This came to light because of a viewer investigation. Heres nbc bay area investigative reporter. Good evening. Thank you for joining us. In the next halfhour, 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 the whistle blow here wanted to expose the dirty secrets. But first, more on the company at the center of our story. Shares surging. It is a publicly trade company. Sysco. Sysco. With annual sales of 44 billion in 2013, it provides food to more than 400,000 clients across north america. The good things come from sysco. After buying the largest competitor u. S. Foods, it secured its foot hold as an industry giant delivering food everywhere. From restaurants and hotels to restaurants and schools, sysco even supplied food for the diner here at nbc bay area. If youve ever eaten at a restaurant, youve probably eaten sysco food. It provides every type of food you can think of. Reporter last summer insiders broke their silence. 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 cost cutting measure used by employees that we couldnt believe. Until we saw it ourselves. For weeks, we kept cameras are outdoor sheds across northern california. They were all rented by Sysco Corporation. And they were all used to store perishable food including what we saw at this shed in concord. It is 4 30 on a Tuesday Morning oufrl cameras were rolling as this sysco delivery truck arrived. Concord storage was the first stop of the day. Watch as he unloads box after box, carrying bread, lettuce, cheese and raw pork. These are the 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 only food. We waxed as the food sat in that shed for hours until the sysco salesmen put in it their cars and delivered to it hospitals. We delivered to hospitals, daycare, anywhere. Five hours after the pre dawn dropoff, this salesman load ad case of butchers block pork into his trunk. We followed that pork from the back of his car to the back of this restaurant. The pattern was the same at every shed we observed. Are any of them temperature controlled or anything . Theyre all just outdoor sheds . Theyre not air tight. It happened up to six days a week including hot days when we measured the temperature inside the storage unit at 81 degrees. What about storing like dry goods or foods or anything like that . Unacceptable. No food of any kind. Thats the policy at most Storage Facilities, according to the staff. How come . Because road enlts will get into them. Weve had circumstances where win decks bottles were chewed through. Still that didnt stop sysco from keeping them on the floor inside the shed. In some cases, just a few feet from mouse traps. Thats just preventive maintenance. We havent caught one in about a year. Wasnt just concord. We were tipped off about these sheds here too. Theres no rerefrigeration. We wanted torng if what we saw was an isolated example or part of a much bigger problem. We decided to reynold our own storage shed. Heres where we got lucky. There was one unit available almost directly across from the storage unit sysco had been reynolding for years. We set up cameras and waxed as the big rigs rolled in. In san jose we spotted this saleswoman shelf picked up food after it was kept for three hours in a shed. Boxes of raw chicken, butter and raw produce shelf didnt deliver it right away. She picked up a friend instead them made a starbucks stop, then hit the road. Food still in the trunk, she finally heads to the snack bar at this kids swim central. We dont know if this was her final stop but remember, she was carrying chicken, butter and produce. Food that at this point hadnt been refrigerated for more than four hours. I said thats going on here. From utah to tennessee, new york to d. C. Sources told us about sheds operated by sysco nationwide and we learned it went beyond the u. S. Sources say they also used sheds throughout canada. Coming up, why sysco was storing food like this. Nbc bay area cameras moving in. As sysco is caught in the act. You work for sysco, right . I do. We found a lot of roadent droppings. [ barks ] whoo mmm oh, yeah [ whistling ] [ male announcer ] discover your new orleans. Start exploring at followyournola. Com. [ woman ] and i love new orleans for the protein packedyg at followyournola. Com. Black forest ham and cheese. Enjoy lean, sliced ham with a hint of sweetness, piled high with all your favorite veggies like green peppers and juicy tomatoes. Now yours at a great price as our 3 sixinch select of august. Subway. Eat fresh. For the barbeque oven roasted chicken melt, now our featured footlong. With juicy chicken and monterrey cheddar, topped with tangy pickles and mmm sweet barbecue sauce. Now thats a 6 footlong special. Subway. Eat fresh. We return to our indepth look at syscos dirty secret. Before the break we showed you sysco employees storing fresh food in these outdoor unrefrigerated sheds, food december continued for restaurants and hotels. After weeks of undercover surveillance, it was time to get answers. Just wondering, are you storing food in these sheds . Are we . Yeah. Im not allowed to talk. Sorry. 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. 