A ‘very shady’ meat monopoly in Egypt dominates day in Menendez corruption trial

Sen. Bob Menendez strides into the Daniel Patrick Moynihan federal courthouse in Manhattan on Friday, May 17, 2024, the fifth day of his corruption trial. (Dana DiFilippo | New Jersey Monitor)

On the fifth day of Sen. Bob Menendez’s bribery trial in Manhattan, the Democrat’s name was barely mentioned, as federal prosecutors focused Friday on showing how co-defendant Wael Hana landed a monopoly on exporting halal-certified beef to Egypt.

Hana had no experience in that industry, no relationship with the beef industry or Islamic organizations, and only one employee when Egyptian officials chose his company IS EG Halal in 2019 to be their sole importer of such meat, U.S. Department of Agriculture official James Bret Tate testified.

U.S. agricultural officials were so mystified by the abrupt decision and Egyptian officials’ refusal to explain it that Tate reported his concerns to the FBI, triggering an investigation, he told jurors.

“We were concerned about the relationship Mr. Hana had with Egyptian government officials and how he had obtained the business,” Tate said.

Prosecutors have said Hana was a “failed businessman” who bribed Menendez and his wife Nadine, one of Hana’s longtime friends, to help him secure the export deal with Egypt. The senator did so, prosecutors contend, by pressuring alarmed USDA officials to back off and by doing favors to benefit the Egyptian government at Hana’s behest. Menendez’s actions included releasing millions of U.S. dollars in military arms and aid to Egypt and revealing sensitive information about staffing at the American embassy in Cairo, prosecutors allege.

The jury didn’t hear any of that Friday, though, as prosecutors focused on backgrounding jurors on Hana’s involvement in Egypt and his monopoly’s impact on U.S. trade.

Tate spent hours explaining the intricacies of halal beef certification, which requires animals to be prayed over and killed in a certain, humane way in adherence to the Muslim faith, as well as U.S. efforts to persuade officials in Egypt — which imports over 70% of U.S. beef liver — to approve more certifiers.

Hana popped up out of nowhere in the spring of 2019, Tate told jurors.

Tate was working at the time as an agricultural attache at the U.S. embassy in Cairo when he organized a two-week trade mission for Egyptian agricultural officials in the U.S. The goal was twofold — to persuade them to approve both the U.S. food safety system and more halal certifiers to their existing roster of four, Tate said. Together, the U.S. and Egyptian officials visited halal certifiers at four slaughterhouses across middle America before returning to an Arlington, Virginia, hotel, where the Egyptian officials were scheduled to meet four more.

“My objective was to support U.S. companies,” Tate said.

Instead, Hana was waiting at the hotel and waylaid the Egyptian officials. It was the first time Tate met him, and he didn’t know who he was.

In the days that followed, Hana appeared wherever the Egyptian officials went, luring them away from other scheduled meetings and looking to participate in their meetings with U.S. agricultural officials, Tate said. Hana’s attorney accompanied them on at least one occasion, and both were so unfamiliar with how halal certification worked they asked Tate to explain it to them.

Yet soon afterward, Egyptian officials notified American agricultural officials that Hana would be their sole importer of halal-certified meat, Tate said.

The change roiled the market and the USDA, where officials warned the monopoly would have damaging effects on both sides of the globe.

“It was in the U.S. interest to maintain free competition in the U.S. halal market,” Tate testified. “Monopolies run counter to our economic interest and we tend to oppose them, writ large.”

Before long, the damage became evident, he said.

Hana jacked up the weight-based fee charged for halal-certified beef exports more than tenfold, from about $200 to $400 per shipping container to over $5,000 per container, Tate said. Typically, such costs are passed on to the consumer, he added. And one of the four halal certifiers delisted by Egypt’s decision to grant Hana a monopoly went out of business, Tate said.

The U.S. Meat Export Federation raised concerns that the shift would disrupt the market because IS EG Halal didn’t have the staff or capacity to do the job, Tate said.

“All the plants will either be: a) clamoring to get the services of the new certifier; or b) refusing to do business with a totally unknown character,” a federation representative wrote to U.S. agricultural officials. “The circumstances around this are very shady, and I think many companies are going to be reticent to do business with this group at all.”

But Egyptian officials would not agree to U.S. agricultural officials’ requests for a meeting.

Egypt is among the countries that receives the most U.S. military aid in the world, so such reluctance was unusual, Tate said.

“When the American embassy requests a meeting, we get meetings,” he said.

The monopoly was equally unusual, he added. Egypt is the only U.S. trading partner that has just one authorized halal certifier, Tate said.

U.S. agricultural officials were so concerned about Hana’s maneuvers that Tate penned a report they posted publicly to the USDA’s website entitled: “New Egyptian Halal Procedures May Disrupt Markets, Drive Up Prices.”

Late Friday afternoon, prosecutors began to question Tate about a telephone call Menendez made in 2019 to a top USDA official about Hana. That line of questioning didn’t last long, though, as defense attorneys demanded a conversation with Judge Sidney H. Stein out of jurors’ earshot.

Menendez attorney Adam Fee warned Stein that Tate’s comments about Menendez’s call could be “deeply prejudicial” and asked him to limit what prosecutors could ask, saying it wasn’t a case brought under the Foreign Corrupt Practices Act.

“Can you stay away from the words ‘corrupt’ or ‘corruption?’” Stein asked prosecutor Eli Mark.

As the debate grew heated and Fee railed about jurors “speculating through the weekend,” Stein lost his patience and banged his fist on his desk.

“Mr. Fee! You wait, sir! Don’t interrupt!” he snapped.

Stein adjourned court for the day shortly afterward.

Testimony will resume Monday morning, with prosecutors expected to call several witnesses including Joshua Paul, former director of the State Department’s Bureau of Political-Military Affairs, which oversees U.S. defense diplomacy, security assistance, and arms transfers to foreign governments.

The ongoing trial is the second corruption trial for New Jersey’s senior senator in the past seven years. His first ended with a hung jury in 2017.

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