Ron Klink: Biden must put American workers first and fight corruption overseas

As President Biden hosts Indian Prime Minister Narendra Modi at the White House this week, Modi will become the third world leader to be honored with an official state visit by our president. As India implements economic reforms and emerges as a global economic power, the Biden administration must do a better job in calling out other foreign countries that do not respect the rule of law. If Biden wants to win a second term, he must put the economic interests of workers in Pennsylvania and across our nation first.

As we continue to Build Back Better, we must tackle corruption overseas. Countries and foreign companies that don’t play by the rules destroy American companies, hurt U.S. exports and kill thousands of American jobs.

In my home state, agriculture accounts for $83.8 billion in economic output alongside 280,500 Pennsylvania jobs. In Pennsylvania, we export over $949 million to Brazil annually. In Latin America and especially Brazil, corruption is rampant and American companies aren’t getting a fair shake.

According to Transparency International, corruption in Brazil and across Latin America is one of the biggest impediments to economic development. Brazil’s largest corruption probe, called the Lava Jato (Car Wash) investigation, exposed a web of shady dealing across Latin America. What began as a money laundering investigation in 2014 ultimately exposed corruption at the highest levels of Brazil’s government and at state-owned entities. Lava Jato led to 280 convictions and retuned over $800 million to Brazilian state coffers.

In Brazil, meatpacking firm Marfrig Global foods has faced extensive allegations of corruption and Marcos Molina, CEO of Marfrig, is facing accusations of insider trading. Molina signed an agreement with federal prosecutors to pay $27.83 million to cover damages related to a bribery investigation. Senior executives at J&F Investimentos, a parent company of the world’s largest meatpacker JBS, admitted bribing more than 1,900 politicians to facilitate JBS’s expansion in Brazil. J&F was forced to pay a 10.3 billion-real ($1.85 billion) fine for their role in Brazilian corruption.

Minerva Foods, a meatpacker and leader in beef exports in South America, has also been investigated by Brazilian federal police for bribing food inspectors. Several Brazilian meatpackers and slaughterhouses, of which Minerva is the largest, are said to have paid monthly bribes to Ministry of Agriculture officials in Brazil in order to avoid fines and oversight. The web of corruption in South America hurts American businesses and our workers that want to play by the rules.

In Brazil, the Diplomata Group and Kaefer International Trading, an agricultural company and animal protein trader respectively that former Brazilian politician Alfredo Kaefer controlled for many years, have a long record of criminal investigations related to money laundering. In 2019, Kaefer was convicted of providing illegal loans between companies and sentenced to four years and six months under house arrest. Unfortunately, this web of corruption has evolved into a family business, with Alfredo’s son Frederico Kaefer, a shareholder at Diplomata, establishing new entities such as Kaefer International in Brazil, the U.A.E., and the United States to engage in the same type of business operations.

During the Diplomata bankruptcy proceedings, Frederico Kaefer’s personal assets were targeted by the courts in the insolvency process. Frederico Kaefer was unable to satisfy the judge on how he obtained the financial resources to establish his new business venture. The Diplomata bankruptcy proceedings ended in default with hundreds of creditors losing tens of millions, impacting American jobs.

In 2019, Kaefer International undertook a merger with Garra International Limited, registered the company in New Zealand and is now using the U.S. financial system to move millions of dollars around the world. The company works with Trade Winds International, a German trade finance company, to receive funds from the purchaser of their meat products. The relationship between Trade Winds International and Garra International must raise red flags for regulators, as DS Concepts International (which later became Trade Winds International) was an active participant in the default of Diplomata.

Whether it is J&F Investimentos pleading guility to U.S. foreign bribery charges or the Kaefar family/Garra International of convicted criminals using shell companies to move money through the U.S. or other foreign companies cheating the system, Pennsylvania workers and their families feel the pain.

Let me be clear: American workers can compete with anyone in the world on a level playing field. Members of the Pennsylvania congressional delegation must conduct oversight of foreign companies with a track record of unethical business practices.

My friend Joe Biden is the most “pro worker” president in my lifetime. Now is the time for the U.S. Congress to combat corruption, investigate foreign companies that don’t play by the rules and stand up for our great American workers.

Former U.S. Rep. Ron Klink served four consecutive terms representing Pennsylvania’s 4th Congressional District. He was the ranking Democrat on the Oversight and Investigations Subcommittee.