SK Foods immediately and permanently broke off all relations with that broker

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The government later alleged in court filings that a broker hiredby SK Foods had paid more than $185,000 in bribes to purchasingagents at some of the nation's largest food companies, includingSafeway and Kraft, in order to secure their business. JusticeDepartment spokeswoman Gina Talamona said only that "the antitrustdivision is investigating the possibility of anti-competitivepractices in the tomato processing industry." No arrests have beenmade.

Brian Maschler, an attorney for SK Foods, said investigators werealso interested in a partnership the company formed in 2006 withIngomar Packing of Los Banos (Merced County) and Los Gatos TomatoProducts of Huron (Fresno County).
Maschler said the companies, collaborating as the California TomatoExport Group, had joined up to sell tomato paste and sauce andother products overseas. That effort did not violate U.S. antitrustlaw, he said.

Still, the partnership was disbanded after the federal raids to"avoid even the appearance of impropriety," Maschler said. It wasnot clear Tuesday whether the export group was the main focus ofthe investigation. U.S. law prohibits business competitors fromagreeing on a price to charge consumers. However, there are someexemptions to the law that shield agricultural groups andcooperatives, said John McLean, a Tiburon attorney who has arguedmajor antitrust cases.

No one has been arrested or charged in the government's briberyinvestigation. But in a sworn affidavit, FBI Special Agent PaulArtley said Randall Rahal, a New Jersey broker working for SKFoods, had paid off employees of Safeway, Kraft, ConAgra,Frito-Lay, B&G Foods and Agusa. The affidavit was filed lastmonth as part of a civil case in which federal prosecutors inSacramento reported seizing nearly $600,000 from bank accountscontrolled by Rahal. The broker did not return a telephone messageleft at his home Tuesday.

The affidavit said investigators had tapped Rahal's telephones andintercepted calls in which he spoke with SK Foods' co-owner andchief executive, Scott Salyer, about the possibility of paying abribe to a purchaser. The affidavit also said investigators hadspoken to a former SK Foods employee who said Salyer had beenpresent while Rahal discussed paying bribes. The employee wasidentified by the FBI only as "Witness No. 1." According to theFBI, the former employee said Rahal had told him he identifiedcustomers open to bribes by dropping a $100 bill, then picking itup and saying, "You must have dropped this, is it yours?"

Salyer could not be reached for comment. Maschler said theexecutive was cooperating fully with investigators, and said theFBI affidavit had cited "isolated conversations" that may have hada different meaning when heard in context.
"SK Foods immediately and permanently broke off all relations withthat broker" after learning of the allegations in April, Maschlersaid. "Any notion of payments, or paying customers under the table,are fundamentally contrary to SK Foods' policies, procedures andvalues. We have a zero tolerance policy for that."

Spokespeople for some of the corporations whose employees allegedlytook bribes said the companies had been victimized as well. BrianDowling of Safeway said an employee accused by the FBI of takingbribes was no longer with the Pleasanton-based supermarket chain."The alleged behavior would have been a clear violation of ourcompany policies," Dowling said.