TO: CBB Members
FROM: Kim Baker, President, Montana Cattlemen’s Association (available on the web)
DATE: June 6, 2011
I write today on behalf of the Montana Cattlemen’s Association (MCA) to express MCA’s full support for the proposed changes to the CBB’s Roles and Responsibilities. MCA is extremely disappointed with the position taken on this matter by the Montana Beef Council and MCA leadership feels it is imperative that the checkoff-paying members of MCA are heard in this process, guarding against an assumption that the Montana Beef Council speaks for all Montana cattle producers. In fact, it is important to note that NCBA and its affiliates represent only two percent or less of Montana’s cattle producers.
MCA commends you for conducting the much-needed update of the CBB’s roles and responsibilities, which have not been updated for nearly fifteen years and MCA believes the roles and responsibilities changes being proposed will provide for a much more inclusive program and will restore integrity and transparency to the checkoff program as well as improve efficiencies. MCA applauds the diligence with which the CBB Executive Committee and the Roles and Responsibilities Committee have approached this matter. We fully support your efforts.
The Joint Committee system currently in place is flawed and must be substantially corrected if we are to restore faith and trust in the national mandatory beef checkoff. The system is absolutely not conducive to participation from the majority of producers who are not members of NCBA or one of its affiliates, and in fact, the current system works to exclude producers who are not members of NCBA or one of its affiliates.
In 1996, when the National Livestock and Meat Board, which included the Beef Industry Council, merged with the National Cattlemen’s Association to create what is now known as NCBA, the Beef Industry Council became NCBA, internally designated as the Federation. In this merger, NCBA was assured of at least ten seats, of the twenty available, on the powerful Beef Promotion Operating Committee which selects and oversees CBB contractors. As the flawed joint committee system evolved, NCBA’s POLICY DIVISION was guaranteed four of the twelve seats on the Joint Industry Budget Committee as well as two of the twelve seats on the Joint Industry Evaluation Committee. It could reasonably be argued that NCBA holds the majority of the twelve seats on the Joint Industry Budget Committee since NCBA’s Federation Division holds four seats in addition to the four seats held by its policy division.
MCA has learned through the CBB’s Annual Report that NCBA received 98.7% of total checkoff contractor funds in 2009 and 98.6% in 2010. In what other public process financed with “taxpayer” funds is the primary, majority contractor allowed to participate as part of a selection and management committee? And in what other public process financed with “taxpayer” funds are hundreds of thousands of taxpayers purposefully excluded from the process?
According to Form 990s filed with the IRS by NCBA for 2006, 2007 and 2008, 80% of NCBA’s income is derived from checkoff funds. Less than six percent (6%) of NCBA revenue during the same time periods came from membership dues. More than 90% of cattle producers across the nation choose not to belong to NCBA and they should not be forced to become members of an organization they do not believe in to have a voice in their checkoff program.
MCA has also learned that in 2010 70.9% of NCBA’s overhead costs were paid with checkoff funds, including 70.9% of the NCBA CEO’s salary. This is the same CEO who misappropriated checkoff funds to pay for a trip for he and his family. Only when the abuse was uncovered through an independent audit review were the funds recaptured. The independent audit review turned up more than $200,000 of checkoff financial abuse (and oversight continues to find more financial abuses), yet incredibly it appears many CBB members are more upset with the Executive Committee for conducting the review and disclosing the results than they were with NCBA for committing the misappropriation. MCA believes this reaction reflects abandoned responsibility by CBB members.
As political appointees acting as an agent of the Secretary of Agriculture, CBB members are tasked with representing ALL cattle producers with the betterment of the overall industry as their first priority. MCA urges CBB members, as they move forward with consideration of the proposed changes, to remember and fulfill their responsibility. Ongoing efforts by the CBB Executive Committee have made great strides towards expanding “ownership” of the checkoff. Your continued commitment to this process will improve and enhance the entire checkoff program. We urge you to stay the course.