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3 months ago
ST. LOUIS - Another welcome break from the rain to start our Friday, but we are far from finished with the wet weather. In fact, Friday will bring the heaviest rain of this stretch to the St. Louis region. After a dry start, the first of two waves of heavy rain and thunderstorms will move [...]
Angela Hutti

In An Era of Big Money, the University of Illinois Shrugs Off Rules on Athletes’ NIL Deals

3 months ago

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Amid a standout season last year, University of Illinois men’s basketball stars found themselves in high demand as they reached the Elite Eight in the 2024 NCAA Tournament.

Three players appeared in a commercial for a local BMW dealership.

One did an Instagram post for TurboTax.

Another promoted an apartment complex near the Urbana-Champaign campus.

But not one of those endorsements — which are allowed now that student-athletes can profit from their personal brands — was reported to the university, as state law requires.

In fact, the entire Illini team reported just $9,100 in name, image and likeness deals during the 2023-24 season, according to records obtained by the Chicago Tribune and ProPublica. By comparison, the average earnings reported for a male basketball player in the Big Ten and the three other biggest college conferences were more than $145,000 during that school year, according to data that institutions voluntarily provided to the NCAA.

The Illini basketball team’s missing disclosures reflect an indifference to documenting NIL deals across the athletic department, the news organizations found. Athletes from 20 sports combined have reported earning only about $1.2 million in three-plus years, compared with the $20 million Ohio State University’s football team reportedly received in a single year, or a University of Missouri quarterback who alone is estimated to have made more than $1 million in NIL deals.

By shrugging its shoulders at Illinois’ reporting requirements, the university is failing to compile a complete picture of how its students — some of them still teenagers — are navigating a relatively new terrain rife with legal, moral and financial pitfalls.

“I find that maddening and irresponsible,” said Bill Carter, founder of Student-Athlete Insights, which provides NIL consulting services. “It seems unethical to me to allow 18-to-23-year-olds to participate in something life-altering like this but provide no structure, no support, no direction.”

A University of Illinois cheerleader rallies fans at the start of a women’s basketball game in February. The lead sponsor of the state’s law on college athletes’ name, image and likeness deals said one goal of the mandatory reporting provision was to examine potential gender gaps in compensation. (John J. Kim/Chicago Tribune)

Officials from the Department of Intercollegiate Athletics say they inform the school’s athletes of their responsibilities but acknowledge they do not enforce compliance, despite the Illinois law requiring athletes to disclose all deals to their schools. The officials downplayed those failures by asserting that reporting is spotty nationwide.

Athletes “should just disclose the deals, but both here and across the country, they just kind of don’t really do that,” Kamron Cox, a U of I assistant athletic director and the school’s NIL specialist, said in an interview.

In a three-page response to questions, the athletic department acknowledged students are underreporting their earnings and did not dispute any of the figures in this story. The statement noted it is students’ responsibility to report NIL agreements and said the university has fulfilled its obligations under the law by paying for an app that allows athletes to do so. It called the state’s disclosure rules — which the university had advocated for — “ineffective,” noting the law carries no penalties and arguing that punishing players internally would harm the institution’s reputation.

“Our program, like most across the country, is doing its best to navigate in uncharted waters,” the statement said. It contended that 70% of NIL deals nationwide go unreported, citing one industry insider whose estimates have varied. “Blind adherence to an untenable process does not appear to be the expectation of the state, the NCAA, or our industry.”

Administrators also said they do not know how much money Illini basketball players — or any of the student-athletes — are receiving through NIL, even though today’s collegiate marketplace requires understanding the amounts needed to recruit and retain star athletes.

That lack of knowledge “is not possible and it’s not believable,” Carter said.

More than 20 states, including Illinois, passed laws requiring athletes to disclose their deals after the U.S. Supreme Court ruled four years ago that collegiate competitors have the right to make money. ProPublica and the Tribune obtained records of the deals reported by U of I athletes from July 2021 through October 2024 via the Freedom of Information Act, offering the public a rare look at the lack of accountability in the big-money world of college sports.

Michael LeRoy, a University of Illinois professor who has studied name, image and likeness deals in collegiate athletics, said he wonders why the Illinois athletic department hasn’t done more to ensure compliance with NIL reporting requirements. (John J. Kim/Chicago Tribune)

The records the U of I provided to the Tribune and ProPublica included 1,037 deals across all sports with the names of the athletes redacted by agreement. Sponsored social media posts were, by far, the most frequent way athletes reported earning money, followed by autograph signings and personal appearances.

