Prominent American food companies are under scrutiny in a federal probe of possible fraud and corruption in the military’s food-supply operations for the Iraq war, according to news reports.

The Wall Street Journal reported Investigators from the Justice Department and the Defense Department are looking into deals that Perdue Farms Inc., Sara Lee Corp., ConAgra Foods Inc. and other U.S. companies made to supply the military.

ConAgra Foods said it has been assured by the Department of Defense that its role in this investigation is limited to that of a witness.

The inquiry is focused on whether the food companies set excessively high prices when they sold their goods to the Army’s primary food contractor for the war zone, a Kuwaiti firm called Public Warehousing Co.

ConAgra, of Omaha, said it has cooperated with the Department Defense’s investigation of Public Warehousing Co.

Allstate’s shares tumble after earnings shortfall

NORTHBROOK, Ill. — Shares in Allstate Corp. sank Thursday after the insurer’s third-quarter earnings missed Wall Street’s expectations and several brokerages issued downgrades.

Allstate owns Lincoln Benefit Life of Lincoln. 

Analysts said the results a day earlier by the nation’s second-largest property and casualty insurer showed disappointing underwriting income, investment income and earnings from its financial services unit, Allstate Financial.

Allstate’s largest single business line, auto insurance, also showed deterioration with the frequency and cost of auto accidents increasing from the third quarter of 2006. Its standard auto loss ratio, a measure of how much it spends on claims, rose 5.9 percentage points to 65.8 percent.

Smithfield files racketeering lawsuit against United Food and Commercial Workers 

RALEIGH, N.C. — Smithfield Foods Inc. filed a civil racketeering lawsuit Wednesday against the United Food and Commercial Workers union, which for more than a decade has waged an outspoken campaign to organize workers at the company’s massive hog slaughterhouse in rural North Carolina.

The lawsuit, filed in federal court in Richmond, Va., accuses the union of engaging in a public smear campaign that included seeking frivolous regulatory investigations and providing false statement to analysts aimed at depressing the company’s stock price.

The union, Smithfield said in the lawsuit, conspired to force the company to recognize it as the “exclusive bargaining representatives of hourly employees … regardless of the degree of actual employee support for such representation, by injuring Smithfield economically until Smithfield either agreed to defendant’s demands or was run out of business.”

The suit was filed days after the end of talks intended to lead to an organizing election at the plant, which the union has tried to organize since it opened in 1992.

 Gene Bruskin, who oversees the union's efforts to organize the Smithfield plant and is named as a defendant, declined to address the lawsuit's specific allegations because the union hadn't yet read it carefully. But he said the timing of the action proves Smithfield never had any intention of working with the union.

In Nebraska, Smithfield owns the Cook’s Ham plant in Lincoln and the Farmland Foods pork processing plant in Crete.

— From news wires