On Aug. 14, the U.S. Court of Appeals for the District of Columbia gave members of the National Pork Producers Council and the farmer-directors of the checkoff-collecting National Pork Board one more reason to loathe the Humane Society of the United States.
In a terse, 11-page order, Circuit Judge Cornelia T. Pillard lit the blowtorch on a long-smoldering lawsuit that promises set the NPPC and NPB’s hair on fire:
“The plaintiffs,” wrote Pillard, the Humane Society, the Iowa Citizens for Community Improvement, and a pork producer named Harvey Dillenburg, “claim that the National Pork Board has misappropriated millions of dollars from a fund for pork promotion … the plaintiffs filed suit in federal district court and the court dismissed their claim for lack of standing. We reverse.”
Those final two words promise to open the door on one of the sweetest “sweetheart deals” ever pulled off in the deeply checkered history of federal commodity checkoffs.
This deal, laid out in the original, 2012 HSUS suit, noted Pillard, began “In 2006, when the Checkoff Board, with the approval of the Secretary of the Department of Agriculture, bought four trademarks with the slogan Pork: The Other White Meat from the National Pork Producers Council for $60 million.”
It was a sugar-soaked deal (as noted in this space at the time) because the checkoff’s Board already, in 1986, had spent $4.5 million for the development and implementation of the Other White Meat slogan. That cash, however, had flowed through the Board’s chief contractor, the NPPC, to the advertising agency, Bozell, that did the creative work.
In Aug. 1987, NPPC filed a trademark application for the slogan despite federal checkoff language that, according to the HSUS lawsuit, “dictates that trademarks developed with checkoff funds shall belong to the United States Government” Law or no law, NPPC, listed “itself as owner of the mark.”
Then, for nearly 20 years, Pork: The Other White Meat “continued to be the Board’s primary advertising message each year through the 2006 purchase date. All was paid for entirely from producer assessments,” or checkoff dollars.
In between, however, a 1999 USDA Office of Inspector General (OIG) report concluded that the Checkoff Board had “relinquished too much authority” to its hired hand, the NPPC. The OIG recommended a separation of the checkoff Board and the NPPC.
Shortly thereafter, hog farmers, distrustful of both groups, voted in a national referendum to kill the checkoff. The incoming Bush Administration’s new USDA boss, Ann Veneman, however, negotiated a deal to separate the Board and the NPPC and life for both went on despite the producer vote.
A key part of the Veneman deal gave the Board “most trademarks and property ownership” developed under contract except for – you guessed it – The Other White Meat slogan. It was licensed by NPPC to the Board “at the rate of one dollar per year.”
By 2004, though, the Board and NPPC had a new deal in place that paid the NPPC $818,000 per year for the trademark, not $1. The Board’s boss at the time, Steve Meyer, “wrote that the increase would ‘allow the NPPC to get the money they need for the next four years.'”
In 2006, that fee became $3 million per year for 20 years when the Board agreed to purchase the trademark from the NPPC. In 2011, however, the Board shelved The Other White Meat campaign (for the uninspiring Pork: Be Inspired), but the $3 million annual payments continued.
According to the initial, 2012 lawsuit filed by HSUS, the money was simply “checkoff expenditures being used to further NPPC programs that are intended to influence legislation and government policy which constitute prohibited uses under” the federal laws that implemented the checkoff in 1986.
The Aug. 14 appeals court ruling means the 2012 HSUS suit will proceed and USDA will be forced to produce a record of what happened under its administrative watch. That will be embarrassing.
It could also prove embarrassing for federally chartered checkoffs, many of which resemble government-mandated, non-refundable slush funds used by Big Ag to promote Big Ag.
Little wonder, then, why Big Meat hates the Humane Society; it’s shining lights into corners that most in U.S. agriculture, often even USDA, want kept dark.
David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.
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