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November 7, 2008 | 9:56 am

A beef with Rubashkin and Agriprocessors

Posted by Brad A. Greenberg

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In just about every issue, Portfolio magazine has a large feature with a heavy religious angle. A few issues ago, Karl Taro Greenfeld wrote a revealing profile of Joel Osteen and the Gospel of Wealth he preaches. Before that, the inestimable Claire Hoffman (for evidence of that adjective, read her profile of “Girls Gone Wild” founder Joe Francis) wrote about the lawyer for the polygamist Mormons busted in that Texas raid.

Despite having a subscription and generally enjoying the magazine, I for some reason never get around to blogging about these stories. The same seemed bound to happen for cover story for the November issue: a profile, by Hoffman, of Jewish bad boy Dov Charney. I’ve written about the American Apparel founder and perennial sexual harassment defendant before, and considering the financial crisis, Charney is really an odd choice for cover boy. So I’ll pass on that. But this issue also includes an article on the Agriprocessors kosher slaughterhouse scandal. And that’s worth discussing.

To recap: Federal authorities raided Agriprocessors’ slaughterhouse in Postville, Iowa, in May. It was the largest immigration bust in U.S. history, and on its heels came accusations of child-labor exploitation. The kosher mega-butcher was slapped with $10 million in fines, and last week news leaked of a possible default on a $35 million loan. The cancer, it appears, had metastasized to the point JTA reported yesterday that Agriprocessors probably wouldn’t survive.

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Kosher King Aaron Rubashkin

“With the kosher meat producer Agriprocessors facing mounting financial problems, including the possibility of foreclosure, industry insiders say the company is finished and that kosher consumers should brace themselves for some rough times,” JTA’s Ben Harris wrote.

Agriprocessors filed for bankruptcy Tuesday. To make matters worse for Jews who keep kashrut, a third major kosher slaughterhouse closed this week following a fire.

Which brings us to the article in Portfolio, a lengthy feature that opens in the small Brooklyn butcher shop of “Kosher King” Aaron Rubashkin. Much of the story is after the jump:

Rubashkin, a Russian immigrant who fled Soviet totalitarianism in the early years of the cold war, is a pioneer, having done for American kosher meat and poultry in recent times what two German immigrants named Anheuser and Busch did for beer in the 19th century.

More than 20 years ago, Rubashkin began toying with the notion of taking the kosher butcher shop from the neighborhood to the nation by applying the strict rules of kosher slaughter to the methods of modern mass production. Kosher hot dogs and chicken had already found their way to the mass market, but nobody was producing steaks, lamb, or poultry in one place on a national scale. Outside of major urban centers, a Jew trying to keep kosher was pretty much out of luck. Thus Rubashkin, say his admirers, saw not only a lucrative business opportunity but also a chance to help all Jews be more observant. The word Hasid, from the Hebrew hasidh, translates as pious, and to those in Rubashkin’s religious circle, his business instincts had rendered him both a successful and a pious man.

It’s a nice story line, as far as it goes. To accomplish his dream, Rubashkin, himself a rabbi, in 1987 ventured far from Brooklyn to a shuttered meatpacking plant in a postcard-perfect Midwestern town called Postville, in the northeastern corner of Iowa. He retooled and refurbished the plant and, lacking sufficient local labor in those first years, recruited a large workforce, including Lubavitch Jews from Brooklyn and other urban centers. He helped save Postville from the big-box retail invasion that has killed off the Main Streets of so many American small towns. Rubashkin also provided jobs for immigrants of many stripes and gave his company a grand corporate name: Agriprocessors.

But when, on a day in early August, I head upstairs from the Brooklyn butcher shop and into the office that Rubashkin has occupied for more than 50 years, I catch the patriarch in an agitated mood. He has not talked much to the press recently, and especially not since the events of three months before, when Agriprocessors’ story took a dark and troubling turn. Physically, Rubashkin is imposing: heavyset, with a wizard’s white beard; dark, piercing eyes; and an imperious voice. We haven’t been talking long before he is pounding his desk, inveighing in a rising tone against those who have leveled all manner of allegations against Agriprocessors and criminal charges against some of its workers and managers. “It’s a shanda, a shame…what happened in Postville,” he says, leaning forward and mixing Yiddish with English, as he does throughout our conversation. “A hurricane came and destroyed everything.”

