Capital Conversations: Sonny Perdue, U.S. Secretary of Agriculture

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Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group teleforum calls, become a Federalist Society member today at fedsoc.org.

 

 

Dean Reuter:  Welcome to the audience to a special Capital Conversations edition of The Federalist Society’s Practice Group Teleforum conference call as today, June 10, 2020, we discuss recent and future events at the U.S. Department of Agriculture. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society.

 

      I’m very pleased to welcome our guest, the Honorable George Ervin “Sonny” Perdue III, U.S. Secretary at the Department of Agriculture. He’s going to speak to us with some opening remarks and then take questions. This is a special 30-minute call. We’re going to be off the record today, but we’ll get to audience questions ultimately.

 

      With that, Secretary Purdue, the floor is yours.

 

Hon. George Ervin "Sonny" Perdue III:  Well, thank you, Dean, and good afternoon to all of you. I would much prefer to be in person, but such as it is, this is a good way to communicate, I suppose. But I think most of you probably are aware of many of the responsibilities of the USDA. You may not be, so for those of you that might not be regarding the issue I’m going to speak about, we’ll talk about it.

 

      One of the mission areas in USDA is the Food Safety Inspection Service. And this, obviously, is in charge of inspecting our meat. We know USDA Grade A. We see those in the meat cases. But we inspect all protein, both beef, cattle, pork, and poultry, as well as any other kind of protein meat. So those are our basic responsibilities. We have inspectors in every meat processing plant in the country.

 

      Beginning in April, we were tracking the numbers because we had begun to hear from our packers that they were seeing inordinate numbers of COVID infections among their workforce and became alarmed about the potential situation with that. As local authorities heard about some of these, believing that these plants were maybe the source of some community transmission, they began making noise about forcing them to close and so forth that could’ve created a crisis in that way.

 

      We began working with them, as well as local authorities and governors, in trying to really manage through this process. When it became apparent that that was not going to work and that different local public health authorities and state public health authorities felt like they really were in control of this situation and were demanding some of these plants close because being deemed a source of community transmission, we felt like something else needed to be done. So in April, the President, you may recall, issued an executive order really delegating the authority under the Defense Production Act to the Secretary of Agriculture to ensure continued production of food supply chain resources, including meat and poultry, during the national emergency caused by the COVID outbreak.

 

      Now, we obviously -- I’d never been involved in the Defense Production Act. I think it was rather unusual. But every crisis probably creates its own language and lexicon. And food supply chain is probably something not many of us had ever thought about. But it’s very critical here in the United States. And it’s obviously been very efficient, which has led to Americans having the lowest cost of food of any developed country in the world, really by a significant amount. In fact, in our calculations compared to France, American consumers probably enjoy about $830 billion more disposable income in their food purchases over the year compared to even developed France in that regard. So it’s a very sophisticated, integrated, and I’d even say synchronized system.

 

      And frankly, it runs on two tracks, on two rails. One processing goes to the food service industry—restaurants, hotels, colleges, schools, and others—and creates packaging and products designed for that market. And the other track designs products and packaging for consumers for the grocery store.

 

      Well, we all know what happened to restaurants very suddenly. As for food service, schools were the first to close, then colleges, and any other kind of congregated feeding and restaurants close. It’s like a crash on a two or a four-lane interstate highway. We all know what happens there. There was a misalignment of the food supply chain and created, along with the COVID infections in the plants, a real misalignment of our food supply chain. And the President felt strongly enough about this issue to issue that executive order on April 28th.

 

      That gave us, as USDA, a tool to use with local governments, local public health, state public health offices, the tool to use to get -- to use with one voice. And that voice was the standards set by CDC and OSHA regarding workers’ safety. As you might can imagine, it was a rather narrow needle to thread with workers’ safety being paramount but also food processing being paramount as well. So those were two competing desires that we had to thread. And it couldn’t be done with disparate regulatory voices in different areas.

