Attorney Daniel D. Owen Explains Checkoff Lawsuit

Excuse me … your Mr. Dittmer? (Meat packer and NCBA defender, Steve Dittmer was in attendance. He misrepresented the facts in a news piece he authored from the news conference the day before.).

“Dittmer? Excuse me. Here’s a copy for you … are you looking for one? Here you go … and your Mr. Dittmer? Good to meet you? Um… I think you wrote Mr. Stokes missed the irony, how did you put it ‘the irony of a lawyers law firm like mine’ I will be happy to visit with you at any length after the program .. Um to go on about the lawsuit.”
Daniel D. Owen – Polsinelli Shughart PC

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What Hasn’t the HSUS Done Lately?

Ag and Trade | Food | By Ben Gotschall | 09/04/2012

The U.S. didn’t lose 91% of its pork producers, 82% of its dairy producers, 42% of its beef producers and 33% of its sheep producers overnight. It has happened by degrees since 1980, during my lifetime, and isn’t going to be slowed down, stopped, or even partially “fixed” in less than a year.

Timmy Samuel Nebraska rancher Ben Gotschall

In a recent column entitled “Waiting for the HSUS,” Daily Yonder co-editor Bill Bishop issued a not-so-subtle challenge to the Humane Society of the United States (HSUS) to prove to him, and apparently to everyone else, that HSUS is working proactively to benefit independent farmers and ranchers.

Clearly, Mr. Bishop is not satisfied with the progress, or (as he sees it) the lack thereof, in the market creation aspect of the HSUS’s new approach of working with ag groups and producers.

As I see it, the question should not be whether or not Mr. Bishop is satisfied with the HSUS’s efforts at this point, but whether or not farmers and ranchers are satisfied, namely those who have been directly working with HSUS. After all, they’re the ones with the most at stake in all this, aside from organizations like the Nebraska Farmers Union that support them.

Those producers and organizations are the ones under the intense scrutiny, and in some cases under the direct attack, from other producers, ag groups, armchair quarterbacks and backseat drivers waiting in the wings to pounce when they smell blood.

From what I can see, as someone intimately involved in the issue, those producers, at least in Nebraska, are extremely satisfied with HSUS’s involvement.

Just last week, not long after Bishop’s column was posted, the Nebraska Agriculture Advisory Council to the HSUS released a video discussing their outlook and goals. The Ag Council published the video on YouTube, the HSUS website, Facebook and the Nebraska Farmers Union website.

Seems pretty public to me. Seems like a group of committed individuals who believe enough in what they do for a living to step up and say something about it—again, in a public forum.

But, to be fair to Mr. Bishop, those producers aren’t HSUS representatives. His question yet remains: what has the HSUS, as an organization, done to help folks like those featured in the Ag Council video?

Maybe a more instructive question to ask would be: what hasn’t the HSUS done in the past 10 months?

They haven’t threatened to kick the asses of perceived opponents out of the state of Nebraska. That was what Nebraska’s Governor Dave Heineman has done, on more than one occasion.

They haven’t siphoned $100,000 from the state’s coffers into a front group established to directly attack its perceived opponents. That was Nebraska Attorney General Jon Bruning and his sweetheart gift to We Support Agriculture.

They haven’t introduced ag-gag legislation to specifically target those who might (God forbid) observe and report practices currently taking place on operations that violate the animal-treatment standards established on those same operations. That was Nebraska State Sen. Tyson Larson, with LB 915, a bill eerily similar to one passed in Iowa in February 2012, which is an obvious paraphrase of bills proposed in Missouri, Utah, Indiana, Minnesota and Illinois. I wonder who wrote them (or should I say it)?

HSUS hasn’t unleashed a ballot initiative in the state of Nebraska to regulate agricultural practices through legislation, in keeping with its agreement with Nebraska Farmers Union.

Ben Gotschall A "flow-well" from my family's ranch in the Sandhills of Holt County, NE. The water perpetually flows from the pipe tapped directly into the Ogallala Aquifer. Clean, cold water, without a pump, using no energy.


HSUS hasn’t put one single independent livestock producer out of business—not in the last ten months, not in the last ten years, not ever.

In short, the HSUS hasn’t fought nearly every effort of independent family farmers and ranchers and our allies to ensure our agriculture system doesn’t slip further into the same highly-concentrated, anti-competitive, transparency-blocking pattern of predatory behavior that has been eliminating livestock operations for decades. I wish I could say the same for some of the other organizations and corporations that purport to collectively “support” agriculture.

Don’t take that to mean that HSUS couldn’t do more. In fact, much more needs to be done.

Our family farmers and ranchers are just as endangered now as they’ve ever been, and any efforts to “save” them are going to have to be well organized, well funded and purposeful—descriptors often attributed to the HSUS by its opponents, as if the same couldn’t be said of those same opponents.