Rubashkin is, of course, talking about the federal raid and the allegations of child labor exploitation and the ensuing financial problems.

Talking to Rubashkin and those in his inner circle, an explanation of the recent unpleasant events slowly emerges: that Agriprocessors has grown exponentially while its management has remained rooted in a kind of naive, family-butcher-shop mentality, and that furthermore, the company never knowingly hired underage workers and had no interest in doing so. Rubashkin tells me that he is hardly the monster his critics make him out to be. He says his business life is inseparable from his religious one. “Divine providence wanted me to be a butcher,” he says. Founding Agriprocessors, he goes on, was as much a religious calling as a business one: “This is the belief of my Rebbe…the belief of my fellow Hasidim, that we are supposed to help any Jew be an observant Jew, in an honest and truthful way.”

Perhaps. But Agriprocessors, as it turns out, has a less than pristine record of regulatory compliance. And in early September, less than three weeks after I spoke with Rubashkin, Iowa’s attorney general filed charges alleging 9,311 violations of child-labor law against Rubashkin and his 48-year-old son Sholom—who, until the raid, oversaw the day-to-day operation of the Postville plant—as well as identical charges against three managers in Agriprocessors’ Postville human resources office. (All have entered pleas of not guilty.) On the same day, I.C.E. agents arrested two of those human-resources managers on felony charges: one for allegedly faking H.R. documents to cover up the hiring of undocumented workers and abetting identity theft, the other for harboring and aiding undocumented aliens, some of them minors. (The managers have pleaded not guilty to these charges also.)

Meanwhile, Agriprocessors faces an ongoing I.C.E. investigation, while the Orthodox Union, a Jewish group that is the country’s largest kosher-meat certifier, threatened to revoke the company’s kosher certification. And everywhere I went in Postville, former employees and their advocates described a corporate culture that they said seemed guided less by religion than by greed, deception, and hostility.

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I read the article too, not when you posted this but when I heard the author interviewed on NPR. The article and the author in person rather support the statements of Rubashkin. The article could be excerpted in two entirely different ways. One could never tell that there was the bitter unionization battle was central to the action at the plant. I remember the advertisements taken out by the union intimating but not daring to state that Rubashkin products had health issues. One would not realize that ‘alleging 9,311 violations of child-labor law’ obscures the fact that there were only 57 underage workers at the plant. One would not know that the abusive supervision and the falsified documentation do not refer to the Jewish owners but the Mexican and Guatemalan lower managers. One would not have read that post-raid, “Since then, [the new CEO] says, Agriprocessors has aggressively pursued policies needed to bring the company up to industry “best practices” and not simply OSHA compliance. Once would not have read of the author’s tour observing the cleanliness of the operation.

But if one is making a political grandstand rather than trying to right any wrongs, one would not fine a company thirty-eight times ($9,600,000) the monetary value of the alleged violations ($264,000) and put them out of business.

And if one is PETA, it is certainly more satisfying to throw the Jew down the well than to infiltrate Swift and Armor and Boar’s Head plants or wherever and photograph the suffering of the animals, which by all accounts far exceeds that of animals undergoing kosher slaughter. The animal rights movement has traditionally gone after the relatively tiny kosher producers rather than the humongous non-kosher producers. And the first thing that the Nazis did upon coming to power was to ban kosher slaughter, citing the greathearted tender compassion of the German people.

Comment by Ben Plonie on 11/13/08 at 8:40 pm

I have myself worked in the beef processing industry since 1990, and my father since the 70’s.  This is not new to the industry that has occurred here. The allegations made against Agriprocessors and the Rubashkin family are rather normal occurances in this industry and are overlooked in order to benefit each company.  Look at the pay that Agriprocessors gave to employees and that in itself speaks for itself.  Who would actually do this type of work and be paid so little.  Buying Kosher products at the grocery, however, does not reflect this.