In this far-from-complete data, deals ranged from a male basketball player’s $326,000 arrangement with a Porsche dealership in Kentucky to $10 for a track athlete to endorse a men’s soap called “Freshticles.”

The Illinois law on NIL requires athletes to provide their schools with copies of contracts when the deals are valued at $500 or more. Illini athletes reported more than 175 deals that meet that standard. But when the news organizations filed a public records request seeking contracts for 12 of the largest reported deals, a university administrator responded that the campus did not have any of them.

“There is nothing in the Illinois law that would be difficult for any Big Ten athletic program to follow,” said Michael LeRoy, a labor and employment relations professor at U of I and former chair of the school’s athletic board. “But they’re clearly choosing not to do it. You have to wonder why.”

The NCAA declined to speak with reporters for this story, but it has issued multiple statements stressing the need for transparency in NIL agreements. It established a policy last year to encourage athletes nationwide to report deals to their institutions, so schools could then provide the information to the NCAA to make available on a public dashboard intended to help students navigate the NIL marketplace.

But up to now, there have been no consequences for athletes or institutions that fall short.

That could soon change. Next week, a $2.8 billion settlement of a class-action lawsuit brought by student-athletes against the NCAA is expected to gain final approval, shifting the landscape again. Under the deal, known as the House settlement after one of the plaintiffs, a school would be able to pay its athletes directly from a revenue-sharing budget capped at $20.5 million for the next school year.

Schools also could be directly involved in negotiating NIL deals for their athletes, and deals worth at least $600 and those made with collectives would need to be reported to an outside entity. That entity would evaluate whether the payments align with a fair market value and ensure the money is not a pay-to-play deal. Those reports are not expected to be made public.

The four largest conferences — the Atlantic Coast Conference, Big Ten, Southeastern Conference and Big 12 — have said they plan to create an organization that would both implement and enforce the rules as the NCAA’s oversight role shrinks. It also could issue penalties.

“The ante has been upped,” said Joshua Lens, a University of Iowa sports management professor who has studied NIL extensively. “It will require disclosure like we have all along, but now … the schools and athletes could be penalized.”

Illinois Gov. JB Pritzker, shown at State Farm Center on the University of Illinois campus, signed legislation in 2021 that allows college athletes in the state to make money off their brand while requiring them to report such deals to their school. (Anthony Zilis/The News-Gazette) Face Wash and Physical Therapy

The NIL era in Illinois began on June 29, 2021, at the State Farm Center on the University of Illinois campus. Gov. JB Pritzker signed the groundbreaking legislation, known as the Student-Athlete Endorsement Rights Act, while surrounded by several Illini athletes, including gymnast Dylan Kolak.

Illinois was among the first states to pass an NIL law, and Kolak was ready to seize the moment. He had begun making TikTok videos during the pandemic to promote men’s gymnastics and fitness, amassing more than 500,000 followers in a little over a year.

When companies approached him about the possibility of endorsement deals, Kolak said he either ignored their messages or explained that NCAA rules prohibited him from earning money that way. For Kolak, a partial-scholarship athlete who excelled at the floor exercise and vault, it stung each time he passed up an offer.

Former Illini gymnast Dylan Kolak reported his NIL deal with Athletico, a physical therapy provider, to the university, in keeping with state law. (TikTok video obtained by ProPublica and the Tribune)

Watch video ➜

He’s the type of athlete state Rep. Kam Buckner, a former Illini defensive lineman, had in mind when the Chicago Democrat sponsored legislation codifying moneymaking opportunities for student-athletes. He was joined by two former Northwestern University athletes, state Sen. Napoleon Harris and Illinois House Speaker Emanuel “Chris” Welch.

Buckner said he remembered what it was like to be a college athlete and need extra cash for necessities.

“In a way, it had the underlying air of indentured servitude where you don’t even own your own space,” Buckner said. “And so for me, this was about fairness.”

The state law’s rules for NIL are straightforward: Athletes can’t take money from the gambling, tobacco or alcohol industries. They can’t use a university logo without permission. They can’t wear their uniforms in advertisements unless they have prior approval from their institutions.

