NEW YORK (AP) — It isn't a household name, but the company that's at the center of a food scandal in China helps make some of the world's most popular foods, including the Big Macs and Quarter Pounders served at McDonald's locations.
OSI Group, a privately-held company based in Aurora, Illinois, was thrust into the spotlight this weekend when a Chinese TV station reported that one of its Shanghai plants repackaged old beef and chicken and slapped new expiration dates on them. The scare has ensnared chains including McDonald's, KFC, Burger King and Starbucks, all of which got ingredients from a unit of OSI (pronounced OH-see) in the region called Husi Food Co.
The controversy deepened Wednesday when five workers for Husi, were detained by police. An official with China's food safety agency told the Xinhua News Agency that some of the illegal conduct it uncovered was an arrangement "organized" by Husi.
None of OSI's more than 50 other plants around the world have been implicated and the company noted in a statement that it was "appalled by the report and is dealing with the issue directly and quickly."
A representative for OSI in the U.S. declined to provide comment beyond the statement.
The scandal is a blemish for OSI, which began as a family-run meat market in 1909 and prides itself on its high standards. The company notes on its website that it has a "strong heritage of quality and service" and that food safety and quality assurance are "guiding principles."
Its business took off after Ray Kroc tapped it in the 1950s to be a beef supplier for McDonald's Corp. OSI grew alongside McDonald's as the hamburger chain expanded around the world, and even helped create the McRib.
OSI doesn't have to report financial information, but according to PrivCo, which researches privately-held companies, it had $6.13 billion in sales last year. OSI also doesn't publicly disclose all of its clients, but it supplies numerous big-name chains including Chipotle Mexican Grill Inc., for which it cooks some beans and carnitas and barbacoa meats.
In the U.S., OSI has said it has systems in place to ensure products can be located and taken out of the system within two hours if any issues arise. Executives have said they work with an outside public relations agency to periodically stage mock crises to be prepared for real-life controversies.
Richard Adams, a former owner of McDonald's restaurants in Southern California who now runs a consulting firm for franchisees, said OSI closely oversees its production process in the U.S. and that he didn't know how the lapses in China occurred.
"They wouldn't be a McDonald's vendor if they weren't producing quality products," Adams said.
It's unknown how much of OSI's revenue come from China or whether it has similar safety systems there, but the company is already dealing with fallout from the controversy at its Shanghai plant.
Yum Brands Inc. said Wednesday it was terminating all supply agreements with OSI in China, not just at the plant in question. The company, based in Louisville, Kentucky, also said it reserves the right to take legal action against OSI, depending on results of the investigation.
A representative for Yum, Virginia Ferguson, noted that OSI wasn't a major supplier for the company in China, but didn't respond when asked about Yum's ties to OSI in other parts of the world.
Over at McDonald's, the impact on the menu seemed to be greater. A spokeswoman, Heidi Barker Sa Shekhem, said the Shanghai plant supplied products including sausage patties, ham patties, beef patties and chicken nuggets. Globally, she declined to specify how much meat and other items OSI provides McDonald's, citing competitive reasons.
Without providing details, McDonald's CEO Don Thompson said Tuesday the company deal with the matter "effectively, swiftly and appropriately" if the allegations prove to be true.
McALLEN, Texas (AP) — When Texas Gov. Rick Perry announced the deployment of up to 1,000 armed National Guard troops to the Mexican border he was speaking to voters in Iowa as much as Texas.
The one-time and possible future presidential candidate is in the waning months of his third and final term as governor. His visits to Iowa, including the weekend before his National Guard announcement, suggest he is considering another run for the Republican presidential nomination.
If Perry's call for troops to the border sounds familiar, that's because it's not new. In early 2009, as he was running for re-election, Perry urged then Homeland Security Secretary Janet Napolitano to deploy 1,000 troops along the border in Texas. At the time Perry was quick to note that his concerns focused on the growing violence from Mexico's warring drug cartels and the potential for a spillover into U.S. cities, including nearby El Paso.
Now, his worry is the arrival of more than 57,000 child immigrants, most of who are from Central America and crossing the border along a narrow corridor in the Rio Grande Valley. Perry had previously asked President Barack Obama to send National Guard troops to the border to help stem the flood of immigrants, and this week Perry deployed them under his own authority as governor.