 

      So in doing that, we sent a letter to the governors and to all the public health officials I think around May 1st to then close the plants where governors or states whose plants were located, encouraging them to resume operations, follow the April 26th guidance by the CDC and OSHA in accordance with that executive order. And this, again, gave them the authority, gave the companies some coverage to begin work with the proper protection, with PP equipment, various things they would do in their plants regarding temperature testing and other types of things they do to resume operations. And on May 5th, we sent another letter to effected governors establishing clear expectations for the implementation of the executive order.

 

      I sort of consider the executive order of the Defense Production Act in food procurement really to kind of be like the nuclear warhead. It was something that we had in our arsenal but I really didn’t want to press the button to launch anything in a power struggle. We felt like we wanted to work with the local groups and the companies, as well as states, which we were able to successfully do. On May 5th we continued when we issued letters to leadership of the major meat and poultry processing companies, instructing them to strictly to use the CDC and OSHA guidelines specific to their industry, to implement the practices and protocols for safeguarding the health of their workers and the communities while resuming operations.

 

      So to continue on, while we had the responsibility for the protein, some of you may know the Food and Drug Administration, FDA, has the responsibility for all other food, and that’s vegetables, canning, and other things. But on May 18th, we signed an MOU with the FDA that allowed them to take the lead on similar efforts with respect to food processes under their jurisdiction, and then they’ll refer any disputes to our office to consider issuance of DPA order.

 

      And while we made it clear that we were ready to issue DP orders as needed, again, I indicated that my preference was to work cooperatively and collaboratively with regulators in all of the states around the plants and communities, mayors and others, some of which had made some outrageous statements regarding blaming these plants as being a source of community infection, which we believe and working with CDC now, we believe it really was more of living conditions. Many of the plant workers, most of the plant workers, actually are immigrants, not temporary workers, but immigrants here in the country legally. Many times they live in congregate settings, which certainly doesn’t lend itself to social distancing like we would’ve hoped. So we believe more that the common transportation to and from work, the socializing after work that was very common within the ethnic subgroups led to a lot of the transmission among the plant rather than the plant being a source of that. We believe those living conditions really contributed to that as well.

 

      So we want to really report the good news I suppose, and that is as we speak today, we’re back to about 95 percent, probably, on beef yesterday, 97 percent pork, 98 percent poultry, 99 percent of their year-over-year capacities from a year ago. So we feel like we dodged the bullet here. It took a lot of anxiety. There were a lot of weekend calls and night calls and threats and others that we were able to circumvent that I think, in the most respectful way, respecting local and state authorities and their roles in public health, utilizing the expertise of CDC and OSHA and worker safety and worker health.

 

      We were pleased about that, and the good news is the end of the story, or right where we are now, appears to be working. Many of the workers are back. Our food inspectors are on the job. And while we had some infection among our USDA food inspectors, most of those are back at work now. And I think we had probably four, possibly five deaths among our food safety inspections. Most of them were under compromised health conditions prior to the COVID, just like we’ve seen many deaths in that way.

 

      I know from a regulatory agenda perspective, you wanted to talk about that. That’s been really an interest, obviously, of mine, as well as the President certainly ever since we began. And what I found is is that oftentimes in departments, which are charged with creating rules and regulations to implement laws for which there was not unanimity out on virtually any law, and you had different expectations, and when you say the role of the Executive Branch is to implement the will of Congress and the intent of Congress, many times even with the majority votes, there’s not a clear intent of Congress, certainly from a unanimous perspective. So what I found when I got to the Department, what I call the Department had bubble-wrapped. We took laws and statutes there, and then we created regulations that tried to cover every foreseen situation from both sides. And it really had a paralyzing effect on the activities of what I believe USDA was designed to do. And I’d lift up the Forest Service as one of those.

 

      The Forest Service, because of litigation, because of environmental stakeholder complaints in many ways, had just kind of hunkered down and played safe in a way that really lost productivity, lost performance, and really lost a lot of jobs across the country because they were trying to please everyone. And when you please everyone, you don’t get a lot done.