And they have to report their NIL deals to their schools. From Buckner’s standpoint, that clause offered universities and their athletes a baseline for understanding what kind of deals — and what kind of dollars — were available in this new and unfamiliar world. The data also could help identify any gender or racial gaps that emerged, Buckner said.

By all accounts, the school took the reporting requirement seriously in the beginning.

“We were told to report our deals constantly,” Kolak said. “We were told we could lose our eligibility if we didn’t. Nobody wanted to risk that.”

Kolak said he reported everything that came his way, including $900 for an Instagram post about a face wash, $1,300 for promoting men’s shoes on TikTok and $2,375 for documenting his physical therapy at Athletico.

Illinois state Rep. Kam Buckner, a former Illini football player, was a chief sponsor of the state’s NIL legislation. He said he remembers what it was like to be a college athlete and need extra money for necessities. (Brian Cassella/Chicago Tribune)

The reporting requirement became so ingrained in Kolak and his teammates in those early NIL days that the men’s gymnastics squad logged 128 deals in 2021 and 2022. It was the most of any Illini men’s team, with only women’s softball recording more deals.

The number dropped significantly, however, by 2023 and 2024, after the university stopped stressing the importance of reporting. The men’s gymnastics team reported just 44 deals in those years — still the most reported by any men’s team.

Cox, the U of I assistant athletic director, said he regularly reminded students about the disclosure rules during the first year of NIL. But after the NCAA in October 2022 barred schools from arranging or negotiating NIL deals for athletes, the department stopped stressing the importance of reporting, according to Cox.

The fall 2022 guidance didn’t say to stop, however. In fact, it stated, “when permitted by applicable state laws — schools can and should require student-athletes to report NIL activities to the athletics department.”

Roger Denny, the U of I athletic department’s chief operating officer, said in an interview that the department still conducts several presentations each year for athletes to go over contracts, taxes and disclosure rules. The department’s statement said it sends weekly emails to athletes and conducts sessions with an NIL consultant. Asked for an example of the emails, the department shared the most recent newsletter, in which the last item reminded athletes to disclose their NIL deals.

Buckner, the Illinois lawmaker, said that he was unaware of the reporting practices and the rules should be followed so athletes understand the playing field. “I don’t believe in just throwing arbitrary mechanisms into policy that aren’t followed,” he said. “If they’re not doing what they’re intended to do, we’ve got to figure out how to change that.”

The university’s lack of attention to students’ reporting is apparent in the school’s data, which shows the reported value of NIL deals dropped by 85% on the Urbana-Champaign campus in the 2023-24 academic year. According to the records, student-athletes reported making a total of just $103,000 that year, down from $702,500 in 2022-23.

First image: University of Illinois gymnast Sam Phillips pets his cat, Richard Parker, at his apartment in Champaign. Phillips, who recently injured his Achilles tendon, said his former school, the University of Nebraska, exercised more oversight over his NIL agreements than the U of I does. Second image: Phillips displays an Instagram promotion he did for Degree deodorant. (John J. Kim/Chicago Tribune)

Illini gymnast Sam Phillips, a two-time All-American who transferred from the University of Nebraska last year, said NIL rules were mentioned at a meeting for new U of I athletes. But there hasn’t been additional discussion about NIL, he said. By contrast, at Nebraska, Phillips said he regularly received advice from an athletic department compliance officer who reminded him to disclose his deals to the university.

He did so through an app that many universities use called Opendorse, which helps athletes find NIL deals and report them to university officials. U of I is spending $260,000 on a contract with Opendorse through mid-2026, which the athletic department said fulfills its obligation under the state’s NIL law to facilitate reporting.

Nebraska’s compliance officer reviewed each of Phillips’ agreements at that school, according to the app, but as of December there was no indication U of I had examined the deals Phillips had reached since his transfer, including with Abbott, Degree deodorant and Savage X Fenty underwear. The university said its athletic department reviews deals submitted through Opendorse but that it does not document it on the app and it is not required to.

“I haven’t spoken to anyone in [the U of I] administration at all,” said Phillips, a nonscholarship athlete who uses the money to pay for living expenses. “It has been on my own.”

Quattrone, who owns five auto dealerships in the Champaign area, has autographed sports memorabilia on display in his office at Serra Buick GMC in Savoy. Quattrone said he has sold cars to student-athletes at hefty discounts, among other compensation, in exchange for their appearances and participation in ads. (John J. Kim/Chicago Tribune) “A Ridiculously Good Deal”

At Illinois, the reporting failures are best exemplified through the university’s marquee men’s sports: football and basketball.

