By Sally Behringer
Fred Stokes, the president of the Organization for Competitive Markets (OCM) and lawyer Dan Owen with Kansas City law firm Polsinelli Shugart LLC, clarified the scope and objectives of a lawsuit filed Thursday evening by OCM member Michael Callicrate. Also commenting on the lawsuit was Wayne Pacelle, president and CEO of the Humane Society of the United States (HSUS). The three were among several speakers at the annual OCM meeting held in Kansas City, Missouri August 9-11. Approximately 40 OCM members attended the conference.
Callicrate, who is the vice president of OCM and a feedlot operator from St. Francis, Kansas, is the plaintiff in the lawsuit, which names five entities as defendants:
· The United States Department of Agriculture (USDA)
· USDA Secretary of Agriculture Tom Vilsack
· The Cattlemen’s Beef Promotion and Research Board (CBB)
· The Beef Promotion Operating Committee (BPOC)
· The Agricultural Marketing Service (AMS)
The lawsuit claims the defendants violated the Beef Promotion and Research Act, passed in 1985, by giving money to the National Cattlemen’s Beef Association, which the suit claims is “primarily a policy and lobbying organization and uses the Beef Checkoff funds to influence governmental action and policy.” The suit’s objective is to force USDA and its checkoff agencies from giving any further Checkoff funds to the NCBA.
The lawsuit claims that an audit by an independent accountant, ordered by the CBB as a routine compliance review, found numerous circumstances where NCBA used Checkoff money for lobbying purposes. In addition, the suit claims that an audit of the AMS, ordered by the Office of Inspector General, found numerous incidents where AMS failed to provide adequate regulatory oversight of CBB and its subcontractors, including NCBA.
As a result, the lawsuit asks the court to suspend any contracts between NCBA and the case defendants and ban the defendants from contracting with the NCBA and giving the organization any additional Checkoff funds.
In addition to clarifying the details and objectives of the lawsuit, Stokes and Owen also addressed the role of the Humane Society of the United States (HSUS) in the lawsuit. Stokes caused quite a stir in the agribusiness community during a news conference on Thursday, when he characterized HSUS as “wanting to be a party” to the lawsuit, and claiming that “every cowboy out there owes a big debt of gratitude to HSUS.”
When asked to clarify that remark, Stokes said, “Dan Owen (the case lawyer) would not have been approached if it was not for HSUS attorneys looking at our materials and saying, ‘Hey, you have a case here.’ They said that they couldn’t pursue the case, but that [we’ve] got a case. So that’s why I was saying that we owe them a debt of gratitude. Because we wouldn’t be here today but for that.”
Stokes remained unapologetic about his organization building a relationship with HSUS on Friday.
“[HSUS] supported country of origin labeling, they supported the GIPSA rule, they have been generally been on our side of the issues where NCBA is almost exclusively on the other side,” he said. “We’re going to build our relationship with HSUS around the issues we agree in common rather than our differences. As far as I understand it, these are decent, caring loyal Americans and they agree with us on this issue, which is the paramount issue of the day, and we’re going to work with them.
When asked to clarify his organization’s relationship with OCM, Pacelle said, “In terms of the legal action we are not a party to the legal action. We are very concerned in general about any misuse of Checkoff funds. If there is no misuse of the funds then NCBA has nothing to worry about. But we’re not a plaintiff or party to the case. It’s their case.”
Reaction to the lawsuit from OCM members was largely positive, but several members were concerned or skeptical about the organization’s relationship with HSUS.
“We certainly favor the lawsuit – we’ve long believed there needed to be a complete separation between the Checkoff itself and any policy organization such as NCBA,” said Bill Bullard, CEO of R-CALF USA. “So we’re hopeful OCM can be successful with this. However, we find [the partnership between OCM and HSUS] surprising and we’re very skeptical. That’s why R-CALF is not involved in the lawsuit right now. Perhaps through this process our members will get a better sense for what is the true agenda of HSUS. At this point we’re taking a wait and see approach.”
The announcement of the lawsuit brought a swift response from the NCBA on Friday, in which NCBA president J.D. Alexander “expressed disgust” over the lawsuit, claiming its objective was to “destroy more than 25 years of market development and consumer demand building”.
In his address to the audience at the OCM meeting, lawyer Owen responded to the NCBA statements.
“First of all, the NCBA is not a party to the lawsuit,” he pointed out. “They respond that this allegation will, and I quote, ‘stifle our ability to mitigate hunger and feed people here and abroad’. Amazing. They claim [the lawsuit] is going to impact consumers by increasing protein costs. Now I’m sorry but how is a reallocation of marketing money going to increase consumers’ protein costs? I don’t understand.”
Bullard voiced a similar reaction by saying, “NCBA is acting quite arrogantly, especially after they were caught with their hands in the cookie jar. USDA has not held NCBA accountable, now we have a private entity doing that and we would expect NCBA to be defensive and they are. “
The suit was filed late Thursday and became public record Friday morning. The next step will be serving the suit to the defendants and beginning the legal process. Owen pointed out that the suit seeks only an injunction against the defendants – it does not ask for monetary damages.
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