OCM: Halt the Corporate Influence At USDA; Oppose Keys Nomination to USDA

The Organization for Competitive Markets (OCM) is calling for Congress to begin restoring public trust in government by halting the degree to which industry corporations influence public policy, particularly in agencies like the U.S. Department of Agriculture (USDA).

OCM President, Keith Mudd, says the organization will vigorously oppose the nomination of G. Chandler Keys to a high level post at USDA.

Recent media reports indicate that Keys will be nominated by the Bush Administration to replace Bill Hawks as USDA’s Undersecretary for the Agricultural Marketing and Regulatory program.
In 2005 Keys left a 20-year career with the National Cattlemen’s Beef Association (NCBA) where he worked as the organization’s chief lobbyist.

After leaving NCBA, Keys handled government relations in Washington, DC for Swift & Co.
"The continued pattern of appointing people with strong industry ties to agri-business companies and special interest sectors to federal regulating agencies must stop," said Mudd. "Research shows there are approximately as many industry people among USDA appointees as there are career civil servants. The revolving employment door between industry and the regulating agency sets the stage for policy influence abuse. Mr. Keys has a long history of opposing grassroots livestock producers while advocating policy that favors corporate agriculture and the meat packing industry. The nomination of Mr. Keys should be rejected and USDA should be directed to search for an unbiased, knowledgeable candidate who will appropriately represent agriculture’s broad base."

In 2004 OCM co-authored a paper titled USDA INC: How Agribusiness Has Hijacked Regulatory Policy at USDA (www.revolvingdoor.info). "Research documented in the paper shows that multi-national agricultural corporations and the meat packing industry are embedded at USDA," noted Mudd. "The current administration seems intent on bringing the business special interests into politics in an effort to take over the regulatory agencies of government so they can, in effect, regulate themselves. This is a disturbing trend that has been very harmful to grassroots agricultural producers. It’s time for Congress to intervene. We urge Congress to reject Keys during the confirmation process and take the first step in restoring
credibility to the People’s Agency."

Waterfield Resigns as P&S Administrator

JoAnn Waterfield, a deputy administrator for the Packers and Stockyards Administration in Washington, DC since 2000, has resigned. 

Waterfield's resignation came on the heels of officials at USDA receiving a report of findings by the Office of Inspector General after a months-long investigation that focused on the agency's enforcement of the Packers and Stockyards Act of 1921. The report will be made public in January.

The Packers and Stockyards Administration is charged with promoting fair and competitive marketing in the livestock industry and investigating any practices that could limit or restrict competition. The agency is also responsible for investigating fraud, deceptive marketing practices and ensuring that livestock producers are promptly and properly paid when selling animals.
U.S. Senator Tom Harkin (D-IA) called for the investigation last April, asking the Inspector General to focus on how aggressively and accurately USDA was enforcing the Act.

In his letter asking for the investigation, Harkin said he had information suggesting the  Grain, Inspection, Packers and Stockyards Administration (GIPSA) was inflating the number of actual investigations being conducted by the agency's competition division "to suggest a high rate of enforcement activity is taking place when in fact, it is not."

Harkin suggested that high level GIPSA administrators were "blocking or tying up" investigations, and he noted that low morale at GIPSA had created high turnover rates from staff who believed they were not being allowed to effectively conduct investigations.

The Organization for Competitive Markets (OCM) asked Harkin to seek the investigation into GIPSA's enforcement after receiving information about the way GIPSA staff logged and defined investigations. 

GIPSA's competition task force conducted 22 investigations in fiscal year 2004, including 16 cases involving alleged price preferences in the fed cattle markets. The Packers and Stockyards Administration found no evidence of any violations.

Waterfield's resignation became effective December 24, 2005 after she took a leave of absence earlier in the month.  Prior to her position at P & S Waterfield served for nine years as an attorney for USDA's Office of General Counsel.

