Why Jamie Oliver Accused LA's School Superintendent of Getting Kickbacks

In an appearance on The Daily Show show on Friday, Jamie Oliver, whose Food Revolution started its second season Tuesday night, made a startling and unusual accusation. While venting about getting completely shut out of the LA school system, Oliver told Jon Stewart that the battle ultimately came down to one man, superintendent Ramon Cortines. Stewart asked why Cortines might assume such a Clint Eastwood position, and Oliver suggested that the reason has to do with kickbacks:

It has been known -- I don't know if you've ever heard of it -- that there's elements of backhandedness or certain things that shouldn't be going on as far as procurement is concerned.

Oliver offered no proof of any dirty dealings. Stewart inserted a joke about masturbation and the subject ended there. So is this just a wild accusation with no possibility of being true?

Not really.

A system of corporate rebates is common in the school lunch business, as writer Ed Bruske has done a great job of detailing. Large food manufacturers offer schools a certain amount of money based on how much of their product they purchase. It's an incentive for schools to buy more of the mostly frozen, processed, packaged stuff that companies like Tyson (TSN), Kellogg (K) and Cargill sell.

If schools work with a foodservice company like Chartwells or Sodexo, then the money goes to them and they're supposed to funnel it back to the school district. Although that doesn't always happen, like in the cases that led to Sodexo having to pay the state of New York $20 million to settle complaints that it pocketed rebates from food manufacturers instead of turning them over to 21 public school districts and the State University of New York.

In the Los Angeles Unified School District (LAUSD), which feeds 650,000 kids two meals a day, there is no middle man and the rebates, which some call kickbacks, go directly to the district. Are some of those rebates going into Cortines' pocket? Or maybe they all go towards important school expenses? We don't know.

What we do know is that a huge amount of business is at stake with LAUSD's food contracts because of the gargantuan size of the district. Last July, Jennie Cooks, a caterer and advocate for reforming the the district's food offerings, wrote that just four contracts -- those with beef supplier Don Lee Farms of California, turkey product supplier Jennie-O, McCain Potatoes and Tyson Foods -- account for $284.5 million of food a year.
It doesn't take a cynic to figure out that if huge rebates are flowing into district coffers then it sets up a huge disincentive for Cortines and other administrators to adopt Jamie Oliver's way of doing school lunch, which entails a lot of cooking from scratch with fresh foods, instead of just heating up frozen product from large manufacturers.

Oliver filmed Tuesday's Food Revolution episode in January and Cortines is scheduled to be replaced as superintendent this month. Perhaps his successor, John Deasy, will let Oliver into an LA school, but don't count on him dismantling all those contracts with food companies.

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