A Rotten Purchase: Why Food Cos. Didn't Know They Bought Bad Peanuts

March 19, 2009— -- Dead rats, roaches, mice and mold. As the list of 3,000-plus tainted peanut products shoppers shouldn't buy continues to grow, lawmakers today took a most unappetizing look at peanut plants linked to the ongoing salmonella outbreak.

Watch "World News With Charles Gibson" tonight at 6:30 ET for the full report.

"Mold was observed growing on the ceiling and walls," said Rep. Bart Stupak, D-Mich., chairman of the House Oversight and Investigations subcommittee.

"These are rodents that are around the air intake," said Rep. Greg Walden, R-Ore.

"How is it possible that a company that looks like this -- with pictures of rodents -- to get an award like this, where they're called superior?" asked Rep. Henry Waxman, D-Calif.

Why the companies that bought peanuts from the Peanut Corporation of America didn't know anything was rotten in the Georgia and Texas plants was the focus of today's hearing on Capitol Hill.

Executives for three of the companies that had to recall products said they didn't do their own inspections of the plant and instead relied partly on assurances from the peanut company on the food's safety. They also relied on third-party audits of the plants, audits that turned up no major problems.

"First and foremost, we deeply regret that the recent salmonella recall situation occurred and that it involved Kellogg products," Kellogg CEO David Mackay said. "We apologize to our customers and consumers, especially those who have become ill from one of our products."

Meanwhile, Michael Taylor, research professor at George Washington University School of Public Health and Health Services, said food companies are partly to blame for the fiasco.

"If you put your label on a food product and sell it to consumers, you are responsible for the safety of that product," Taylor, a former government food safety official at the Food and Drug Administration, told ABC News today.

"You cannot point the finger at somebody else."

The hearing highlighted one company in particular, Switzerland-based Nestle, that did send its own inspectors. In doing so, Nestle found rodent droppings, beetles and dead insects. At that point, the company refused to do business with the peanut company.

Recalls Continue in Salmonella Outbreak

It has been more than two months since the Centers for Disease Control and Prevention first traced the salmonella outbreak to contaminated peanut butter made by two plants, one in Georgia and one in Texas, owned by the Peanut Corporation of America. Federal investigators have found the company's Blakely, Ga., plant knowingly shipped peanut products that had tested positive for salmonella. But the company was under no obligation to share those test results with state or federal regulators.

Though it's unusual to have additional recalls this far into an investigation, a total of 3,491 products made by 275 different companies have now been recalled in one of the largest food recalls ever. The companies involved range from big names like Kellogg to small firms that many people have probably never heard of. In tracing where those products have gone, the FDA has contacted more than 14,000 firms along the distribution chain.

As of Monday, the outbreak had sickened 691 people and may have caused nine deaths. There have been no reported new illnesses since Feb. 24.

Although recalled products, including peanut butter and peanut paste, have landed in everything from cookies and crackers to cereal and ice cream, the Peanut Corporation of America's plants in Texas and Georgia both got superior ratings in 2008 from an outside auditor, the AIB company, when inspected. In one case, AIB gave the peanut plant three-months notice of its plan to visit.

Waxman called food companies like Kellogg "sloppy" for not taking matters into their own hands to investigate. But food companies said it isn't easy to inspect each plant. "The practicality, is when you look at Kellogg, even as a big company, we have 3,000 ingredients, a thousand suppliers," Mackay said.

He said Kellogg, based in Battle Creek, Mich., bought up $10 million a year in products from the Peanut Corporation of America, which amounts to a small portion of Kellogg's business.

Martin Kanan, CEO for Solon, Ohio-based distributor King Nut, said, "My personal belief is it should start with the manufacturer or the one who is actually making the product, sealing it, boxing it, casing it.

"We were a distributor of this. I understand our name was on it but we bought a closed container and that's where we have to look at today. We have got to start with the manufacturers."

Researcher Taylor said, "There's no question that a lot of people, including companies, were victimized by Peanut Corporation of America and its egregious behavior. But that doesn't mean that the companies are free to stand by or just trust or hope that companies providing them product are meeting appropriate standards."

Georgia Town to Host Peanut Expo to Revamp Image

Meanwhile, the epidemic has dramatically reduced demand for peanut products.

Georgia, a state that produces 45 percent of the nation's peanuts, is trying to reverse that trend this weekend with a sprinkle of good publicity.

Blakely, the city at the center of the controversy, will try to move on, hosting a "Peanut Proud" expo.

Also, President Obama used his most recent radio address to announce plans to upgrade food-safety laws.

ABC News' Brian Hartman contributed to this report.