OCM beef checkoff transparency lawsuit moves forward
November 15, 2018
LINCOLN, Neb. — Nov. 14 marked the start of the most critical phase in a four-year legal battle between family farmers and ranchers and the U.S. Department of Agriculture over USDA's refusal to release public audit and financial documents related to Beef Checkoff Program spending.
By law, farmers and ranchers are mandated to pay into the government fund for research, promotion and development of markets for beef, but concerns arose after an audit found gross misuse of the program funds by the government's primary contractor, a beef-industry lobbying group. The lawsuit, filed by the Organization for Competitive Markets in 2014, has begun its summary judgment phase with a court decision expected in early spring 2019 as to whether the audit and financial records must be released to the public.
"We strongly support a transparent Beef Checkoff Program that works for the hardworking family farmers and ranchers who pay into the program. We have a right to know how our government and its contractors are spending our mandatory assessments," declared Fred Stokes, OCM founding member and Mississippi cattle producer.
OCM initially filed a Freedom of Information Act (FOIA) request in 2013 to reveal the activities and spending of the federal Beef Checkoff Program following multiple troubling program audits. A 2010 partial audit of the equivalent of nine days of spending found numerous irregularities, requiring the primary checkoff contractor, the National Cattlemen's Beef Association, to return over $200,000 to the government. These irregularities included improper payment for expenses, including spousal travel, golf tournaments and prohibited lobbying activity. A full government audit of the program that ensued was mired in controversy, as released documents showed agency "heartburn" and fear of "embarrassment" over an audit report that was "reworked," "transformed," and "rebooted."
USDA failed to comply with OCM's FOIA request, so in 2014 OCM filed the ongoing lawsuit to force the USDA to release the government audit documents and financial records. OCM and its members are still waiting for answers. Since 2014, USDA and NCBA have stalled the release of the information in court. In 2017, the U.S. Government Accountability Office issued a report calling out USDA for its lack of transparency and oversight over the Beef Checkoff Program. The same year in the courtroom, USDA turned over more than 12,000 pages of financial and audit documents that had been almost completely blacked-out and redacted. Legislation considered during the 2018 farm bill debate would require regular auditing, full transparency and accountability of all of the commodity checkoff programs.
"With the court ordering that briefing on the merits proceed, USDA and NCBA have run out of delaying tactics that have prevented family farmers and ranchers from having their day in court. The people paying the federally mandated checkoff assessment shouldn't have to spend four years in court to see how the government spends those funds," Stokes said.
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The case has completed the records-production and processing phase and is now in the summary judgement phase. On Nov. 14, USDA and NCBA were required to file opening briefs for summary judgment, in which USDA argued that it had turned over all of the documents it is going to. Unfortunately for America's family farmers and ranchers, that means virtually nothing.
On Jan. 9, 2019, OCM will file opposition to those briefs and a motion to compel USDA to release the records it has withheld. Each party will then get two to three weeks to reply. After the briefing ends in February, the court will decide whether to hold a hearing, and then will issue a decision. Case documents are available on the OCM website.
"With USDA and NCBA's complete lack of transparency they are destroying the integrity of the Beef Checkoff Program. If they have done nothing wrong they should just release the audit and financial expenditure documents," Stokes concluded.
Attorneys for the Humane Society of the United States are providing pro-bono legal representation in this case in furtherance of their work to reform the Beef Checkoff Program. ❖