Heads in a Box
The Deadly Results of Foodmaker Inc.'s Corporate Attitude

by Ben Tansey


Soon after the recent outbreak of E. coli bacteria that killed three Puget Sound children, Jack in the Box president Bob Nugent publicly admitted that his chain of fast-food restaurants had not been complying with a state of Washington food-service law requiring that ground beef be cooked to 155¡ F.

Had Jack in the Box obeyed the law, state health officials speculate, the outbreak might have been greatly reduced - inflicting perhaps 20 to 50 people, rather than the approximately 500 who eventually were taken ill by primary or secondary E. coli infections.

"My guess," said Bert Bartleson of the state Department of Health's food protection program, "is that if the meat had been cooked at 155¡, it might not have killed anybody."

Initially, Jack in the Box claimed it didn't know about Washington's updated cooking standards. The rule only went into effect last May, they said. And the company's headquarters in San Diego, they contended, had not been notified of the change.

These claims, as it turned out, were patently false, and there was ample evidence to prove it. Three weeks after the initial outbreak, Jack in the Box President Bob Nugent admitted as much at an annual stockholders conference in San Diego. But by then, Nugent had already testified before the Senate Agriculture Committee in Washington, DC, waving his claims of ignorance.

Ever since Nugent changed his tune and admitted being informed of the state's new cooking rules, the issue of Jack in the Box's corporate responsibility largely has been dropped by government regulators and the mass media. Instead, the focus has turned to improving meat inspections - a worthy though useless reform if restaurants don't do their part to ensure safety.

Jack in the Box's sense of responsibility to its customers, however, is an issue that carries serious, even life-threatening implications. A closer look at the company's response time to Washington's new cooking regulations has turned up disturbing revelations about a company that's trying to win back customers by saying "Trust us."



'Oh, you mean those rules ...'
Nugent has said that he's located two notifications that the company received from the state about the 155¡ cooking standard. But the Free Press has learned that the company received a barrage of information about the new standards. Here is a sampling of the flood of rule-change notifications that the company received, and the other opportunities it had to learn about the new policy - all of which the company apparently ignored:

Nugent called the Bremerton bulletin "innocuous-looking," and inexplicably claimed the memo did not constitute "proper notification." He refused to say what would have been "proper."



Out of the Loop?
Moreover, as anyone even vaguely familiar with administrative procedures knows, a long public-hearing process precedes the adoption of new state regulations. A change in the required cooking temperature for ground beef was particularly well known because it was part of a wholesale revision of Washington's food service rules, which had been ongoing since 1987.

During those five years, the state Board of Health - working through its committees, the Office of Community Health and the Washington State Restaurant Association - held at least a dozen hearings and work sessions, and shuffled their way through at least nine separate drafts of the proposed revisions. Many local health department officials told restaurants throughout the state about the proposed revisions through phone calls, newsletters or during routine visits by inspectors.

"We exceeded the Administrative Procedure Act," said the Department of Health's Bartleson. "We didn't have to hold that many meetings in that many locations, but we wanted to get as many (restaurant owners) in those meetings as possible. It behooves us to have an open process because it makes implementation easier."

After the rules were formally adopted in early 1992, Bartleson ordered 40,000 copies to be sent to hearing participants, state industry organizations, health districts and others. State sanitarians canvassed the state, training local health department personnel on the new rules, who in turn incorporated them into their training sessions, which nearly all restaurant employees must attend.

That Jack in the Box could have remained in the dark during such a massive revision of state food-service regulations indicates at best an inattentive company, and at worst a negligent one.



Ignorance of the Law is Our Excuse
Jack in the Box's professed ignorance of these regulatory reforms exposes a deeper, more disturbing corporate approach of dealing with government regulations. It also raises questions about other safety-ensuring regulations that may be on the books, but not on the minds of Jack in the Box officials.

