Harkin demands Postville explanation

*I can tell you that there will never be an explanation, for a certain lobby will never allow such questions to be answered.*

Washington, D.C. – Sen. Tom Harkin wants the Bush administration to explain why the Agriprocessors slaughter plant in Postville was allowed to operate when it couldn’t pay for the livestock it was buying.

Harkin, the Iowa Democrat who is chairman of the Senate Agriculture Committee, says it was clear by the middle of October that Agriprocessors was not fully paying cattle and poultry sellers.

The plant was processing poultry up to two weeks ago, Harkin said in a letter Monday to Agriculture Secretary Ed Schafer.

“Companies that are insolvent or in breach of their obligation to pay promptly are not to continue operating,” Harkin wrote.

The USDA enforces a federal law that’s meant to protect farmers in the event that a packer gets in financial trouble. The law requires packers to hold livestock and proceeds from meat sales in trust until their cash suppliers are paid. But Harkin said unpaid claims against Agriprocessors “evidently far exceed” the amount in trust.

USDA spokesman Keith Williams disputed that statement, saying that the company has a bond as well as trust assets to cover claims and that the value of the claims is yet to be determined.

Williams also said it would be up to the courts to decide whether the plant was operating while it was unable to pay its suppliers.

The plant, which was once the nation’s largest supplier of kosher meat, went into decline after an immigration raid in May and then filed for bankruptcy protection and stopped operations in November.

http://www.desmoinesregister.com/article/20081202/BUSINESS01/812020366/-1/ENT05

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