Identifying, developing and expanding new markets is a huge undertaking, and the to-do list grows by the day.

Let’s keep in mind that the HSUS agreement with Nebraska Farmers Union happened less than a year ago, and much of that time has been spent defending said agreement from attackers, detractors and naysayers—a fair share of which came from the ranks of their own members.

The U.S. didn’t lose 91% of its pork producers, 82% of its dairy producers, 42% of its beef producers and 33% of its sheep producers overnight. It has happened by degrees since 1980, during my lifetime, and isn’t going to be slowed down, stopped, or even partially “fixed” in less than a year.

We must start somewhere, and this is still only the beginning.

Case in point: earlier this month, directly after the OCM meeting Mr. Bishop sat through dissatisfied, I met HSUS executive director Wayne Pacelle for the first time along with members of the Nebraska Ag Council. I presented a progress report to the group on what I had been doing for the past four months as Coordinator for the Ag Council.

It was an educational experience—not really for those of us at the table well versed in raising livestock as a business—but mostly for Mr. Pacelle. He asked many questions: about the landscape of processing facilities, about the economic challenges of drought and feed shortage, about the hurdles placed in the path of direct producer-to-consumer connections.

Mr. Pacelle listened (I’ll repeat: listened) to our concerns, ambitions, drought stories, and jokes about vegans enjoying a steak dinner. I know I for one, and I think Mr. Pacelle also, came away from that meeting with a renewed sense of purpose and an understanding of the road ahead.

To respond to Mr. Bishop’s challenge, I offer this:

The real nuts and bolts business of market development isn’t sexy. It isn’t the stuff you see in front-page, above-the-fold newspaper headlines. You don’t hear CEO’s and senators singing its praises. It’s the day-to-day, often frustrating, sometimes boring, but always important work that is essential to rebuilding a sustainable system from the ground up.

It takes a collaborative effort. It requires a lot of listening to a lot of different voices. The more voices represented in our efforts, the more widespread those benefits will be. I invite Mr. Bishop, and any other interested parties, to join not only in the discussion, but also in the action.

Ben Gotschall is a fourth-generation rancher from Nebraska. In addition to raising beef and dairy cattle and marketing meat and cheese, he is the Energy Director for Bold Nebraska and the Coordinating Consultant for the Nebraska Agriculture Advisory Council to the Humane Society of the United States. He is also the president of District 5 and Lancaster County Nebraska Farmers Union.

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R-CALF USA Demands Suspension of Contracts Between NCBA and Beef Checkoff


August 28, 2012

The Honorable Tom Vilsack
Secretary of Agriculture
U.S. Department of Agriculture
1400 Independence Ave., S.W.
Washington, D.C. 20250

Sent via facsimile and U.S. Mail: 202-720-6314

Re: R-CALF USA’s Demand for the Immediate and Permanent Suspension of all Contracts Between the Beef Checkoff and the National Cattlemen’s Beef Association

Dear Secretary Vilsack:

R-CALF USA hereby demands that you fulfill your statutory and regulatory duty to enforce the Beef Promotion and Research Act of 1985 (Act) and the Beef Promotion and Research Order (Order), which together govern the Beef Checkoff Program (Beef Checkoff), against the ongoing, unlawful expenditure of producers’ Beef Checkoff funds by immediately ordering the permanent suspension of any and all contracts between the National Cattlemen’s Beef Association (NCBA) and the Beef Checkoff.

For longer than two years: beginning May 24, 2010, and subsequently on Aug. 4, 2010; Dec. 14, 2010 (to Deputy Secretary Merrigan); Jan. 17, 2011; Jan. 20, 2011; Feb. 3, 2011; Feb. 28, 2011; and Aug. 22, 2011, R-CALF USA sent formal letters, replete with researched evidence of NCBA’s unlawful use of Beef Checkoff funds, that urged you to fulfill your statutory and regulatory responsibility by immediately suspending all contracts between the NCBA and the Beef Checkoff.

During that longer than two-year span, you abrogated your statutory and regulatory duty to preserve the integrity of the Beef Checkoff for U.S. cattle producers, despite your receipt of evidence from us that demonstrate the Beef Checkoff is being unlawfully abused under your watch. Instead, you and your Department have played the role of NCBA’s patsy. You have continued to allow the Beef Checkoff to unlawfully award tens of millions of dollars to NCBA, which enabled that organization to continue its unlawful use of Beef Checkoff funds to successfully undermine your Administration’s stated goals concerning country-of-origin labeling (COOL) and the competition rule proposed by the Grain Inspection, Packers and Stockyards Administration (GIPSA), just to name two.

