving the amount of damages," said Harold Davis, deputy administrator of Packers and Stockyards programs. "Can we afford to spend the resources looking at what the financial harm is in every case? No."

Futile attempt at redress

On Maryland's Eastern Shore, regulators barely heard when Barbara Adkins blew the whistle on Tyson Foods.

Adkins started in the poultry industry as a $1.80-an-hour clerk at the feed mill for Holly Farms Poultry. She worked hard, liked her bosses and worked her way up to executive secretary at company offices in Snow Hill. Along the way the people she worked with became like family, especially the farmers who depended on her to get the numbers right that determined their paychecks.

"She's as honest as could be," said a former boss, Perrie Waters. "A very faithful employee."

In 1989, after Adkins had been on the job 20 years, Holly Farms was bought by the nation's largest poultry company, Tyson Foods.

For a while, few things changed. But in 1991, in walked a new boss, Mark Welborn, the assistant manager for live production.

Longtime managers began retiring or were forced out. But what rankled most, Adkins said, was that Welborn began mistreating the farmers. He cursed them, threatened them and sometimes, Adkins said, he manipulated the numbers on their settlement sheets, favoring those he liked.

Adkins took her complaints, and some of her paperwork, up through Tyson's chain of command.

Nothing happened. So, as she later told a gathering of regulators, farmers and elected representatives, she decided to take her case to Packers and Stockyards. And she quit.

"Being the naive and trusting person I am," she said, "I thought, although this situation is completely beyond my control, I can turn it over to the authorities that govern this kind of wrongdoing."

Disappointing results

The agency's investigation found evidence that some growers' rankings had indeed been manipulated. But proving anything further became difficult. When Adkins told investigators which records to seek, Welborn told them the documents no longer existed.

The result: Tyson reimbursed a few growers for the money they lost - about $700 in all - and the agency thanked the company for its "voluntary" gesture.

USDA also put Tyson on formal notice for the future, citing "numerous instances where records were not prepared, improperly prepared or were not retained to fully document all transactions pertaining to the growout operations."

But that was all. Adkins, who'd given up her 23-year career, an $8.86-an-hour salary and six months of her life, was crestfallen. She telephoned C. James Stroud, a regional administrator for Packers and Stockyards, to demand an explanation.

According to a tape recording Adkins made of that conversation, Stroud told her he was powerless to force Tyson to produce records. Nor could he take action on her allegation that growers had been "threatened, intimidated and cussed."

"There's a lot of things, Mrs. Adkins, that are unfair, and there are a lot of things that aren't right," Stroud says on the tape, "but they're not necessarily violations of the Packers and Stockyards Act."

In an interview, Tyson spokesman Archie Schaffer called Adkins "a disgruntled employee" and said the matter is closed. Welborn, who moved to North Carolina, did not respond to a letter or phone calls from The Sun.

Davis, the Packers and Stockyards deputy administrator, said recently: "I believe we did a full and complete investigation in that case. I'm not aware that we didn't get records that we were looking for. As far as I know, we got everything we thought we had to have."

Adkins declined to be interviewed for this article. But at the gathering of regulators and farmers several years ago, she said she believed her efforts had done the growers more harm than good:

"Now they know 100 percent for sure ... they are stuck between ruthless, demanding [companies] and an agency that has sent out a message to all poultry growers that [it] will not fairly represent them or come to their aid."

Tyson's Shore growers continued to have problems after Adkins made her claims, but the government agency found no wrongdoing in those cases either. In June 1994, investigators wrote that four growers had been "victims of poor weighing practices" caused in part by a scale breakdown at the Temperanceville, Va., plant. But because the agency found no discrimination or "intentional" misweighing, it did nothing to see that farmers were compensated.

Stroud, who has retired from the agency, would not discuss the Adkins case or any other agency matter. "I'm just not willing to participate anymore in that part of my life," he said.

Up or out

In Murfreesboro, Ark., Jack Sweeden and his wife, Pat, looked forward to a good life.

They had been laborers with little education who supported themselves by logging and working in grocery stores.

Then, in 1967, the poultry industry began to boom around their town, and it seemed appealing: a business you would own at the end, if things went right. Once you made the investment, fellow farmers told them, all you needed to succeed were "a weak mind and a strong back."

The Sweedens signed with one of what was then a flock of local companies. They did well - well enough to sell the first farm and buy a better one, with more land, within 15 years. They kept their contract, then with Lane Poultry. The chicken houses on the new place had been used when the Sweedens bought them, but they were in good enough shape to keep the couple competitive with other farmers.

Tyson bought Lane Poultry in 1986 and took on its growers. The Sweedens continued to do well for the poultry giant even though their balance sheet barely showed a profit after payments on the farm loan.

In 1990, when Tyson announced an expansion in the region, Sweeden decided he would grow along with the company. He asked Tyson about adding new houses to his two old ones.

That's when the bottom fell out of the Sweedens' dream.

"They told us if we built some new ones, we'd have to tear our old ones down," Sweeden said.

But he couldn't afford that option. He was still paying for the old houses, and construction loans would double or even triple his payments. He told Tyson thanks, but no thanks.

The ultimatum came down anyway: new houses or no houses.

So Sweeden called Packers and Stockyards.

Some growers lose their contracts because they are poor managers, but Sweeden wasn't one of them. In USDA documents, Paul Britt, Tyson's Nashville, Ark., complex manager, admitted it: The Sweedens were cut off for no other reason than that their houses were old.

"Mr. Britt stated he did not have anything against the Sweedens' performance," wrote Hal Crocker, a USDA investigator. "Having performed as well as they have with old, run-down houses indicates [the Sweedens] care and put a lot of effort in taking care of their birds."

But because Tyson said it was cutting off every grower with "old, out of date" houses who wouldn't convert completely to new ones, Crocker could find no evidence of discrimination against the Sweedens - and no violation of the law.

The investigator trudged to the Sweedens' home to deliver the news: There was nothing he could do. Pat Sweeden remembers the way he looked while he did it: "like a whipped puppy."

The Sweedens didn't know whether to cry, break things or both.

"I didn't cry, but later on she had to go and get on blood pressure [medicine]," Jack Sweeden said, recalling the day. "It just made me mad, and I done a little cussing. We thought Packers and Stockyards could do something."

Crocker, the investigator, had thought so, too. "I really hated that," he said. "I tried. But I was told that I couldn't do anything."

Without intervention from the government, the Sweedens lost their contract. No other area company would pick it up, even though they had been second in the running for top grower of the year.

For the Sweedens, there was nothing to do but invite appraisers to look over their 30 acres and home. They finally sold the place at a bargain rate and moved to a smaller house, not far away.

Today, eight years later and now age 63, Jack Sweeden drives a garbage truck. His 59-year-old wife is a school janitor.

And the two chicken houses that once symbolized their hope for a better life?

The buyer tore them down.

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