 

      So one of these issues that we addressed was really the biotechnology rules. In biotechnology the last rule over plant protection, plant genetics had to do with 1987. You might know we’ve had a lot of technological revolutions in biotechnologies since 1987. This was a rule that had been tried to be modified and changed I think over a couple of periods of time, maybe first early in the last administration and even in 2017. That always had been rescinded because opposition came out of the woodworks. It was something that I felt like needed to be done, and we persevered and have finally published a final rule. It’s part 340 of the CFR. It’s the Department’s Plant Biotechnology Regulations. And I think it really can safely say that it brings these regulations to the 21st century, acknowledging the technology that’s been developed in the last three decades, removing duplicate and antiquated processes, and I think it will facilitate the development and availability of modernized crops.

 

      One of the things we’re focusing on here at the USDA is thinking of an Ag. Innovation Agenda where literally food can become therapy and medicine. And medicine can be food in that regard. So we think in order to design those kind of crops, what we’re looking at and what we’ve based the safety of part 340 on, the new regulation called the Secure Rule, is that any change in plant biology that can be achieved over natural breeding processes over a number of years but which could be expedited through genome and gene editing changes in a more rapid fashion, we felt like didn’t really require regulation if that was a plant through natural selection and breeding processes over many years could be achieved. So we were able to publish that rule. We think it will give the innovation community and the food sector a leg up in developing many types of products that will be healthy.

 

      I, just last week, was in Orlando, Florida with a company called Kalera. And they're using different light spectrum technology to bring -- to grow greens in a vertical enclosed warehouse, disease free, chemical free, GMO free, using water—95 percent less water—in a hydroponic type of environment with a beautiful presentation. I tasted some and really the crunchiness of their lettuce was really just pretty amazing in that way. These are the kind of technologies that we hoped to be developing.

 

      We also, frankly, have -- we’re in discussions now with the FDA, who they believe they have the responsibility in biotechnology changes in animals. We think that was just a parcel out years ago in 1987 of that. And we are now looking to assume that responsibility in food animals, not certainly in any other animals, but through using the same principles and techniques in food animals, we believe the gene editing -- which is non-transgenic. We’re not taking one species and putting genes in from another species. We’re talking about manipulating the genes within a species that can create safe, wholesome, nutritious, and even therapeutic food products in the future.

 

      So these are the kinds of things we’re doing. The Forest Service, I’ve asked because they had really bubble wrapped themselves into low productivity from using our forests for many of the purposes for which we think: obviously timber production, recreation, outdoors, the economy of local small towns all across the country, particularly out in the West, that depended on the national forests for productivity. So from a job, economic development perspective, from recreation-managed forests, we had many people -- we’d kind of succumbed to the fact that many people didn’t want us to do anything. And as we know forests can become overgrown and they're not really very pleasant to visit when they become overgrown like that.

 

      So we’re redoing our NEPA regulations and the way we do business. And we will be announcing really this week in Montana a Secretary’s Memorandum to the Forest Service about expectations of productivity and permitting, and I just call it, sooner-rather-than-later type of common sense. We, many times, get used to how long it takes in the federal government to get something done. Coming from the private sector I never was satisfied with that. I’m still amazed from a regulatory change how long it takes. When they told me it took 18-24 months on regulations, I was shocked when I got here. So we’re making progress in that way in a deregulation environment. Certainly, that was at the President’s charge, and we welcome that. We can see the need for that.

 

      These types of processes streamline, reviews, and approval processes which enable the products to get to the marketplace sooner. So we think these are good for the U.S. economy. We think they're good for the environment. We think they're good for the innovation, entrepreneurship, and creativity of which we believe the United States of America is still supreme. And as we look to bring back critical industries and critical products on shore, we want to -- I think the pandemic has been helpful in helping us recognize we need to become more self-sufficient in those areas.