Because you shirked your responsibilities under the Act and Order and to U.S. cattle producers, a lawsuit was necessarily filed against you by an R-CALF USA member, Mike Callicrate. That lawsuit, Michael Callicrate v. USDA et al., makes nearly all the allegations we made to you during the past two years; references nearly all the evidence we provided you during the past two years; and, it seeks the same remedy we urged you to grant our industry during the past two years.

R-CALF USA is outraged by your inaction – particularly following your receipt of our evidence that showed NCBA had misappropriated hundreds of thousands of cattle producers’ Beef Checkoff funds – and fully supports the merits of the Michael Callicrate v. USDA et al. lawsuit. The lawsuit was filed against you because you failed to stop the NCBA from unlawfully using Beef Checkoff funds to continually undermine the policy goals of independent U.S. cattle producers, which has effectively reduced their economic opportunities. A summary of the lawsuit that highlights the meritorious arguments R-CALF USA fully supports is attached.

We demand that you, by your own fruition, immediately put a stop to the NCBA’s ongoing abuse of the Beef Checkoff by fully implementing the entire remedy sought in the lawsuit, which is the remedy we have unsuccessfully sought from you for longer than two years. We are calling on you to act, and to act appropriately, without the lawsuit having to proceed any further.

Individual cattle producers should not have to file a lawsuit to ask a federal court to order you to enforce statutes and regulations that you know are being violated. And, you should not be assigning your responsibilities to individuals and federal courts in hopes that they will do what you lacked the courage to do.

As part of our demand we call your attention to an allegation that R-CALF USA did not previously articulate, but which is contained in the lawsuit. That allegation is that the “prohibition on the use of checkoff funds applies equally to any trade/producer organizations funded wholly or in part by a particular board or contractors to the board.” We believe this language expresses the clear intent of both the Act and Order as it unequivocally bars any trade association that may receive Beef Checkoff funds from also engaging in activities to influence governmental action or policy. In other words, no policy-oriented trade association can continue its lobbying activities if it is a recipient of Beef Checkoff funds. Your Department must initiate a rulemaking to make it crystal clear that organizations that contract with the Beef Checkoff are barred from engaging in lobbying activities.

Your Department’s August 24 announcement indicating that you are now expanding the contracting authority for the Beef Checkoff is void of any mention that recipients of Beef Checkoff funds cannot engage in lobbying activities. Essentially, your Department’s announcement suggests that you intend to perpetuate the ongoing, unlawful use of Beef Checkoff funds by authorizing groups in addition to NCBA to compete directly with policy groups like NCBA for available Beef Checkoff funds. This is unconscionable.

We trust that you will carefully consider our demand and choose to comply in full. Doing so will negate the need for R-CALF USA to formally join in a complaint against you.

Sincerely,

Bill Bullard, CEO

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R-CALF USA Summary of Beef Checkoff Lawsuit

Summary of Beef Checkoff Lawsuit
Mike Callicrate v. USDA et al.

Prepared by R-CALF USA
Revised August 23, 2012

THE PARTIES:
Mike Callicrate is the only Plaintiff in the complaint.

Named Defendants in the complaint include:

    U.S. Department of Agriculture
    Agriculture Secretary Tom Vilsack
    Cattlemen’s Beef Promotion and Research Board Beef
    Promotion Operating Committee
    Agricultural Marketing Service, USDA

A Third Party named in the complaint is the National Cattlemen’s Beef Association

THE COMPLAINT:
Mike Callicrate’s complaint alleges that Defendants violated the Beef Research and Information Act of 1985 (the “Act”), which prohibits any Beef Checkoff funds from being used in any manner for the purpose of influencing governmental action or policy. Specifically, the complaint alleges that Defendants’ gave the National Cattlemen’s Beef Association (NCBA) hundreds of millions of dollars in Beef Checkoff funds even though NCBA is a policy and lobbying organization and uses Beef Checkoff funds to influence governmental action and policy in ways that serve the NCBA and are often against the interests of the very cattle producers who pay the Beef Checkoff.

THE ARGUMENTS:

  1. The NCBA unlawfully controls who receives Beef Checkoff Contracts.
    1. The NCBA effectively controls the Beef Promotion Operating Committee (BPOC) that awards Beef Checkoff contracts because the NCBA appoints 10 of the 20 members of the BPOC and a majority of the remaining 10 members on the committee are also NCBA members.
  2. The Beef Checkoff Program is unlawfully funding NCBA operations:
    1. Approximately 65 percent of NCBA’s reported income is derived from Beef Checkoff funds.
    2. In 2011, Beef Checkoff funds paid 71 percent of the NCBA CEO’s administrative time.
    3. The contractor for Beef Checkoff funds was suppose to be a non-policy organization, as was the Beef Industry Council of the National Livestock and Meat Board prior to its 1996 merger with NCBA. USDA-AMS Checkoff Guidelines drafted in 2010 state that the “prohibition on the use of checkoff funds applies equally to any trade/producer organizations funded wholly or in part by a particular board or contractors to the board.” Therefore, no contractor of Beef Promotion Operating Committee (BPOC) may use the Beef Checkoff funds for the purpose of influencing governmental action or policy, and NCBA is doing so unlawfully.
  3. The NCBA has used Beef Checkoff funds to unlawfully influence governmental action and policy.
    1. A 2010 compliance audit that reviewed less than one percent of NCBA’s Beef Checkoff funds revealed that NCBA used Beef Checkoff funds to influence governmental action and policy. Improper use of Beef Checkoff funds include NCBA’s payment of expenses for:
      1. participating in a Country of Origin Labeling meeting;
      2. a senior NCBA staff member who charged all his or her time to the Beef Checkoff since 2009;
      3. consulting fees that benefited NCBA;
      4. NCBA employee participation in a membership revenue development meeting;
      5. travel expenses for NCBA’s Spring Legislative Conference;
      6. travel expenses for an NCBA Governance Task Force meeting; and vii. travel expenses for an NCBA employee’s spouse to travel to New Zealand.
    2. NCBA returned over $216,000 to the Beef Checkoff fund to settle claims of unlawful expenditures.
      1. However, if the ratio of misappropriated or misused funds hold true for the rest of the Beef Checkoff funds in NCBA’s control that were not subject to the very narrow compliance review, the amount misappropriated or misused by NCBA would be in the tens of millions, if not more.
    3. A follow-up audit by the Cattlemen’s Beef Promotion and Research Board (CBB) identified an additional $39,000 in misappropriated Beef Checkoff funds, bringing the total known amount of Beef Checkoff funds that were misappropriated or misused by NCBA to at least $305,365.
    4. The USDA Office of Inspector General (OIG) conducted an audit and found that Defendants failed to properly oversee Beef Checkoff contracts as required by law, including their failure to confirm that none of the Beef Checkoff funds were used for lobbying.
    5. NCBA continues to receive tens of millions of dollars annually from the Beef Checkoff, and the funds continue to be used to fund or otherwise benefit NCBA’s efforts to influence governmental action and policy.
  4. The NCBA failed to keep financial transaction records as required by the Act.
    1. The 2010 compliance audit identified numerous instances where NCBA failed to maintain adequate records of its financial transactions involving Beef Checkoff funds.
  5. USDA and other Defendants failed their responsibility to suspend NCBA as a Beef Checkoff contractor following NCBA’s known violations of the Act.
    1. NCBA continues to receive tens of millions of dollars annually from the Beef Checkoff, and the funds continue to be used to fund or otherwise benefit NCBA’s efforts to influence governmental action and policy.
  6. The U.S. cattle industry has suffered due to NCBA’s abuse of the Beef Checkoff.
    1. Despite U.S. cattle producers’ mandatory contributions of more than $1.6 billion to the beef checkoff during the past 25 years, U.S. cattle producers have:
      1. lost market share;
      2. downsized the U.S. cattle herd;
      3. suffered from a drastically reduced producer’s share of the retail beef dollar; and
      4. Nearly 500,000 beef cattle operations have gone out of business, including 35,000 cattle feeders, since 1996.

    RELIEF REQUESTED:

    Mike Callicrate is not seeking monetary damages in his complaint. He is requesting the Court to enter an Order to:

    1. Immediately and permanently suspend any contracts between NCBA and Defendants.
    2. Permanently enjoin Defendants from contracting with the NCBA under the Act or otherwise giving the NCBA any additional Beef Checkoff funds, together with awarding Plaintiff costs, attorney fees, and such other relief as the Court deems just and equitable.
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Stop the NCBA Beef Checkoff lies, the public deserves the truth

I am J. Dudley Butler. I am an independent family farmer, agricultural lawyer and former Admin. of the Grain Inspection Packer and Stockyard Administration at USDA.

I’ve experienced first-hand the vicious, slanderous personal attacks by the meat packers, their chosen media minions, and the puppets like the leaders at the National Cattlemen’s Beef Association.

These types of lies must stop. The public deserves better.

The lone plaintiff, Mike Callicrate, in the lawsuit filed against USDA seeks to save the Beef Checkoff Program, and restore it to its original intent, not destroy it.

I hope that Secretary Vilsack will exhibit the courage of a true statesman by suspending all current contracts with and deny all future contracts to NCBA.

The independent cattle of our country paying their hard earned dollars into the Checkoff deserve no less.

Visit http://www.FarmandRanchLaw.com Today.

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