Brazil meat probe will show further evidence of graft: sources

SAO PAULO (Reuters) - A police inquiry into corruption and unsanitary conditions in Brazil’s powerful meatpacking industry contains more than 8,000 pages of evidence suggesting systematic fraud, not just isolated abuses, said three sources with direct knowledge of the probe.

Employees are seen during a technical visit of Brazil's Agriculture Minister Blairo Maggi at the Brazilian meatpacker JBS SA in the city of Lapa, Parana state, Brazil, March 21, 2017. REUTERS/Ueslei Marcelino

The evidence, they said, will contradict assertions by the government and meat companies that police raids last week on meatpackers accused of bribery to conceal health violations had unfairly tarnished the entire industry.

Brazil’s meat sector, facing suspensions from over a dozen of the more than 150 countries to which it sells, is scrambling to preserve business that fueled $14 billion in exports in 2016.

So far, police have made public only a small percentage of the alleged abuses by meatpackers, the sources said, from small firms supplying the domestic market to major exporters who rank among the world’s largest food companies.

Most of the suspected crimes, they added, remain under judicial seal.

“The investigation does focus on endemic corruption,” one source with direct knowledge of the inquiry told Reuters, speaking on condition of anonymity. The person is not allowed to discuss the investigation publicly.

None of the three sources would name companies or individuals implicated by the evidence.

Brazil’s federal police declined to comment.

An Agriculture Ministry spokeswoman said the ministry would work with police and deal with further details as they emerge.

Since the scandal emerged one week ago, meatpackers and government officials have sought a balance between condemning any wrongdoing and asserting that Brazil boasts the highest sanitation standards of any meat industry worldwide.

The two-year investigation, known as “Operation Weak Flesh,” has already lodged accusations against more than 100 people, mostly health inspectors, for taking bribes, allowing the sale of rancid products, falsifying export documents, or failing to inspect meatpackers at all.

Prosecutors have yet to present charges.

Still, governments from China, Hong Kong, the European Union and other major buyers in recent days announced at least partial bans on Brazilian meat imports.

BRF BRFS3.SA, the world's largest exporter of poultry, and JBS JBSS3.SA, the world's biggest meatpacking company, are among dozens of firms targeted by police, court documents show.

Both companies deny wrongdoing.

Some politicians and government officials, including Agriculture Minister Blairo Maggi, accuse investigators of seeking the spotlight and sensationalizing the probe.

The criticism prompted the head of the federal police in Brasilia to issue a joint statement with the Agriculture Ministry on Tuesday, saying incidents uncovered by police “do not represent a widespread malfunction of the Brazilian system.”

The sources said that police agreed to issue it to relieve political pressure and continue their investigation in a calmer environment. The police did not respond to a request for comment about the statement.

Reporting by Brad Brooks and Stephen Eisenhammer; Editing by Paulo Prada and Frances Kerry