"I will not stand idly by while our citizens are under assault and little children from Central America are detained in squalor," Perry said Monday.
The deployment will cost Texas an estimated $12 million per month. Texas Adjutant General John Nichols said the troops' top priority will be deterring illegal activity along the border and referring it to either state troopers or Border Patrol agents.
"If we find someone conducting illegal activities, smuggling, then DPS has arrest authority," Nichols said. "If they are coming into the country illegally then they'll refer them to CBP."
Under the federal Posse Comitatus Act, National Guard troops can enforce state laws while deployed under Perry's direction. But the soldiers will be able to do little more than call immigration authorities if they encounter immigrants who successfully cross the river into the United States.
The problem today is not immigrants crossing the border while trying to evade capture. Most of them caught in South Texas are surrendering to authorities. Border Patrol stations equipped to temporarily hold immigrants while they await processing have suddenly been clogged with children traveling alone.
Rep. Beto O'Rourke, a Texas Democrat from El Paso, said he doesn't know of what he described as a "practical, pragmatic reason" to send troops.
"One of the reasons that some have concluded is that this is a political maneuver; that's as good an explanation as any," O'Rourke said. "I have yet to hear of the legitimate public safety ... threat here with any proof or numbers or facts."
In a letter to Rep. Joaquin Castro, D-Texas, Perry said he is deploying troops "because of continued federal inaction to secure the border. This is a crisis enabled by a porous border and worsened dramatically by President Obama's misguided policies, which you support."
Perry added the troops will also help address crime in Texas that he attributes to security conditions at the border.
Bob Dane, a spokesman for the Federation for American Immigration Reform, a Washington-based group that advocates for border security and lower legal immigration rates, said the troops will act as a "force multiplier" that will help discourage immigrants from trying to cross the border in the first place.
"It seems urgent, it seems fair," Dane said of Perry's decision.
The situation at the border has become a political crisis for Obama, who has been accused by Republicans of encouraging illegal immigration by creating a program to delay deportation for some young immigrants and implementing a series of prosecutorial discretion policies that have protected many others from facing removal.
The Senate last year passed a sweeping immigration bill that included a provision to add about 20,000 new Border Patrol agents, which would nearly double the agency for the second time in the last 10 years. House Republicans have insisted the first priority should be securing the border before other changes are made.
On Saturday night, Perry brought potential voters in Des Moines, Iowa to their feet when he said, "We know how to secure the border. If the federal government will not do its duty then I will suggest to you that the state of Texas will." Less than 48 hours later, he called out the National Guard.
Caldwell contributed to this report from Washington.
Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
When U.S. and European airlines quickly canceled flights to Israel on Tuesday, they showed both a skittishness and a new sense of urgency in dealing with global trouble spots following last week's downing of a passenger plane over Ukraine.
Delta Air Lines turned around one of its jets midflight and indefinitely canceled all future flights between the U.S. and Israel after a rocket fired from the Gaza Strip landed near Tel Aviv's Ben-Gurion Airport. Other U.S. airlines quickly took similar action, and counterparts in Europe and Canada followed within hours, despite protests from the Israeli government. Israeli airline El Al maintained its regular flight schedule.
The airlines were out ahead of aviation regulators in stopping service. The Federal Aviation Administration imposed a 24-hour ban on flights to Israel after the U.S. airlines acted. Germany's Lufthansa, Italian airline Alitalia and Air France all acted before the European Aviation Safety Agency issued an advisory.
How long the cessation of flights will last is unclear. U.S. airlines now must wait for the FAA, which said it will provide updated guidance by midday Wednesday.
Scandinavian Airlines canceled two flights from Copenhagen to Tel Aviv on Tuesday evening and Wednesday morning, and said it will rethink the situation Wednesday for two more flights this week. Budget airline Norwegian said it had scrapped a flight from Stockholm to Tel Aviv on Wednesday and was monitoring the events closely, the airline's spokeswoman Charlotte Holmbergh Jacobsson said.
Also Wednesday, Royal Jordanian suspended its flights to Ben Gurion until further notice, according to the airline's spokesman, Basil al-Kilani.