The elder Rubashkin may truly not have been aware as to the goings on in Postville, but he should have.  To put one’s trust completely into the hands of another with no auditing or other forms of monitoring the company is foolish.  Foolishness, however, is not a crime. 

The severe actions taken against Agriprocessors, in my opinion, are rather to the extreme.  The Government, I believe, is sending a strong message to the business community that this sort of behavior will not be tolerated, and because of this I believe Agriprocessors will indeed cease to operate as a result.  To be a “simple Simon” and believe that this is however an isolated incident, would indeed be false. 

This sort of behavior goes on in many, many plants, including the one in which I work.  The sad thing is that Mr. Rubashkin will, however, have to endure the publicity and legal proceedings against him with little hope of prevailing, all because he was the one put under the spotlight.

To Mr. Rubashkin I say, “For a pious man you will suffer a great deal in the future.  The loss of your business in Postvillle will be one, but also your family will have to endure living without some of its fellow members.  Was all this worth the consequences?  I think not.” 

Money cannot but back years of ones life. As we all know, Greed is a terrible thing, and the end result could be more than we bargained for.  May God look down on you kindly, you will need it.

Comment by Chris S on 11/15/08 at 11:31 pm

And perhaps the government of Iowa will find that the care and feeding of hundreds of Mexicans and Guatemalans is more than they bargained for as well. On the bright side, property in Postville will be a bargain for the shrewd investor who can afford a few decades to wait out the recession.

Comment by Ben Plonie on 11/16/08 at 3:52 am

There was a protest in Brooklyn today against Rubashkin’s butcher snd Agriprocessors. I welcome your comments.

Joe Walker

Comment by joe walker on 11/17/08 at 1:28 am

My first comment is that a search of Google news on the demonstration turned up nothing.

My second comment is that Lindsay Lohan being pelted with four for wearing fur tuned up without even a search.

My third comment requires that you read my opening comment and Chris S. second comment for context.

My fourth comment is that given that information, you as a journalist know that context is everything. A little poking around turns up that the US meat industry for beef, pork, poultry and miscellaneous is on the order of magnitude of a hundred billion dollars a year, and Rubashkin’s gross revenue is (was) 250 million dollars a year. How many NY Times hits did the next thousand meat processors get? Given Chris’ comments, whether you are an animal rights activist of a worker rights activist, where is the action here? Here, from June 06, Meat-Processing Firms Attract Hispanic Workers

My fifth comment is that I should not have to be doing this research for you, unless you call soliciting comments research.

My sixth comment is that given the above, if there is something rotten in Postville and Brooklyn, might it be the mob throwing the Jew down the well rather egregious offenses by the Rubashkin family? You mentioned going to Mass, in which the Western cultural background radiation consists of a Jew dying for your sins. Could this still be playing out as Agriprocessors dying for the sins of the industry?

My last comment is when the mob will be visiting their mommies and daddies to protest exploitation of their cleaning ladies and nannies and gardeners and building contractors and fast food delivery men and bicycle messengers. Never, that’s when. I apologize for the egg you got, but how could you be differentiated from all the other hyenas circling around the bleeding prey?

Comment by Ben Plonie on 11/17/08 at 1:28 pm

Mr. Ben Plonie, it is obvious you do not work in this industry.  Instead you do “research” and then make up your own conclusions.  I dont need to do research because I WORK IN THIS INDUSTRY EVERYDAY.  I am not from PETA. I am not for any rights group.  This is not some witch hunt.  Mr. Rubashkin and his associates broke the law.  He got caught.  I suggest you get off your pedestal and stop crying persecution, and come work in a beef plant.  See how it is for yourself and then you can throw away the garbage you call research because you will know the truth.  The egg is in your face on this one.

Comment by Chris S on 11/18/08 at 12:32 am

From The Jewish Telegraphic Agency:

>>>>>

Agriprocessors suspending production

November 17, 2008

NEW YORK ( JTA)—Production at the Agriprocessors facility in Iowa has been suspended, a spokesman confirmed.

