Across the Food Industry thinking came to light because of your sterling investigation. Here is nbc bay area Investigative Reporter vicky nguyen. Good evening and thank you for joining us. In the next half hour, we investigate how your food is handled, from farm to table. Tonight well show you how we uncovered the illegal actions of the Worlds Largest food distributor. Sysco corporation. Our reports resulted in a landmark settlement to better protect Public Health. It all started with a whistleblower who wanted to but first, more on the company at the center of our story. [ closing bell ] shares surging, talk about sysco. Reporter Sysco Corporation is a publicly traded company. Sysco. Sysco. Sysco. The Food Service Distributor reporter with annual sales of 44 billion in 2013, sysco provides food to more than 400,000 clients across north me. The good things come from sysco. Reporter after buying its largest compete tore u. S. Foods, sysco secured its foothold as an industry giant, delivering food everywhere. From restaurants and hotels to hospitals and schools, sysco even supplies food for the diner here at nbc bay area. If you have ever eaten at a restaurant, youve probably eaten sysco food. Sysco provides every type of food that you can think of. Reporter last summer, insiders from across the country broke their silence. It was nasty. Reporter some asking to be disguised for fear of retaliation. It has always been the method of operation. Reporter they all came forward to reveal a costcutting measure used by sysco employees that we couldnt believe until we saw it ourselves. For weeks, we kept cameras on outdoor sheds across northern california. They were all rented by Sysco Corporation. And they were all used to store perishable foods, including what we saw at this shed in concord. Its 4 30 on a tuesday morning. Our cameras were rolling as this sysco delivery truck arrives. Concord self storage was the drivers first stop of the day. Watch as he unloads box after box carrying bread, x auu q cheese, and raw pork. These are Storage Facilities that you or i would take our unwanted items and store them. Because we dont even want them in our house. The sun is just blaring down on that food. Reporter we watched as the food sat in the shed for hours until syscoco salesmen picked i up in her personal cars and delivered to it customers. Xd hospitals, schools, jails, day care, anywhere there goes the pork. Reporter fife hours after the predawn dropoff, this salesman loaded a case of butchers block pork into his trunk. And the bread. Reporter we followed the pork from the back of the car td the back of this restaurant. The pattern was the same at every shed weni observed. Are any of them cold . Theyre all just like outdoor sheds . Yeah, theyre not airtight. Reporter it happened up to six days a week, including hot days when we measured the temperature inside a storage unit at 81 degrees. Xdxd what about storing like dry goods or foods or anything like that . Unacceptable. No food of any kind, no water at all. Reporter thats theni polic at most Storage Facilities, according to the staff. How come . Because rodents will get into there. Weve had circumstances where people stored windex bottles and rodents chewed through the plastic to get to the windex. Reporter still, that didnt stop sysco from keeping raw chicken, beef, vegetables and milk on the floor of these sheds, in some cases justx p fe feet from mousetraps. Do you have a mouse issue . No, thats preventative maintenance. We havent caught one in about a year. Reporter were tipped off about these sheds in san jose too. Theyre outside, open to the public,co and there is refrigeration. We wanted to know if what we saw was an isolated example or if it was part of a much bigger problem. To find out, weco decided to re our own storage shed. Here is where we got lucky there was one unit available almost directly across from the storage unit sysco had been renting for years. Well set up cameras and watched as the big rigs rolled in. In san jose, we spotted this sales woman. She picked up food after it was kept for three hours in a shed. Boxes of raw chicken, butter, and produce. But she didnt deliver it right away. She picked up a friend instead. They made a starbucks stop and then hit the road. Food still in the trunk, she finally heads to the snack bar at this kid swim center. We dont know if this was her ] carrying chicken, butter, e and produce. Food that at this point hadnt been refrigerated for more than four hours. I said thats going on here. Reporter from utah to tujuaqqnew york, to d. C. , sources told us about sheds operated by sysconr nationwide. The u. S. Sources say sysco also used sheds throughout canada. Coming up, why sysco was storing food like this. Im not allowed to talk. Sorry. Nbc bay area cameras move in as sysco is caught in the act. You work for sysco, right . I do. Plus we found a lot of rodent droppings that were present. What food inspectors found that