Where Did It All Go?

– by Lee Pitts, Livestock Market Digest

Sometimes you have to really dig to find a story. And then sometimes it finds you.

In the past few weeks I’ve received several phone calls from people associated with the beef checkoff. This alone is a minor miracle because I haven’t exactly been on speaking terms with these folks. Suffice it to say, I’m not on the Christmas card list of the NCBA or the Beef Board.

At first I was skeptical. The callers, fearing retribution, did not want their names used but insisted their information was accurate. Were they setting me up by feeding me incorrect information? So I checked out the sources and the information they gave me as much as I could, after all, getting any information out of the NCBA usually involves the Freedom of Information Act. I found that the callers all had something NCBA execs don’t have… a conscience.

The Right to Know

Believe me, I really did not want to wade into the checkoff mess again as it has only brought me grief and an enemy’s list a mile long. I’ve learned the hard way that you can’t criticize anything about the beef checkoff. That would be heresy!  Un-American!  It’s like criticizing mom and apple pie, only when it comes to the checkoff, mom is a street-walking harlot willing to do anything for money, and the apple pie is made with horse apples.

Still, I thought you had a right to know how your money is being spent.

Just to make sure I have your attention let’s start with a big bombshell. Prior to the phone calls, the last info I was privy to about the salary of NCBA’s CEO, Forrest Roberts, was from his 2013 federal tax forms when he was paid $428,319. That’s extravagant enough but according to a Cattleman’s Beef Board big wig who called me, Mr. Roberts is now allegedly making $550,000 per year! But that’s not the biggest insult. I wouldn’t have a problem if Mr. Roberts was being paid with NCBA dues money, that’s their money and let them spend it how they want. But according to my source, 72% of Robert’s salary is paid by the beef checkoff because that’s how much time the NCBA says he spends on checkoff matters. 72%! The NCBA sure couldn’t pay that kind of a salary if they had to live off dues, now could they? One of the reasons they stole the checkoff money to begin with 30 years ago was they were slowly going broke.

Keep in mind that the NCBA is a lobbying organization and checkoff money is not supposed to be spent on lobbying because the checkoff is a government program. It is supposedly illegal for Congresspersons to levy a tax which will then be funneled back to those same Congresspersons in the form of campaign contributions. Anywhere but Washington D.C., this is known as a bribe.

Mr. Roberts is not the only one with his hand deeply into the checkoff cookie jar. According to one source, there are at least ten people working for the checkoff who are making more than $290,000 per year! NCBA paid out $13 million in yearly salaries and 82% of NCBA’s budget comes from your checkoff dollars.

Speaking With One Voice

Everyone who called me said that the beef checkoff is “staff driven” to the point that when an NCBA President or other emissary gives a speech, you are not hearing independent thoughts but a speech written by staff. And the speakers are not to deviate from the prepared remarks. One CBB caller told me he once strayed from the staff written speech and was called on the carpet for it. I suppose this is what they mean when they say, “Speaking with one voice.”

I was often frustrated by NCBA’s refusal to even discuss the use of beta agonists and hormones, until I read Forrest Robert’s resume. For the 16 years prior to hitting the jackpot and being named NCBA’s CEO, “Roberts held several marketing and sales positions in two animal health companies,” says his resume on NCBA’s web site. “He started with Upjohn Animal Health in 1992 and remained with the company through two mergers with Pharmacia Animal Health and later Pfizer Animal Health. In 2004 he left Pfizer to join Elanco Animal Health, where he served as the marketing manager for Elanco’s Beef Business Unit.”

Gee, do you think he might be a bit prejudiced when it comes to antibiotics, hormones, and natural versus chemically produced beef?

The reason I got those tell-all phone calls was because the NCBA/CBB is in the process of raising the checkoff to two dollars. Three dollars in some cases. Several states had votes asking their members if they wanted to raise the checkoff to two dollars per head. In some states, like Texas, it passed, while in others, like California, it did not. The only way the state beef councils had any hope of getting a “yes” vote was to promise that 100% of the new dollar would be kept in-state and out of NCBA’s greedy hands. I was informed this is nonsense. It might not come in through the front door, but all the NCBA/CBB has to do is raise the cost of its board seats (that’s right, you have to buy them) and the new checkoff dollars will flow to NCBA’s coffers.

A Big Waste of Time

For over three years a dozen groups have been working to improve the checkoff through the Beef Checkoff Enhancement Working Group. Recently that group came to a Memorandum of Understanding to ask Congress for another dollar per head. But like making sausage or legislation, it wasn’t a pretty thing to watch. The National Farmers Union dropped out calling it a “big waste of time.” NFU President Roger Johnson said, “The meetings were a bridge to nowhere, because they were largely controlled by the organization that has a vested interest in making sure the current structure never changes.” That would be the NCBA.

The checkoff working group agreed to a Memorandum of Understanding asking for another buck and promises there will be a referendum. And you can ask for a refund, but only on the second dollar. I can only imagine how difficult they will make it to get your money back. As for the referendum on the second dollar, I’ll believe it when I see it.

We’ve already seen how that process works when the LMA gathered what they thought were the necessary signatures for a referendum only to have a chunk of those signatures declared invalid. With the checkoff, things have a way of changing from the agreed upon deal. It reminds me of how the government broke treaties with American Indians, only this time it’s the cowboys getting deceived instead of the Indians. For example, when they wanted you to approve the initial checkoff they said it was a producer controlled program but when they went to the Supreme Court the only way the NCBA could save it was by saying it was a government program. And who would have ever thought an organization that did not even exist when the original checkoff finally passed (after three tries) that in the future a new group calling itself the NCBA would be getting 97% of the contracts!

