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Callicrate withdraws checkoff lawsuit

Lawsuit against Vilsack regarding use of beef checkoff funds on hold after OIG audit finds checkoff administered properly.

Kansas cattle feeder Mike Callicrate has temporarily withdrawn his lawsuit against Agriculture Secretary Tom Vilsack and other parties.

The suit, filed with assistance from The Humane Society of the United States (HSUS), charged that the Cattlemen's Beef Board had channeled beef checkoff funds to the National Cattlemen's Beef Assn. (NCBA) that the association was using for government affairs efforts to influence government policy.

However, the U.S. Department of Agriculture's Office of the Inspector General (OIG), in an audit of the beef checkoff program, concluded that there were no such violations (Feedstuffs, April 8).

Callicrate, who filed his suit last year (Feedstuffs, Oct. 29, 2012), requested the withdrawal subsequent to the OIG findings.

Callicrate, who also is president of the Organization for Competitive Markets (OCM), said OCM has submitted a request under the Freedom of Information Act for OIG records related to the audit. He said his suit will be held in abeyance while OCM assesses the OIG audit and awaits OIG's response to the records request.

Callicrate's suit was based on an incident in 2010 when the Beef Board commissioned a regular review of the board's contractors' accounting for and use of checkoff funds. The review found that NCBA had made some errors in its accounting and had misspent some funds (Feedstuffs, Aug. 2, 2010).

NCBA, the board's primary contractor, and the board subsequently developed corrective practices that included decisions by NCBA to hire a compliance officer to manage and oversee its use of checkoff funds and to reimburse the board for certain billed checkoff expenses (Feedstuffs, Aug. 8, 2011).

Nevertheless, Callicrate said NCBA has consistently misused checkoff funds to advance its "political interests" rather than to develop programs to build beef demand and stabilize the beef industry. He sought a court ruling that would order the Beef Board to suspend all contracting with NCBA.

HSUS attorneys helped write the lawsuit based on the board's 2010 review.

The Beef Board manages the checkoff program, which collects $1 in all cattle selling transactions to fund beef advertising and promotion, consumer information, industry research and producer education. The program was created by Congress in the 1985 farm bill, and by law, checkoff funds cannot be used for public affairs and policy activities.

USDA oversees the Beef Board and 19 other boards that manage commodity checkoff programs. OIG's audit was part of a complete review of all of those programs.

Callicrate's cattle feeding operations are near St. Francis, Kan. He also owns Ranch Foods Direct, a beef processing and retail business in Colorado Springs, Colo.
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