Korean Air Lines Co. said on Friday that it was suspending its flights between Incheon International Airport near Seoul and Tel Aviv until at least Thursday, citing tensions between Israel and Palestine.
Aviation and legal experts said that airlines are now taking risk assessment into their own hands, both for the safety of passengers and to avoid claims of negligence, following last week's Malaysia Airlines disaster.
"Most airlines have security departments that try to evaluate those sorts of risk," said William Waldock, a professor of safety science at Embry-Riddle Aeronautical University. "Some do it better than others, but I would expect that everyone is on a very heightened sense of alert right now."
Richard Aboulafia, an analyst with the Teal Group, said airlines might be more proactive about avoiding hot spots, although he noted that there are very few areas where non-government militaries have weapons sophisticated enough to shoot down a plane.
Western governments have accused pro-Russian separatists in Ukraine of shooting down Malaysia Airlines Flight 17 with a surface-to-air missile while it was flying at 33,000 feet. Some experts have second-guessed the airline's decision to fly over the area. But Malaysian officials have countered that the plane's path from Amsterdam to Kuala Lumpur was approved by international regulators.
The Israel government felt the airlines overreacted Tuesday. The Transportation Ministry called on the companies to reverse their decision, insisting Ben-Gurion Airport is safe and completely guarded and saying there is no reason to "hand terror a prize," by halting the flights.
Former New York Mayor Michael Bloomberg strongly urged the FAA to "reverse course" and permit U.S. airlines to fly to Israel.
Bloomberg released a statement saying he is flying on El Al to Tel Aviv on Tuesday night to "show solidarity with the Israeli people and to demonstrate that it is safe to fly in and out of Israel."
"The U.S. flight restrictions are a mistake that hands Hamas an underserved victory and should be lifted immediately," Bloomberg said.
Palestinian militants have fired more than 2,000 rockets toward Israel, and several heading toward the area of the airport have been intercepted by Israel's Iron Dome defense system, but police spokeswoman Luba Samri said Tuesday's landing was the closest to the airport since fighting began on July 8.
While Hamas rockets aren't as sophisticated as the guided missile that the U.S. and others contend hit the Malaysian jet, they can cause massive damage if they hit an aircraft. For instance, unguided mortar fire in Tripoli from a militia batting to control its international airport destroyed a $113 million Airbus A330 used by Libya's state-owned Afriqiyah Airways over the weekend.
Last year, an average of 1,044 passengers flew each way on the four daily flights between the U.S. and Israel on American carriers, according to the Bureau of Transportation Statistics.
Jack Ram, 50, of Tel Aviv, who was in New York visiting friends, said threats of violence and disruptions while traveling were nothing new for Israelis. He prayed Tuesday before entering the departure area at Newark, New Jersey, for his El Al flight to Israel.
"We're used to it. That's how we live for the last 30 . 3,000 years actually," Ram said.
Jonathan Reiter, a prominent New York aviation-accident attorney, said flying into an airport after a near-miss by a rocket could be used to show that the airline was negligent. That explains why the airlines are suspending service to Israel.
"I'm sure it is human concern as well," Reiter said, "but I think (the airlines) feel it is wise to err on the side of caution because it is their burden to prove they are doing everything possible to avoid injuries and deaths."
Associated Press Writers Jan M. Olsen in Copenhagen and Omar Akour in Amman, Jordan, contributed to this report.
NEW YORK (AP) — Experimentation with human growth hormones by America's teens more than doubled in the past year, as more young people looked to drugs to boost their athletic performance and improve their looks, according to a new, large-scale national survey.
In a confidential 2013 survey of 3,705 high school students, being released Wednesday by the Partnership for Drug-Free Kids, 11 percent reported using synthetic HGH at least once — up from about 5 percent in the four preceding annual surveys. Teen use of steroids increased from 5 percent to 7 percent over the same period, the survey found.
Travis Tygart, CEO of the U.S. Anti-Doping Agency, depicted the numbers as alarming but not surprising, given the extensive online marketing of performance-enhancing substances and near-total lack of any drug testing for high school athletes.
"It's what you get when you combine aggressive promotion from for-profit companies with a vulnerable target — kids who want a quick fix and don't care about health risk," Tygart said in an interview. "It's a very easy sell, unfortunately."
