ASA vs USB: Did anyone see this coming?

Years ago I felt compelled to air my worries about the way checkoff dollars were being spent, particularly for the soybean checkoff. American Soybean Association (ASA) and its state affiliates developed the concept for a national soybean checkoff in the late 1980's and worked with Congress and USDA to enact this program in the 1990 Farm Bill. Since the checkoff went into play back in 1992, soybean farmers have paid a total of $1.3 billion in checkoff assessments. Back in 1992 the annual amount was just $41 million; today, with higher valued crops and more acreage, collections are estimated to exceed $140 million.

Along the way, hints of improper spending would occasionally surface and run across the farm media's desk. Not much was ever written, in part because no one wanted to upset the apple cart, and few farmers would talk on the record. It seemed that the thing soybean officials and United Soybean Board farmer-directors feared most was bad publicity and open criticism.

But now, it seems, the bean has hit the fan. The ASA has asked USDA to investigate how the USB has been spending checkoff money. And while it's not going to attract the kind of media attention Illinois Gov. Rod Blagojevich has in recent days, it should make soybean farmers sit up and take notice.

When you start talking about $140 million a year, improprieties are bound to creep into the system. Some of the juiciest charges stem from whistleblower allegations and the failure by USB to properly investigate the claims. Significant allegations of improper actions have surfaced at the U.S. Soybean Export Council (USSEC), an entity created at USB's initiative by USB and ASA to carry out international marketing activities. These allegations include use of a knife by a USSEC employee at a USSEC function, complaints of an improper employee relationship, a complaint of receiving direction to break overseas laws and American regulations, complaints regarding the awarding of no-bid contracts, complaints of a hostile work environment, wasteful or fraudulent feeding trials, mismanagement, and more.

According to ASA's charges against USB: "Incomplete and one-sided investigations were conducted by USB's and USSEC's legal firm (which are one in the same) on only some of these issues, and the whistleblowers were quickly fired or dismissed.•bCrLf

Spending limits The federal laws regarding the checkoff limit the amount of funds that can be spent on administrative staff salaries and benefits to one percent (1%) of assessments collected by USB. ASA believes USB has evaded this restriction by placing USB office staff members on the "books•bCrLf of contractors, even though they have been physically located in the USB office and have served under the direct day-to-day supervision of the USB CEO and USB Executive Director.

In addition, the rules say costs incurred by the USB board cannot exceed 5% of assessments collected by USB. ASA wants USDA to determine whether USB has classified expenses properly as administrative costs, or has misclassified expenses in order to evade the 5% cap.

Federal laws clearly prohibit any checkoff funds from being used in any manner for the purpose of influencing legislation or government action or policy, except under very narrow and specific circumstances. There is concern that USB may be violating this prohibition directly and through USB-created entities such as QUALISOY, the U.S. Soybean Export Council, the Soy Nutrition Institute, and others. Various USB contractors are known to travel regularly to Washington, D.C. to meet with government agencies and personnel to provide checkoff viewpoints on governmental actions and policies — a big no-no.

There are complaints that USB staff and directors have utilized coercive and bullying tactics to silence criticism from state checkoff organizations. These complaints include USB threats to conduct over-rigorous compliance audits of state activities to silence criticism and questions from state checkoff board staff.

While the Iowa State Soybean Association has no position on the allegations yet, its president John Heisdorffer believes the issues need to be addressed because state affiliates - no surprise here - voted unanimously to investigate.

"We have been concerned about the deteriorating relationship between ASA and USB for several years,•bCrLf he says. "Unfortunately these difficulties have gone very public. It is our hope that the seriousness of these allegations can be addressed and the important work of the national checkoff can continue.•bCrLf

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