Judge: Beef Checkoff records lawfully exempted from disclosure

Published 10:15 am Friday, November 29, 2024

After a decade of litigation, a federal judge has refused to compel the USDA to release additional records about its audit of the Beef Checkoff program.

U.S. District Judge Emmet Sullivan in Washington, D.C., has ruled the USDA’s Office of Inspector General properly exempted the documents from disclosure under the Freedom of Information Act.

“The Court is persuaded that USDA-OIG has met its burden of showing that the redacted information is generally treated as private by the owner of the records,” the ruling said. “The withheld contents include information such as financial reports, accounting ledgers, budgets, and vendor contact information.”

In 2013, the USDA’s Office of Inspector General published an audit examining the Beef Checkoff, a federal program which raises money from cattlemen to fund research and promotions.

The audit was triggered by allegations the National Cattlemen’s Beef Association, an industry group that receives checkoff dollars, unlawfully misused that money for prohibited purposes, such as lobbying for policy positions.

According to the audit, the USDA’s “internal control function needs improvement,” as shortcomings in the agency’s oversight resulted in “reduced assurance that beef checkoff funds were collected, distributed and expended” in compliance with federal regulations.

However, the Organization for Competitive Markets — a nonprofit that’s critical of the checkoff program — claimed the audit left out information about “vulnerabilities” that contributed to NCBA’s “virtual chokehold” over contracts from the Cattlemen’s Beef Board, which oversees the checkoff.

Alleging a “discrepancy” between the USDA’s audit and earlier findings from an independent accounting firm regarding “prohibited policy operations,” the Organization for Competitive Markets filed a Freedom of Information Act request seeking to obtain additional records about the agency’s investigation.

Though the USDA turned over about 23,000 documents to the nonprofit, the agency claimed other records were exempt from the Freedom of Information Act, which prompted the Organization for Competitive Markets to file a lawsuit in 2014 to compel their disclosure.

The litigation was repeatedly delayed as the USDA and the plaintiff negotiated over the records and due to other procedural matters, but the judge has now agreed with the agency that it had properly exempted the remaining documents from release.

While the Organization for Competitive Markets argued that NCBA and other contractors “do not have an expectation of privacy” regarding information they’re required to provide the government, the judge decided that such financial records can remain confidential.

The documents contain information about NCBA’s “business operations, budgeting, strategies and operational efficiencies” that could prove damaging if revealed publicly, the ruling said. “In the hands of NCBA’s competitors or the public, NCBA has adequately shown that any of this information alone could foreseeably cause financial and competitive harm.”

Likewise, the USDA properly withheld information regarding the Office of Inspector General’s “deliberative process” in researching and writing the audit.

The Organization for Competitive Markets claimed the exemption relating to government deliberations should not apply because of the USDA’s misconduct.

Specifically, the nonprofit claimed that agency officials involved in checkoff oversight improperly coordinated with the Office of Inspector General and influenced its report.

As an example, the plaintiff cited an email between officials in the USDA’s Agricultural Marketing Service and the Office of Inspector General that referred to “heartburn over the report” due to its potential to “reflect poorly on USDA.”

However, the judge said “the evidence doesn’t reach the egregiousness required” to qualify as misconduct, meaning the Freedom of Information Act exemption still applies.

“While the evidence shows that USDA-OIG communicated and collaborated with AMS regarding the audit report and that AMS was potentially concerned about the audit findings, the combination of these does not equate to evidence that USDA-OIG lost its objectivity and independence during the audit or that USDA-OIG had a nefarious intent,” the ruling said.

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