Relying on social media, news releases and media interviews, ProPublica and the Tribune identified dozens of endorsements that were not included in the database provided by U of I. The missing endorsements include several promoted during March Madness in 2024, including the TurboTax ad from basketball player Marcus Domask and a popular commercial for a Serra Champaign car dealership that featured three of his teammates.

In that ad, Terrence Shannon Jr., Coleman Hawkins and Ty Rodgers wore Groucho Marx glasses as they sought an autograph from Illini teen superfan Tommy Rouse. The players, who have all driven luxury vehicles from Serra, had their cars cleaned while they shot the video in the showroom, according to dealership owner Ben Quattrone.

Quattrone, a longtime supporter of the athletic department, said he has sold cars to athletes at hefty discounts in exchange for their appearances and participation in ads, as well as provided car washes in exchange for signed basketballs, all permitted under the NIL rules. He estimates he has spent about $150,000 in the past few years to purchase TV ads and other media promotions featuring Illini athletes.

Illini athletes have posted videos on social media showing them driving BMWs, including a BMW XM, an SUV with a sticker price of $160,000. “I make them a ridiculously good deal,” said Quattrone.

Records on NIL deals reported to the University of Illinois did not include this 2024 commercial for a Champaign car dealership in which Illini players Coleman Hawkins, Terrence Shannon Jr. and Ty Rodgers appeared in Groucho Marx glasses. (Obtained by ProPublica and the Tribune)

Watch video ➜

No Illinois athlete, however, has disclosed a deal with Serra to the university, records show. Quattrone said he reminds athletes to set aside money to pay taxes on their NIL deals but said he was unsure of their reporting obligations to the university.

Around the same time as the Serra ad came out, the Pacifica on Green — a new apartment complex that caters to students — also tried to capitalize on the success of the university’s basketball team and its football program. The Tribune and ProPublica identified at least six football and men’s basketball players featured on the apartment complex’s Instagram, including then-Illini forward Dain Dainja, who appeared in multiple posts throughout the 2023-24 season.

In one post, which celebrated the team advancing to the Elite Eight, Pacifica gave a signed Dainja jersey to a tenant who renewed his lease during March Madness. An earlier photo showed Dainja signing the jersey for the renewal promotion while wearing an olive green Pacifica T-shirt.

No men’s basketball or football players disclosed receiving any kind of payment from the complex. Only one Illini athlete — a female basketball player — told the university about receiving compensation from Pacifica: more than $16,000 for Instagram reels, according to the data.

Former Illini basketball player Marcus Domask promoted TurboTax in a “paid partnership” Instagram post last year. The deal was not included in the NIL records provided by the university. (Screen recording by ProPublica. Cropped by ProPublica.)

Watch video ➜

None of the athletes in the Serra, Pacifica or TurboTax promotions or their representatives agreed to comment for this story. A Pacifica representative also did not respond to interview requests.

The failure by many male athletes to disclose their deals also makes it difficult to assess differences in NIL compensation between male and female students at U of I — a stated goal of the Illinois law’s lead sponsor.

That a gender gap exists is clear, despite the flawed nature of the data. In the three-year period examined by the Tribune and ProPublica, male athletes accounted for more than $1 million in reported earnings, compared with $160,000 total for female athletes.

But in the 2023-24 school year, after administrators stopped stressing the importance of reporting, men disclosed only $44,500 in NIL deals, compared with $58,500 for the women.

The falloff in reporting also obscures the role played by a boosterlike nonprofit organization called the Icon Collective in raising NIL money for Illinois student-athletes. Such collectives have become common at many universities, raising millions of dollars paid to players in exchange for community service such as volunteering at a food bank.

Icon is supposed to be independent from the U of I’s athletic department, though records show they work together on everything from athlete appearances to the beer sold at Memorial Stadium.

Reporters identified at least six U of I athletes who promoted the Pacifica on Green apartment complex on Instagram, but only one deal with Pacifica, involving an unnamed woman, was included in the NIL data from the university. (John J. Kim/Chicago Tribune)

In announcing Icon’s launch in early 2023, a university press release said the collective had raised more than $1.5 million intended for student-athletes.

But Illini athletes reported receiving only about $99,000 from Icon between February 2023 and October 2024, with the bulk of it — $75,000 — going to Illini football players. No men’s basketball players reported receiving any money via the collective, though the group regularly uses images of men’s players in its marketing material.