Nine percent of teen girls reported trying synthetic HGH and 12 percent of boys.
"A picture emerges of teens — both boys and girls — entering a largely unregulated marketplace (online and in-store) in which performance-enhancing substances of many varieties are aggressively promoted with promises of improved muscle mass, performance and appearance," said the report. "This is an area of apparently growing interest and potential danger to teens that cries out for stricter controls on manufacture and marketing."
Given the high cost of authentic HGH, it's possible that some of teens who reported using it may in fact have obtained fake products. As the survey said, "It's very difficult to know what exactly is in the substances teens are consuming, or what the short and long-term impact on their health may be."
Steve Pasierb, president of the Partnership for Drug-Free Kids, said the motives of today's youthful dopers were different from the rebellious or escapist attitudes that traditionally accompanied teen drinking and pot-smoking.
"This is about how you feel, how you look," Pasierb said. "They're doing this thing to get ahead. ... Girls want to be thin and toned. For a lot of boys, it's about their six-pack."
He urged parents to talk candidly with their children about the dangers of performance-enhancing substances, but to avoid moralizing.
"It's not about illegality, or whether you're a good parent or bad parent," he said. "It's a health issue. These substances literally alter your body."
Pasierb said high school coaches have a key role in combatting doping. Some are vigilant, other oblivious and perhaps a third are prepared to tolerate doping in the interests of winning, he said.
The new survey noted that the upsurge in teen HGH use occurred even as famous athletes were caught up in high-profile doping cases. Last August, Major League Baseball punished Alex Rodriguez with a lengthy suspension after investigating his use of performance-enhancing drugs. A few months earlier, Lance Armstrong admitted in a TV interview to doping throughout his cycling career.
One of Armstrong's former teammates is Tyler Hamilton, who was forced to return his 2004 Olympic gold medal after being found guilty of doping. In recent public appearances, Hamilton has implored young athletes to resist the temptation to dope.
"There's so much pressure on winning — it's tough for these kids to stay true to themselves," he said. "I can't change every kid's mind, but if I can do my part and other people do their part, we can beat this monster."
Tygart, who as USADA's chief oversaw investigations of Armstrong and Hamilton, noted that stringent testing regimens are an increasingly effective deterrent to doping among athletes in major pro sports and in international competitions.
"But most young athletes are not in any testing program, and their chance of getting caught is zero," he said. "When left unchecked, the win-at-all-cost culture will take over and athletes will make the wrong decision."
Synthetic HGH is supposed to be available only by prescription, yet products claiming to contain HGH are widely promoted and enforcement of the regulations is inconsistent, Tygart said.
Among the groups seeking to reverse the teen doping trend is the Texas-based Taylor Hooton Foundation, named after a 17-year-old high school athlete whose suicide in 2003 was blamed by his family on his use of anabolic steroids. Its staff has spoken to thousands of young people at school assemblies and sports camps.
Donald Hooton Sr., Taylor's father and the foundation's president, depicted teen doping as an epidemic fueled by widespread ignorance among parents and coaches. He estimated that more than 1.5 million youths in the U.S. have tried steroids.
Information about teen use of performance-enhancing drugs is readily available online. The Mayo Clinic, for example, provides a list of possible hazards and side-effects, including stunted growth, acne, liver problems, shrunken testicles for boys and excess facial hair for girls.
The clinic urges parents to check the ingredients of over-the-counter products used by their teens, and to be on the lookout for warning signs, including increased aggressiveness, rapid weight gain, and needle marks in the buttocks or thighs.
The Partnership for Drug-Free Kids survey also reported on other forms of substance abuse. Among its findings:
—Forty-four percent of teens report using marijuana at least once within their lifetime; 24 percent report using within the past month; and 7 percent report using at least 20 times within the past month. These levels have remained stable over the past five years.
—After a sharp increase in teen misuse and abuse of prescription drugs in 2012, the rate remained stable in 2013, with 23 percent of teens reporting such abuse or misuse at least once. Fifteen percent reported having used the prescription painkillers Vicodin or OxyContin without a prescription at some point.
The survey of 3,705 students in grades 9-12 was conducted at their schools between February and June of 2013.