 

      I’m thankful as part of USDA that fortunately we are food, so that’s self-sufficient. And that’s good news. I know we’ve become energy independent on foreign sources for a while and we saw what kind of trouble that created. So I’m just happy that we in this country, based on our producers, ranches, packers, processors, and logistics, and retail stores, and others, that we are food independent and self-sufficient here. And that helps us to help fulfill our USDA motto, which is to do right and feed everyone.

 

      Without being able to look at our audience in feedback, I feel like I may be droning on here, but I’m happy to engage in conversations, Dean, with you over questions and our audience if there are any regarding the role of USDA certainly in the Defense Production Act, in the rule 340 of biotechnology reform and regulations, or any other kind of rules or regulations, or any other thing that your audience may want to talk about today.

 

Dean Reuter:  Well, very good. Thank you so much, Secretary. It’s really a pleasure to have you with us. This is not a 60-minute conversation. This is going to end fairly soon, so we’ve got just one question, at this point in time -- two questions. Let’s see if we can get to them both before -- and you tell me, Secretary, when you need to move on to your next thing. But for now, let’s check in with our first caller.

 

Michael Stewart:  Hello, Governor Perdue, Michael Stewart here. How’ve you been, my friend? Can you talk about how you’ve changed the investigation and litigation process within the Department compared before you got there? Because as you and I have discussed several times in the past, a lot of these agencies can be sort of drain you dry in their punitive -- before you actually get to any sort of Article III court.

 

Hon. George Ervin "Sonny" Perdue III:  Yeah, Michael, I think the best example I can show you this, and frankly, we’re still getting beat up in the press over this, having to do with the NRCS rules, the National Resource Conservation Service, had made some very extreme environmental regulations -- not regulations but decisions over wetlands and personal property rights there of things that had been decisions. And then the decision would be adjudicated and the administrative law judge or the court would rule for the appellate there. And then NRCS would go back and really require them to do the same thing.

 

      We had one family where that had happened about four times in order to -- it was just almost like a vindictive type of approach. And I think that’s kind of where you got to in your own situation in that area. But it became rather vindictive there. And as we learned, I had both our general counsel, Stephen Vaden in his shop, as well as NRCS go back and check with DOJ if we had any other pending legislation that would’ve been differently handled under this administration rather than the prior administrations. And we’ve only found a couple. Some of them were legitimate. But really only a couple. So I think we’re wading through that.

 

      It’s really just a matter of fairness in that, and also respecting the rights of the citizens, and not assuming the federal government is always right. This is one thing I appreciate about the President and this administration, allowing us to serve citizens in a way that we don’t do it from an over-lording perspective over the different levels of government. This President -- you know, I was governor for eight years -- this president has more conversations and more communication with governors and other state officials I ever remember having with the federal government. We were always given edicts and instructions of what to do and never asked how can we do better together. So I appreciate that about that, certainly from my history of state and local government. And I appreciate the very fact, and that’s the way we try to treat people. That’s what we found, and it’s just a matter of not assuming the federal government’s always right, but giving it a fair hearing.

 

      We’ve got, now, a national appeals director. You may remember Frank Wood that was in the U.S. Attorney’s Office there, that is reviewing those cases, and I think making great decisions. Thank you for the question.

 

Dean Reuter:  Secretary, do you have time for another question?

 

Hon. George Ervin "Sonny" Perdue III:  Certainly, yes.

 

Dean Reuter:  All right. Let’s check in with our next caller.

 

Brad Brown:  Secretary, it’s Brad Brown. How are you?

 

Hon. George Ervin "Sonny" Perdue III:  Hi Brad.

 

Brad Brown:   You talked about USDA’s regulation over protein and the supply chain. That’s pretty complex, so does the USDA have other leverage over the transportation part of it, the production part of it? How does it all come together? So when you have a problem in one area you can make up for that by calling on another part of the country.

 

Hon. George Ervin "Sonny" Perdue III:  Only from a persuasive perspective. We have no regulatory authority over those other than food safety. Obviously, you can’t transport food in an unrefrigerated or freezer truck that’s not working, and those kind of things. But only from a food safety perspective. That’s really our role in these meat packing plants is really food safety. We want to avoid any E. coli, Salmonella issues. We want to make sure that food is safe for our consumers.

 

      Aside from that, we have to work collaboratively with other people like the DOT. And we have done that over a number of occasions over these hours of service, issues for fresh produce and livestock and things like that. So it is complex. It’s complicated. But our tools, primarily, reflect just the safety from the field.

 

      Even the Food Modernization and Safety Act business call was giving the FDA the responsibility of going to the fields and making sure the production was safe. I think probably that role should’ve gone to USDA because we have a relationship with the growers. But we’ve also worked collaboratively with FDA to work through that for the most part. That works okay. But the Food Modernization and Safety Act really goes to FDA.

 

      So we have to work in an interagency fashion, which requires mutual respect and cooperation, but kind of staying in your lane for the most part, but also communicating with others over how we all could get to a better result from end to end. Obviously, consumers only care about the value that’s produced to them at the end. Most people, as you might imagine, prior to the pandemic, didn’t even think about food supply chain. But it is a very complex, complicated, well-oiled, efficient system in the United States for which our consumers are the beneficiaries.

 

Brad Brown:  Thank you.

 

Dean Reuter:  Well, Secretary, this is Dean. I want to keep to our commitment in timing and maybe give you a chance to wrap up. And as you do that, if you want to talk about your experience. You mentioned being in the private sector. You mentioned being in local and state government, and now, of course, the head of a major agency. How has that informed your views? And are you satisfied? Are you happy with the level of cooperation you’ve gotten from state and local governments and from the private sector, maybe lobbyists even and industry folks?

 

Hon. George Ervin "Sonny" Perdue III:  To your last question, I think, again, I'm happy because I believe it stems from mutual respect. And there, again, we don’t come in from the federal perspective and say we’re from Washington D.C. and we’re here to tell you what to do. I sort of experienced some of that when I was governor in state government. And I recall specifically a situation with mental health. We were doing all that we could in Georgia, and we had a great plan. And the Department of Labor came down and said, “This is unsatisfactory. We’re going to sue you.” I said, “Well, you need to come on and sue us because we think we got a great case.” And they finally backed down during that period of time. There was a bully in that attitude there that was not mutually respectful. It was not recognizing that.

 

      What I also saw was punitive. It was not educational and trying to bring people and regulate them into compliance. It was regulating them into punitive fining actions that I just don’t think is what government should do. We want to -- rules and regulations are there to comply with. Sometimes compliance is out of ignorance. Non-compliance is out of ignorance. Sometimes it’s out of other things. Sometimes it’s willing rebellion there, and that needs to be dealt with in a special way. But that’s pretty rare. So I think if we try to take those lessons that I learned in those other roles and try to treat people the way I wished I had been treated in those roles . . .

 

      And I think, again, I give the President credit. He really listens to governors. A governor has direct access and call him. And if there’s something they don’t think we’re doing right, I get a call from him. And then we have to resolve that. So there’s an accountability measure there that I think comes from the top that sets a tone that we’re here. We’re one level of government. We’re not a supreme, even though we have a Supremacy Clause. It’s just like this Defense Production Act. We had that nuclear weapon, but it sure made a lot more sense to use it as a deterrent rather than as offensive weapon. And that’s why I think we were able to get cooperation sooner rather than later and get these plants back working.

 

Dean Reuter:  Well, Mr. Secretary, you’ve been very generous with your time. I want to thank you personally and thank you on behalf of The Federalist Society. It’s been a pleasure to spend a little time with you here today. And thank you for your work and your continued service. You mentioned Stephen Vaden. It’s good to have him on your team, I'm sure. Again, thanks for your time. I want to thank our audience as well for dialing in. Check your emails and our website for upcoming Teleforum conference calls. But until that next call, we are adjourned. Thank you very much, everyone.

 

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Dean Reuter:  Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.