It has long been the policy of the chain to change its procedures only after people from the outside specifically tell it to do so. Nugent said so himself in his Feb. 5 testimony before the Senate in Washington DC. "Historically," he told Sen. Thomas Daschle (D-SD), "we have relied upon the government and our suppliers to provide us any information that would suggest that we need to make adjustments in our standards."

Daschle stuttered in amazement, according to a transcript of the hearing. "Does that mean that if the government doesn't come to you ..." he began, and then trailed off. Recovering, he continued, "It would seem to me that, that is such a basic part of the handling of an edible product that it would be imperative for a company to determine, by whatever means necessary, whatever information was available, the adequate safety."

The senator tried to give Nugent a chance to save face, citing the firm's "otherwise impeccable record." But he refused to let him all the way off the hook. Like many citizens, Daschle said, he was "just curious as to what goes through the minds of executives making decisions like this when it comes to something as important as this; that is, the standards that must be set to ensure adequate confidence about the reliability of the products they are serving."

Whereupon Nugent dissembled. "Mr. Chairman, I wish I had known about the Washington state regulation in May of 1992 when it was established." But, he conceded, "I didn't." And, perhaps feeling that not one, but two embarrassing omissions would make him seem an even more pitiable figure, he said he also wished he'd learned earlier of an outbreak in Walla Walla killed two people a few years before.

After virtually admitting corporate negligence, Nugent, according to the transcript, tried to regain credibility. "I have instituted a full-scale investigation," he insisted. "We are pulling records from all of our restaurants! We are interviewing all of our employees to find who knew what and, if anybody knew anything, why didn't our corporate headquarters know it?"

Bartleson, of the Health Department, recoiled at Nugent's vision of corporate responsibility. "To say that they were not notified is pure baloney," he charged. "It's an incredibly narcissistic view of the way the world works to say, 'If you don't tell me, it's not my fault.' "



Foodmaker on Regulations:
Out of Sight, Out of Mind
Many corporate chains stay abreast of state regulation development as a matter of course. Bartleson said he regularly gets form letters from corporate chains asking about updates to state regulations. Some corporations have agents on retainer in some states to keep them informed of state regulations. Some agents often double as lobbyists.

"Jack in the Box clearly did not have anyone like that," Bartleson said.

On Feb. 12, Jack in Box announced that it would begin trying to keep track of new regulations through a filing and database system. "Regulations will be made known to appropriate field operatives," and a corporate manager has been assigned the to "document all regulatory changes that affect Jack in the Box operations."

McDonald's, which has about as many restaurants in Washington as Jack in the Box, has had such a representative for some time. Becky Bogard, a Seattle attorney who specializes in government relations, is on retainer for McDonald's. Her primary job is to monitor legislation, but she also keeps up with state regulations.

One day in mid-1991, shortly after Bogard had been retained by McDonald's, a state inspector mentioned something about the regulation upgrade to one of the chain's restaurant managers. The manager called Bogard, who immediately followed up on the tip.

She became a conduit for McDonald's technical experts in Oakbrook, IL, sending them copies of the draft regulations and participating in teleconferences that the technicians had with state health officials, including Bartleson. Unlike Jack in the Box, McDonald's had a say in the formation of the new rules.

"We've reached the point where it is important that you keep up on regulations," Bogard said. "McDonald's recognizes there is a lot government does that affects owners and operators and it is important to have someone watching those things."

Bogard said Nugent's assertion that corporate executives were not informed about the regulation changes didn't surprise her. She said she believes the state does have an obligation to notify affected parties when a rulemaking is underway, particularly when the number of changes being made is as large as the recent overhaul of Washington's food service rules. More effective notification methods, she said, might have been a news conference or a mailing based on the state Department of Revenue's business listings.

Bogard said, however, "it is a good business practice to know what the law is and to be in compliance with it. That is a corporate obligation."

Ben Tansey is a writer who lives in Seattle.

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Contents on this page were published in the April, 1993 edition of the Washington Free Press.
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