Scandal strikes the tomato-paste industry.

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March 19 2010 11:21 AM

Rotten Tomatoes

Scandal strikes the tomato-paste industry.

Tomatoes.
Scandal strikes the tomato-paste industry

The feds had been investigating his tomato-processing company for more than four years, but Scott Salyer was apparently taken by surprise when the FBI nabbed him at JFK Airport last month. Salyer, who flies his own jet, had been traveling to Paraguay and Andorra, among other locales, looking for an extradition-safe home. He was visiting the United States to see his newborn grandson when the investigation closed in on him.

Prosecutors have assembled a mountain of evidence against Salyer and his company, SK Foods, including tapes in which the 54-year-old orders his underlings to bribe purchasing agents from major food companies such as Kraft, Frito-Lay, Safeway, and Cargill. In some of these conversations, he sounds more like a mafia don than a prince of tomatoes. After a salesman tells Salyer that a buyer at a major food company "needs a retirement program," Salyer responds, "How fast are you going to reel in that fish? I want that sucker on speed reel." He was trying, desperately and aggressively, to keep tomato-paste contracts out of the hands of his rivals and to unload paste that was a bit moldy or watered-down.

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Tomato paste may seem like too cheap and unalluring a product to inspire such underhanded dealing. It's not smack, after all. But having written a book on the fruit, I'm not at all surprised that graft has grown out of the tomato fields.

*****

Tomato trucks are a fixture of any summertime drive between Los Angeles and San Francisco. They barrel down Interstate 5 from the field to the cannery, each one trailing two gondolas loaded with 26 tons of tomatoes. A sharp curve will jolt a few of the small, oval fruits out of the trailers. When they hit the pavement, they bounce.

The bouncing tomato of California is a wonder of science—the fruit of breeding programs that began in the 1940s when Jack Hanna, a cranky olericulturist at the University of California-Davis, got the idea of designing a tomato sturdy enough to be picked by a machine. Hanna was remarkably unsentimental about the old thin-skinned, teardrop-shaped, gooey tomato—the type that made a colorful splash when it hit a politician's shirt. His tomatoes were hard and uniform and bland-tasting. Canned tomatoes would get mixed with spices and condiments "to the point that you don't know what the tomato underneath tastes like anyway," he told a reporter in 1977. Besides, bland was good for business. "The more bland a food is," Hanna said, in a comment that echoes weirdly in an age of overabundance, "the more people eat it."

Today, about 90 percent of professionally grown tomatoes in the United States are canning or "processing" tomatoes, and nearly all of them are grown in California. A single, tiny company that you've never heard of—Morning Star Co., based in Woodland, Calif.—produces around one-quarter of all the commercially grown tomatoes in America. Most canning tomatoes are then turned into concentrated tomato paste. (Though some are diced or sold peeled and whole.)

Grown between Bakersfield and Chico from July to November, the tomatoes in a given field ripen nearly simultaneously and are harvested by gigantic machines that can pick a ton in about 20 seconds. In the 2009 growing season, the five big tomato processors (Morning Star, Rio Bravo, SK Foods, Ingomar, and Los Gatos) paid farmers about $80 for a ton of tomatoes and earned about 50 cents for each pound of paste—enough to make a couple of the Ragu spaghetti sauce jars that you buy for $3.99 each.

The Big Five have enormous operations, but tight regulations and water shortages make it impossible for them to build new canneries. So they must run their existing plants with a frightening efficiency. The California canneries operate 24/7 during the three- to four-month harvest, in which they crank out 12 million tons of paste, stored in large, sterile bins. (The paste is sold to brand-name businesses like Heinz, Nabisco, and Kraft, who turn it into the ketchup, pizza and spaghetti sauces, salsas, and juices that we consume with such gusto.)

Since the bulk processors sell a nearly interchangeable commodity, they're in a fierce competition to win customers by producing paste as cheaply as possible. Scott Salyer, the tomato kingpin who was arrested in February, was being outclassed by his chief rival, and the undisputed champion of tomato efficiency, Morning Star Co.'s Chris Rufer. Salyer, it would seem, resorted to fighting dirty. To keep Morning Star and other competitors from edging him out of deals, prosecutors say he bribed contracting officials. He was also litigious—in fact, he sued Morning Star over a lost customer barely two months before the FBI raided his offices.

*****

I've spent two years talking with people in the tomato business, and in that time I haven't found many willing to volunteer a nice comment about Salyer, whose grandfather "Cockeye" Clarence Salyer came to California in 1918 and at one time owned 50,000 acres of farmland. The Salyers lost most of their land in a battle with the rival Boswell clan. And now he's lost SK Foods, which declared bankruptcy last year. Nine of Salyer's employees or the purchasing managers they bribed had pleaded guilty to fraud and other charges prior to Salyer's arrest. He's being held without bail in Sacramento, facing 20 years in prison if convicted.

Salyer's arrest seems to be the climax of the federal investigation, but food companies have meanwhile filed class action lawsuits against SK and two other big California tomato processors, Ingomar Foods and Los Gatos Foods. The lawsuits claim that the three companies conspired to set domestic prices, a claim they deny. Ingomar and Los Gatos officials have said they rue the day they got involved with Salyer.

If the tomato investigation goes deep enough, other dark secrets might turn up. Six years ago, a field manager for Rio Bravo, Jerry Gilbert, committed suicide in the middle of a legal conflict. A farmer had sued Gilbert, claiming that in previous years—when Gilbert was still working for Morning Star—he requested what amounted to bribes in exchange for a tomato-growing contract. Then, according to the farmer, Gilbert stiffed him.

Gilbert's job was to buy tomatoes from farmers in an area measuring several hundred square miles around Morning Star's cannery in Williams, which is the biggest in the world. It's a complicated affair because the contracts are usually signed in the spring, but the size of the summer harvest is always subject to weather.

A dirty field manager, farmers say, will guarantee you—for a price—a good spot in the harvest schedule, so your tomatoes don't rot on the vine. Or, say you're a farmer and you've contracted to sell one of the companies 50,000 tons of tomatoes, but ended up producing 55,000 tons because of good weather. It's September and you have 5,000 tons of tomatoes sitting ripe in your fields. The field manager will do you a favor: He'll buy your tomatoes for 50 cents on the dollar. What choice do you have? And then maybe he'll put your tomatoes through a dummy contract set up with another farmer, who'll sell them at full price to the cannery and split the returns with his friend the field manager. "There's been every kind of scam you can imagine in this business," says Don Cameron, who manages a large farm near Huron.

*****

As far as the consumer is concerned, the Salyer case is of little significance. Moldy tomatoes don't pose a health risk if they've been cooked and recooked by food processors. And the added price for paste that his buyers paid in return for bribes probably had a negligible effect on consumer prices. It hasn't affected the business much, either. Olam, a Singaporean concern, bought out SK's canneries and has taken up the slack.

Tomato industry folk in California are ready for the whole saga to end."Everyone is so darn happy he's getting his just rewards," said Gwen Young, a tomato executive with Kagome, a Japanese food-processing giant. "We can't have anyone playing underhand. It makes it sound like the rest of us do, and we don't." One bad tomato, she says, doesn't spoil the whole 3,000-pound aseptically sealed box. *

Correction, March 19, 2010: This article originally referred to a 300-pound box of tomatoes. The author meant a 3,000-pound box. ( Return to the corrected sentence.)

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Arthur Allen is the author of The Fantastic Laboratory of Dr. Weigl, Ripe, and Vaccine. He is a health writer and editor at Politico.

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