Ex-Bumble Bee CEO says subordinates conspired, not him

SAN FRANCISCO -- Christopher Lischewski, the former Bumble Bee Foods CEO accused of colluding with competitors in three major packaged seafood companies, blamed his top lieutenants Friday for arranging an alleged conspiracy to fix tuna prices.

Taking the stand for the first time, Lischewski said he was not aware the company's sales and trade marketing executives entered into illicit pricing agreements with the competition.

Lischewski, who resigned as CEO of Bumble Bee in 2018, is accused by federal prosecutors of masterminding a plot that allegedly included StarKist Co. and Chicken of the Sea. He faces up to 10 years in prison if convicted in a trial before U.S. District Judge Edward Chen.

Bumble Bee pleaded guilty to price-fixing in May 2017 and paid a $25 million fine. Two of the company's executives, Kenneth Worsham and Walter Scott Cameron, agreed to cooperate with federal prosecutors for potential leniency. They testified they colluded with Starkist executives Charles Handford and Stephen Hodge to coordinate canned tuna price points.

Defense attorney Elliot Peters argued the co-conspirators who turned government witnesses independently set up the scheme without Lischewski's knowledge.

Lischewski testified Worsham was responsible for "establishing prices" while Cameron "executed" selling the canned tuna at agreed-upon prices. He said they "had my trust," adding he was primarily involved at a "strategic level."

Worsham previously testified Lischewski had "final sign-off" on every price change allegedly coordinated with Starkist and Chicken of the Sea. The two, in addition to Cameron, met often to discuss "alignment and agreements in terms of pricing activity moving forward," he said.

But Lischewski said Friday he only occasionally spoke with Worsham and Cameron because they largely worked autonomously.

Worsham, who used to work for Starkist, had contacts within the company to solicit price-fixing agreements, according to Peters, a partner at Keker Van Nest & Peters. Worsham previously testified his father served as a "conduit of information" between the two companies.

Lischewski said he was unaware of various connections between top executives at the two companies.

The antitrust division of the Department of Justice indictment alleges the three companies colluded to fix canned tuna prices from November 2010 to December 2013and that Lischewski led the conspiracy. U.S. v. Lischewski, 18-CR0203 (N.D. Cal., filed May 16, 2018).

Testifying as an expert for the defense, Yale economics professor James Levinsohn said there were variations in average prices across the three companies for the same products.

"It doesn't matter how you cook it," he said when challenged that he misrepresented the data.

But on cross-examination, Levinsohn conceded prices went up during the alleged conspiracy period.

Facing massive fines and potential liability from criminal fines and civil lawsuits stemming from the alleged price-fixing conspiracy, Bumble Bee, the largest North American packaged seafood seller, filed for bankruptcy last week. It has spent "10s of millions of dollars in defense costs," which resulted in it defaulting on roughly $650 million of debt, according to bankruptcy court filings.

The San Diego-based company has received $280 million in new financing to continue operations through its bankruptcy. It has agreed to sell its assets to Taiwan-based FCF Co. for roughly $925 million.

FCF supplies Bumble Bee with nearly all of its albacore and most of its "light meat" tuna.

There are three class actions from consumers, retailers and distributors in addition to eight other complaints from grocers, making their way through the courts.