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Feds suspend companies in peanut-product recall

  • Story Highlights
  • Peanut company and subsidiary suspended at least one year
  • Feds: PCA is "excluded from participating in government contracts or subcontracts"
  • Agriculture chief removes PCA's president from USDA's Peanut Standards Board
  • Moves come amid recall of peanut products linked to salmonella cases
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(CNN) -- The U.S. Department of Agriculture announced Thursday that it is suspending Peanut Corporation of America and its subsidiary, Tidewater Blanching LLC, from doing business with the federal government for at least a year, and perhaps longer.

PCA has 30 days to submit information contesting the Department of Agriculture's suspension.

Amid a recall, the FDA has begun a criminal probe of the Peanut Corporation of America's Blakely, Georgia, plant.

The move comes amid the recall of peanut butter and peanut paste made by PCA because it was contaminated with salmonella. The bacteria have been linked to more than 500 illnesses nationwide, including eight deaths.

"Effective immediately, PCA is excluded from participating in government contracts or subcontracts, as well as federal non-procurement programs," the USDA said in a written statement. "PCA will also be excluded from doing business as agents or representatives of other contractors, including serving as a subcontractor to other individuals or companies doing business with the government."

The agency proposed that the suspension be in effect for three years.

"The actions of PCA indicate that the company lacks business integrity and business honesty, which seriously and directly hinders its ability to do business with the federal government," said David Shipman, acting administrator of USDA's Agricultural Marketing Service.

PCA has 30 days to submit information in opposition to the actions. Video Watch a Senate hearing on the recall »

Separately, Secretary of Agriculture Tom Vilsack removed Stewart Parnell, PCA's president and CEO, as a member of USDA's Peanut Standards Board.

Neither PCA nor Tidewater Blanching returned calls seeking comment.

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USDA spokesman Billy Cox said that in his 18 years on the job, he could not recall a similar case.

The federal government currently has no contracts with PCA, Cox said, though it has in the past bought PCA products for its school lunch program, for food banks and for feeding programs for American Indian reservations, he said.

All About U.S. Department of AgriculturePeanut Corporation of AmericaTom Vilsack

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