sparked action across north america. We return now to our indepth look at syscos dirty secret. Im vicky nguyen. Before the break we showed you sysco employees storing fresh food in these outdoor unrefrigerated sheds, food destined for restaurants and hotels. After weeks of undercover footage, it was time to get answers. Reporter excuse me, are you storing food in these sheds . Are we . Im not allowed to talk. Reporter this part of the investigation was tricky. We knew we wanted to approach sysco employees as they were picking up the food and ask them why sysco was doing. This we also figured we had just one shot. So based on our surveillance, this was happening most often in concord and here in san jose producer kevin went to concord and i approached the employee who showed up here. Can you tell us where this stuff is going . He didnt have much to say before shutting the shed and taking off. But in concord you work for sysco, right . Reporter this sysco employee tried to explain. Its a common thing, though. I mean, because, you know, food distribution. Yeah. We saw you coming from an outdoor shed to take the food here. Do you guys normally do that . We do it for Paper Products and shelfstable foods. Reporter at first he told us the sheds were only used for nonperishable foods, not foods that could spoil. Weve seen you guys carry meat, pork, cheese, other perishable items, things that had been sitting there for as listening as five hours. Does that sound right to now you . It doesnt sound right. Reporter he confirms what many other sources nationwide had said. This was a widespread and longstanding practice at sysco. Well, ive only been here ten years, and weve had it for those ten years. Reporter throughout our investigation, sysco declined our request to be interviewed. But after we revealed what our hidden cameras saw, the Company Issued a press release. Sysco acknowledged the Public Health concerns and announced the immediate closure of all of its sheds across the u. S. And canada. The action made international headlines. Ceo build delaney said we deeply regret the concern created by our lapse in complying with our policies. We begin with an nbc bay area exclusive. Reporter what is more, our reports prompted the usda to investigate sysco facilities nationwide. North of the border, food inspectors from three agencies in canada launched their own investigation. co nowhere were inspector morse active than california. Those facilities were not registered. Reporter Patrick Kenneallyx is the food safety chief for the California Department of food safety. There is a breakdown in their program inspectors immediately descend. At some point rodents had been in there. Rodents carry a lot of disease and becomes the prime concern of the transmission from the rodent to the product. Reporter and remember, the steaks for you and your family are high. The centers for Disease Control estimates 48 Million People get sick in the u. S. Each year from eating bad food. 3,000 people die. And i was actually very shocked, weapon a company of this size. Reporter inspectors combed through four years of syscos records. They found sysco had 25 unregistered drop sites in california, spanning from sacramento to san diego. Not a single shed was licensed to store food. More than 400,000 foodxd items were stored illegally. Why would a company like sysco cut corners like this . I think this became based on what were seeing so far a little bit of a runaway train. Reporter sources say the sheds were used to save money so sysco could deliver more orders to more customers. They were a convenient pit stop that allowed the expensive refrigerated big rigs to make fewer deliveries, leaving it up to individual salespeople to take the food to their customers on their time. Theyre always cutting corners. Theyre always trying to get over on the system. Reporter we learned syscos costcutting measure could end up costing sysco big. Still ahead how dare you. Outraged lawmakers called for changes and regulators crack down with a massive fine that is one for the history books. This came to light because of your sterling investigation. co none of us would have known about it. Reporter plus, the effects on the entire fq rdustry. T nr bay area veterans waiti for new teeth. You may have to wait more than a month. But less than two. Now insiders reveal how long these vets are really waiting for dental care. It was pretty bad. Monday at 11 00 on nbc bay area news. We investigate. Dont wait for awesome. Totinos pizza rolls. Gets you there in just 60 seconds. Some people think vegetables are boring. But with green giants delicious seasonings and blends, we just may change their minds. Ho ho ho green giant good evening. Im vicky nguyen. Youre watching we investigate syscos dirty secrets. Earlier, we showed you how our surveillance cameras captured the Worlds Largest food supplier storing raw food in dirty unrefrigerated sheds before delivering it to unsuspecting customer. It was