The margin of error was calculated at plus or minus 2.1 percentage points.
Founded in 1987, the New York-based Partnership for Drug-Free Kids is a nonprofit working to reduce teen substance abuse and support families affected by addiction.
PORTLAND, Ore. (AP) — Low-income Oregon residents were supposed to be big winners after the state expanded Medicaid under the federal health care overhaul and created a new system to improve the care they received.
But an Associated Press review shows that an unexpected rush of enrollees has strained the capacity of the revamped network that was endorsed as a potential national model, locking out some patients, forcing others to wait months for medical appointments and prompting a spike in emergency room visits, which state officials had been actively seeking to avoid.
The problems come amid nationwide growing pains associated with the unprecedented restructuring of the U.S. health care system, and they show the effects of a widespread physician shortage on a state that has embraced Medicaid expansion.
It's too early to tell whether there will be lasting troubles associated with these immediate challenges. Overhaul supporters say they anticipated the need for more doctors and are already implementing solutions to improve access to care. They also point to the crush of new Medicaid enrollees as proof that their efforts are necessary and working.
Still, early indications show clear challenges associated with expanding Medicaid and establishing coordinated care networks, the centerpiece of Gov. John Kitzhaber's plan to reduce costs and improve care by focusing on primary care and keeping patients out of emergency rooms.
"As soon as people got insured, they all showed up at once, wanting to deal with the problems they couldn't deal with for years," said John Guerreiro, a primary care doctor in northwestern Oregon.
Under the federal overhaul, the state this year added nearly 360,000 people to the Oregon Health Plan, its version of Medicaid. It was more than twice the number projected and swelled the state Medicaid rolls to nearly 1 million people, about a quarter of the state's population.
Timothy McDaniel, a self-employed computer programmer from Springfield, gained Medicaid coverage in January and said it took him six months to find a doctor. He even went to an urgent care clinic seeking a wellness exam but was turned away, because the facility didn't provide such evaluations.
"It was rather frustrating because I'm getting older, I'm in my late 50s," McDaniel said. "I thought I had this health insurance. I wanted to use it. I wanted to get checked out, and I couldn't."
The flood of new enrollees like McDaniel has hit hardest in rural parts of the state, where the physician shortage is most severe. But problems have been reported from every corner, the AP has learned after contacting each of 15 regional coordinated care organizations, regional networks of doctors and nurses intended to see patients more often for treatment of small and chronic problems.
The coordinated care model has been championed by the state's Democratic governor, an early supporter of President Barack Obama's Affordable Care Act, and is unique to Oregon.
Five of the 15 regional coordinated care organizations declined to comment. The others reported a list of complications.
— Two regions have stopped accepting new patients, locking out more than 16,000 new enrollees in western and southern Oregon, state data shows. The new patients are still insured, but without a coordinated care network, they're on their own to find a doctor.
— Eight regions saw some practices, clinics and individual doctors close to new Medicaid enrollees.
— In five regions, thousands of enrollees haven't been assigned to a doctor or been in for their first medical appointment.
— Seven regions report that new patients are facing long waits for primary care visits, delays that can last months.
— Seven regions report an increase in ER visits, up to 30 percent, in a statistic that has been particularly troubling for supporters of Oregon's efforts.
Officials say the jump in ER use is likely fueled by newly covered patients who are unable to access primary care. "Medicaid expansion has exposed how serious the provider shortage is, that we definitely need more doctors," said David Cole, CFO of the Eugene-based coordinated care organization Trillium, one of the two that's turning away Oregon Health Plan patients. Trillium also has more than 9,000 enrollees for whom it's yet to find a doctor.
For critics, these problems are the latest in a series of Oregon woes that include the state's decision to spend a quarter of a billion dollars on an online marketplace that failed under a litany of embarrassing problems and prompted a switch to a federal site.
But many state officials consider such issues as bumps in the road, far from anything that would threaten the overhaul. They say they're working on bringing in all enrollees into the coordinated care system by year's end.
"I would consider it a rare success story for Oregon to absorb all these new patients," said Leslie Clement, chief policy director at the Oregon Health Authority, a state medical regulating agency. "The primary care shortage is a national problem; it's not an Oregon issue."