Initiative 300 Ruled Unconstitutional

On December 15, 2005 U.S. District Judge Laurie Smith-Camp ruled that Nebraska's ban on corporate farming is unconstitutional because it interferes with interstate commerce and violates the federal Americans with Disabilities Act.  Judge Smith-Camp enjoined the state of Nebraska from enforcing the ban, widely known as Initiative 300.  Attorney General Jon Bruning has promised to appeal the decision.  Initiative 300 will remain in effect while the case is appealed.
Initiative 300 generally prohibits corporations and certain other business entities from owning farmland or engaging in agricultural activity, although there are numerous exceptions.
The lawsuit was filed by several ranchers, including former state Senator Jim Jones, who said the ban restricted family corporates from perserving their operations.

The ban exempts farms that are family owned and operated, nonprofit corporations, American Indian tribes and corporations, land used for seed or nursery purposes and land used for research or experimental purposes. 

At least nine states, including Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma, South Dakota and Wisconsin, have passed laws to restrict corporate farm ownership.  Last year, the U.S. Supreme Court refused to hear an appeal of a similar decision, which found that South Dakota's ban on corporate farming was unconstitutional.

Smith-Camp said Nebraska's law violated the federal commerce clause, which state many not adopt laws that discriminate against or unduly burden interstate commerce. 

The Nebraska-based Center for Rural Affairs said the ruling should send shivers down the spines of all Americans.  "Its implications reach far beyond agriculture and Nebraska.  The decision will be appealed, but if it stands, it strikes a profound blow to the power of states to control corporate power.  And it concentrates power in the federal government.  More local and responsive levels of government will be neutered of their ability to control corporate excess."

$20 Billion BSE Class Action Lawsuit Against Canadian Government Will Go Forward

On January 5, Toronto Regional Senior Justice Warren Winkler ruled that the class action lawsuit involving approximately 100,000 Canadian cattle producers against the federal government and Ridley, Inc. (Canada) will continue.  The suit alleges that the bovine spongiform encephalopathy (BSE) crisis, the closing of the U.S. and other international borders to Canadian cattle and beef, and the loss of billions of dollars by the Canadian cattle industry was the result of gross incompetence on the part of the Canadian government and negligence on the part of feed manufacturer, Ridley, Inc.  Damages claimed exceed $20 billion.

Justice Winkler ruled to dismiss a motion brought by lawyers representing the Canadian government and Ridley, Inc. (Canada) to  strike the claim.  The motion to dismiss the claim against Ridley Corporation Limited (Australia) was granted.

The suit charged the federal government with negligence in enacting, or failing to enact in a timely fashion, regulations with respect to permissible ingredients in cattle feed.  It also alleges that Ridley, Inc. was negligent as a result of its continued inclusion of ruminant meat and bone meal in cattle feed sold in Canada, despite the knowledge that ruminant meat and bone meal use in cattle feed could cause BSE in cattle.  Claimants say Ridely, Inc. knew, or ought to have known, that a diagnosis of BSE would result in a ban on the importation of Canadian cattle and beef products into the U.S. and elsewhere.

Although findings of liability against the Canadian government and Ridley, Inc. remain to be made, attorneys for producers say the judge's ruling is a positive development and they urge cattlemen to visit the BSE class action web site for more information: www.bseclassaction.ca.

Alito and Antitrust

The American Antitrust Institute has asked Michael J. Freed, one of its Advisory Board members, to look into the record of U.S. Supreme Court nominee Judge Samuel Alito with respect to antitrust. Freed found no relevant articles by Judge Alito, but identified a small group of cases in which Alito sat as a judge where antitrust issues arose.

The American Antitrust Institute says that while one must read between the lines to discover the outlines of a position, it appears that Judge Alito is not favorably disposed toward the private enforcement of antitrust laws. The one case in when he seemed most friendly to an antitrust claim was decided over fourteen years ago. Mr. Freed concluded from his research that "Judge Alito is not likely to be a supporter of antitrust enforcement."

The American Antitrust Institute is an independent non-profit organization that supports enforcement of antitrust laws. The group can be found at www.antitrustinstitute.org.