Lawmakers scrutinize food service company over school lunches

One of the world’s biggest food services companies is falling under increasing
scrutiny from lawmakers.

Sodexo, Inc., is already facing questions over its handling of a food service
contract with the U.S. Marine Corps. Now the company is also confronting a
possible probe over its school lunch business.

{mosads}On Sept. 16, Rep. Rosa DeLauro (D-Conn.), chairwoman of the House
Agriculture Appropriations subcommittee, wrote a letter to Agriculture
Secretary Tom Vilsack calling for an inspector general investigation into the
National School Lunch and Breakfast Programs.

DeLauro said the programs warranted further scrutiny after
Sodexo agreed to a $20 million settlement this past July for failing to pass on
rebates to several school districts in New York.

“I write to you today to ask the USDA to begin an investigation by the Officer
of the Inspector General and to alert state education and agriculture agencies
to the $20 million settlement between New York Attorney General Andrew M. Cuomo
and Sodexo for overcharging 21 New York school districts and the SUNY system
for food service,” DeLauro said in her letter to Vilsack. 

If the department decided to open up a probe, it could put a significant chunk
of Sodexo’s business under scrutiny. The French-based company dominates the
food services industry, along with Aramark Corp. and the Compass Group, and has
contracts across the country to provide school lunches.

A House Democratic aide said an investigation into the school lunch program
would not focus solely on Sodexo. Nonetheless, the company would face questions
over its handling of the school contracts.   

“This is classic ‘Let’s go to private contractors to save money.’ Sodexo is
just the example,” said the aide. “To think they are not passing along the
rebates like they should to make a buck is egregious.”

The USDA does not have direct contracting authority over the school lunch
program — that’s up to local and state school districts — but they do have
oversight power on how it is run. 

“We have issued guidance specifically directed at the issues involved in [the
Sodexo] case and we are working to remind states and school districts of their
responsibilities in this area,” said Justin DeJong, a USDA spokesman. 

A spokeswoman for Sodexo declined to comment for this story. 

A probe into Sodexo’s school lunch business is not likely to help in their
dispute with the Service Employees International Union (SEIU). The union has
been battling to organize Sodexo’s U.S. workers.  

Renee Asher, SEIU’s assistant director of communications for
property services, said DeLauro’s letter puts the spotlight on Sodexo’s
business practices.

“It means a higher level of scrutiny for Sodexo and whether their profits are
being generated at the expense of kids,” Asher said.

In the New York attorney general’s investigation, Sodexo was found to have
earned rebates from suppliers that weren’t passed on to schools. Contracts with
school districts often stipulate that such savings be shared; withholding them
is also a violation of federal law.

Congress’s interest in Sodexo’s handling of school lunches follows intense
scrutiny from lawmakers over their performance on a massive food services
contract with the U.S. Marine Corps. 

In August, Reps. Rob Andrews (D-N.J.), Sanford Bishop (D-Ga.), Marcy Kaptur
(D-Ohio) and Steven Rothman (D-N.J.) wrote letters to Pentagon officials asking
questions about the contract, which rose in cost from $881 million to $1.2
billion. 

The food services company has hired lobbyists to help with its troubles. 

Earlier this year, Sodexo hired its first outside lobbyists at Gephardt Group
Government Affairs, home to former House Democratic Leader Richard Gephardt
(D-Mo.), as well as at Trammell and Company. So far, Sodexo has spent $70,000
on lobbying fees for the two firms, having spent $470,000 overall on lobbying
in 2010.