CONAGRA PAYS $8.3 MILLION IN PENALTIES FOR FRAUD SCHEME
                                            Release No. 0087.97
                                                               
                                   Tom Amontree  (202) 720-4623
                                   Jim Petterson (202) 720-4623
                                                               

CONAGRA PAYS $8.3 MILLION IN PENALTIES FOR FRAUD SCHEME

     WASHINGTON, March 19, 1997--Agriculture Secretary Dan Glickman today
announced that ConAgra, Inc., one of the nation's largest food companies,
agreed to pay $8.3 million in penalties, after agreeing to plead guilty to
federal charges of adulteration, misgrading, and misweighing of grain by the
company's grain division, Peavey Grain.  The settlement amount included a
criminal fine of approximately $4.4 million, a reimbursement of $450,000 to
the USDA for unearned storage payments and expenses associated with the
investigation, and about $3.45 million as compensation for criminal profits. 
This $8.3 million settlement is in addition to an earlier civil settlement
in excess of $2 million which was reached between ConAgra and a group of
Indiana farmers.

     "This settlement culminates a four-year investigation by a task force
headed by USDA's Office of Inspector General," Glickman  said.  "The plea
agreement not only serves as punishment to the offenders, it also offers the
opportunity to repay farmers who were financially damaged by these criminal
acts.  I want to personally thank Roger Viadero and his staff, as well as
those who assisted from GIPSA and FSA, for their excellent work in this
case."

     In addition to the charges against ConAgra, four of its former
managers agreed to plead guilty to criminal charges.  Two others under
contract and licensed by USDA to sample grain have also agreed to plead
guilty to charges in this case.   

     ConAgra used several schemes to defraud farmers and grain buyers to
increase their own grain inventories and profits.  Soybeans were
purposefully misgraded allowing ConAgra to pay less to the farmer, yet sell
at higher rates; water was added to grain inventories, thereby adding to its
weight and increasing profits when the grain was sold; and ConAgra
significantly misweighed grain being sold to end users, thereby shipping
less grain than for which they were paid.  In addition, gratuities were
given to USDA licensed grain samplers, who allowed elevator employees to
substitute poor quality grain samples with better quality grain.  This
resulted in false grade certificates which were used to invoice end users. 
These acts constituted violations of the U.S. Grain Standards Act, the U.S.
Warehouse Act, and the U.S. Food, Drug and Cosmetics Act.

     The practice of adding water to grain was a central issue in the
investigation.  Because grain is measured by weight, this practice resulted
in significant inventory growth.  The addition of water also caused spoilage
of grain in transit due to excess moisture.  Adding water to the grain
constitutes adulteration, which is in violation of the law prohibiting the
addition of substances to food for the purpose of adding weight.  According
to testimony presented to Congress, water systems used for adding water to
the grain were found at many of the company's domestic facilities and export
elevators. 

     USDA Inspector General Roger Viadero said, "This is the first time we
have used the adulteration statute when proving that water was added to
grain.  While the company initially claimed the water was added to suppress
dust, our investigators proved the true intent was to make more money."

     USDA's Grain Inspection, Packers and Stockyards Administration and
Farm Service Agency joined OIG in this investigation. 

     "This investigation was instrumental in amending the U.S. Grain
Standards Act to increase criminal penalties for violations," GIPSA
Administrator James Baker said.  "It was also instrumental in amending U.S.
Grain Standards Act regulations on February 11, 1995, to prohibit the
application of water to grain."

     "Repayment to the government of storage payments paid to ConAgra by
the Farm Service Agency also represents a historic move by USDA," said FSA
Administrator Grant Buntrock.  "Storage payments are normally only reclaimed
when grain warehouses fail to keep the required quantity of grain on hand,
or the inventories of the required grade of grain fall short.  In this
instance, although this Department lost no grain, USDA and the U.S.
Attorney's office for the Southern District of Indiana agreed that ConAgra
had failed to live up to the terms of their agreement with USDA, which
prohibited the addition of water to grain."

     "This means that grain warehouses will have to fully live up to the
standards set forth in their grain storage agreements with USDA," Viadero
said.  "While prosecution will undoubtedly be restricted to those operations
which use fraud and deceit, these precedent setting prosecutions have given
us a new tool with which to protect the interests of this Department, and of
the farmers of this nation.  The American farmer is the key to all
agribusiness and the cornerstone of the American market, both domestic and
around the world.  USDA is dedicated to preserving the rights of the farmer,
ensuring that everyone receives fair and equitable treatment at market."

     Viadero added, "I greatly appreciate the efforts of Judith Stewart,
U.S. Attorney for the Southern District of Indiana, and Assistant U.S.
Attorneys Kathleen Sweeney and Steve DeBrota, in the prosecution of this
matter of such significance to USDA."

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