Top 10 Most Egregious Checkoff Program Abuses

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A bipartisan amendment to the House version of the Farm Bill has been filed to reform the commodity checkoff programs. The Brat-Blumenauer Amendment No. 71 establishes restrictions and requirements for checkoff programs to ensure transparency and accountability. Checkoff programs may not engage in any act that may involve a conflict of interest, anti-competitive activity, unfair or deceptive act or practice, or act that may be disparaging to, or in any way negatively portray, another agricultural commodity or product. It also provides that any entity that lobbies may not be a contractor or recipient of checkoff funds.

The amendment follows growing concern over checkoff program spending. In November 2017, the U.S. Government Accountability Office called on USDA to increase oversight of all 22 of the checkoff programs. It found that USDA does not routinely review checkoff program subcontracts, impairing its ability to spot when funds are being misused. Further, GAO found that USDA does not ensure that certain documents, such as budget summaries and evaluations of effectiveness, are shared with stakeholders on program websites. According to GAO, USDA agreed with these findings.

A History of Injustice

Below are the 10 most egregious abuses of the checkoff programs, compiled by the Organization for Competitive Markets:

  1. In 1999, the Office of Inspector General (OIG) found that USDA had “relinquished too much authority to its primary contractor, the National Pork Producers Council (NPPC), and has placed the NPPC in a position to exert undue influence over Board budgets and grant proposals.” https://www.usda.gov/oig/webdocs/018011kc.pdf
  2. In 2000, the majority of American hog producers passed a referendum to end the pork checkoff, only to have USDA overturn their decision. http://www.hpj.com/archives/hog-farmers-criticize-veneman-for-not-terminating-checkoff/article_3c8c6451-5341-55b7-9c70-974e3d5435d9.html
  3. In 2010, an independent audit of the equivalent of just nine days of beef checkoff program spending found more than $200,000 in improper spending by the primary beef checkoff contractor, the National Cattlemen’s Beef Association (NCBA), including the use of checkoff dollars for lobbying and overseas vacations. https://competitivemarkets.com/wp-content/uploads/2016/10/Cattlemens-Beef-Board-CGAUP-Final-1.pdf
  4. In 2014, after waiting more than 18 months to receive Freedom of Information Act records from USDA on expenditures of the Beef Checkoff Program, the Organization for Competitive Markets was forced to file a lawsuit to obtain public records relating to Beef Checkoff audit reports. NCBA has entered the case blocking the release of over 12,000 documents. This case has been ongoing for four years. http://www.starherald.com/farm_ranch/usda-claims-confidentiality-for-pages-of-federal-checkoff-spending-records/article_c413d93f-8dd3-5e26-92dc-c0335f1226e2.html
  5. In 2015, documents obtained under a Freedom of Information Act request showed that the American Egg Board illegally used checkoff dollars to attempt to halt sales of an egg-free mayonnaise product. https://www.lee.senate.gov/public/index.cfm/issue-in-focus?ID=D9212876-FC43-4536-B60D-469612FFDE92
  6. In 2016, it was discovered that the Oklahoma Beef Council lost 2.6 million checkoff dollars to embezzlement by a staff member who wrote 790 fraudulent checks to herself during a 10-year period. https://www.usnews.com/news/best-states/oklahoma/articles/2017-05-10/former-oklahoma-beef-council-accountant-charged-with-fraud
  7. In 2017, USDA came under fire for failing for more than four years to publish legally required annual financial reports on the $400 million per year dairy checkoff. http://www.capitalpress.com/article/20171002/ARTICLE/171009995
  8. In 2018, the Ohio Beef Council illegally used government property to promote a fundraiser for a gubernatorial campaign on behalf of the trade and lobbying group, Ohio Cattlemen’s Association. According to the Ohio Cattlemen’s Association’s brochure, the Ohio Beef Council is also actively engaged in soliciting campaign contributions on behalf of the Ohio Cattlemen’s Association’s Political Action Committee (PAC) through the state agency’s email domain. https://competitivemarkets.com/farm-tax-dollars-used-illegally-to-influence-ohios-governor-race/
  9. In 2018, a federal judge ruled that the USDA unlawfully approved spending $60 million of hog farmers’ checkoff money on a defunct promotional campaign. http://www.capitalpress.com/Livestock/20180206/ruling-halts-other-white-meat-pork-payments
  10. According to the NCBA’s 2015 IRS Form 990, beef checkoff funds make up approximately 73% of the lobbying group’s total annual budget. As much as 72% of the NCBA president’s nearly half a million dollar salary comes from beef checkoff funds. NCBA membership accounts for less than 4% of cattle producers. http://morural.org/where-did-it-all-go-lee-pitts-from-the-livestock-market-digest, https://competitivemarkets.com/western-ag-reporter-dave-wright-says-al-capone-would-applaud-ncbas-schemes/

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