February 8, 2011
Evidence Suggests Corruption Runs Deep in Beef Checkoff Program
Washington, D.C. – In a letter sent last week to the U.S. Department of Justice (Justice), the U.S. Department of Agriculture (USDA), USDA's Office of Inspector General (OIG), and the Cattlemen's Beef Board (CBB), R-CALF USA asserts that the National Cattlemen's Beef Association (NCBA) has long been improperly spending Beef Checkoff (Checkoff) funds to subsidize activities designed to influence governmental actions and policies, which are prohibited activities under the Beef Promotion and Research Act of 1985 (Checkoff Act).
NCBA – by its own admission – has routinely billed the Checkoff an unbelievable one-half of NCBA's officer travel, yet the laws governing the Checkoff make it clear that Checkoff funds are never to be used to influence governmental actions and policies related to the U.S. cattle industry.
"…This is preposterous as NCBA officers are the spokespeople for NCBA, and they have led NCBA's vehement opposition to some of the most critical and pivotal policy initiatives ever to face U.S. cattle producers – initiatives that we believe were supported by the preponderance of Checkoff-paying cattle producers," the letter states. "Allowing NCBA officers, with a fiduciary duty to advance the policy interests of their members, to subsidize their expenses through the Checkoff fundamentally violates conflict of interest principles that the government is obligated to prevent. To make matters worse, anecdotal evidence indicates that upwards of 60 percent to 70 percent of NCBA's overhead is paid with Checkoff dollars."
R-CALF USA is again calling for a thorough and probing investigation, going back at least 10 years, into NCBA's long history of Checkoff violations. R-CALF USA has furnished investigators with documents that list dates and locations of NCBA's policy activities that should not have been subsidized with Checkoff funds.
"Many of these dates and locations, beginning in 2002, were events where R-CALF USA publicly debated NCBA officers on policy related issues," said R-CALF USA CEO Bill Bullard. "We want investigators to determine if R-CALF USA members not only paid to have their voices represented by R-CALF USA at these events, but also, if they were unlawfully forced to pay half of NCBA 's officer travel so NCBA could fight against their interests through the wrongful use of R-CALF USA members' Checkoff contributions."
R-CALF USA asked investigators to determine if NCBA used Checkoff funds to participate in any of the following activities and events so they can determine the extent to which NCBA used Checkoff funds to promote its policy positions in violation of the Checkoff Act:
March 2002: NCBA commissions Sparks Co. Inc. to create a report titled "Potential Impacts of the Proposed Ban on Packer Ownership and Feeding of Livestock.
July 2002: NCBA President Eric Davis and R-CALF USA testify before the U.S. Senate Ag Committee about packer ownership of livestock and enforcement of the Packers and Stockyards Act.
November 2003: NCBA's Jay Truitt participates in a COOL summit in Denver, hosted by R-CALF USA.
February 2004: NCBA CEO Terry Stokes and R-CALF USA CEO Bill Bullard debate industry policies in La Junta, Colo.
April 2004: NCBA hires law firm, threatens to sue R-CALF USA for distributing video of the La Junta, Colo., debate between the two organizations.
April 2005: NCBA hires law firm to file an amicus brief on behalf of NCBA and 29 of its state affiliates in the lawsuit between R-CALF USA and USDA regarding USDA's administrative rule on mad cow disease.
September 2005: NCBA and R-CALF USA debate industry policies at the Clay County (Iowa) Fair Beef Industry Forum.
October 2005: NCBA and R-CALF USA debate industry policies at the Empire Farm Show in Seneca Falls, N.Y.; and, NCBA and R-CALF USA debate industry policies in Goliad, Texas.
November 2005: NCBA and R-CALF USA debate industry policies at the Wisconsin Livestock Industry Forum.
January 2006: NCBA and R-CALF USA debate industry policies at the Montana Winter Fair.
August 2008: NCBA attends Livestock Industry Country-of-Origin Labeling Implementation Meeting in Kansas City, Mo.
November 2009: NCBA participates in the Cattle Industry Animal Identification Roundtable Discussion in Kansas City, Mo.
March 2010: NCBA participates in the first competition workshop jointly sponsored by Justice and USDA.
July 2010: In Washington, D.C., NCBA participates in a congressional staff briefing session to oppose proposed livestock competition reforms.
August 2010: In Fort Collins, Colo., NCBA participates in rally to generate opposition to proposed livestock competition reforms and then participates in the competition workshop hosted by USDA and Justice.
November 2010: NCBA participates in a forum wherein NCBA provided a presentation in opposition to proposed livestock competition reforms.
December 2010: NCBA participates in the final competition workshop sponsored by USDA and Justice.
In addition to the CBB's finding that NCBA misappropriated nearly $217,000 in producer Checkoff dollars, R-CALF USA states that evidence abounds regarding NCBA's and its affiliated state organizations' strategic and unlawful use of their control over the Checkoff to exclusively influence governmental action to advance their policy positions. For example: in the July 2, 2010, issue of the Ag Journal*, the Colorado Cattlemen's Association (a state affiliate of NCBA) uses the Checkoff logo to legitimize the organization's fierce opposition to the GIPSA rule.
And, another example of flagrant disregard for the law and the incestuous conflicts of interest within the Checkoff can be found on the CBB Web site, at http://www.beefboard.org/library/cbb-publications.asp, which contains a document titled "Beef Industry Long Range Plan" and is touted by the CBB as the document that "guides program spending decisions."
"Yet, contrary to the Checkoff's clear and unambiguous prohibition against using any Checkoff funds in any manner for the purpose of influencing governmental action or policy, with the single exception of recommending amendments to the Order, this 'Long Range Plan' is replete with policy initiatives," said Bullard. "The conflicts of interest and other unlawful practices are so pervasive as to render the Checkoff as little more than a government-funded means of advancing NCBA's policy positions, helping to sustain NCBA and its affiliate organizations.
"Regardless of the positions of cattle producers on eliminating estate taxes, supporting a national animal identification system, or engaging in critical policy areas such as trade and cattle marketing, these initiatives developed by and distributed by the CBB are prohibited under the Checkoff," he pointed out. "It is no comfort to Checkoff-paying cattle producers that these initiatives were developed by representatives from McDonalds, Cargill Meat Solutions, Outback Steakhouse and Five Rivers Ranch Cattle Feeding.
"Indeed, these initiatives have provided NCBA the foundational arguments to aggressively oppose the GIPSA rule (e.g., by calling for limiting government involvement in business decisions), and the CBB is directly and inexplicably supporting this unlawful activity," Bullard concluded. "We, again, implore USDA and its OIG, as well as the Justice Department to take decisive action to stop the ongoing Beef Checkoff charade by immediately suspending the NCBA's contract with the CBB pending the completion of a thorough and probing investigation into all aspects of the Beef Checkoff."
:lol:
