Public Values

Cafeteria kickbacks: corporate food companies bilk millions from taxpayers

Fraudulent rebate schemes keep local providers out of school, hospital, government kitchens, critics charge.

Writer Lucy Komisarby Lucy Komisar, In These Times

At the end of the 2006 school year, children's nutrition advocate Dorothy Brayley had a disturbing conversation with a local dairy representative. He had come to her office to discuss participation in the summer trade show of food providers she runs as director of Kids First Rhode Island.

At the time, the state's schools were buying 100,000 containers of milk each week. The salesman for Garelick Farms, New England's largest dairy, told Brayley that Sodexo - a food and facility management corporation that managed most of the state's school lunch programs - was paying Garelick more than competitors in order to get a bigger rebate.

State Education Department records, which are required to chart milk prices, showed that Sodexo passed on the price hike, billing schools 24 cents to 27 cents a half-pint, while milk was available from Aramark, a competing company, for 18 cents to 21 cents a half-pint - a loss to schools and families of more than $100,000 a year.

That's just a taste of the hundreds of millions of dollars of "rebates" - or kickbacks from suppliers - that Sodexo, a $20 billion-a-year global leader in the food and facility management industry, has taken while operating cafeterias and other facilities for schools, hospitals, universities, government agencies, the military and private companies across the country, according to evidence provided by whistleblowers and internal company documents.

In some cases, such rebates violate the contracting policies of federal agencies. In others, undisclosed rebates may constitute fraud. . .

To read further, please click on the link below. . .

Links and sources
  Cafeteria Kickbacks, by Lucy Komisar, In These Times, March 3 2009

Posted: April 30, 2009

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