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GR Notice 1566

September 23, 1974 U.S. DEPARTMENT OF AGRICULTURE, Agricultural Marketing Service, Grain Division, Hvattsville, Md. Action by: Field Offices and Official Inspection Agencies. Information for: Interested Parties in the Grain, Rice, and Pulse




This notice identifies the interim criteria to be used by official inspection personnel in reporting low quality inspected grain, rice, and pulses for possible action by the Food and Drug Administration (FDA). Final criteria will be issued in writing at a later date.

Section A (4) of the AMS-FDA Agreement (see GR Instruction 910–6) states that AMS will report to FDA any lot of grain, rice, or pulses which is found to be actionable under the Federal Food, Drug, and Cosmetic Act. The following quality criteria shall be considered actionable and shall be reported to the appropriate FDA District Office for possible action:

Wheat, rye, rice, or pulses containing filth, such as:

Bird droppings (2 or more per 1.000 grams);
Rodent pellets (2 or more per 1,000 grams) ; or

A combination of filth types (1 or more bird droppings
and 1 or more rodent pellets per 1,000 grams).
Grain, rice, or pulses containing toxic substances, such as:

Castor beans (2 or more per 1,000 grams);
Crotalaria seeds (3 or more per 1,000 grams); or

Treated seeds, such as pink kernels or mercury-treated
seeds (20 or more per 1,000 grams).
Grain, rice, or pulses which are graded distinctly low quality
for any reason.

Grain, rice, or pulses with a commercially objectionable foreign odor. Grain containing objectionable foreign matter, such as:

Metal fragments (2 or more on basis of lot as a whole or in original sample)

Glass fragments (2 or more on basis of lot as a whole or in original sample) Rice or pulses containing objectionable foreign matter, such as:

Metal fragments (1 or more on basis of lot as a whole or in original sample)

Glass fragments (1 or more on basis of lot as a whole or original sample). Stones:

All rice, except rough rice (in excess of 0.1 percent, by weight, of sample)

1 "Inspected" shall include all inspections of graded items under the U.S. Grain Standards Act and Part 68 regulations of the Agricultural Marketing Act of 1946.

2 Grain shall include barley, corn, flaxseed, mixed grain, oats, rye, sorghum, soybeans, and wheat.

3 Pulses shall include dry beans, dry lentils, and dry peas.

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Pulses (in excess of 0.3 percent, by weight, of sample). Rice and pulses which are graded sample grade on account of live or dead insects, insect webbing, or insect refuse. Immediately after ascertaining that a lot is actionable, the office performing the original or appeal inspection (Official inspection agency, cooperator, or Grain Division) shall telephone a report of their findings to the applicant and to FDA. Toll calls to FDA should be made collect. (See attachment A for list of FDA names and telephone numbers to contact. Grain Division field offices shall promptly inform official inspection agencies and cooperators of the specific FDA district office with whom they are to associate.) Calls to FDA district offices should be directed to the following individuals in the indicated preference order:

1. Director, investigations branch.
2. Director, compliance branch.

3. Deputy regional FDA Director. This oral report will be promptly confirmed in writing in the format shown in attachment B. When requested by FDA the sample work portion shall also be forwarded to them, using USDA franked tags. The grade certificate shall, as usual, be presented to the applicant and a copy forwarded to the Grain Division Field Office together with a copy of the written report to FDA.

After receiving the above notification, the applicant should promptly contact the FDA district office and discuss with them FDA interest in the commodity and proposed further handling of the commodity. Further communications concerning the commodity should be restricted to FDA officials and the applicant only.

All pertinent information shall be included on inspection certificates issued to the applicants. Upon request by an interested party, inspections of grain, rice, and pulses are subject to appeal in accordance with the part 68 regulations under the Agricultural Marketing Act of 1946, and the part 26 regulations under the U.S. Grain Standards Act. In those instances where lots, previously reported by official inspection agencies as actionable, are subsequently appealed by the applicants, the Grain Division field offices shall promptly report appeal findings to both the applicant and FDA. Further communications concerning the commodities should be restricted to FDA officials and the applicants only.

This notice implements section A (4) of the AMS-FDA agreement described in GR instruction 910–6, and is effective immediately. On recipt of this notice, Grain Division field offices shall discontinue issuing "unfit notices, form 1, to applicants for inspection and discard all unused copies of the form.


Director, Grain Division. [Attachments*]

Questions 21 and 23. Do you see any problem in giving the Grain Inspection Branch the responsibility for the weighing, as well as grading, of grain? If so, explain.

What would you suggest as an appeal procedure on grain weights ?

Answer. We are not in a position at this time to recommend what changes in existing regulations or legislation, if any, may be needed

*See appendix D, p. 494.

to improve the system for weighing grain—at either port elevators or interior elevators.

The Department's responsibility with respect to weighing grain is confined to the administration of the U.S. Warehouse Act. Our responsibility under that statute is explained in the response to question 1.* There have been few complaints about misweighing practices at grain warehouses licensed under the U.S. Warehouse Act. The current investigation by the Department's Office of Investigation and the Department of Justice was initiated because of problems in the grain inspection system. While the investigation is covering related aspects of the storage, handling, distribution and sale of grain, there have been no indictments for misweighing. Thus, before suggesting changes in the weighing system, we would want to evaluate the extent and nature of the problem as developed by the investigation. Further, as you suggest, a change in the U.S. Grain Standards Act to cover weighing would be an option to consider, but such an option cannot be effectively evaluated until it is known what changes will be made in that act.

Question 22. What recourse or appeal is available to a buyer-seller who has a dispute on weight under the present system?

Answer. On most grain when it is sold or bought, the contract specifies what weight will apply. For example, most grain going to the gulf is sold on "destination" weights. Most grain moving from country receiving points to terminals also is sold on a "destination” weight basis. There are some occasions between terminal grain dealers when grain is sold on "origin" weight. In either event the contract is satisfied by the furnishing of "official” weight of the “destination" or "origin" market as the case may be, "official” weights from markets having either a class 1 or class 2 classification by the AAR.

Storage grain delivered to a warehouse or delivered from a warehouse after storage to a depositor generally will be received and delivered under "official” weights if available. The “official” personnel usually will have licenses to weigh under U.S. Warehouse Act as well. If such weights are not available, then weighers licensed under the C.S. Warehouse Act will perform the services. The weights at the warehouse will be controlling, except on CCC grain where destination “official” weights apply.

In either event when there is a dispute over weights there is very little that can be done. Unless the grain was put away identity-preserved, which is a most unusual situation, the grain cannot be reweighed as it has been commingled with other grain of like grade. About all that can be done is for the weighing process to be reviewed. “Official” weight markets keep records other than the weight certificate which generally shows the scale over which the grain was weighed, the sequence of its weighing, the individual drafts, seals removed, condition of car when unloaded (leaks-depressions noted, etc. which generally are a matter of a car condition report) and whether or not there were any factors which might contribute to incomplete or faulty weighing. Thus, when a complaint is made, the official weighing agency generally reviews the supporting records and if the car or lot has a clear record there is not much more that can be done. The seller or


*See p. 160.

buyer must settle on the basis of the agreed upon "origin" or "destination" weights.

It is not unusual for two “official” markets to have clear records on the weight of a lot of grain and unless it can be shown that something happened in transit it is a difficult situation to determine which is right or when the difference occurred.

If the lot moved by rail and if circumstances warrant, a claim can be filed with the railroad. To our knowledge there are no transportation agencies taking responsibility for intransit losses on truck, barge, or vessel grain. Most State grain dealers associations and the Grain and Feed Dealers National Association have processes of arbitration for disputes between members and this recourse is taken at times.

At country points most grain is received by truck and weighed over a platform scale and the owner of the grain or his representative observes the weighing process and can complain if they do not feel that the lot is being weighed correctly or coming out to their expectations. Dial type scales are used extensively and are visible to the owner or his agent.