Icon’s president, Kathleen Knight, a former athletic department employee, declined to answer questions about the inconsistencies between the athletes’ reports and her organization’s purported fundraising.

In a brief statement, Knight said Icon does not publicly share its financial information.

Cox, the assistant athletic director and NIL specialist, said he does not know how much money Icon has distributed to its athletes, in part because of the lack of disclosures.

The university made a similar statement on Thursday. Leadership of the athletic department “remains unaware of the terms of Icon’s agreements with most of our student-athletes,” it said.

Several experts told ProPublica and the Tribune that the idea an athletic department wouldn’t know the amount of money a collective gave to its athletes defies credulity, given the well-known financial demands of the college marketplace and the typically close relationships between collectives and athletic departments.

“It’s not even putting their head in the sand,” said Carter, the NIL expert. “It’s patently false.”

A video board at the University of Illinois’ State Farm Center displays an advertisement for a new Icon Collective membership drive. The collective raises NIL money to benefit Illini student-athletes. (John J. Kim/Chicago Tribune) The Future of Transparency

At a congressional hearing last month, Illini athletic director Josh Whitman talked about the future of NIL and the importance of creating national standards for revenue-sharing and NIL deals instead of a patchwork of state-by-state legislation.

“We certainly don’t have an interest in micromanaging those opportunities for our student athletes,” he told federal lawmakers. “But it is important that we do try and create some system to monitor that, to create some level of transparency. Our student-athletes want that transparency.”

U of I administrators, however, have argued against public transparency when it comes to NIL deals. Cox, also an adjunct professor at the university’s law school, wrote in a law publication last year that “the best move for all institutions to support student-athletes is to refuse disclosure of student-athlete NIL information as a matter of policy.”

Administrators then succeeded in getting a law passed that they contend exempts NIL records from the Freedom of Information Act, severely hindering any further public analysis or accountability. Indeed, the U of I said in early January that it would no longer release the type of records obtained by the Tribune and ProPublica for this investigation.

“Our position is that that’s not the public’s business,” Whitman told a reporter last year.

The Illinois athletic department also referenced the FOIA exemption in its three-page response to ProPublica and the Tribune, saying that although there is public desire for NIL information, “the privacy of students is the more pressing concern.”

But even as Illinois administrators pushed to change the law last year, the requirement that athletes report the deals to their institutions remained. And athletes will be required to disclose their deals under the House settlement — a mandate the university celebrated in its written statement.

In the face of “strong and swift accountability,” officials said, their athletes would comply.

Joe Mahr of the Chicago Tribune contributed data analysis. Mariam Elba of ProPublica contributed research reporting.

by Stacy St. Clair, Chicago Tribune, and Jodi S. Cohen, ProPublica

No Personnel Is Policy

3 months ago
The Trump administration is accomplishing through layoffs what it couldn’t accomplish through Congress.
David Dayen

Unsanitary Practices Persist at Baby Formula Factory Whose Shutdown Led to Mass Shortages, Workers Say

3 months ago

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

Workers at one of the nation’s largest baby formula plants say the Abbott Laboratories facility is engaging in unsanitary practices similar to those that led it to temporarily shut down just three years ago, sparking a nationwide formula shortage.

Current and former employees told ProPublica that they have seen the plant in Sturgis, Michigan, take shortcuts when cleaning manufacturing equipment and testing for microbes. The employees said leaks in the factory are sometimes not fixed, a dangerous problem that can promote bacterial growth. They also said workers at the facility do not always take required swabs to check for pathogens while performing maintenance during production. Supervisors have urged workers to increase production and have retaliated against workers who complained about problems, the employees said.

One worker complained to the Food and Drug Administration in February, saying the plant has experienced “persistent leaks” and “unaddressed contamination issues,” according to correspondence between the worker and the agency viewed by ProPublica. Water and chemicals have pooled on the floor, the worker said. In one spot, white sweetener oozed from a pipe and formed a pile like a stalagmite on top of a tank used for blending, the employee said.

The complaints come as the Trump administration is dismantling wide swaths of the federal government — including conducting mass layoffs at the FDA — and filling some key regulatory positions with industry-friendly voices. The new head of the FDA division that oversees baby formula is a corporate lawyer who previously defended Abbott against a lawsuit.

