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Court finds for USA Rice

On Jan. 12, the Circuit Court of Pulaski County in Arkansas agreed with the Virginia-based USA Rice Federation (USARF) and USA Rice Council that the organizations are exempt from the Arkansas Freedom of Information Act. The ruling was made after the Arkansas Rice Growers Association (ARGA) filed suit last year claiming FOIA requests regarding the disclosure of a range of USARF financial expenditures had gone unmet since 2002.

“The judge was fairly clear and succinct when he said that under the Arkansas statute, state entities — state government entities of Arkansas — are subject to action under the act but not entities that aren’t state organizations such as USA Rice and the (USA Rice) Council,” says Bob Cummings, USARF senior vice president. “From our view, it was pretty cut-and-dry because back in November of 2007 the Arkansas Supreme Court said the same. That’s what the judge based (the current) decision on.”

In a press release, Jamie Warshaw, USARF chairman said, “This is the not the first time ARGA has initiated frivolous legal action against USA Rice and they need to stop wasting rice industry resources. The staff time and money spent responding to these unfounded accusations would be better spent on work to help the rice industry.”

John Alter, a participant in the FOIA requests who sits on the Arkansas Rice Research and Promotion Board (ARRPB), says ARGA is only seeking a full accounting for the portion of the USARF “funding that comes from Arkansas.”

Despite being commonly referred to as check-off funds, the $2 million-plus the USARF receives annually from Arkansas “is a tax, not a check-off,” claims Greg Yielding, executive director of ARGA. An opinion from the Arkansas Department of Finance and Administration last August backs up this assertion and, citing law decided by the Arkansas Supreme Court, states money being collected under the Rice Research and Promotion Act “constitutes a ‘state tax.’”

When arguing his points, Alter puts much stock in the tax designation and says that makes “broad brush” audits even more unacceptable. “When you’re spending tax money, it’s your obligation to be totally transparent. That isn’t the case here. … In these economic conditions, accountability is even more important.”

Cummings says it is “noteworthy” that in “attempts to avoid the lawsuit trail or having to go to court, we provided probably 2,300 pages worth of documents to (ARGA), saying, ‘Look, here are the things we normally provide to the Arkansas Rice Research and Promotion Board about how we’re stewards of the promotion money which is sent to us by the board. So, here are all the documents.’”

The FOIA requests, says Cummings, were “extremely broad … covering many, many documents. That would have required us to spend, in our view, an inordinate amount of time in order to comply with everything being asked for. It was a very scattershot approach in requesting documents.”

While admitting USARF has turned over several thousand pages of documents, Yielding says few relate to the FOIA requests. “We’ve actually been sent floor plans of hotels where (USARF) personnel held meetings. But we don’t know how much money they spent there and on what.”

Asked the USARF’s position on releasing information on where funds are spent, Cummings said both Arkansas members and the Rice Research and Promotion Board “receive, for example, a copy of our audited financial statement by outside auditors. We provide information on a regular basis to our members and the research and promotion board on the activities we’ve undertaken to promote, in this case, Arkansas rice both domestically and internationally through our … promotion programs. That material is presented during briefings we undertake throughout the year.”

Annual meetings — like the one held in late January in Brinkley, Ark. — are also an avenue to “provide information to the membership. … Our business meeting is in July and we have another set of business meetings at the Rice Outlook Conference in December (the latest held in Little Rock). Depending on the program any given year, there’s always a presentation on promotion. It may be larger or smaller depending on the program, but it’s always available. So, I think we’ve got a pretty robust and scheduled system of letting the membership know how we’re spending the money we receive.”

ARGA says it will appeal the recent ruling.


TAGS: Rice
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