A Bridge to Nowhere

My Beef Board source said that early in the process there was a deal on the table in which the groups would sign off on the Memorandum of Understanding asking for the extra dollar per head checkoff if the NCBA would give up its stranglehold on the process whereby the NCBA controls the Federation of State Beef Councils and the awarding of contracts.

The NCBA was allegedly not willing to sign off on such a deal. The NCBA keeps telling everyone how much the beef industry needs the extra dollar yet they were not willing to give up any of their power in exchange for the extra buck. In other words, the NCBA put their own well-being ahead of beef promotion and the beef producers who are largely paying NCBA’s way.

NFU’s Johnson says the “NCBA regards the checkoff as its own personal financial trough and will do everything possible to cement that status into eternity.” That’s why the NFU left the working group and why the U.S. Cattlemen’s Association refused to sign the MOU.

PIGS

After the MOU was signed The Federation of State Beef Councils recommended to Congress that there be an increase in the checkoff, but precisely because they are funded by your checkoff dollars they are supposed to be prohibited from using checkoff funds to lobby for rate increases. We wonder, where is the line between “recommending” and lobbying? It’s as dubious as the supposed “firewall” between the lobbying NCBA and the checkoff-spending NCBA. Laws mean nothing to these arrogant people. One of my sources went into great detail in explaining how the NCBA controls the nominating committee, the Federation of State Beef Councils and how they got half the seats on the checkoff’s contracting committee, which decides who receives contracts for checkoff dollars.

So now we have the MOU going to a Republican Congress for their action to increase the checkoff and you can count on it because in the 2014 mid-term elections the NCBA gave nearly $800,000 to mostly Republican candidates who now control the House and Senate. Lest you think I’m bashing Republicans, I am lifelong registered Republican and I still think this deal stinks to high heaven. The NCBA is no better than all the green groups and progressive interest groups (PIGS) who have nearly destroyed this country, and the idea that Beef Checkoff funds are being unlawfully used to support the rate increase should make any honest person hold their nose, regardless of party affiliation.

An Illegal Cattle Tax

The USDA is supposed to be in charge, not the NCBA, but the feds are in on the take, being paid to oversee the checkoff. Ag Secretary Vilsack promised he’d do something but at the first hint of resistance he folded like a broken ironing board. He didn’t have the courage to stand up to the NCBA even though he has said there are “offensive and glaring conflicts of interest within the Beef Checkoff Program.”

According to R CALF’s Bill Bullard, “there were two Office of Inspector General reports that found the Secretary was not properly overseeing the Beef Checkoff Program and, as a result, it’s not possible to determine if the millions of dollars collected by the checkoff each year are being spent properly.” Yet ranchers are going to be asked to pay another dollar per head even though there has never been a complete audit of the old checkoff.

In 2010 an independent review found that over $216,000 in producer beef bucks had been misappropriated and compliance reviewers said the NCBA had breached the so called “firewall”. And those auditors only looked at 983 transactions between the beef checkoff and the NCBA, out of 19,000 total transactions. That’s less than 5%.

The Organization for Competitive Markets tried to get a look at 40,000 pages of documents that would have painted a clearer picture of how checkoff funds have been spent, but like reporters who ask for facts, they are merely told, “Producer approval of the beef checkoff program is at an all-time high.”

Dudley Butler was once a part of USDA’s inner circle and got to smell the stench first hand. “The administration is well aware that the NCBA has misappropriated producer money and the NCBA has helped defeat policy reforms that would have helped small producers,” said Butler. He calls the checkoff an “illegal cattle tax” and says Vilsack has the power to reform the program, but won’t. He wrote to Vilsack, “Your lack of leadership has ensured that independent cattle producers will continue to be systematically pushed toward the slaughterhouse of vertical integration.”

Bought and Paid For

The NCBA has lobbied against a number of rancher supported programs, like Country of Origin Labeling, and they act like they don’t care that we have only 730,000 ranchers left, down from a million and a half. They don’t care where America’s beef comes from. A CBB board member told me for every 600 pounds of beef imported into this country the CBB gets a dollar. Most of which ends up in NCBA’s hands. NCBA employees would keep their outrageous salaries even if there wasn’t one American cattleman left on earth. And they wouldn’t have to listen to dues-paying members, or try to keep secrets from curious journalists. You can bet they’d still be saying “a recent study calculated that every dollar collected by the checkoff delivers $11.20 in return.” Blah, blah blah. It’s amazing what you can get a professor to say when you paid for the results.

Says NFU’s Johnson, “Every other commodity checkoff program has separated the policy organization from the non-political, promotional entity. The beef checkoff is the only program that has failed to embrace this new model.”

Why would they when they’re making such big bucks?

What have all these beef checkoff dollars got us, besides well-paid employees? The answer comes from beef’s biggest competitor. The National Chicken Council says that during the 29 years of the beef checkoff’s existence about $2.2 billion has been collected and spent. During those same 29 years, per capita beef consumption fell by a third, from 79.2 pounds per person in 1985 to 54.1 pounds per person in 2014. At the same time poultry consumption grew by 35 pounds per person, a 55% increase in per capita consumption.

And, oh, by the way, the chicken producers don’t have a checkoff.