The workers ProPublica spoke to said they did not want to be named because they feared repercussions from Abbott management, but they felt compelled to speak up out of concern that a baby who drank formula made at the plant would fall ill.

“I can’t have this on my conscience,” one of the workers said.

Abbott called workers’ assertions “untrue or misleading,” denied their claims about retaliation and said the company “stands behind the quality and safety of all our products including those made at Sturgis.” In a statement, a spokesperson said that since 2022, the company had increased plant staff by 300 people, spent $60 million on upgrades and stationed multiple food-safety consultants there on weekdays. The company said the plant often takes more than 10,000 environmental swabs across the facility in a month to check for microbes.

“We believe Sturgis is the most inspected, tested, and swabbed infant formula manufacturing facility in the U.S., and likely in the world,” the statement said.

That said, Abbott conceded that the plant acted “outside of our quality process” in one incident from last May.

Workers told ProPublica that, instead of retrieving a portable pump, an employee used a piece of cardboard from a trash bin to funnel coconut oil, a formula ingredient, into a tank during production of the company’s Pure Bliss by Similac Organic brand. Abbott said the cardboard “was reactively used to prevent spilling onto the floor.” The company denied that there was a trash receptacle in the area and said plant practice was for cardboard to be stacked on a pallet before being recycled.

Food-safety laws require companies to use clean tools to transfer ingredients, not a makeshift implement like cardboard, said Patrick Stone, a former FDA inspector who works as a consultant.

“No one would think that’s a proper use,” he said. “It’s not something that’s been cleaned and verified it’s clear of contamination.”

Abbott, however, downplayed the significance of the incident, saying it occurred early in the manufacturing process, before pasteurization, and the product underwent “enhanced testing” that came back negative for microbes.

“We acknowledge that this is outside of our quality process, and this has been addressed,” Abbott’s statement said. The company said the plant had a discussion with the employee reiterating the proper procedure.

Employees complained about the incident at the time and some hoped the plant had destroyed the formula. But a few weeks later, they received an email, which ProPublica viewed, that said the plant had released all batches “not just on time, but early.” It congratulated workers for an “amazing milestone and achievement for Sturgis.”

Abbott said there have been no medical complaints related to the lot. The brand is advertised as suitable for newborns.

In another incident in February, an employee said that the company had signed off on the use of an amino acid that was 10 months past its manufacturer’s “best by” date. A photo of the label viewed by ProPublica showed a best by date of April 2024. The law requires that ingredients in formula not expire before the formula as a whole, Stone said.

Abbott said that the powder’s expiration date had been “extended,” which it said regulations permit in some cases, after the company used third-party testing to confirm its nutrient levels.

But the worker said the amino acid powder was “chunky” and employees refused to add it to a formula mixture. It had been manufactured in October 2023.

Abbott told ProPublica that two containers of amino acid mix were, in fact, placed on hold due to “crustiness” and later destroyed. “When we find products that don’t meet all specifications, we dispose of them,” the company said.

Some of the workers said they’ve felt pressure not to disrupt the manufacturing process. At one meeting in February, a worker said a senior manager told employees the plant needed to improve its profit margins by either increasing production or reducing the amount of formula it was discarding as unusable.

Abbott disputed the idea that it is cutting corners to make more formula.

“Any assertion that quality is being sacrificed at the expense of volume and profit is patently untrue,” it said. The company said that in 2024, Abbott made 41% less formula at Sturgis than it had in 2021, the year before the shutdown.

For its part, the FDA did not respond to questions about whether an inspection or investigation is taking place at the Sturgis plant in response to the complaint it received. The agency said it generally does not comment on “potential or ongoing inspections or investigations.”

In a statement, the FDA said that it “takes reports related to infant formula seriously and follows up as appropriate.”

The case could prove to be a major test for President Donald Trump’s second administration, which just last month announced an effort to “ensure the ongoing quality, safety, nutritional adequacy, and resilience of the domestic infant formula supply.” Dubbed Operation Stork Speed, it promised to increase ingredient testing and communicate regularly with consumers and the industry “as significant developments occur to ensure transparency, including information regarding nutrients and health outcomes.”

“Egregiously Unsanitary” Conditions

The Abbott employees’ concerns come three years after the company voluntarily recalled several formula brands, including Similac, Alimentum and EleCare, and temporarily halted production at Sturgis amid reports of unsanitary conditions and infant deaths.

