Letter to the editor – National Cattlemen’s Beef Association (NCBA) made false statements regarding the beef c heckoff audits.
Oct 14, 2016
In the article on Sept. 23, 2016, “NCBA files for intervener status in checkoff case,” National Cattlemen’s Beef Association (NCBA) made false statements regarding the beef checkoff audits. Organization for Competitive Markets (OCM) would like to set the record straight.
In 2010, the Clifton Gunderson Accounting Firm (CG) performance review, commissioned by the Cattlemen’s Beef Board, examined a small number of expenditures from a 29-month period ending in 2010. Irregularities were uncovered resulting in NCBA having to return to the National Beef Board more than $200,000. These numerous irregularities included improper payment for such things as spousal travel and private loans.
With this evidence, OCM and others pressured the USDA Office of Inspector General (OIG) to audit the Beef Checkoff Program. In 2011 OIG began their audit of USDA Agriculture Marketing Services (AMS), the agency whose responsibility is to oversee the checkoff programs. The investigation was completed in December, 2011. The final report was expected to be issued March, 2012. On March 29, 2013, 15 months later, a scant 17-page report was finally released.
This first “final” audit report concluded that NCBA had properly expended all Beef Checkoff Program funds and that the relationship between the CBB and the NCBA complied with U.S. law.
Because these findings flew in the face of the CG 2010 performance review, OCM promptly filed a request under the Freedom of Information Act (FOIA) for an extensive list of records pertaining to the audit report. The OIG FOIA office initially responded by releasing 101 heavily-redacted pages and denied release of the 3,120 pages of report drafts and 125 pages of related emails under a claim of exemption. OCM challenged this claim. Further, R-CALF USA filed a complaint against this first final audit report. Under this pressure, the first final audit report was withdrawn in July 2013.
When the audit report was not issued in March of 2012, OCM engaged one of Kansas City, MO’s large law firms that assisted OCM with filing a lawsuit against NCBA. NCBA and their Big Ag partners pressured them, causing the law firm to withdraw. OCM then reached out to the Humane Society of the U.S. (HSUS). HSUS agreed to help OCM bring this cloud of contradictions to light by providing the legal services necessary to pursue the FOIA request.
Then on Jan. 31, 2014, OIG issued a corrected final report, some 36 months after the initiation of the audit. This corrected final report withdrew OIG’s conclusions that the NCBA had properly expended all Beef Checkoff Program funds and that the relationship between the Beef Checkoff Program’s Cattlemen’s Beef Board (CBB) and the NCBA complied with U.S. law.
OCM now has reason to believe that the OIG “rebooted” its initial findings that would have exposed vulnerabilities in the checkoff. Further, OCM suspects the evidence will demonstrate that a central finding of an early draft audit report by OIG determined that as much as 25 percent of checkoff funds were “vulnerable to misuse” and that producers lack assurance that the Beef Board could protect those funds.
During OCM’s five-year struggle to get the truth, NCBA has continued to have a stranglehold on the Beef Board’s operating committee, ensuring it receives the lion’s share of our checkoff dollars. This enables NCBA, through paid advertisements and other expenditures, to increase their positive name identity, which they then use when pushing their anti-independent family farm policy, claiming they are the voice of the U.S. cattlemen in spite of the fact they represent less than 4 percent of the U.S. cattle producers. They used this ill-gotten influence to end Country of Origin Labeling (COOL) and stop the new GIPSA rules that would have ended predatory market practices. This is a clear conflict of interest that is prohibited by law.
The truth, OCM’s FOIA complaint is simply an effort to have all pertinent documents released to the U.S. cattle producers, letting the light of day into what has been a very dark secret. — Fred Stokes, OCM Board Member and Checkoff Reform Taskforce Lead