Chaim Abrahams said Monday that company executives were in New York for a hearing on the kosher meat producer’s bankruptcy filing and hoped to resume production Tuesday. It was unclear, however, whether the company could meet the target.

CEO Bernard Feldman confirmed two weeks ago that the Postville plant would not have “substantial production of any kind in the near future.” The statement by Abrahams is the first to confirm that production has been suspended.

Agriprocessors was the target of a massive federal immigration in May, but in recent weeks its troubles have multiplied, leading to a Chapter 11 bankruptcy filing earlier this month.

Several companies have filed lawsuits against Agriprocessors, including a St. Louis bank that claims the company defaulted on a $35 million loan. The former Postville plant manager, Sholom Rubashkin, was arrested twice and is now being held in federal custody on multiple charges.

Rubashkin, the son of the company owner Aaron Rubashkin, stands accused of helping illegal employees procure fake work documents and orchestrating an accounting scheme that permitted the company to borrow more money than it had collateral to cover. If convicted, Rubashkin faces more than 50 years in jail.

Agriprocessors’ production woes add to an already unstable market for kosher meat. Retailers, restaurants and customers across the country have reported shortages and price increases.

On Sunday, the market received a dose of good news when Empire Kosher Poultry, a major producer in Pennsylvania, announced it would be increasing production by 50 percent. The increase will go into effect next week, as will a 10 percent reduction in the price of boneless chicken breasts.

Comment by The Web Guy on 11/18/08 at 1:32 am

Chris S
I have no idea what your beef is. My conclusions were no different than yours. I did not read your comment as contradicting anything I have said nor mine as contradicting anything you have said. Nor did I see you disproving the facts of the case. I don’t believe you fully received my transmission. And you said, ” The allegations made against Agriprocessors and the Rubashkin family are rather normal occurances in this industry and are overlooked in order to benefit each company… To be a “simple Simon” and believe that this is however an isolated incident, would indeed be false… This sort of behavior goes on in many, many plants, including the one in which I work.” Without working in the industry, that is exactly the impression I got, too.

Mr. Rubashkin broke the law? I’m sure there were violations. I say that the move against Rubashkin is just a diversionary maneuver, the cheapest way for activists and politicians to grandstand without upsetting the big guys. 9,311 violations of child-labor law for 57 workers? Ten million in fines for a quarter million financial charges? This after replacing the CEO and instituting wholesale changes in procedures. I just say that these actions against his company were not simply focused on enforcing the law.

Rubashkin is being portrayed as an evil mastermind rather than a small operator relying on conventional operators to set up a large scale industrial operation. I could see it happening to me or anyone in that situation.

Comment by Ben Plonie on 11/18/08 at 3:02 am

All the accusations are true as far as I know from my own past experience whith him.
Mr Aaron Rubashkin has been breaking the law of government and god (shame on him for alwys hiding behind religion) for at least the past fourty years.
In 1968 I went to work as a delivery man for Mr Rubaskin who had a butcher store on 14th avenue in Broklyn known as Leiberman and Rubashkin. I worked for below minimum wage because he liked to pay people off the books, I put in 60 hours per week and was paid for only 40 hours. I was never paid any overtime pay, I was verbely abused and threatend if I complained about anything. When I finished my reguler duties they always found some extra (not my job) work for me to do, such as cutting meat cooking food in a resteraunt that they owned,  collecting overdue rents (they were slum loards),driving family members to social functions anything they could think of for me to do just so that I not go home on time. He fired me becuase one day after working from 7:00 a.m. to 7:00 p.m. I just could not work any lomger so I told him I needed to go home he told me that he still had work for me that day and if I left I should not come back. I am 60 years old today and for the past 30 years I have owned my own firm that employes over 30 people. In all my working life I HAVE NEVER SEEN AN EMPLOYER AS LOW DOWN AND BAD AS HIM. He is all about GREED and himself with no regard for his fellow man or the teachings of the Torah he hides behind. I see his current problems as justice for all the employees he has abused in the past 50 years. There is a god after all.

