Despite Salmonella, Firm Sold to USDA.

peanut scare
© J. Scott ApplewhiteGabrielle Meunier of South Burlington, Vt., tells the Senate agriculture committee how her son Chris became ill after eating peanut-butter crackers. (By J. Scott Applewhite -- Associated Press)

Peanut Corporation of America sold 32 truckloads of roasted peanuts and peanut butter to the federal government for a free-lunch program for poor children even as the company's internal tests showed that its products were contaminated with salmonella bacteria.

Yesterday, the U.S. Department of Agriculture abruptly suspended its contract with the company, which is at the center of an outbreak of salmonella illness that has killed eight people, sickened 575 and triggered one of the largest food recalls in U.S. history.

The fact that a federal agency that shares responsibility for keeping food safe was among the thousands of customers that may have received tainted food from the Blakely, Ga., plant is the latest revelation in a scandal that has exposed an array of failures in the government's systems for keeping deadly pathogens out of the food supply.

Schools in California, Minnesota and Idaho received the suspected peanut products between January and November 2007, said Susan Acker, a spokeswoman for the Agriculture Department. Federal officials notified the affected schools last week and told them to destroy any uneaten food, but officials said most of it has already been consumed, Acker said. She said the agency is not aware of any illnesses linked to the peanut products it bought.

"This company had no conscience in its production practices, sales and distribution," Sen. Tom Harkin (D-Iowa), chairman of the Senate Agriculture, Nutrition and Forestry Committee, said yesterday. "That they would knowingly ship products tainted with salmonella to our nation's children almost defies belief."

Peanut Corporation of America found salmonella in its products 12 times in 2007 and 2008, but the company sold them anyway, sometimes after getting a negative test result from a different laboratory, federal officials say. The test results were kept confidential; companies and laboratories are not required to alert health officials when pathogens are found in foods. And federal investigators say the company did not clean its equipment or plant after learning of the salmonella contamination.

A company spokeswoman did not return messages yesterday.

The Justice Department has launched a criminal investigation.

Lawmakers, regulatory experts and consumer advocates say the current outbreak has created the best opportunity in years to improve the nation's system of food regulation.

It has raised more concern than the recent contamination of other foods for a simple reason. Unlike spinach or jalapeños, peanut butter is a ubiquitous American food consumed in large quantities by children.

"What's more sacred than peanut butter?" Harkin asked yesterday, waving a jar of peanut butter from the dais. "I still eat peanut butter sandwiches."

In addition, a new president is making food safety a priority and expressed concern this week about his 7-year-old daughter's consumption of peanut butter, a Democratic Congress is bent on strengthening regulation, and the food industry is so concerned about losing consumer confidence that it, too, is calling for tougher policing.

"The food companies have become vocal about this, and that's key," said Sen. Amy Klobuchar (D-Minn.).

The peanut scare has revealed so many weak spots in the regulatory system that it is serving as a kind of road map for reform, experts said.

"I've been doing food safety for a long time, and I don't think I've seen an outbreak or a reported set of behaviors by a company that better demonstrates the fundamental problems of food safety," said Michael R. Taylor, a former top Food and Drug Administration official who is a professor at George Washington University. "There are so many failures on so many levels."

The inspection history of the Blakely plant illustrates the disjointed nature of the food safety system, Taylor and others said.

In addition to making peanut butter for private labels and institutions, the Blakely plant produced peanut paste and other peanut-containing ingredients that were sold to manufacturers for use in a wide variety of consumer products, including cakes, crackers, ice cream and dog biscuits.

The FDA, which is responsible for regulating peanut-processing facilities, last inspected the plant in 2001, when it only roasted and blanched peanuts. The agency learned the company was making peanut butter in 2006, when it was notified by the state of Georgia.

Understaffed, the FDA contracted with the state to perform annual inspections. The FDA has delegated an increasing chunk of its inspection duties to the states, with varying results. The agency has refused requests for a copy of its contract with Georgia and has declined to answer questions about it.

Although FDA inspectors were not visiting the Blakely plant, Agriculture Department agents were.

The USDA sent inspectors 10 times between 2001 and 2007 because the agency was buying its peanuts and peanut butter for the free-lunch program, said Kent Politsch, a spokesman for the department's Farm Service Agency.

But those inspectors were not looking at sanitary conditions or checking for contamination. "We are not food inspectors," Politsch said. "We audit processes: We walk through and see whether they can produce the product."

Last month, when the FDA traced the outbreak of salmonella illness to the Blakely plant, FDA inspectors descended on the factory and catalogued a range of unsanitary conditions, including dead roaches, mold on the ceiling and walls in the cooler where finished products were stored, and rainwater leaking from skylights into the production room. Inspectors found four strains of salmonella and noted deficiencies in the plant's design and construction that invite contamination.

Yesterday, at congressional hearings on the outbreak, experts said the country's food safety system is outdated, fractured and hobbled by shrinking budgets and staffing.

"The FDA's food program has largely disappeared," said William Hubbard, a former associate commissioner at the agency.

Hubbard and others believe that Congress and the FDA should create a system that requires food manufacturers to write safety plans that identify possible hazards, spell out the processes and equipment they would use to prevent them, and keep records to document their actions. This is currently required only of the seafood and juice industries, which have seen a decline in illnesses caused by food-borne pathogens, Hubbard said.

The FDA should also get tougher enforcement tools, including the legal authority to order a product recall and stricter sanctions for violations, they said.

The country could also speed its reaction to outbreaks, one top federal official told the panel. "We need new laboratory tools, new information tools, computer-assisted telephones to bring information together in real time," said Rear Adm. Ali S. Khan, assistant surgeon general.

Gabrielle Meunier, whose 7-year-old son, Christopher, was hospitalized in Vermont after eating peanut butter crackers contaminated with salmonella, told the committee her agony was magnified by a lack of information from health officials. Christopher ate the crackers Nov. 25, but it wasn't until January, when she stumbled on a news report, that she realized the bacteria came from crackers that were still in her house.