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Briefing Paper | Shell Game Diverts Millions of Farm Tax Dollars to Kansas Lobbying Group, Threateni

Under federal law, every head of cattle sold incurs a $1.00 tax, which is to be collected by state entities to be used to benefit the American cattle industry. A review by the Organization for Competitive Markets of one of the largest of these state programs, the Kansas Beef Checkoff Program, reveals a system rife with illegal financial payments and other conflicts that harm the economic well being of American cattle producers.

The major findings of this report are:

  1. the state checkoff tax collector, the Kansas Beef Council, is actually the Kansas Livestock Association, which is illegally collecting and administering the federally mandated beef checkoff assessment;

  2. the Kansas Beef Council is not a separate entity as required by law;

  3. the purported nonprofit does not submit IRS Form 990s as legally required;

  4. the dubious legal structure of the Kansas beef checkoff lacks transparency and makes it impossible to determine how producer funds are being spent;

  5. the limited financial information available reveals numerous financial irregularities;

  6. funds are controlled by a minority of producers who suffer from conflicts of interest;

  7. Kansas checkoff funds are used to harm the economic interests of the majority of producers by opposing policies that benefit American farmers.

This groundbreaking report provides overwhelming evidence that Kansas cattle producers are being forced to pay into a scheme which violates federal law that actively harms their own interests. Among other findings, readers will discover how shell corporations disguise legally questionable activity and self-dealing, the reason the Kansas Beef Council pays nearly twice as much for office space as the market rate, and why the former executive director of the Kansas Livestock Association earned $277,128 in 2016 for one hour of weekly work. Deceptive actions by the Kansas Livestock Association place a dark cloud over the national Beef Checkoff Program, jeopardizing its existence.

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