A former plant employee in 2021 had told the FDA that the plant was using lax cleaning practices, falsifying records and releasing untested infant formula to the public. FDA inspectors found leaking equipment valves, standing water and a type of bacteria at the plant called Cronobacter sakazakii, which is common but can be deadly for young babies. Company documents showed the manufacturer had even discovered the bacteria in its finished formula in 2019 and 2020, the report said. Food-safety laws require companies to test samples of their formula to check the nutrient content and look for harmful microorganisms.

Those inspection findings were “shocking,” a former FDA chief said later. He called the plant “egregiously unsanitary.”

Initial reports said several infants were hospitalized and two died from an illness caused by the Cronobacter bacteria after drinking formula made at the Sturgis plant, according to an inspector general’s report. Between December 2021 and June 2022, it said the FDA received a total of 16 consumer complaints involving infant deaths and Sturgis facility products.

The report said the FDA did not directly link drinking formula from the plant to any of the infants’ illnesses or deaths. Abbott said no unopened Abbott formula has ever tested positive for Cronobacter.

Still, in May of 2022, Abbott signed a consent decree with the Department of Justice and the FDA and committed to following improved procedures at the facility. The decree is still in effect. It says the company can be fined up to $30,000 a day for violations, with a maximum of $5 million in a year.

The plant’s nearly four-month-long shutdown in 2022 sparked a nationwide formula shortage, which was worsened by COVID-19-related supply-chain issues. Store shelves emptied of formula, leaving parents desperate. Some babies developed symptoms such as spitting up and diarrhea after being forced to switch brands, researchers found. Nearly half of parents in one survey of primarily low-income families said they’d resorted to at least one unsafe feeding practice, such as watering down formula.

Abbott said it disagreed “vehemently” with the FDA chief’s comments on the Sturgis plant being unsanitary, and it said the former employee who filed the 2021 complaint with the agency was dismissed for “serious violations” of its food-safety policies. Abbott said the employee’s specific claims were not supported by the FDA. “It’s time to stop giving credence and fame to individuals with questionable agendas” that have led to “unnecessary” formula shortages, Abbott said.

New Complaints Arise as FDA Is Cut

It’s unclear how the Trump administration, with its reduced federal workforce, will respond to the newest complaints. The administration recently eliminated 3,500 FDA jobs as part of extensive cuts in federal health workers’ ranks. While officials said the reductions will not impact inspectors, the agency did not answer a question about whether any of the employees being let go are involved in inspection or enforcement for the Sturgis facility.

The White House also recently installed a corporate lawyer in a top FDA post, putting him in charge of the agency’s regulation of formula. Kyle Diamantas, acting deputy commissioner for human foods, previously defended Abbott against a lawsuit in which families alleged the company failed to warn them about a deadly bowel condition that premature babies who are fed formula have a greater risk of developing. Abbott has appealed a verdict in which it was ordered to pay $495 million.

Meanwhile, at the Department of Agriculture, officials disbanded an advisory committee that had been studying the threat of Cronobacter contamination in powdered formula. The USDA said at the time that it did so to comply with an executive order seeking to reduce bureaucracy but it remained committed to food safety. The Heritage Foundation’s Project 2025 blueprint for a Trump presidency had listed as one of its goals reevaluating “excessive regulation” of infant formula.

Families using formula aren’t being protected if the FDA is acting like a partner to companies like Abbott instead of overseeing them, said Jennifer Pomeranz, a professor and expert in public health and food policy at New York University who has served as a witness for plaintiffs suing Abbott over the bowel condition. She called Diamantas’ appointment the “perfect example of regulatory capture.”

In its statement to ProPublica, the FDA said it is “committed to enhancing regulatory oversight of all infant formula manufacturers to help ensure that the industry is producing infant formula under the safest conditions possible.”

The Sturgis plant is a major supplier of formula in the United States and had been producing about 20% of the nation’s formula when it shut down in 2022. Abbott provides formula to more than half of babies in the government-backed nutrition-assistance program, called WIC, that subsidizes families’ formula purchases. The company has contracts to be the sole source of formula for WIC recipients in 36 states and Washington, D.C., as of August of last year.

“If You Have Leaks, Forget About It”

Since the 2022 consent decree, FDA records show it has completed 10 inspections, including a multiweek review that was underway when employees said the cardboard incident took place. (The company says that according to its records, it has been inspected by FDA 12 times in that period.) No action was required in response to most of those visits, according to a database that tracks FDA inspections.

