A court granted the National Cattlemen’s Beef Assn. (NCBA) limited entry into a lawsuit brought by Organization for Competitive Markets (OCM) to obtain audit records of the beef checkoff program.
In April, 2013, OCM filed a Freedom of Information Act (FOIA) with the Office of Inspector General (OIG) at USDA. OCM was seeking all the underlying information from an extensive audit the OIG conducted of CBB operations in 2010. OCM, with Humane Society of the United States’ (HSUS) legal help, filed a lawsuit against USDA's OIG in November, 2014, asking for an injunction to force OIG to process more documents "immediately."
Kendal Frazier, NCBA chief executive officer said, “NCBA requested intervenor status for the purpose of ensuring our business records and private staff information stay out of the hands of HSUS, and we are pleased that the Court recognized our concerns and granted us that status.”
The lawsuit seeks the release of documents related to two OIG audits of the beef checkoff and its contractors, including NCBA. NCBA said both audits found that producer investments in the checkoff are protected by the firewall, which prevents beef checkoff dollars from being used for policy activities. Two OIG full audits and multiple random audits by USDA have found contractors, including NCBA, to be in full compliance with the laws which protect checkoff funds.
OCM said it’s demand for the documents stems from the discrepancies between two audits. The first was a performance review conducted by Clifton Gunderson Accounting Firm (CG), commissioned by the Cattlemen’s Beef Board (CBB). The partial performance review uncovered irregularities in how NCBA was spending Beef Checkoff Program funds, resulting in NCBA having to return to the Cattlemen’s Beef Board (CBB) more than $200,000. These numerous irregularities included improper payment for such things as spousal travel and private loans.
The second audit was initiated by the USDA OIG. In 2011, following the CG performance review, OIG began their audit of USDA’s Agriculture Marketing Services (AMS), the agency whose responsibility is to oversee the checkoff programs. The investigation was completed in December of 2011, and 15 long months later a scant 17-page report was finally released (first “final” audit report).
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.
In part the court’s order stated, “NCBA’s participation in this case is limited to reviewing documents and records for NCBA’s confidential and proprietary business information and objecting to the production of documents and records to OCM exclusively on the basis that those documents and records contain NCBA’s confidential and proprietary business information.”
OCM board member Fred Stokes said the organization is “not seeking proprietary information, but we sure are demanding to see how our checkoff funds have been spent by NCBA, who we feel is responsible for hiding the truth from cattle producers. It’s our money; it’s our right to know.”