USDA Only Pretended to Do Probes

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Report: USDA Only Pretended to Do Probes

By LIBBY QUAID , 01.18.2006

Forbes

The Agriculture Department has pretended to investigate

anticompetitive behavior among stockyards and meat companies since 1999, but in

hundreds of cases hasn't actually filed complaints, says an audit released

Wednesday.

Senior officials blocked investigations from being

referred to department lawyers, who can file complaints or refer cases to the

Justice Department, according to the audit by the agency's inspector general.

In the meantime, employees were told to create the

appearance of a high rate of enforcement by logging routine letters and reviews

of public data as investigations, the inspector general said.

" Competition and complex investigations were not being

performed, and timely action was not being taken, " the audit said.

As of last August, 50 investigations were being held up

by deputy administrator JoAnn Waterfield, who had final say over sending cases

to department lawyers. Waterfield quit abruptly last month without giving a

reason.

Waterfield reprimanded one regional office last year

because it didn't count routine correspondence as an investigation. After being

chided, the east region climbed from last to first among the three regions by

reclassifying more than 300 routine activities as investigations.

Department officials acknowledged the problems but said

they're being fixed.

" Of course I was bothered, " said E. Link,

the new administrator of the Grain Inspection, Stockyards and Packers

Administration. " When I came here, I didn't know the agency had those

internal problems. You can't fix a problem till you know you have it. "

Iowa Sen. Tom Harkin, who sought the audit, said top

officials were blocking investigations " and then cooking the books to

cover up the agency's lack of enforcement. "

" America's

producers have faced an increasingly integrated and consolidated market, but in

the past five years, USDA has made virtually no attempt to investigate or take

action against unfair and anticompetitive market behavior, " said Harkin,

senior Democrat on the Senate Agriculture Committee.

The report didn't give a reason for the lack of action,

but Link said he didn't think employees deliberately tried to inflate their

numbers. He said employees have told him they were frustrated with management

and felt they couldn't do their jobs.

" I think there was a lot of misunderstanding between

headquarters and field offices as to what really constituted

investigations, " he said.

While anticompetitive complaints have not been initiated

since 1999, officials said there have been complaints involving financial and

trade practices. There were 104 financial or trade cases referred to department

lawyers from 2003 through 2005. There have been three more since Jan. 1, and

several more referrals are expected in the next few days, officials said.

Under the 1921 Packers and Stockyards Act, the department

is charged with investigating unfairness, deception and practices that inhibit

competition in livestock, meatpacking and poultry trade.

With about 150 employees and a budget last year of $19.5

million, the Packers and Stockyards Program regulates a livestock industry

worth about $120 billion.

Source: Associated Press

forbes.com

USDA P & S ‘cooks the books’

Report: USDA staff inflated probe count

Recent changes will include a definition of what an

investigation should entail.

By PHILIP BRASHER

DES MOINES REGISTER WASHINGTON BUREAU

January 19, 2006

Des Moines, Iowa

US

Washington, D.C. — The government officials who

regulate competition among stockyards and meatpackers inflated the number of

their investigations by counting routine actions such as writing letters,

auditors say.

A report released Wednesday by the Agriculture

Department's inspector general cited USDA staff as saying that monitoring

activities were counted as investigations because those were the only types of

actions being approved.

Among other things, the Grain Inspection, Packers and

Stockyards Administration is supposed to investigate complaints that packers

are restricting competition or manipulating prices. The agency also must assure

that livestock sellers are paid promptly.

The report shows that USDA officials " were blocking

employees from pursuing investigations and then cooking the books to cover up

the agency's lack of enforcement action, " said Sen. Tom Harkin, D-Ia.

Mergers in the packing industry mean there are fewer

places for livestock producers to sell their cattle and hogs, fueling concerns

that companies are driving down prices.

USDA officials have recently taken several steps to

address the problem, including defining what constitutes an investigation.

Correspondence requesting information from companies and monitoring activities

that involve publicly available data no longer count.

The deputy administrator of the agency, JoAnn Waterfield,

abruptly resigned last month.

A new administrator, Link, took office in October

and ordered changes after learning of the inspector general's findings.

" We've already taken several actions to get very

active in the field, and we're going to get more active as time will permit us

and funds will permit us, " Link said.

His agency, which has 150 employees, is supposed to

protect livestock producers from anticompetitive behavior by packers.

According to the report, Waterfield reprimanded the

agency's eastern regional office last June for failing to classify enough of

its work as investigations.

The agency's two other regional offices - in Des Moines and Denver

- already were classifying all of their activities, including routine

correspondence, as investigations, the report said. The Des Moines office is in charge of hog

packing.

In June, the eastern office reported that it was tracking

425 investigations. By September, the total had jumped to 760.

The report also said it found incomplete records for more

than half of the 1,842 cases being tracked by the agency as of June 30.

Waterfield's former office did not know her whereabouts.

She has not yet been replaced.

Link said he was referring several cases to the inspector

general for further investigation.

Harkin, whose concerns initiated the inspector general's

review, said he would introduce legislation to create an office of special

counsel at USDA to oversee enforcement of competition laws.

" America's

producers have faced an increasingly integrated and consolidated market, but in

the past five years USDA has made virtually no attempt to investigate or take

action against unfair and anticompetitive market behavior, " Harkin said.

www.MajestyFarm.com

" Remember, bureaucracy

is the epoxy that greases the wheels of progress. "

Jim Boren