Not only did the USDA allow farming company Valle Verde to choose and pay Primus for organic certification — a conflict of interest enabled by federal rules — but the agency trusted the accused certifier to declare the grower innocent.

“It’s a horrible story,” said Alexis Baden-Mayer, Organic Consumers Association political director. “This information was handed to the National Organic Program on a silver platter, and they still don’t take the enforcement actions that are permitted under the law.”

If the USDA wouldn’t act when presented with stark evidence of fraud, critics ask, how can consumers rely on the agency to police any of the annual $43 billion in U.S. organically certified food?

The answer is that the system can’t be trusted, NerdWallet found.

The Cornucopia Institute, a nonprofit watchdog organization, blames USDA corruption and negligence for an influx of fake-organic imports and alleged violations by domestic egg and milk producers.

USDA officials refused, after three months of interview requests, to discuss the systemic failings, Primus and the pineapple cases. Primus executives did not respond to repeated requests for comment.

Primus, headquartered in California, also conducts inspections outside the organics industry. The company, which sold in 2015 and changed its name to Primus AuditingOps, approved sanitary conditions four years before at a U.S. cantaloupe plant that killed 33 people in a listeria outbreak.

Today, the new company continues certifying organic farms and processors, and like all USDA certifiers, it is paid not by the agency but by the businesses it inspects.

Customs records show that since 2015, Valle Verde’s “USDA organic” shipments to the United States have grossed more than $6 million — a $3 million markup from conventional fruit. The company’s Costa Verde-brand pineapples, which its managers insist are organic, continue reaching Safeway, Ralphs and other U.S. chains.

In the United States, competing importers are aghast at the USDA’s inaction. Stuart Follen, owner of SL Follen Co., which imports organic pineapples, is angry that the agency’s compliance officer on the case stopped returning his calls last year.

“Why would you rob a bank, when the USDA looks the other way?” Follen asks. “Just go into the produce business and mislabel stuff.”

Northern Costa Rica’s pineapple king is Luis Alberto del Carmen Barrantes Quesada. The 48-year-old grew up poor as one of five children of a cassava farmer. He has built an organic fruit export venture at extraordinary speed.

Barrantes heads Del Valle Verde Corp., whose name means “of the green valley.” Valle Verde subsidiaries export fresh pineapples and funnel more into a processing plant that sends frozen chunks abroad.

Barrantes’ companies capitalize on Costa Rica’s renowned international image as a center of ecological wonder. A country slightly smaller than West Virginia, Costa Rica — with its ethos of “pura vida,” or pure life — is known for wholesome natural products, sustainable tourism, pristine beaches and protected wildlife reserves.

In Pital, a pineapple capital that ships hundreds of truckloads a day, Barrantes waves to friends from his SUV. He points out houses where his mother and other family members live. He swings by his ranch, a Disney-style spread with a rodeo ring, show horses and 20 prized bulls.

When questions become pointed in Valle Verde’s conference room, Barrantes stands up from his chair. He defers to his farm manager and company attorney, saying he only made it through sixth grade.

“I’m a farmer through and through,” Barrantes said. “I don’t have a computer because then I’d have to get myself an office. So my team handles all the documentation.”

Barrantes spent much of a day driving a reporter through pineapple fields on steep hills outside Pital. He stopped to pluck a pineapple and slice it deftly with a machete into juicy samples.

At his luxurious private ranch, Barrantes displayed strutting turkeys, a rare sight in Costa Rica, as he urged a reporter to stay for dinner and beers. He spoke proudly of hosting a recent rodeo-themed event for 1,000 to benefit struggling local families.

Barrantes said that concern for the environment prompted him to begin growing organics in 2013. Valle Verde was able to plant them immediately on land that had never been chemically treated, he said. The company jump-started exports by buying organics from local USDA-certified farms.

But nearby organic farmers, including some who supplied Valle Verde, tell other stories.

Jose “Pepe” Castro Otarola told the Costa Rican investigator that after his USDA-certified farm sold organic pineapples to Valle Verde, a company worker had him sign duplicate invoices that could be used to exaggerate export quantities. In an interview on Costa Rica’s Flecha TV news, Castro said he watched Valle Verde workers dump a truckload of his organics into a rinse that he had just seen them use to wash conventional fruit.

Werner Lotz, another local grower who spoke to NerdWallet and Flecha, sold organic fruit to Valle Verde in amounts that the company inflated, the investigator wrote. To produce that much fruit, he calculated, Lotz’s farm would have had to have been nine times its 5-hectare size.

Valle Verde’s former farming boss provided an even more troubling inside view.

