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Calling the expansion of the lawsuit against the beef checkoff to include 13 more states disappointing, the National Cattlemen’s Beef Association (NCBA) reaffirmed it will continue to defend the checkoff.
“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,” NCBA said in a statement.
On Monday, the federal district court in Montana granted R-CALF’s motion to expand its beef checkoff lawsuit against USDA to include 13 more states, in addition to Montana.
Expressing disagreement with the ruling, NCBA CEO Kendal Frazier said, “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. 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.”
R-CALF filed the lawsuit last year, alleging the Montana Beef Council (MBC) is a private entity and therefore violates the First Amendment rights of Montana cattlemen by using the checkoff to fund speech some do not agree with. Early this year the court granted a preliminary injunction against the MBC which was upheld by the 9th Circuit Court of Appeals in April. Under the injunction, the $1 per head beef checkoff is still collected, and the money is sent to the Cattlemen’s Beef Board. Montana ranchers who wish for half of their dollar to go to the Montana Beef Council must complete a producer consent form, and the CBB then sends the money back to Montana.
Monday’s ruling allows the lawsuit to expand to state beef councils in the following states: Hawaii, Indiana, Kansas, Nebraska, Nevada, New York, North Carolina, Pennsylvania, South Carolina, South Dakota, Texas, Vermont and Wisconsin.
NCBA, however, says accusations that checkoff money invested in the Federation of State Beef Councils is being misused are false. In its statement, NCBA said it has a longstanding commitment to the beef checkoff and the state beef councils, whose collections and demand-building work pre-date the federal checkoff. NCBA is firm in its commitment to defend both the checkoff and state beef councils against outside attacks. Further, NCBA said the volunteer cattlemen and cattlewomen who serve on state beef council boards do not deserve the attacks being leveled by activist groups.
“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’s statement says. “These groups know that beef demand is increasing in the United States and abroad, in part due to work funded by the checkoff. These achievements make the beef checkoff and other agriculture industry self-help mechanisms a target for organizations and individuals driving a vegetarian agenda.”
“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,” Frazier said. “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. That’s not the future NCBA members choose, so we will defend the beef checkoff and cattle producers against these attacks.”
R-CALF USA’s CEO Bill Bullard stated in their Nov. 5, 2018 news release that state beef councils were sending about $10 million in checkoff funds each year directly to the National Cattlemen’s Beef Association (NCBA), a political lobbying group, to fund the NCBA Federation of State Beef Councils (NCBA Federation), and those monies are not subject to the same fiscal controls imposed on the national checkoff program’s Cattlemen’s Beef Board (CBB).
‘By redirecting their money to the CBB rather than to their state beef councils, cattle producers can reduce the amount of money now flowing to the NCBA under the group’s pay-to-play scheme, which we believe is a form of money laundering,’ Bullard stated.
Bullard says there is nothing at all phony about his allegations. Referencing the NCBA Federation of State Beef Councils 2017 Investor Report (NCBA Report), Bullard said it is clear that in 2017 state beef councils sent over $10.5 million in producer checkoff dollars not to the CBB-controlled beef checkoff program; but rather, to the NCBA Federation, with over $145,000 of those dollars earmarked specifically for the NCBA.
According to a beef checkoff-sponsored slide presentation, the NCBA Federation makes its own independent financial decisions, meaning its decisions regarding where they spend their money are not subject to the fiscal controls imposed on the CBB under the national beef checkoff program.
“What we believe is a form of money laundering is the NCBA Federation’s pay-to-play scheme which is described in the NCBA Federation Division Investment Schedule (NCBA Schedule). Unlike the CBB whose representation is based on the number of cattle in each state, representation on the NCBA Federation is based on how much money the state beef councils send to the NCBA. According to the NCBA Schedule, even states with small numbers of cattle must pay 10 percent of the checkoff payments they collect from producers if they want any representation at all on the NCBA Federation.
The NCBA Schedule also shows the top 15 cattle producing states, several of which are now included in R-CALF USA’s beef checkoff case, each pay $32,000 to the NCBA for their first three seats on the NCBA Federation. Based on the NCBA Schedule and the NCBA Report, those states must then pay about $263,000 each for their fourth and fifth seats and $526,000 for their sixth seat. Then, if a state sends the NCBA $1 million or more, it is entitled to a leadership position on the NCBA Executive Committee.
Three of the states now in R-CALF USA’s beef checkoff case paid the NCBA more than $1 million to buy representation on the NCBA’s Executive Committee.
“This looks like a classic case of money laundering to us,” Bullard said adding, “The NCBA is free to admit or deny these allegations and the facts we are presenting but it certainly looks crystal clear to us.”
- True Grit Farms
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R-CALF is fighting NCBA for some of the money to promote "US BEEF" how they see fit. I don't see it as a bad thing to split the money up between a few groups that represent BEEF, the more you have the better it is for US. I'm sure there's a lot of skimming going on or there wouldn't be such a fuss.
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