Prosecution Details Late Payments For Cattle As Key Witness Stumbles

Late payments illegal under federal law but rarely prosecuted criminally.

Rubashkin prosecutors turn to new federal violation case
JENS MANUEL KROGSTAD • Waterloo-Cedar Falls Courier

SIOUX FALLS, S.D. -- During former Agriprocessors executive Sholom Rubashkin's third week on trial, prosecutors started making the case that he violated a federal law mandating buyers pay cattle providers within 24 hours of a sale.

The government alleges between February and April 2008, Rubashkin violated a 2002 order when the northeast Iowa kosher meat plant failed to make timely payments to livestock sellers.

Defense attorneys said they believe it is the first time in history criminals charges have been filed under the 1921 law, the U.S. Packers and Stockyards Act.
Prosecutors presented several checks from Agriprocessors to Equity Cooperative Livestock Sales Association, based in Baraboo, Wisc., that showed the plant frequently mailed a check several days after purchasing cattle.

The paper trail, which relied on Agriprocessors records and hand-written notes from Equity's office staff, showed Agriprocessors sometimes waited a few days to write a check, let a few days pass before time stamping the envelope, followed by another few days delay before receipt at Equity.

Wenda Slezak, credit manager at Equity, contradicted her affidavit to Packers and Stockyard investigators when she said the company offered Agriprocessors option to send check via pre-paid Federal Express package. In her affidavit, she said Agriprocessors paid its own postage for a U.S. Postal Service two-day delivery. Several jurors scribbled notes after she admitted the error.

The company's chief operations officer, Tod Fleming, said Agriprocessors sometimes made late payments, particularly after April 2008, but always paid its debts in full.

Fleming said despite the chronic tardiness, his company continued to do several millions of dollars of business every year with Agriprocessors.
Defense attorney F. Montgomery Brown suggested the company prompted the investigation by contacting the U.S. Department of Agriculture about late payments, even though it continued to benefit financially from the arrangement.

"It's kind of like calling in to Iowa State Patrol and saying, 'I'm following this guy whos going really, really fast.' And they say keep following him," he said.
Another executive at a livestock provider company, Waverly Sale Co., offered similar testimony.

Co-owner Ronald Dean said Agriprocessors, while sometimes late in payments, always paid its bills in full before its next purchase.