Unlike the U.S. Grain Standards Act, there are no appeal provisions written into the U.S. Warehouse Act for settlement of disputes on weight sand grades.

A buyer or seller suspecting weight discrepancies at a given warehouse licensed under the U.S. Warehouse Act may notify personnel of the Warehouse Service Branch. Such complaints would then be looked into by Warehouse Service Branch personnel to determine if a violation of the U.S. Warehouse Act, such as issuance of a false weight certificate or fraudulent weighing, had taken place. If violations are found to have occurred, actions which may be taken include suspension of the weigher's license, revocation of the weigher's license, and recommenations to the Department of Justice to prosecute under section 30 of the U.S. Warehouse Act.

Question 24. I understand that an employee of the Grain Division, Willard W. Griffin, made reports to his superiors in 1971 and 1972 about irregularities in the inspection system and the need for better inspection procedures. Weuld you furnish all such reports made by Vir. Griffin in 1971 and 1972 for the record ?

Answer. Copies of material relating to this matter have been referred to Mr. Gerald J. Gallinghouse, U.S. attorney, New Orleans, La., because they may be pertinent to the current series of investigations. In the event Mr. Gallinghouse interposes no objection, we will provide the material at the earliest opportunity. CHRONOLOGY OF EVENTS AND ACTIONS ON IRREGULARITIES IN INSPEC



November 9, 1970.-Special Agent Griffin directed a memorandum to then Assistant Regional Inspector General John P. Cunningham (attachment 1). This memo recites Griffin's suspicions concerning ir

on it.

regularities in the inspection, grading, and weighing of grain based upon his review of certain elevator records and discussions with Grain Division officials. The elevators mentioned in his memo are Bayside Elevator, Reserve, La., and Mississippi River Grain Elevator, Myrtle Grove, La.

An Agricultural Marketing Service (AMS) oflicial told Griffin that if the grain shown on each inventory sheet represented the grain loaded on the particular vessel indicated, it would be impossible to arrive at the grade shown on the document. Griffin posed questions in his memo suggesting possible irregularities. Files do not show that this memorandum from Griffin was reviewed or that any action was taken

James D. Whelan was Regional Inspector General during this period.

November 23, 1971.-A routing slip from Griffin to Supervisor Stephen Tokoly (now retired) forwarded a copy of an unsigned, undated request for investigation, with attachments, from the Grain Division to the Office of the Inspector General (OIG), which apparently resulted from Griffin's discussions with Grain Division officials. Griffin expressed concern that this request had not been sent to OIG (attachment 2).

S. D. Jones succeeded Whelan as Regional Inspector General in February 1972. Jones visited Louisiana and talked to Griffin who apparently discussed the grain situation with him.

April 1, 1972.-A routing slip from Regional Inspector General Jones to Griffin (attachment 3) indicated Jones had looked into the matter and that a decision had been made to "eave it to the Grain Division to see if an investigation is needed.” Jones advised Griffin that he would be hearing from the supervisor on it."

Griffin retired in about June 1972. In November 1972, he was recalled to duty in connection with a prosecution of another case he had handled. He apparently discussed the grain situation with Assistant U.S. Attorney (AUSA) Robert L. Livingston in New Orleans,

November 16, 1972.-AUSA Livingston wrote a letter to OIG (attachment 4), assessing the possible criminal acts and requested an investigation.

November 22, 1972.-OIG, Temple, Tex., scheduled an investigation (attachment 5).

November 29, 1972.-Memo of conversation between Assistant Regional Director P. H. Czarowitz, Temple, Tex., and William Gould, Operations, General Investigations, OIG, Headquarters, Washington, concerning question by an official, Agricultural Marketing Service, on the investigation scheduled (attachment 6).

January 9, 1973.-Supervisory Special Agent William Payne interviewed Griffin and obtained certain material from him. Payne then discussed situation with another AUSA, Stephen Mayo, who had succeeded Livingston.

February 8, 1973.-AUSA Mayo wrote OIG Temple (attachment 7) saying the facts were not sufficient to "show that inspectors were negligent in employment" and advised that further investigation was not needed.

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