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 . I do. The sysco employee tried to explain. It is a common thing. You know, food distributorship. We saw you coming from an outdoor shed to take the food here. Do you normally do it . We do it for like Paper Products and shelf stable foods. At first he told us the sheds were only used for nonperishable foods. Weve seen you carry meat, pork, cheese, other perishable items. Things that have been there for as long as five hours. Does that sound right to you in. It doesnt sound right. He confirmed what many other sources said. This was a widespread and wide standing process as sysco. Ive only been here ten years and weve had it for ten years. After we revealed what our hidden cameras saw, the Company Issued 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 bill delaney said we deeply regret the concern created by our lapse in complying with our policies. We begin whats more, our reports prompted the usda to investigate the sysco facilities nationwide. North of the bored he, reports from three agencies in canada launched their own investigation. Nowhere were inspectors more active than california. The facilities were not registered. He is the food safety chief for the Cast Department of Public Health. There is a huge breakdown. He said after we contacted his department, they immediately deskrenled on the sysco shed. At some point the rodents were in there and that is a prime part of spreading disease. And remember the stakes for your you and your family are high. The centers for Disease Control estimates 48 Million People get sick each year in the u. S. Inspectors comb 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 food items were stored illegally. Why would a company like sysco cut corners like this . I think this became, based on what were seeing, a runaway train. Sysco could deliver more orders to more customers. They were a convenient pit stop that allowed the refrigerated big rigs to make fewer deliveries leaving individual salespeople to take the food to their customers on their time. Theyre always cutting orders. Always trying to get over on the system. We learned syscos cost cutting measure could end up costing sysco big. Still ahead outraged lawmakers called for changes and regulators crack down for a massive fine this came to light because of your sterling investigation. None of us would have known about it. Plus the effect on the entire food industry. Good evening. Youre watching we investigate. Syscos dirty secrets. We showed you how our surveillance cameras captured the Worlds Largest food supplier storing raw foods in dirty unrefrigerated sheds. It was an egregious violation. Publics trust and the States Health code. It prompted regulators to move in and it stunned syscos clients. Jeff is in charge of the athletic club. We showed him video exposing how sysco was delivering food to its clients including his popular snack bar. Raw chicken. Also sitting there for hours on the ground. Heres an example of what our surveillance exposed. Raw chinl sitting in unrefrigerated sheds alongside milk and steaks in san jose. This is perishable food. Food that can breed deadly bacteria. Food that was delivered after it sat in outdoor sheds, sometimes as long as five hours. Temd club would strongly reconsider its relationship with sysco after saw the video. Because of the regular inspections that we have, we play it as safe as possible. He wasnt the only customer who was surprised to see what was happening to perishable foods before it got the 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. Managers at the tower grille in concord reacted the way we did. Thats horrible. Im judging by your reaction, didnt know this was happening. Not at all. We definitely dont practice that here. Restaurant managers werent the only ones outraged to learn their food was coming from here. Sysco admitted it used sheds beyond what we found. Then the question became, who would hold sysco accountable at the next level . It violates the trust of the consumer. He represents the central coast. It oversees the food safety regulation. He spoke us via satellite. I appreciate the investigative reporting that went o here. This is really important. What really struck me is how dare you. How dare you hurt the farmers in california. He said our investigation exposed a major flaw in food handling practices by a company that should be an industry leader. I think this will require the handling industry to upgraze those laws and protocols. If they wont do it themselves, got will do it for them. This attorney led the task force that led a lawsuit against sysco. This came to light because of your sterling investigation. In the xlaenlt, district attorneys from ten counties throughout california alleged sysco violated state laws for how the company stored food and that it falsely advertised the safety of its food. This is a major health issue. What did you think when you saw a company of syscos magnitude handling food this way . I was appalled. Im a consumer. I go to restaurants. One year after our investigation began, sysco agreed to settle for 19. 