WASHINGTON, Nov. 13, 2014 – A group called the Organization for Competitive Markets (OCM) has filed a federal lawsuit charging that the USDA’s Office of Inspector General (OIG) is unlawfully holding back records regarding the OIG’s 2011 through 2014 investigation into the national beef checkoff program.
In a news release, the group said the filing on Wednesday follows an 18-month effort to get to the bottom of an audit by the OIG into the national beef checkoff program that began in February 2011. USDA oversees the checkoff, which raises money for research and promotion of beef products through a $1 assessment on each head of cattle sold.
OCM said the audit followed a performance review by the Clifton Gunderson accounting firm commissioned by the Cattlemen’s Beef Board. According to OCM, after examining nine days of activity, the firm found “irregularities” that resulted in the National Cattlemen’s Beef Association (NCBA), the biggest contractor of the checkoff, returning more than $200,000. The irregularities, it said, included improper payment for such things as spousal travel and private loans.
More than two years after beginning its investigation, the OIG issued a 17-page report that OCM said “appeared wholly irreconcilable” with the Clifton Gunderson findings. That report found that the relationship between the Cattlemen’s Beef Promotion and Research Board, whose members are appointed by the Secretary of Agriculture and which oversees collection of the checkoff funds, and other industry-related organizations… complied with legislation.” This “shocking statement” was later removed from the report without explanation, OCM said.
“Unaddressed in the report was the glaring and fundamental conflict of interest created by NCBA having iron-fisted control of the checkoff contract-awarding process and using this control to consistently award more than 90 percent of the contracts to itself,” OCM said in the release.
In an initial response to a Freedom of Information Act (FOIA) request by OCM, OIG acknowledged it had located more than 10,000 pages of information. “Yet, after 18 months and multiple demands, OCM has received less than 1,000 relatively innocuous, heavily redacted pages from OIG, and with no final determination in sight,” the group said.
“OIG’s stonewalling on the release of the documents leads one to suspect an outright cover-up,” Fred Stokes, an OCM board member, said in a telephone interview. “OCM is confident the records we have requested will clearly demonstrate that NCBA has played fast and loose with U.S. cattlemen’s money.”
The OIG’s office and the NCBA, responding separately, said they had no comment on the OCM lawsuit.
Attorneys for the Humane Society of the United States (HSUS) filed the OCM complaint in the U.S. District Court for the District of Columbia. OCM said HSUS attorneys are providing representation in furtherance of their work to reform the Beef Checkoff on behalf of organizations like OCM and “to prevent misuses of the program for activities detrimental to animal welfare.”
Based in Lincoln, Nebraska, the Organization for Competitive Markets describes itself on its website as a national, non-profit public policy research organization that “believes we must work together, across all commodities, toward the common purpose of returning its food and agricultural sector to true supply-demand based competition.”
The organization often allies itself on issues with R-CALF USA, which mainly represents smaller cow-calf operations and feedlots and opposes NCBA on many issues, including country-of-origin labeling, which it supports.
In a separate news release, R-CALF said it hopes the court will order the OIG to release all the records associated with the OIG's investigation.
“Those secret records are particularly important because the OIG officially withdrew its original report that erroneously concluded that the USDA and the NCBA were operating the beef checkoff program in accordance with the law and that checkoff funds were being properly spent. The OIG later re-issued its report and stated that the facts uncovered during its investigation did not support its original conclusions," R-CALF CEO Bill Bullard said in the release.
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