While farmers say they saw irregularities on the ground, officials in Washington, D.C., and San Jose, Costa Rica’s capital, flagged the country’s organic-pineapple surplus.

Miles McEvoy, then the National Organic Program director, told Costa Rican pineapple executives in October 2015 that the numbers needed attention.

In March 2016, a top official at Costa Rica’s agriculture ministry received more complaints from pineapple industry managers that the nation’s organic exports exceeded its certified capacity. He assigned Jose Miguel Jimenez Mendez, a ministry agrochemist, to investigate.

The search for fake organics was a delicate assignment for Jimenez, 50, a certified international organics inspector trained at Costa Rican and Mexican universities. He would have to review work by colleagues who showed signs of growing too close to companies they inspected.

Jimenez would need to retrace steps of international certifiers such as the Costa Rican branches of Primus and Kiwa BCS Oko-Garantie GmbH, a German firm also accredited by the USDA.

Jimenez had a vast territory to search. Spiky pineapple plants roll out like shoulder-high shag carpets, covering the equivalent of seven Manhattans worth of land in Costa Rica, the world’s top exporter of the fruit named for resembling pine cones.

More farmers are converting to organic amid controversy over contamination of soil and groundwater from the use of pesticides and fertilizers in the country’s pineapple boom. The switch isn’t easy, even in Costa Rica’s ideal warm climate and rich volcanic soil.

Jimenez knew that to meet USDA requirements, farmers must normally wait three years to plant in a field that once grew conventional crops, allowing chemicals to dissipate. Without pesticides, farmers take on greater risks of insect outbreaks and disease. Learning to prevent and treat these scourges takes time, money and labor.

The investigator also knew that dishonest farmers could profit by spending less to grow conventional fruit and inflating the wholesale price by falsely labeling it organic.

Jimenez began by visiting Compania Frutera La Paz, a processing company that buys fruit from certified-organic farmers and slices and freezes it for export. He found that the amount of organics purchased matched the quantity sold. Therefore, he concluded they were genuine.

At Valle Verde, however, Jimenez said he found “inconsistencies and anomalies.”

“I discovered that pineapple being exported was not organic,” said Jimenez, as he alleged in two meticulously documented reports.

Jimenez wrote that he found chaos in the agriculture ministry file documenting the transition of Valle Verde fields from conventional to organic farming. Plots changed sizes and locations. Soil analyses and land-use records were missing. Pages had been mysteriously added to the official record, he wrote.

The ministry, which normally supervises organic transitions before USDA-appointed certifiers get involved, had allowed some land to convert in weeks instead of years, Jimenez wrote. Farms lacked required vegetation barriers between organic and conventional crops, he wrote.

Jimenez checked with suppliers of plastic sheets, which growers often use instead of chemicals for weed control. He found that Valle Verde didn’t buy enough plastic to cover its acreage, and began buying other organic farming supplies late in the process.

He wrote that information provided by Valle Verde, the ministry and Primus, which first certified the farming subsidiary in July 2015, did not coincide.

“Nothing matched,” Jimenez said. “There are so many irregularities that it’s just unbelievable.”

Humberto Gonzalez Guerrero, then director of Primus’s Costa Rica branch, recertified Valle Verde’s farming subsidiary in December 2016 even though the company’s processing branch was suspended by the agriculture ministry. Soon after certifying his client, Gonzalez left Primus to head Kiwa’s branch.

Gonzalez took Valle Verde’s business with him to his next job. At Kiwa last summer, he certified the company’s farms again. He said in an interview that Kiwa and Primus had certified Valle Verde correctly at all times.

Word of an issue regarding Primus’s involvement did reach McEvoy, the National Organic Program director, according to documents among thousands of pages obtained by NerdWallet from the USDA under the Freedom of Information Act.

“Please develop a plan to address the Primus issues in Costa Rica,” McEvoy wrote in an email to staff members July 7, 2016.

USDA compliance officer Karin French followed up. She launched what could have developed into a full-fledged investigation of Primus, Kiwa and Valle Verde.

French noted on July 18, 2016 that the USDA’s Organic Integrity Database, a web-based compendium of businesses and certifiers, contained no mention of Valle Verde’s suspension. The database is riddled with errors and omissions.

Like some others at the agency, French lacked investigative or law enforcement experience. After earning a master’s degree in animal science, she had moderated social media before a job as a federal program analyst led her to USDA organic enforcement.

French transferred to a USDA grants management job while the pineapple cases remained open. Nothing in the file indicates that she traveled to Costa Rica.

On Aug. 3, 2017, the USDA issued a case closure memo signed by Betsy Rakola, the department’s new compliance and enforcement director. Rakola is a former organics policy advisor and marketing specialist. She also lists no investigative or enforcement skills in her extensive LinkedIn entry.

“Two USDA certifying agents, Kiwa BCS and Primus Labs, conducted thorough inspections of their clients’ operations in 2016,” Rakola wrote, “and found no evidence supporting the allegation of non-organic pineapples being sold as organic.”

Rakola’s memo closed the Valle Verde case and the earlier one, in which the USDA failed to prosecute the confessed ringleader, in an agency drive to clear a backlog. Clearly, the USDA was done with Costa Rican pineapples of whatever stripe.

Rakola’s memo did not address Jimenez’s findings. She wrote that “several additional complainants, who appear to be competitors” of Valle Verde, contacted her agency with concerns of fraud after they received “preliminary investigative materials” from his first report.

“However,” she wrote, “these complainants were unable to provide any verifiable evidence of fraudulent activity by the certifier.”

That was news to the complainants. They include farmers and other Costa Rican pineapple industry members who formed an anti-fraud organization called Canagro, the National Chamber of Organic Agriculture in Costa Rica. Three months before Rakola’s memo, Canagro had sent a 910-page “Complaint Against PrimusLabs” to McEvoy, French and top Primus managers.

Canagro never heard back.

The agency’s failure to directly investigate either the certifiers or Valle Verde doesn’t surprise Richard Mathews, who served in senior USDA National Organic Program positions for a decade, ending in 2009. He now directs the Western Organic Dairy Producers Alliance, a farmers’ association.

Mathews said that the agency’s team of five compliance officers routinely depends on certifiers to investigate. He estimated that until recently the officers faced a backlog of about 500 cases; they closed hundreds of them this year in a drive to reduce the backlog.

“That’s the way they handle all their enforcement, except for what I call ‘cubicle enforcement,’” said Mathews, referring to Washington, D.C., desk work.

“The USDA gets a complaint and they send it to the certifier to investigate,” he said. “The only things that they really investigate to any level is when they get a complaint about someone who is selling a product that has not been certified.”

The earlier Costa Rican pineapple scam, which the USDA did directly investigate, fit that description. Compliance officers worked that case for two years via email and phone.

Mathews accuses McEvoy, the former National Organic Program director, of gross mismanagement, saying he “failed miserably” at rule making, accreditation and enforcement. He said McEvoy surrounded himself with former certifiers during his eight-year tenure, tilting the table still further toward the outside agents.

McEvoy retired in October, soon after the Inspector General’s report about fumigation of organic food at U.S. borders.

For three months, NerdWallet asked to interview USDA officials concerning systemic issues and the pineapple cases.

A reporter submitted detailed interview questions at officials’ request. But USDA public affairs officials were unresponsive, in contrast to the agency’s public-records unit, which released scores of documents during the same period.

David Glasgow, USDA agricultural marketing service public affairs director, characterized NerdWallet’s proposed discussion topics as detailed and then as vague. He said that the National Organic Program was just one of many programs his office covered, adding at one point that officials were busy with fiscal year-end issues.

On Nov. 9, a deputy spokeswoman emailed that an interview would not be possible. McEvoy did not respond to an interview request after his departure.

Members of Congress are concerned by the regulatory system, which U.S. Sen. Pat Roberts, R-Kansas, calls unreliable. Roberts, chairman of the Senate Committee on Agriculture, Nutrition and Forestry, said at a July committee hearing that “uncertainty and dysfunction” had overtaken organic regulations.

Rep. John Faso, R-New York, is sponsoring a bill that would boost the USDA’s annual $9 million National Organic Program budget and give the agency access to Customs databases. Consumers paying a premium deserve to know that products are truly organic, Faso said.

“Also we want to make sure that the people who are making certifications abroad are accurate and reliable,” Faso said. His bill would strengthen USDA authority over certifiers’ foreign offices, such as the Costa Rican branches of Primus and Kiwa.

But reformers aren’t going so far as to address the conflicts of interest that critics cite as the fundamental flaw, the practice of businesses choosing and paying certifiers.

John Bobbe, executive director of Ofarm, a group of U.S. organic grain and livestock producers whose businesses have been undercut by fraud, says that if certifiers were employed by the USDA, they’d be more likely to be objective. Under the current system, organic farmers or processors who anticipate bad inspection results can switch certifiers, he said.

Bobbe supports raising the maximum $11,000 penalty, which pales in comparison to potential payoffs. “Profits can be $4 million on a shipload of grain,” he said, “so we’ve had people tell us there’s more money in fraudulent organic grain than there is in the drug trade.”

