More money, less accountability

More money, less accountability
By: Alan Guebert

First printed in Farm and Food File for the week beginning Sunday, Jan. 22, 2017.  Reprinted with permission of the author.

On Jan. 5, Harvest Public Media reported that “a federal investigation has been launched into the alleged embezzlement of $2.6 million by an employee” of the Oklahoma Beef Council.

According to the report, the state’s beef checkoff-collecting group had been unaware that “its former accounting and compliance manager” allegedly “started forging checks in the group’s name” beginning in 2009.

Remarkably, the undetected check writing continued through 2014 when the same person “allegedly embezzled $316,231, nearly 9 percent of the state beef council’s annual income,” and then for two more years, into 2016, when “the compliance manager allegedly forged 131 checks totaling $557,789.”

How does a dime or more out of every checkoff dollar collected by a state’s beef council go missing for more than seven years without anyone at any level even noticing?

Easy, explained Tom Fanning, chairman of the Oklahoma Beef Council, the council had “a staff member that did not share [its] vision.”

Vision?

If so, then it’s more accurate to say that the “staff member” mentioned by the boss was, in fact, the only person at the council who actually had a clear view of where millions in Oklahoma checkoff dollars went for many, now-embarrassing years.

Certainly, no one on the state beef council or the national checkoff’s Cattlemen’s Beef Board (CBB) knew. The same goes for anyone at the Agricultural Marketing Service, the U.S. Department of Agriculture’s (USDA) checkoff administrators who often offer long assurances on the steadfast integrity of federal commodity checkoffs—albeit usually after Oklahoma-like scandals.

Worse, there’s strong evidence that they still don’t know. It’s posted on the Oklahoma Beef Council’s website under “Industry Information” and a subsequent drop-down tab titled “Audit.” (All links are posted at www.farmandfoodfile.com.)

The “Audit” tab pulls up a 15-minute video from a 2012 meeting that shows two high-ranking CBB officials, Chief Executive Officer Polly Ruhland and Chief Financial Officer Katherine Ayers, explaining how the beef checkoff monitors “expenditures of all the dollars.”

The meeting was held shortly after another checkoff scandal rocked the CBB and the National Cattlemen’s Beef Association, the CBB’s largest contractor. That scandal, reported the New York Times, found “…tens of thousands of expenditures”—about $215,000 —“that were either improperly charged to the marketing fund or lacked adequate documentation” under USDA rules.

It was pure coincidence that as Ruhland and Ayers were explaining to CBB directors “how your staff works to fulfill oversight everyday” back in 2012, that someone at the Oklahoma Beef Council was writing unauthorized checks totaling $328,132 that no one, including Ruhland and Ayers, would miss for another four years.

It cannot be coincidence, however, that weeks after the Oklahoma checkoff acknowledged a missing $2.6 million in checkoff money, the group’s website still sports a years-old video on diligent “oversight.”

It will get worse.

Presently, at least 14 states now collect a second, in-state-only beef checkoff—usually an extra 50-cents or $1 per head—in addition to the mandatory, non-refundable $1-per-head federal checkoff.

More checkoff money without improvements in oversight means more opportunities for more people to help themselves more often.

USDA could patch the many holes in the checkoff fence. Don’t count on it anytime soon, however, because it’s busy with an ongoing court fight over the Organization for Competitive Markets’ request for public documents used in the department’s controversial 2013 report that downplayed NCBA’s repayment of “improperly charged” checkoff money.

USDA is also busy with a court challenge over its even more controversial decision to approve the pork checkoff’s 2006 purchase of the unused “Pork. The Other White Meat” motto from the National Pork Producers Council for a staggering $60 million.  (On Jan. 9, USDA asked the court to dismiss the suit.)

Little wonder, then, that much-needed checkoff reform and obvious improvements in accountability are delayed: USDA is too busy explaining past checkoff scandals to address reforms farmers and ranchers need to head off future scandals.

As such, it’s just a matter of time before the next one and the one after that and …

© 2017 ag comm