Seafood Source Exclusive Interview with Lischewski on His Conviction for Tuna Price Fixing

  1. Unless I misunderstood your testimony, you swore under oath that you were not part of any conspiracy to fix the prices of canned tuna while you led Bumble Bee. Do you stand by that statement? And if so, is that an indictment of the numerous individuals who swore under oath that you had been a leader in the purported conspiracy? 

I did swear under oath that I would tell the truth which is exactly what I did.  The Government tried to insinuate otherwise and questioned my responses — but that’s because my answers didn’t fit the false narrative they wanted the jury to believe.  The Government couldn’t prove any instance where I didn’t tell the truth – because there wasn’t one. 

There is no question that Scott Cameron and Ken Worsham failed to tell the truth.  My defense team demonstrated this not only by showing how their testimonies evolved during the 53 meetings the two of them had with the Department of Justice, but also by highlighting numerous inconsistent statements they made during their cross examination at trial.  Perhaps most revealing is that both Cameron and Worsham testified that I told them to engage in illegal activity but neither one of them could remember when or where I told them or what I said.  If my boss had told me to engage in illegal activity I can assure you I would remember all of the details.

As for the other witnesses, I never said they lied.  None of them testified that I was aware of, participated in, or was a leader in the purported price fixing conspiracy.  A tactic used by the Government was to grossly mischaracterize their testimonies.  Jeff Chang of Lion Capital described how competitive the marketplace was during the early period of Lion’s ownership.  Steve Hodge, of StarKist, said he had never met me or communicated with me and he testified that my name never came up in any conversations he had with Bumble Bee’s Worsham.  Shue Wing Chan, of Chicken of the Sea, admitted that the purported agreement he said he had with me to ‘not promote aggressively’ was in his mind and he conceded that I had never acknowledged any such agreement.  Renato Curto, of Trimarine, said the comments he wrote in an email, comments where I purportedly said Bumble Bee people were talking to StarKist people all the time, were his words and not mine.  They were his words as I never said that.  And David Roszmann of Chicken of the Sea stated that he and I never had any agreement.  I agree with the testimony of these witnesses.  But as part of the Government’s strategy to mislead the jury, during my cross examination they tried to insinuate that I said all of these witnesses lied.  That was not the case.

In addition to mischaracterizing testimony of the various witnesses, the Government misrepresented what was written in many emails and used selective words and sentences to paint a picture of a crime that didn’t happen.  I believe they did this knowing that the conclusions they were presenting to the jury were false.  My defense team proved beyond a shadow of a doubt that there was no financial evidence of price fixing.  What I saw and witnessed during the purported conspiracy period was unprecedented cost inflation, aggressive attacks on the Bumble Bee brand by StarKist and Chicken of the Sea, pressure on our market shares and lower profitability.  There is no denying these facts when you look at the financial data and these facts demonstrate that there was no price fixing.   

2. Why do you think the government chose you – and only you – to pursue criminal charges against?

That’s an interesting question for which I don’t have a definitive answer.  But if I were to speculate, I would offer the following theory.

Chicken of the Sea was the whistleblower and as part of that role, the company and all of its employees were granted amnesty from prosecution by the Government.  To be accepted as the whistleblower, you have to offer the Government information that they believe will help them prosecute the case and in this situation it meant assistance in the prosecution of Bumble Bee or StarKist.  Chicken of the Sea was always the price discounter in the U.S. market so they couldn’t offer the Government any evidence of their involvement in price fixing with Bumble Bee and StarKist.  But what they did offer is testimony from their CEO, Shue Wing Chan (the cousin of Thai Union’s CEO, Thiraphong Chansiri), that he was engaged with me in an agreement to “not promote aggressively”.  I believe this was a false admission given to the Government with the hope it would be juicy enough to get Chicken of the Sea accepted as the whistle blower – and it worked.  Since Chicken of the Sea and Chan had amnesty, there was no risk for them to make this admission.  Even though Chan later admitted that a) the agreement was in his mind, b) I never acknowledged it, c) he never told anyone at Chicken of the Sea about it (so his testimony could not be corroborated), and d) he could not provide evidence of even one ‘promotion’ he impacted to adhere to the purported ‘agreement’ he had with me, this admission became the cornerstone of the Government’s action against me.

As far as StarKist, who would the Government have gone after?  During 2010 – 2014 StarKist had four different CEO’s.  Which one would they have chosen to prosecute? 

Then you have the two individuals from Bumble Bee who pled guilty and became Government cooperators.  Scott Cameron, Bumble Bee’s SVP of Sales, pled guilty to a crime that we proved he did not commit.  Cameron pled guilty to price fixing from November, 2010 to October, 2011.  However, neither StarKist or Chicken of the Sea pled guilty, nor were they charged with price fixing, for this period of time.  Cameron pled guilty to colluding with himself.  But by pleading guilty, he avoided the risk of prosecution and as part of his plea he negotiated a deal with the Government for a reduced fine and a reduced sentence in return for his promise to help the Government convict me.

Ken Worsham, Bumble Bee’s SVP of Trade Marketing, testified that he and StarKist’s Hodge were in regular communication.  After reviewing the emails, looking at the phone logs, and listening to their testimony, I believe that they did coordinate two list price increases – increases which were inevitable due to unprecedented cost increases – and they tried to align quarterly pricing guidance.  But these activities don’t translate to customer level price negotiations where competition remained fierce, not only among the three brands, but also with the retailers’ private labels. 

Worsham never told me about his communication with Hodge, although he testified that he did during trial.  He conveniently testified that he told me in private, one-on-one meetings which no one could corroborate.  From my viewpoint – and that of my financial staff and my Board — there was no appearance of price fixing in the market place.  The period when the Government claims the tuna industry was engaged in price fixing was one of the most competitive periods of time I have ever witnessed.

Similar to Cameron, I believe Worsham was pressured into a guilty plea by the Government with the commitment that they would offer him a deal of a lower fine and lower prison sentence in return for his testimony against me.

This is a long explanation but it is the only one I can come up.  The Government wanted to catch a big fish and with Chicken of the Sea’s Chan having received amnesty and the constant turnover in the CEO role at StarKist, I was the only big fish left.

3. Can you explain what your main arguments will be in your appeal?

Given my pending appeal I can’t answer this question right now other than saying a key part of our appeal will be to challenge the constitutionality of the Per Se rule under which I was prosecuted.  The Per Se rule is a ‘judge authored’ addition to the Sherman Antitrust Act that came into force in 1898 when price fixing was a misdemeanor with a maximum fine of $1,000.  Under the Per Se rule, any act of price fixing is defined as unreasonable and the Government only needs to show the existence of an agreement to convict for price fixing.  They do not have to show that the price fixing was ever put into place, that it was effective or that there was any harm on customers.  We believe the Per Se rule violates the fifth and sixth amendments of the U.S. Constitution and it should be up to the jury – not the Court – to make the determination of what is unreasonable. 

4. Are you concerned about your potential liability in future civil litigation?

How could I not be although, to be honest, I am more concerned about the ongoing cost of funding my legal defense.  There is a significant difference between criminal and civil litigation as plaintiffs in civil litigation must prove financial damage.  I believe this will be difficult to do given the evidence that demonstrates that no U.S. customers were overcharged for their Bumble Bee canned tuna.

5. How do you feel about Bumble Bee’s bankruptcy and FCF’s purchase of the company?

I am extremely disappointed about the bankruptcy which was brought about by the plethora of frivolous civil lawsuits that were filed against Bumble Bee (and StarKist / Chicken of the Sea) following the criminal guilty plea, a guilty plea that was required following the guilty pleas of former executives Cameron and Worsham.  I believe Bumble Bee could have prevailed in the civil litigation but their lawyers convinced them to settle and based on settlement costs, costs of legal representation, and unsupportive lenders, the company ended up with no other alternative than to file for bankruptcy.  The U.S. Department of Justice is theoretically precluded from taking anti-trust action if it plunges a company into bankruptcy, but that is exactly what they did to Bumble Bee – the last American tuna company.

As for FCF, FCF had been a long time minority shareholder of Bumble Bee and is also the company’s largest supplier.  They understand Bumble Bee’s business and I believe they will have a positive impact on the future.  Bumble Bee has long been owned by private equity investors which has impacted the company’s ability to make investments that support long term growth.  I believe FCF will have a longer investment horizon and will support a strategy that ensures ongoing growth and profitability for Bumble Bee.

6. Do you believe the government is likely to pursue future antitrust cases against other food companies, and specifically, against other seafood companies or sectors?

It has already started.  The Department of Justice is now targeting the U.S. beef processing, poultry and salmon industries for price fixing.  Four of the largest beef processors in the U.S., Tyson Foods, JBS SA, Cargill and National Beef / Marfrig, who are said to control more than 80% of the domestic beef processing industry, have recently been subpoenaed.  In the poultry industry, Perdue Farms, Tyson Foods, Pilgrim’s Pride, Sanderson Farms, Peco Foods, Wayne Farms, Koch Foods, Mountaire Farms and House of Raeford Farms have been in the news for price fixing and two CEO’s have recently been indicted. In salmon, Mowi and Scottish Sea Farms co-owners SalMar and Leroy have been sent subpoenas. 

If the low bar of the Per Se rule is allowed to be applied to all of these companies, they will face the same challenges that the tuna industry has endured.

7. Do you think the seafood industry is too close-knit or works too collaboratively? It seems like even if there was no wrongdoing, the frequent communication between employees of the rival tuna companies gave the prosecutors ammunition for their case and may have raised questions for the jury.

I believe this is a valid concern.  Seafood tends to be an incestuous business where people regularly move between companies and there is very little migration into seafood from other industries.  Furthermore, executives seem to remain in the seafood industry for long periods of time during which relationships with competitors form.  While communicating with competitors about business, and even discussing prices (as long as there is no agreement to fix prices), is not illegal, it is something Government prosecutors can effectively present as questionable behavior to a jury.  Coupled with the prosecutor’s ability to mischaracterize phone calls and emails, this is a significant risk.

8. Is there anything you wish to communicate to the larger seafood industry? Perhaps a lesson you’ve learned from this experience or any word of caution?

The key message that I would leave, a message targeted to CEO’s and senior executives, is that companies must implement strict compliance management processes that include training, monitoring and enforcement.  While Bumble Bee had a General Counsel whose responsibility included compliance, we didn’t take this responsibility serious enough.  If Bumble Bee had a stricter compliance monitoring process, we would have uncovered the activities of Cameron and Worsham.  This would have allowed us to take immediate disciplinary action and we would have avoided this entire legal tragedy.

Historically I always believed it was sufficient to provide training and discuss acceptable (and unacceptable) behavior.  I trusted that Cameron and Worsham, two executives who worked with me for more than 15 years, would be honest and ethical in how they conducted their business activities.  I was wrong and the trust I put into them has resulted in a guilty verdict against me for a crime I did not commit and a crime that had no victim – but a crime for which I will spend 40 months in prison.

Sorry, comments are closed for this post.