Comment by Sam Wincer on 12/18/08 at 12:48 pm

I don’t believe a word you say. Incidentally, it is impossible to hide behind religion. Your characterizations are contradicted by every other personal report about Rubashkin personally. Including the writer of the Portfolio magazine story that is the blog entry (who as I mentioned I listened to on NPR). Better get back to work on your rejected novel.

Comment by Ben Plonie on 12/18/08 at 7:41 pm

chabad is a new religion…..watch chabad try to recruit an actual jew here http://www.youtube.com/watch?v=2G4DjmRhMXM

Comment by jewish on 12/29/08 at 8:57 am

I have always admired people who don’t mind making fools of themselves. Have you ever considered that the people who egg you on do it because they like to abuse morons?

Comment by Ben Plonie on 12/29/08 at 9:44 pm

To Chris -

It seems to be fairly well known that these offenses are endemic to the beef (and other) industries.  Why was it that only Rubashkin has been the recipiant of this level of treatment?

If we assume that Rubashkin was a butcher who knew how to provide kosher slaughter and that his businenss grew at a rate that was faster than he, a mom-and-pop-store proprieter could handle properly, is it not possible that he was too naive to provide the proper h/r checks to determine that all his workers were of the proper age and legality, especially knowing how many vendors are fooled each year by false IDs?

Would it have not served the federal goverment, the workers, the Rubashkins, and kosher consumers better if the fines imposed on them would have been of a more humane nature and that they would have been required to work with real experts in verifying legalities, thereby continuing the employment of those who were legal and continuing the production of kosher meat and poultry?

Why is Rabbi Rubashkin still in prison?  Are not those guilty of homocide released in many cases after posting bond?  Is there any REAL worry of his fleeing to a country from which he could not be extridited (and btw:  Israel and the USA have extradition treaties)?

Comment by Aryeh on 1/08/09 at 10:35 am

I do have to admit that maybe the US Attorney is going to the extreme with prosecuting this case.  The attempt to force forfeiture of the business and all trademarks, etc. seems to me as if the government is looking to prosecute in criminal court for alleged offenses, and then essentially take everything this family owns that is connected to the processessing facility.  These actions do bother me.

  However, Rabbi Rubashkin is creating many problems for himself by his own actions.  In my opinion, there is a valid reason to believe that he would flee the country to avoid prosecution, having a bag of money along with your passport together at your house usually is a good indicator that he is ready to flee, and the Government is doing what is necessary to bring him to trial.

A trial will bring to light all the other questions you have raised, and answer many others.  I myself am very interested how this will play out in the courts, as many know it is difficult to win a case against you in Federal Court, especially when the other player against you is the government.
 
I am entitled to my own opinion as you are yours.  In my opinion, money is important but ones freedom is valued far greater.  In the past fines have been issued against others in this industry but has it really changed anything?  I can tell you without a doubt that the answer to this is no. If these owners or company CEO’s know that they can very well go to prison for violations of the law, then this matter will be taken far more seriously. 

Maybe Rubashkin is getting a raw deal here.  Maybe he will go to prison.  Maybe he will lose his business.

Maybe he should have ran his business legally.

Comment by Chris S on 1/08/09 at 11:32 pm

See, Salomon made some honest mistakes.  They told him to sign the $35 million credit application and he just smiled and signed it. Aaron believed his workers as well.  The management was just too overwhelmed with the little stuff and were barely to make it to the bank with the millions in profit, yet alone hire a financial staff to help manage the finances.  No time for that stuff.

Comment by SeeIToldYou on 11/05/09 at 8:14 pm

I hope this comment will go to the participants of this thread, especially Chris S who says he is interested in how this plays out in court.

Mr. Rubashkin has now been cleared of ALL Federal charges, despite the government having flown in their witnesses from Nicaragua. State charges are pending of bank fraud which involve inflating invoices to obtain better credit terms and delaying payment to suppliers in contravention of a 1924 statute about paying suppliers. However they all WERE paid a bit late, along with additional interest accrued by the delay.

So to summarize, RUBASHKIN STOLE NOTHING, HURT NOBODY, had his business destroyed by the government in an unprecedented manner using hundreds of federal agents and Blackhawk helicopters and crippling fines, has spent years in jail with no parole, and is still being prosecuted to be given a life sentence.