But for one inspection that ended in December 2022, the FDA issued a citation that noted concerns related to contamination prevention, worker hygiene and the handling of consumer complaints, documents say.

A report from that inspection — completed just seven months after Abbott signed the consent decree — said the agency found problems similar to those that had shut down the plant.

The report noted, among other things, six instances of employees failing to collect required swabs to test for bacterial contamination after cleaning up a leak. It also said inspectors found “apparent insects and dust like debris” near formula-making equipment. “You did not establish a system of process controls covering all stages of processing that was designed to ensure that infant formula does not become adulterated due to the presence of microorganisms in the formula or in the processing environment,” the report said.

Stone, the former FDA inspector who is now a consultant, said the citation is significant. “FDA should have really hammered on them harder,” he said, “but they’re weak and they’re scared.”

Without taking those swabs and testing them, the company cannot know if the formula is contaminated, Stone said.

“Unless you’re monitoring your environment, you don’t know what’s in your environment,” he said. “If you have leaks, forget about it. You don’t know what’s in there.”

Abbott said it “has addressed all FDA observations” from 2022. FDA inspectors have raised no major issues since then, the company said.

In 2023, Abbott confirmed the Department of Justice had opened a criminal investigation into conduct at the plant. A spokesperson for the department’s Western District of Michigan did not respond to a request for information about the investigation’s status. Abbott did not respond to a question about the probe but said at the time that it was “cooperating fully.” The Securities and Exchange Commission and Federal Trade Commission were also scrutinizing the company after the problems surfaced in Sturgis. Spokespeople for the SEC and FTC, which released a report on the formula supply disruptions, declined to comment. Abbott did not respond to questions about the investigations.

More recently, some employees who spoke to ProPublica said plant leaders have urged them to speed up production — even though the consent decree aimed to add more safety protocols. “Imagine a 10-page rule book you’re told you have to operate by no matter what,” one said. “No deviations. You’re doing that, and then your boss says, ‘You’re not doing your job fast enough.’”

The workers said some employees have pushed supervisors to follow sanitary procedures more closely and at times refused to run equipment until their concerns about sanitation were met, even as they feared losing their jobs. Abbott is one of the largest and highest-paying employers in the largely rural area near the Indiana border. The plant’s tall white tower, emblazoned with a large green “a,” looms over nearby homes.

An employee said that since the consent decree, he had witnessed leaks of formula, oil, chemicals and water that were not cleaned up, fixed or documented properly. Sometimes, the worker said, supervisors resisted shutting down machinery — always a money-losing proposition — to address a leak. The worker reported seeing a leak that hadn’t been handled correctly more than once a month. “It’s all over,” the employee said.

Photos taken in the plant show equipment whose outer surface was streaked with drips from formula ingredients that had leaked. In one instance, an absorbent mat had been placed on the floor to catch drips. Procedures require the plant to contain leaks, fix equipment and test the area for pathogens, workers say. Leaks can become breeding grounds for bacteria.

Abbott said “in a facility the size of Sturgis, with literally miles of pipes, leaks, drips, and condensation are inevitable.” The plant has a team it deploys quickly to contain leaks, then swab, test and sanitize the area, the company said. The plant aims to limit standing water and sanitize regularly to prevent bacterial growth, Abbott said, and it runs six times the number of Cronobacter tests on finished product samples as required by federal regulations.

“Abbott has a quality policy that we make our products as if they were for our own families,” the company’s statement said. “If quality were not our first priority Abbott would not still be here at 137 years.”

A contractor Abbott hired to improve its processes has raised concerns about the facility not following protocols or procedures in past audits but cited no such problems in the audit completed earlier this year, said Mansour Samadpour, co-founder of IEH Laboratories and Consulting Group. IEH, which began its work after the consent decree, reports back to Abbott and the FDA on what the plant needs to correct. Neither Abbott nor IEH provided a copy of the most recent audit.

Samadpour declined to detail the earlier concerns. He said it was possible an employee could miss a swab, but said there’s no systemic problem. He said he does not have concerns about sanitary practices in the plant.

“If I have any concerns, they will hear from me and FDA will hear from us,” said Samadpour, who spoke with ProPublica at Abbott’s request. “That is our job.”

Debbie Cenziper contributed reporting.

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