060118 Senators Slam USDA on Packers “Anti-Competitive Behavior”

Washington - News that the U.S. Department of Agriculture gave misleading information about investigations into anti-competitive behavior by meatpackers comes as no surprise, said U.S. Sen. Mike Enzi, R-Wyo.

That's because the USDA has a "habit of dragging its feet on country-of-origin labeling, which is also another important issue to the packers," Enzi said in a statement.

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. Enzi and Sen. Craig Thomas, R-Wyo., say the small number of meatpacking companies present a problem for livestock producers in Wyoming and elsewhere because of their control of the marketplace.

The two senators also have pushed for measures requiring meat to be labeled with its country of origin, but meatpackers and the Bush administration say such labeling is unworkable and costly.

According to an audit by the USDA's inspector general, senior officials blocked investigations on anti- competitive meatpacker behavior from being referred to department lawyers, who can file complaints or refer cases to the Justice Department. 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.

Thomas called the audit's findings "appalling and completely unacceptable.

"We have pressed for increased scrutiny of packers and potential anti-competitive behavior for some time. To think that officials might be side-stepping their responsibilities is intolerable," Thomas said in a statement. "I want some answers and intend to work with my colleagues on the Senate Ag Committee to get those answers as quickly as possible."

Enzi said he is considering legislation in direct response to what the USDA inspector general found.

"He’s hopeful this investigation will result in some good and that the USDA will finally see the need to do its job and guard against anti-competitive packer behavior," said Enzi's spokesman, Coy Knobel.

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 investigations. 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 James 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."

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 anti-competitive 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.

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.

Enzi said he has already introduced legislation to "address the problem of captive supply in the livestock industry to prevent packers from manipulating the base price after the point of sale."

He is also the co-sponsor of a bill to ensure that small and large producers would have market access because it would be unlawful for packers to own, feed, or control livestock seven business days before slaughter.

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