4 million. It is one of the large nest california history. Our goal is to see that the conduct has stopped and the consumer is protected. You took and it did a great investigation which really made our job much easier. We saw this was a very common practice. Patrick is the states food safety chief. What we were seeing does not teem to be an anomaly. It was very consistent. That this has been a longstanding practice. He said inspectors reviewed four severe sysco records and interviewed dozens of employees. They found this was a practice that extended back for years and was widespread. I know the agencies and my fellow state agencies were looking into it. It turnls out they didnt go very far. In an email they said there is no current open investigation at this time. However, we will continue to monitor the issue. Canadian Health Officials told us, when he this looked into the issue last september, there was no indication that the drop sites had been soeshld with unsafe food. Luckily we had some good video to show what was happening. By the time the other states heard about it, the sheds across the country were being shut down. Are they not able to request records the same as california did . They can request records but not having demonstrative evidence. If the shed was shut down, did it have refrigeration or not . If you dont have it, youre not there at the time the violations are during, it is a little more difficult to put it together. Coming up next, how the multimilliondollar settlement will be used to improve foot safety. To make sure this never happens again. I think they are gambling with Public Health. You treat every minute like its a chance to do something. So youre always moving. Constantly searching for the next opportunity to make the most of what life has to offer. Your time is valuable. So you reach for something better. Fewer calories. Fewer carbs. More to experience. Michelob ultra. The superior light beer. Thanks for joining us for our indepth investigation into syscos dirty secret. Youve seen what we saw. Fresh food hidden in outdoor Public Storage sheds without rerefrigeration. Food that went to restaurants, school and hotels. Sysco admitted it was wrong. The company agreed to pay 19. 4 million in a landmark consumer settlement. Where that money was requesting and a glimpse into an industry with lax regulations. I think they are gambling with Public Health. He runs a private company that trains workers to safely tranls port food. He contacted us after exposing the sysco food sheds. When you see a big company like this violating trust, if you can say it that way, then all of a sudden everyone has to start questioning whats going on in the industry. Whats going on was 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. The food safety modernization act. The goal is to prevent ricky practices that jeopardize Public Health. The rules give federal inspectors new authority when it comes to how our food is stored and transported. They are rules long overdue, according to ryan. The lack of government standards allows people to get away with whatever they want to get away with. If you were talking to Public Health inspectors, what would you tell them . I would say start from the trailer and start working your way, all the way up the food chain. Control vacuum packaged chicken. We asked california food safety chief patrick where the holes are when it come to regulation. We do inspect trucks while were doing inspections. It is about to change. Remember the 19. 4 million settlement agreement. 3 million will go to the state Health Department food safety programs. I will pay for more inspectors and oversight. Another million will go toward food donations for 58 food banks throughout california. The rest, roughly 15 million, will be paid in penalties to the offices of the ten district attorneys who brought the lawsuit against sysco. People are now paying attention. Sysco has repeatedly denied an interview. But after the settlement, bill delaney said we september responsibility for the breakdown in our system in california and we have taken this opportunity to emprove our practices. If i was a customer i would be asking them to deliver my product in a safe and timely manner without any risk to Public Health or safety. Meanwhile, for the sources who blew the whistle on syscos dirty secrets a freaking storage shed. Are you storing food in these sheds . Are we . None of us would have known about it. Someone needs to stand up and say 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 the right to know it is coming to them honestly. Satisfaction that their courage made a difference to the millions of people who eat sysco food 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 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 actions that improved the safety of food storage and delivery across north america. For a complete time line and to watch our series, to go nbcbayarea. Com and search sysco. Thanks for watching. For all of us at nbc bay area, im vicky nguyen. Good night. I never thought this day would come, lizzie. Okay, push. [groaning] push, liz lemon here comes your baby congratulations. Its meat cat [laughs] the cheesy blasters mascot. Im whats inside ya razzmatazz [laughs] [gasps] i got to eat better. Oh, hello, mr. Hornberger. I thought i was the only one here at this hour. No, this is just my little ritual, so i can have a moment of peace and quiet between home, where this happened, and work, where. Im always being interrupted. Oh, i get it. A little pete time. Pardon the familiarity. Well, you just enjoy your coffee, sir, while i tell you a funny story about my friends cat. His name is mr. Wiggles, and his cats name is benson. Wheres liz