Solutions include starting a new residency program in Eugene and using more nurse practitioners, physician assistants, pharmacists and a system of team-based care.
Coordinated care organizations are also opening new clinics and offering grants to physicians who'll accept more Oregon Health Plan members, offsetting low federal reimbursements that had prompted many doctors to turn Medicaid patients away. Two coordinated care regions have even increased Medicaid reimbursement rates for doctors to run even with commercial rates.
The Virginia Garcia Memorial Health Center, which comprises nine clinics in northwestern Oregon, serves 36,000 patients in Washington and Yamhill counties. The center has been working through a backlog to link thousands of people to doctors, using innovations such as group visits and telemedicine.
About 2,600 new patients are yet to be assigned at the Beaverton clinic where Guerreiro practices alongside seven other doctors. "It's a little intimidating," Guerreiro said, "but we need to bring all these new patients in."
It's widely agreed that Kitzhaber's coordinated care organizations have provided examples of success, most notably the 2-year-old system led to a decrease in ER visits before the massive influx of new patients. And supporters say the approach will save billions once it's operating properly.
It's not clear, however, when that will be.
"From 2007 to 2014, we're going to triple our enrollment," said Bill Guest, executive director of southern Oregon's Cascade Health Alliance, the other coordinated care organization that has closed its doors to new patients.
"Unfortunately," he added, "the primary care supply has not tripled over that period."
NEW YORK (AP) — Six people were indicted Wednesday in an international ring that managed to take over more than 1,000 StubHub users' accounts and fraudulently buy tickets to such prime events as Jay-Z and Elton John concerts, a New York Yankees-Boston Red Sox game and Broadway shows like "The Book of Mormon," the Manhattan district attorney said.
Manhattan District Attorney Cyrus R. Vance Jr. said the thieves would then resell the tickets and split up the proceeds.
"Today's arrests and indictment connect a global network of hackers, identity thieves and money-launderers who victimized countless individuals," Vance said at Wednesday's news conference.
He said investigators pored over more than 1,600 compromised accounts to trace the accused thieves via Internet protocol addresses, PayPal accounts, bank accounts and other financial accounts around the world.
Money stolen in the scheme, in ticket value, was at least $ 1.6 million, he said.
In addition to the six people indicted in the New York City case, four others have been arrested internationally: three in London and one in Toronto, under charges in their respective countries, Vance said.
StubHub said it was alerted to "a small number of accounts that had been illegaly taken over by fraudsters" last year and the online ticket seller began working with authorities around the world.
StubHub, which is based in San Francisco, said that the thieves didn't break through its security — rather, they got account-holders' login and password information from data breaches at other websites and retailers or from key-loggers or other malware on the customers' computers, spokesman Glenn Lehrman said.
"It is important to note, there have been no intrusions into StubHub technical or financial systems," Lehrman said.
"We are pleased to be able to play a role in this effort as part of StubHub's continuing commitment to maintaining safe and open markets for fans to buy and sell tickets."
The company detected the unauthorized transactions last year, contacted authorities and gave the affected customers refunds and help changing their passwords, he said.
StubHub, owned by eBay Inc., is the leading digital marketplace for reselling concert, sports, theater and other tickets, offering brokers and fans a way "to buy or sell their tickets in a safe, convenient and highly reliable environment," as its website pledges. The company, which serves as an official secondary ticket market for such entities as Major League Baseball, this spring unveiled plans to become an event producer itself, selling tickets to a handful of its own concerts.
In the last few years, major companies such as Target, LinkedIn, eBay and Neiman Marcus have been hacked. Target, the nation's second-largest discounter, acknowledged in December that data connected to about 40 million credit and debit card accounts was stolen as part of a breach that began over the Thanksgiving weekend. Even Goodwill Industries Inc. found itself announcing last month that shoppers' payment card data might have been stolen.
Ticket-sellers also have been targeted. The event ticketing service Vendini recently settled a class action lawsuit related to a data breach in 2013.
Since many people use the same passwords at multiple retailers, hackers who get hold of a password for one site often try it at another, Lehrman said.
Authorities generally advise consumers to protect against possible identity theft from such breaches by keeping close watch on their bank statements and using credit card monitoring services, among other tips.