Congresswoman requests investigation into contracted-out food services after Sodexho settles with New York state

Sodexho reached a $20 million settlement with the Attorney General of the state of New York in July for overcharging 21 school districts and the state university for food services. "This company cut sweetheart deals with suppliers and then denied taxpayer-supported schools the benefits," Attorney General Cuomo said in a statement.

Now, Congresswoman Rosa DeLaura has asked the United States Department of Agriculture (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. Congresswoman DeLaura states:

Attorney General Cuomo's investigation revealed that it is common practice within the food service industry for providers like Sodexo to leverage their size and market dominance to obtain rebates from vendors that supply food products, equipment and supplies without passing those savings onto local school districts - despite federal and state laws and local contract language that requires them to do so. I am concerned that these practices are prevalent in many more school districts around the country, potentially resulting in the misuse of tens of millions of dollars of taxpayer funds intended to provide school children with access to healthy school meals.

Congresswoman DeLaura requests a review of contract school meal programs in other states to help identify and recover any federal funds that have been misappropriated through the illegal procurement practices revealed in the New York investigation.

Sounds like a good idea. Now, what about Canada?

The Attorney General's statement notes that the investigation "revealed that it is common practice within the food service industry for service providers like Sodexo to leverage their size and market dominance to obtain rebates from vendors that supply food products, equipment and supplies." Moreover, the Attorney General "continues to examine the rebating practices of other large, multi-national corporate providers of food service and facilities management to taxpayer-funded organizations".

For more background see here, or for the SEIU story, see here.

dallan@cupe.ca

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