Oklahoma Beef Council missing $2.6 million paid by farmers, ranchers | TSLN.com

Oklahoma Beef Council missing $2.6 million paid by farmers, ranchers

Peggy Lowe and Joe Wertz
Harvest Public Media
A ranch foreman unloads a trailer of Red Angus to winter in a pasture near Alva, Okla. Courtesy photo

A federal investigation has been launched into the alleged embezzlement of $2.6 million by an employee of an obscure state board that promotes the beef industry, money created by a mandatory government program funded by farmers and ranchers.

No criminal charges have been filed, but the nonprofit Oklahoma Beef Council in October 2016 filed a civil lawsuit seeking the recovery of money it says was obtained by its former accounting and compliance manager, identified in court records as Melissa Morton.

The former compliance manager allegedly forged checks dating back to 2009, an independent audit obtained by Harvest Public Media reveals. Through her attorneys, Morton declined to comment.

The Oklahoma Beef Council said in a news release, “When initial evidence was discovered, we notified appropriate officials of our intent to launch an internal investigation as soon as inconsistencies were noted. We immediately terminated the employee and hired an accounting firm to perform an extensive forensic analysis and assessment, which documented $2.6 million in employee theft between 2009-2016. The Oklahoma Beef Council provided this information to Federal authorities in September. Our goal throughout this process has been to speed recovery and restitution to the greatest extent possible. The board of directors and staff have cooperated fully with Federal authorities as the investigation has moved forward.”

“We look at it as a federal tax on cattle. The government has almost no oversight over this money and this is exactly what happens,” he said. “Somebody can embezzle $2.6 million of cattlemen’s money.”Dudley Butler, representing R-CALF

The Oklahoma Beef Council is one of 43 state boards that make up the Cattlemen’s Beef Promotion and Research Board, an organization funded by a $1-per-head “check-off” paid by farmers and ranchers each time they sell an animal. While few consumers know of the group’s existence, their “Beef, It’s What’s For Dinner” ad campaign was popular for years.

“We look at it as a federal tax on cattle,” said Dudley Butler, a former USDA official who now represents a group of producers fighting the check-off called Ranchers-Cattlemen Action Legal Fund, or R-CALF. “The government has almost no oversight over this money and this is exactly what happens,” he said. “Somebody can embezzle $2.6 million of cattlemen’s money.”

Discovered in July 2016, according to the audit, the Oklahoma Beef Council kept the embezzlement under wraps until an inquiry by Harvest Public Media and StateImpact Oklahoma. The council’s board then confirmed “possible criminal activity” in a statement released in September, though it offered no specifics.

The U.S. Attorney’s office in Oklahoma City confirmed an investigation last week, but refused to give any more details.

On Jan. 5, after Harvest Public Media and StateImpact Oklahoma presented the audit to Heather Buckmaster, the Oklahoma Beef Council’s executive director, she confirmed that it is “a critical piece in an on-going federal criminal investigation.”

Tom Fanning, chairman of the Oklahoma Beef Council, said in a statement that the board and staff have cooperated with federal investigators since September.

“Our board and staff take great pride in serving beef producers in investing their beef checkoff dollars to grow and protect beef demand,” he said. “Discovering you have a staff member that did not share that vision and abused our trust has been a devastating blow to all of us.”

The Oklahoma Beef Council said it has taken the findings from the forensic analysis and assessment to strengthen their accounting systems and internal controls to ensure the integrity of the organization. They have moved forward in their operations with a third-party accounting firm to ensure an additional level of oversight and a greater level of segregation of duties. The beef council will be adding a new position to our team, Director of Compliance, to assist with checkoff compliance and outreach.

“We have taken what we have learned from this situation to create a stronger organization with a clear vision to moving forward in our mission of serving Oklahoma’s farming and ranching families,” says Oklahoma Beef Council president Tom Fanning.

Little oversight

As Harvest Public Media reported in 2015, some farmers and ranchers are upset that the national beef board takes in roughly $80 million a year with little oversight by the U.S. Department of Agriculture. Some producers are also angry that while the beef board is supposed to increase demand for the product, it doesn’t specifically promote U.S. beef.

The law that mandates the $1-a-head charge was created by the 1985 Farm Bill. State groups collect the money, keep half of it, and send the rest on to the national beef board, which is based in Colorado. F

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