Did he, like, refuse to pay a bagman for a protection racket? Somebody else propose a reason for this.

Here is the accumulated reportage on the trial from an Orthodox community paper
https://www.yated.com//_yated/uploads/documents/Perfidy_in_Iowa.pdf

Gee, I wish I knew a lawyer or even a law student who was qualified to analyze the case and its progress for us.

Comment by Ben Plonie on 6/12/10 at 9:07 pm

Mr. Rubashkin was convicted in Federal Court by a jury of 86 counts of Fraud. He was not acquitted or found not guilty. In State Court Mr. Rubashkin was found not guilty of allowing workers under the age of 18 work in a meatpacking plant, and with dangerous chemicals.

No one argues the point, however, that there were in fact minors present and working inside his meatpacking plant. Mr. Rubashkin denies any knowledge of this fact. No one argues the point that illegal immigrants were employed in his meatpacking plant. Mr. Rubashkin denies any knowledge of this fact. In the trial is was disclosed that loans were obtained by using false documents. Mr. Rubashkin also denies any knowledge of this either.

So what I understand is an owner of a business doesn’t know who he employs, doesn’t know anything about them, and doesn’t know where he gets the money to run his business, and doesn’t know if all his bills are being paid or not.

But hey, whenever you get a loan, don’t you as the owner have to sign the loan agreement? Woouldn’t you read the loan application before signing it, especially if it involving millions of dollars? Wouldn’t you be asking whoever in charge of paying all the bills to provide something to show that all the bills are being paid especially if it involves a statute that has been public knowledge since 1924? By the way that Statute is actually an Act and it involves the paying of persons and businesses promptly after delivery of livestock is made to a meatpacking plant. You get your cattle or other livestock on time, so the livestock producer should be paid within a reasonable amount of time set forth in the Act, so they don’t suffer financial hardship which was a big issue in 1924 because plants would get their cattle, etc. and then pay the livestock producer whenever they felt like it, or just not pay at all. It is common knowledge this is ILLEGAL.

So, Mr. Plonie, you are incorrect in many ways. Mr. Rubashkin was convicted in Federal Court, and is in fact facing the possibility of spending the rest of his life in Federal Prison. Mr. Rubashkin, in my opinion, is a thief. Not paying for goods received by law is stealing, and getting loans based on false documents is stealing.

When Mr. Rubashkin didn’t pay for those livestock on time, he put hardship on those businesses that depend on that money to also pay their bills and operate, and that hurt them.

Filing loans based on false documentation to make a financial company falsely believe that Mr. Rubashkin’s company had more funds available when it didn’t, and because of this false informastion he did in fact get those loans for his business. Then what do you know he doesn’t pay those loans because he doesn’t know what’s going on inside his company and goes bankrupt. Losing those millions of dollars in loans by financial companies, is hurting the company, it’s stockholders, and it’s employees.

Mr. Rubashkin has not been singled out by federal authorities, because a much bigger company had to endure many of it’s plants being raided at the same time across several states on a much larger scale. That company is still in operation today.

In my opinion, after following both the Federal and State trials in regards to Mr. Rubashkin he is in fact a thief and a criminal and deserves whatever punishment he will receive from his upcoming sentence. Also, in my opinion, Mr. Rubashkin is a supid and ignorant business owner and does not deserve to own or operate any kind of business because of the way in which this company was operated.

The facts are all there, plain to see. The only question is whether you choose to see them or not.

Comment by Chris S on 6/13/10 at 4:49 pm

Thanks for the information i think everybody have their own religion and they are performing their work very good nobody has the right to interfere in it.

4gl tools

Comment by Jackson on 8/22/10 at 8:31 pm

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Comment by bankruptcy on 10/04/10 at 4:19 am

I really enjoyed reading your post here and I just wanted to tell you that I totally agree with you. I must say “Not everyone can provide information with proper flow”.  I am going to save the URL and will definitely visit again.

Comment by shortsalesafe on 11/26/10 at 4:42 am

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