Report Finds USDA Inaction on Enforcing Packers and Stockyards Act
USDA Inspector General report finds evidence of false accounting to conceal failure to enforce the Packers and Stockyards Act.
Compiled by staff
Published: Jan 19, 2006
A new USDA Office of Inspector General report reveals that USDA's Grain Inspection, Packers and Stockyards Administration management has failed to effectively enforce the Packers and Stockyards Act.
The report finds that GIPSA management blocked investigations of anti-competitive behavior, such as failing to provide established procedures for investigations and refusing to approve and provide clearance for employees seeking to investigate wrongdoing.
The report documents instances where top employees at GIPSA instructed regional offices to count routine correspondence and other mundane activities as investigations to give the misleading appearance that GIPSA was actively pursuing cases of unfair, deceptive and anti-competitive acts in livestock and poultry markets.
Senate Agriculture Ranking Member Tom Harkin, D-Iowa, called for swift and substantial changes in GIPSA to remedy the agency's shortfalls. "This report clearly finds that top officials at GIPSA were blocking employees from pursuing investigations and then cooking the books to cover up the agency's lack of enforcement action," says Harkin.
Harkin says despite an increasingly integrated and consolidated market, USDA has made "virtually no attempt to investigate or take action against unfair and anti-competitive market behavior" in the past five years. He plans to introduce comprehensive legislation to create an office of special counsel for competition matters to oversee more effective enforcement of the law and coordinate with the Department of Justice and Federal Trade Commission.
The OIG report was requested by Harkin in April 2005 in response to concerns that GIPSA was misrepresenting its enforcement activities by inflating the number of investigations GIPSA personnel reportedly carried out.
The report issued confirms these concerns while finding additional problems within the agency:
- High-level agency officials blocked all investigations into anti-competitive conduct. As a result, referrals of such cases to USDA's Office of General Counsel have ceased, and since 1999 GIPSA has not filed any complaints alleging violations of the Packers and Stockyards Act.
- GIPSA regional managers were directed by the Packers and Stockyards Deputy Administrator to inflate the number of reported investigations into anti-competitive conduct. GIPSA employees were told to report all types of work performed - even routine monitoring activities - as full-fledged investigations. The GIPSA Eastern Regional Office was even reprimanded for not following orders to inflate and distort the number of actual investigations performed.
- Records were incomplete in nearly all of the matters GIPSA recorded as investigations because important information was not reported. This includes critical information such as the primary reason for conducting the investigation, the location in which the investigation was taking place, the status of investigative work and whether the cases had been closed.
- GIPSA's effectiveness has been hindered by the agency's failure to provide a positive and supportive work environment.
- GIPSA has failed to establish a procedure for determining if and when changes are needed in regulations in order to enforce the Packers and Stockyards Act effectively.
- GIPSA headquarters failed to respond to requests for guidance or implement policy decisions regarding issues raised by GIPSA staff administering the Packers and Stockyards program. Of the 64 pending unresolved policy decisions, 55 were initiated by program staff prior to 2004.
- GIPSA failed or refused to implement critical recommendations from a 1997 report by USDA's Office of Inspector General and a 2000 report from the Government Accountability Office.
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