A court decision is expected in early spring 2019 as to whether an audit of the Beef Checkoff Program and its financial records must be released to the public.

"We strongly support a transparent Beef Checkoff Program that works for the hardworking family farmers and ranchers who pay into the program. We have a right to know how our government and its contractors are spending our mandatory assessments,” said Fred Stokes, Organization for Competitive Markets founding member and Mississippi cattle producer.

"The announcement that R-CALF will be allowed to expand its activist-funded crusade against state beef councils is a disappointment to countless beef producers and NCBA members across America," NCBA said in a media statement. "The phony allegations being perpetuated by R-CALF and its activist legal partners are without merit and only serve to divide beef producers and distract beef councils from the important work of building demand for our products."

By law, farmers and ranchers are mandated to pay into the government fund for research, promotion, and development of markets for beef.

Timeline

The Organization for Competitive Markets initially filed a Freedom of Information Act request in 2013 to reveal the activities and spending of the federal Beef Checkoff Program following multiple troubling program audits. A 2010 partial audit of the equivalent of nine days of spending found numerous irregularities, requiring the primary checkoff contractor, the National Cattlemen’s Beef Association, to return over $200,000 to the government. These irregularities included improper payment for expenses, including spousal travel, golf tournaments, and prohibited lobbying activity. A full government audit of the program that ensued was mired in controversy, as released documents showed agency “heartburn” and fear of “embarrassment” over an audit report that was “reworked,” “transformed,” and “rebooted.”

"The simple fact is that regular audits of the beef checkoff and NCBA have found both to be compliant with the laws governing the checkoff. Two audits conducted by USDA’s Office of the Inspector General have also come back clean. R-CALF’s accusations to the contrary are false,” said Kendal Frazier, NCBA Chief Executive Officer. "R-CALF has become nothing more than a front group for activists seeking to divide the industry, lessen beef demand and drive producers out of business."

Still waiting

USDA failed to comply with OCM’s FOIA request, so in 2014 OCM filed the ongoing lawsuit to force the USDA to release the government audit documents and financial records. OCM and its members are still waiting for answers. Since 2014, USDA and NCBA have stalled the release of the information in court. In 2017, the U.S. Government Accountability Office issued a report calling out USDA for its lack of transparency and oversight over the Beef Checkoff Program. The same year in the courtroom, USDA turned over more than 12,000 pages of financial and audit documents that had been almost completely blacked-out and redacted. Legislation considered during the 2018 Farm Bill debate would require regular auditing, full transparency, and accountability of all of the commodity checkoff programs. 

"With the court ordering that briefing on the merits proceed, USDA and NCBA have run out of delaying tactics that have prevented family farmers and ranchers from having their day in court. The people paying the federally mandated checkoff assessment shouldn't have to spend four years in court to see how the government spends those funds,” Stokes said.

"It has been repeatedly demonstrated that these attacks by R-CALF are being aided by allies at the Humane Society of the United States, Food and Water Watch, Public Justice and other activist organizations that stand against cattlemen and women," NCBA said.

Attorneys for the Humane Society of the United States are providing pro-bono legal representation in this case in furtherance of their work to reform the Beef Checkoff Program.

“It’s unfortunate that R-CALF has chosen to become a puppet in the war being waged by animal rights activists and the vegetarians seeking to drive beef producers out of business. Let’s be clear, though, the groups aligning with R-CALF are choosing a future with shrinking beef demand, less opportunity and more government involvement,” said Frazier. “That’s not the future NCBA members choose, so we will defend the beef checkoff and cattle producers against these attacks."

Where does the case stand?

The case has completed the records-production and processing phase and is now in the summary judgement phase. On Nov. 15, USDA and NCBA were required to file opening briefs for summary judgment, in which USDA argued that it had turned over all of the documents it is going to. On Jan. 9, 2019, OCM will file opposition to those briefs and a motion to compel USDA to release the records it has withheld. Each party will then get two to three weeks to reply. After the briefing ends in February, the court will decide whether to hold a hearing, and then will issue a decision. Case documents are available on the OCM website. 

"With USDA and NCBA’s complete lack of transparency they are destroying the integrity of the Beef Checkoff Program. If they have done nothing wrong they should just release the audit and financial expenditure documents,” Stokes said.

"NCBA is firm in its commitment to defend both the checkoff and state beef councils against outside attacks," NCBA said. "The volunteer cattlemen and cattlewomen who serve on state beef council boards are committed to improving the beef business and demand for our products and they do not deserve the attacks being leveled by these activist groups."

Source: Organization for Competitive Markets, NCBA