an egregious violation of the Publics Trust and the States Health codes. It stunned syscos clients. Its pretty scary. Reporter Jeff Griffith jones is in charge of the am den valley athletic club. Well showed him video exposing how sysco was delivering food to its clients, including his popular snack bar. Raw chicken, also sitting there for hours outside on the ground. Reporter here is an example of what our surveillance hr t hahp hc raw chicken sitting in unrefrigerated sheds alongside steaks and milk in san jose. This is perishable food, food that can breed deadly bacteria if improperly stored. Food that we followeds after it sat in outdoor sheds sometimes as long as five hours. Going into the trunk of somebodys car. Reporter he said the club would strongly reconsider its relationship with sysco after io saw the video. We play it as safe as possible. Fortunately, no, we havent had any complaints. Reporter but he wasnt the only customer who was surprised perishable food before it got to their kitchen. This is a box of pork that was in a shed in concord for five hours before it came here to this restaurant. Really . Reporter managers at the tower grille in concord reacted the way we did. Thats horrible. Reporter im judging by your reaction, you didnt know this was happening. No, not at all. Because we definitely dont practice that here. Reporter Restaurant Managers werent the only ones outraged from here. Sysco admitted it used sheds beyond what we found. But thenni the question became o would hold sysco accountable at the next level . It violates the trust of the consumer. Reporter congressman sam farr represents californias central coast. He also sits on the house subcommittee that oversees food safety regulation. He spoke to us via satellite from washington, d. C. After seeing our report. Well, i appreciate the investigative reporting that went on here. This is really important. And what really struck me is how dare you. How dare you hurt the farmers in california. Reporter he says our investigation exposed a major flaw in food handling practices by a company that should be an industry leader. And i think this is going to require the Transportation Industry and the handling industry to upgrade those laws and protocols. And if they wont do it themselves, then government will do it for them. Sysco is being held accountable. Reporter Santa Clara DeputyDistrict Attorney fran allen led the task force that brought a Consumer Protection lawsuit against sysco. X p t hahp hc this came to light because of your sterling investigation. Reporter in the complaint, District Attorneys from ten counties throughout california alleged sysco violated state and transported food, and that it falsely advertised the safety of its food. This is a major health issue. Reporter assistant d. A. Kelly walker represents santa cruz county. What did you think when you saw a company of syscos magnitude handling food in this way . Well, i was appalled. Im a consumer. I go to restaurants. This is a fricking storage shed. Reporter one year after our investigation began, sysco agreed to settle for 19. 4 million. Its one of the Largest Consumer settlements in california history. Xd to see that the conduct as stopped and that the consumer is protected. You took it and you did it. Undercover investigation, which really made our job much easier. This is really a very common practice. Patrick kenneally is the food safety chief. Essentially, what we were seeing was not an anomaly. Does not appear to be an anomaly from all the interviews we did, the information we were provided was very consistent that this has been a longstanding practice. Reporter he said inspectors reviewed four years of sysco records and interviewed dozens of sysco employees. They found this is a practice that extended back for years and was widespread. I know that the agencies and my fellow state agencies and federal agencies were looking into it. But i dont know where their investigations stand. Reporter it turns out they didnt go very far. In an email, the u. S. Department of agriculture said there is no current open investigation at this time. However, we will continue to monitor the issue. Canadian Health Officials told us when they look into the issue last september, there was no indication that sysco drop sites food. Here luckily we had some good video from your investigation to show some very demonstrative evidence of what was happening. By the time the other states actually heard about this, the sheds across the country were being shut down. Reporter are they not able to request records in the same man theyre california did . They can probably request records. But again, not havingxd specifi demonstrative evidence of how the sheds were being used, if the sheds we2 shut down, did it have refrigeration or did it not . If you dont have that information because youre not there at the time it is occurring, its a little more difficult to put the cases together. Coming up next, how the multimilliondollar settlement will be spent to improve food safety and give back to california. It costs sysco millions to fix a problem, so be coit. To make sure this never happens again. Somewhere there has to be a message spent. I think they are gambling with Public Health. Thanks for joining us for our indepth investigation into syscos dirty secret. Im vicky nguyen. Youve seen what we saw, fresh food hidden in outdoor Public Storage sheds without refrigeration. Food that went to restaurants, schools and. Sysco agreed to pay 19. 