Checkoff lawsuit zones in on findings
November 13, 2014
In a lawsuit filed Nov. 12, in the U.S. District Court for the District of Columbia, Organization for Competitive Markets v. Office of Inspector General, the plaintiff alleges that the U.S. Department of Agriculture (USDA) Office of Inspector General (OIG) is unlawfully withholding records regarding the agency's 2011 through 2014 investigation into the USDA-controlled national beef checkoff program.
The OIG investigation followed the 2010 discovery that the National Cattlemen's Beef Association (NCBA) had misappropriated over $216,000 in beef checkoff program funds and all the USDA did at the time was ask that NCBA reimburse the checkoff program for those ill-gotten funds.
R-CALF USA is hopeful the court will order the OIG to release all the records associated with the OIG's multi-year 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," said R-CALF USA CEO Bill Bullard.
The OIG's issuance of a corrected report resulted from a May 9, 2013 complaint that R-CALF USA filed under the 2001 Data Quality Act. The complaint alleged that the OIG's initial report was a "colossal whitewash of monumental proportions," and that it misled Congress and the public because it contained significant "errors, omissions, and falsehoods."
Bullard said the OIG's action of withdrawing its original audit report from the public domain and then reissuing a substantively corrected report is unprecedented.
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"The credibility and integrity of the OIG and USDA are called into question as a result of the OIG's action of making false claims that improperly exonerated USDA and the NCBA for their roles in abusing producer checkoff funds.
"After we filed our complaint under the Data Quality Act, Secretary Vilsack unexplainably defended the original, false report by the OIG stating that he had "full confidence" that OIG's audit report on USDA's oversight of the beef checkoff program was proper.
"Then, and even after the Secretary's confidence in the OIG was proven unwarranted when OIG was forced to re-issue a corrected report, USDA Under Secretary Edward Avalos, nevertheless continued to claim the OIG audit report had exonerated both USDA and NCBA.
"In response to our request that USDA take action to address the abuses within the current beef checkoff program, Under Secretary Avalos stated unequivocally that the OIG had fully addressed all of our concerns and that there is no basis for USDA to take any further action.
"The OCM lawsuit may very well help us to finally get to the bottom of these bizarre circumstances that strongly suggest that both the USDA and the OIG are involved in a serious cover-up designed to preserve the NCBA's primary income stream, which is the tens of millions of dollars it receives each year from the beef checkoff program that is funded by mandatory assessments on independent cattle producers," Bullard concluded.