In the course of this investigation, NerdWallet purchased 12 Costa Verde-brand fresh pineapples in Oregon and California, and a bag of Valle Verde frozen chunks in Texas, and sent them for testing by a USDA-compliant lab. The tests detected no chemicals prohibited for organics.

While a test result exceeding USDA maximums would reveal a violation, an absence of chemicals doesn’t prove organic authenticity. Chemicals would be difficult to detect if applied at the start of the 10-month growing period when their effect would be greatest, pineapple farmers said.

Agricultural engineer Jean-Marc Caminade, pineapple sales manager for global fruit conglomerate Compagnie Fruitiere Paris, orders lab tests weekly when buying from a new organic grower. “If they are clever and using pesticides at certain moments, then you cannot find any residues on the fruit,” Caminade said.

Caminade said he started buying organic-labeled pineapple from Valle Verde in 2015. But he said that the company had repeated problems supplying government inspection forms to prove each shipment was organic, as the European Union’s more strict system requires. The EU requires not only producers but organic brokers and importers to be certified, establishing a chain of accountability from farms to wholesale distributors.

Paperwork that Valle Verde ultimately sent to Caminade listed pineapples bought from Pepe Castro, the farmer who described irregularities to Jimenez. Caminade ended purchases after Valle Verde abruptly raised its price, a move that he regarded as a pretense.

Caminade has not visited Valle Verde. But he said that a visitor who tours a genuine organic farm and talks to the grower can sense integrity.

As an example, Caminade cited Valle del Tarso, a farm in Upala, northwest of Pital. Here, farmhands from neighboring Nicaragua live and breathe organics.

Production manager Isaac Bustos Boza stresses prevention, taking extraordinary measures to safeguard his MD2s, organic versions of the Gold Extra Sweet pineapple pioneered in Hawaii and revered by aficionados worldwide. The sweet, juicy variety perfected in 1996 by Fresh Del Monte Produce Inc., triggered the pineapple boom but proved vulnerable to pests and disease.

“Organic pineapple is a high-risk crop,” said Bustos, an agronomist. “Once you have a disease, it’s explosive. There’s no way you’re going to control it in 70,000 plants.”

Prevention is expensive and takes practice. Instead of applying a chemical insecticide to kill worms, for example, the farm uses a fruit product from the neem tree grown in Australia.

Valle del Tarso makes natural insecticides from chili pepper and tea. It ferments organic fertilizers from pineapple waste. The farm is carbon neutral, with certifications from the Rainforest Alliance and GlobalGAP, as well as the USDA.

The farm is the kind of enterprise that Mark Kastel, co-founder of the nonprofit Cornucopia Institute, cites when urging skeptics not to let a few bad pineapples spoil the lot.

“If you just paint this as being a corrupt system,” Kastel said, “you’re throwing literally thousands of families under the bus that are getting their hands dirty and cracking a sweat every day doing this right.”

Yet Bustos says that low prices in the pineapple industry are  warning signals. Flooding the Costa Rican market with fake organics depresses the price and makes it difficult for legitimate farmers and processors to cover their costs.

“When you see a … price of 50 cents a kilo, it shows that fraud is happening” with organic pineapple, he says. “There’s no way you can grow it for that.”

Prices have fallen to the extent that managers at Compania Frutera La Paz, the first processor that Jimenez checked in his investigation, decided in November to cut their losses by selling frozen organic pineapples as conventional.

La Paz managers say the company took a $100,000 hit.

In recent weeks, Costa Rican television reporters have converged on pineapple fields, questioning more farmers about Valle Verde. A member of Costa Rica’s congress held a news conference, calling for action by the agriculture ministry.

Amid the publicity, Valle Verde owner Luis Barrantes may be ready to walk away. A ministry official said the company is withdrawing some farms from organic status.

Ministry records show that an official inspecting a neighboring farm recently smelled what he believed to be the telltale odor of diazinon, an organic-banned insecticide, emanating from a Valle Verde field. The ministry is investigating.

On Dec. 5, the ministry disclosed that Costa Rica’s national police had seized documents concerning the agency’s decision to lift Valle Verde’s suspension as an organic processor. A week later, company competitors challenged that reversal in a lawsuit that accuses officials of ignoring evidence and railroading Jimenez.

After two turbulent years, the Valle Verde pineapple saga is undergoing a plot twist. But the word around Pital is that more growers are lining up to play the organic game.

And Pital isn’t the only place that stinks.

NerdWallet investigative reporter Alex Richards contributed to this article.

News conference photo by Orlando Rojas Esquivel. All others by Richard Read, NerdWallet.

About the author

Richard Read
Rich formerly worked as an investigative journalist on NerdWallet’s public interest reporting team, probing issues that affect consumers.

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