Mimesis Law
21 August 2017

Stewart Parnell: A Life Sentence for Greed

Sept. 23, 2015 (Mimesis Law) — Stewart Parnell, former CEO of a peanut processing company, received what will likely amount to a life sentence for shipping salmonella-tainted peanut butter. CNN reports:

A federal judge handed Parnell a 28-year prison sentence, the toughest penalty ever for a corporate executive in a food poisoning outbreak. Parnell is 61 and unless he wins an appeal, he will have to serve out most of his term.

The article noted that he was actually facing up to 803 years:

Parnell’s trial was groundbreaking: Never before had a corporate executive been convicted of federal felony charges related to food poisoning. Parnell was facing up to 803 years in prison, and even though his sentence fell far short of the maximum, food safety advocates hailed it as a big step forward.

“Honestly, I think the fact that he was prosecuted at all is a victory for consumers,” said Bill Marler, a food safety lawyer who represented several of the victims in the PCA outbreak.

“Although his sentence is less than the maximum, it is the longest sentence ever in a food poisoning case,” Marler said. “This sentence is going to send a stiff, cold wind through board rooms across the U.S.”

In retrospect, mention of the maximum was not a terribly enlightening piece of information considering that he actually got 775 years less, not quite three and a half percent of what they reported he could have gotten. However, the sentence he did get might end up having the same effect. He will be in his eighties if he ever gets out of prison. Whether that makes much of a difference anywhere, especially in board rooms, is up for debate.

The 2008 salmonella outbreak traced back to peanut butter paste manufactured by PCA killed nine people and sickened 714 others, some critically, across 46 states. It was the deadliest salmonella outbreak in recent years and resulted in one of thze largest food recalls in American history — from Keebler crackers to Famous Amos cookies to the snack packets handed out on airlines.

Suddenly, one of America’s favorite foods had turned into a killer.

Parnell invoked the Fifth Amendment when called to testify before Congress and had never publicly spoken about the tragedy until Monday, when he expressed remorse in the courtroom. His family members also testified Monday on behalf of his character and asked for mercy.

In some ways, the severity of the outbreak diminishes the deterrent effect. The average CEO playing a little fast and loose with some potentially contaminated product isn’t going to affect all but a few states in the country, kill nine people, and sicken hundreds of others. It probably isn’t going to affect some other name-brand products as well. In all likelihood, if Parnell’s sentence has any effect at all, the cold wind blowing into board rooms will only send executives straight to their lawyers for a quick talk.

It’s hard to imagine the DOJ would’ve been as keen on going after him if he hadn’t been called to testify before Congress in the first place, and that never would have happened but for the scope of the outbreak. Parnell’s decision to invoke in front of Congress no doubt put him in the crosshairs, but that was probably a wise decision. The real lesson to CEOs may be to cover their tracks. An older article, one written prior to charging, discusses some of the evidence against Parnell:

In one internal e-mail, he complained about a positive salmonella test, writing, “I go thru this about once a week. … I will hold my breath … again.”

Other records showed the company shopped for labs to get negative bacterial results. In one instance, after a product tested positive for the salmonella, the company had it cleared by another lab.

Parnell instructed his plant manager in an e-mail to ship it out, writing, “Turn them loose.”

He also complained about the price of testing, saying in an e-mail it was “costing us huge $$$$$.”

What may seem at first like a case that will strike fear in the hearts of greedy CEOs who put public health second to profit and cause a disaster is probably only going to be a lesson for those who are incredibly blatant about it too. Parnell apparently admitted to getting weekly positive salmonella tests, and he was even snarky about it.

He also shopped around to get the results he wanted, and his choice of language about unleashing dangerous products on the public couldn’t have been much worse. His comment complaining about the cost of testing seems like it was taken from the script of a 1980s action movie with a greedy corporate villain.

What happened to Parnell may well frighten CEOs who have already done what he did, but it will only encourage them to close ranks within their organizations and rethink their email retention policies. Furthermore, it seems unlikely the DOJ is suddenly going to start combing every food poisoning outbreak over the past few years looking for corporate executives to charge. Plenty of CEOs just as guilty as Parnell, though with fewer victims, will continue to get away with it, just like before. The ones who are doing it or thinking about doing will just be a little more careful.

There’s something almost funny about trying to use something as childishly simple as the deterrent effect against a group of people who are in many instances smarter and better educated than the people making and enforcing the laws intended to achieve it, yet for some reason, the seductive appeal of deterring others by making an example out of someone like Parnell never seems to fade. The CNN article explains:

“We have lost our loved ones and have worked hard to help to prevent this from happening to others,” said the letter, which Almer shared with CNN. “Our request is not a selfish request; we only ask that you assign any monies to aid families who have suffered or are suffering from food borne illnesses.”

Carl Tobias, a University of Richmond law professor, said Parnell’s sentence will make corporate executives think twice before engaging in wrongful activities.

“I don’t have the impression that Parnell set out to kill people,” Tobias said. “He just ran his business in a way that caused a lot of injury and some deaths. The sentence was appropriate and maybe it should have been stiffer.”

The idea of using monetary penalties to help mitigate the sort of damage Parnell did is hard to criticize. Professor Tobias’s comments, however, are confusing.

If Parnell didn’t set out to kill people but instead prioritized his business goals in a way that ended with that result, how is he different from countless other CEOs making morally reprehensible but not necessarily illegal decisions every single day? The recent actions of Martin Shkreli, whose company raised the price of a drug used by AIDS and cancer patients from $13.50 per tablet to $750.00 per tablet, come to mind immediately. If people suffer and die as a result, would 28 years be an appropriate sentence for Shkreli too?

Professor Tobias doesn’t seem too worried about Parnell’s motivation, so is it something about the wrongfulness of Parnell’s activities or what he feels were the unintended results that might merit even more than 28 years? How much worse is shipping an adulterated product than depriving people of a potentially life-saving one? Is the existence of a federal statute governing the former all that matters?

What really matters is that Parnell doing 28 years will make the general public feel like the government did something about a nationwide tragedy. It’s a populist statement, a CEO getting the treatment ordinary people get from the system all the time.

It’s also a much-needed step in the right direction to all the people whose special interests superficially seem to be served by sending one of their bogeymen away for a very long time. What it most certainly isn’t, however, is a stiff, cold wind that is going to do anything about good old fashioned American greed.

Main image via Flickr/Daniella Segura

2 Comments on this post.

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  • jdgalt
    23 September 2015 at 2:44 pm - Reply

    This is the food-industry equivalent of Sarbanes-Oxley: There was a tragedy and we don’t exactly know why or who is at fault, so let’s grab the nearest scapegoatCEO and sacrifice him to the gods!

    I predict that in 10 years, every large food company will pin a “CEO” badge on some dumb figurehead, while giving its real boss some other, innocuous title — or better yet, putting the real power in the hands of a committee so that everyone will have plausible deniability.

    • dm
      23 September 2015 at 5:53 pm - Reply

      Get real.
      The evidence demonstrated that the CEO was the driving force for shipping the tainted product which killed 9 people and sickened hundreds more.
      This is no corporate witch hunt, this is an individual not being allowed to hide behind a corporate façade and dodge personal responsibility for his deliberate actions.
      Even if there is no deterrence effect, Parnell got what he deserved.