4 million in a landmark consumer settlement. Now where that money is going, and why food safety expert says this was a revealing glimpse into an industry with lax regulation. I think they are gambling with Public Health. Reporter food safetyni expe jon ryan runs a private company that trains workers to safely transport food. He contacted nbc bay area after seeing our investigation, exposing syscos food shed. When you see a big company like this violating trust, if i can say it that way, then all of the sudden everyone has to start questioning whats going on in the industry. Reporter whats going on in the industry are sweeping changes set in motion by the food and drug administration. If you think about what happens when food goes into a transportation arena, it basically becomes invisible. That allows companies to move it just about any way they choose. Reporter in may, the fda detailed this new Public Health mandate, the food safety modernization act. The goal is to prevent risky practices thatco jeopardize pubo health. The rules give federal inspectors new authority when it come hoss how our food is stored and transported. They are rules that are long overdue according to ryan. The lack of government standards allows people to get away with whatever they want the get away with. If you were talking to Public Health inspectors, what would you tell them . I would say to start from literally the trailer and start working your way all the way up the food chain. Control vacuum packaged chicken. Hes got it out. Reporter we asked california food safety chief Patrick Kenneally where the holes are when it comes to regulation. We do inspect trucks while were doing informations at distribution centers. What we dont have people to do is to trail people around while theyre on their routes to see what theyre doing between point a and point b. Reporter thats about to change. Remember the 19. 4 million settlement cisco agreed the pay . 3 million will go to the state health Department Food safety program. It will pay for more inspectors and oversight. Another million will go towards food donations for 58 food banks throughout california. Will be paid in penalties to the offices of the ten District Attorneysnr who brought the lawsuit against cisco. People are now paying[o attention. Reporter sysco has repeatedly declined our request for an interview. But in a statement after the settlement, company ceo bill delaney said we accept responsibility for the breakdown in our system in california, and we have taken this opportunity to improve our practices. If i was a customer, id be asking them to deliver my product in a safe, timely manner without any risk to Public Health or safety. Reporter meanwhile, for the sources who blew the whistle on syscos dirty secret a fricking storage shed. Are you storing food in these sheds . Risks we . None of us would have known about it. I was just shocked. Someone needs to stand up and say hey, enough is enough. People deserve to know what they are providing for their family. And if theyre working hard to provide it, they also have to right to know its coming to them, honestly. Reporter satisfaction that their courage made a difference to the millions of people who eat sysco foods every day. Never be afraid to tell the truth, no matter what. Its been a year since we first uncovered the sheds used by Sysco Corporation to store the fresh food. What started in california spread across the u. S. And canada and prompted sweeping changes in the policies at sysco. Our investigation prompted action that improved the safety of food storage and delivery across north america. For a complete timeline and to watch our series of original reports, go to nbcbayarea. Com and search sysco. Thanks for watching. For all of us at nbc bay area, im vicky nguyen. Good night. Like many of our investigations, this one started with a tip. If you have a story for the investigative unit, call 888996tips, or send an email to the unit at nbcbayarea. Com. Hi Everyone Welcome to a very special edition of on the money. Im becky quick. My conversation with the last president. I just want to know if you know anyone. From apple, to hershey how theyre doing the right thing and whether its the bottom line. Do consumers care about corporations or will they buy the cheapest products they can find . And well be talking to the investor of the index fund about the best places to put your money. On the money begins riht