Documents Detail how California-Based Company Misled Retailers and Consumers

(Washington, D.C.) – Today, the Government Accountability Project (GAP) requested that the United States Department of Agriculture’s National Organic Program (NOP) initiate an investigation into violations of organic standards allegedly committed by a mushroom production company based in California. A formal complaint from GAP was submitted earlier today against Golden Gourmet Mushrooms, Inc. (GGM) of San Diego County.

According to documents acquired by GAP, the specialty mushroom company may have violated organic standards and public confidence in several ways, including:

  • The sale of conventional mushroom products as organic
  • The manipulation of organic certification documents
  • Making false claims regarding the nature and origin of its mushroom products.

GAP urges the NOP to immediately begin investigating GGM’s alleged violations of the organic standards and whether its supplier, Japan’s Hokuto Corporation (Hokuto), participated in fraudulent practices. GAP further asks the NOP to review the performance of private organic certifier Quality Assurance International (QAI) to determine if it is capable of and intent on fulfilling its obligations as a certifying agent.

“Every violation of the standards reduces public confidence in the organic label. It is critical that the National Organic Program thoroughly investigate complaints and weed out any bad actors now while the program is still young,” says Jacqueline Ostfeld, GAP Food and Drug Safety Officer.

GGM sells both fresh mushrooms and dried mushroom powders. The company makes claims to its customers, and states on its Web site, that its fresh mushrooms are cultivated in California. However, discussions with anonymous sources have revealed that GGM has been importing all of its fresh mushrooms from Hokuto for the past 2 years. Surplus mushrooms are dried by GGM for use in its powder products. Japanese mushrooms constitute nearly 50% of GGM’s dried mushroom powders.

In October 2006, GGM was only certified by QAI to produce and process 100% organic mushroom mycelia (roots) for its mushroom powder products. Following certification, GGM management not only failed to establish procedures to prevent the commingling of conventional mushrooms from Japan with its own 100% certified organic mycelia, it instructed employees to continue blending the powders as they had always done in the past. According to certification documents maintained on QAI’s website, Hokuto’s “First Certified Date” did not occur until January 22, 2007. On that date, Hokuto was certified organic to ‘handle’ mushrooms. GAP began seeking clarification on GGM and Hokuto’s organic certification status in early May 2007. The USDA was unable to fulfill GAP’s FOIA request regarding certification documents because of its policy that these materials be maintained and released by the certifying agency. QAI has ignored requests from GAP to obtain this ‘public information.’

“Certifying agents have an obligation to release certification documents to any member of the public upon request. QAI’s failure to release the documents for over five months raises serious questions about its complicity in the fraud we allege was perpetrated by GGM and Hokuto,” says Ostfeld.

Hokuto was not certified organic to produce mushrooms by QAI until late May 2007, weeks after GAP submitted its initial request to QAI for certification documents. In late May, Hokuto was certified organic by QAI to produce 3 types of mushrooms — White Beech, Brown Beech and Maitake. While Hokuto is not yet certified organic to produce the King Trumpet mushrooms it sells to GGM, the California company has been touting them as organic for months.

The complaint alleges that GGM has misled its customers about the nature and origin of its mushrooms. The company has instructed employees to lie to customers when asked about the origin of the fresh mushrooms. To conceal this misrepresentation, GGM upper management doctored Hokuto’s Organic System Plan Summary, a document validating Hokuto’s certification to ‘handle’ organic mushrooms, to indicate that it belongs to GGM rather than Hokuto. When customers have asked for certification documents, GGM sends them a copy of their own “Certificate of Compliance” for the mushroom mycelia production attached to Hokuto’s doctored Organic System Plan Summary.

Not only has GGM manipulated organic certification documents, GAP has evidence that it violated country of origin labeling laws by purposefully misrepresenting the country of origin of its produce. It is a legal requirement, enforced by Customs and Border Protection, that imported fresh produce packaged in consumer ready packets be labeled with a country of origin mark on its outermost package.

Ostfeld added, “the fraud in this case is so willful and flagrant, it would be truly shocking if GGM were permitted to continue selling products under an organic label.”