Livestock Industry Opinions
Oct 29, 2010
by WLJ

Golden parachutes

Golden parachutes

The midterm elections on Nov. 2 promise to be interesting and potentially historic. They are likely to be the most expensive in history and they are also probably going to go down as the most corrosive elections yet. There hasn’t been much good news or positive spin generated by candidates of either party. Perhaps th divide is just too wide to be bridged by those we’ve chosen to represent us. We’ve spent too long electing the “lesser of two evils.” There just aren’t that many people willing to put themselves up for office and face the scrutiny that our modern system has created. Those who are willing to subject themselves to the process are probably a little bit suspect in their motives.

The livestock industry has gotten caught up in a similar cycle it seems. Whether intentional or not, the interests of this business are being batted about like a ping-pong ball, and industry groups are being used as pawns in a larger game in Washington, D.C. The obvious example is the pending set of competition regulations proposed by USDA’s Grain Inspection Packers and Stockyards Administration (GIP- SA). These rules seem to be part of a larger plan to return people to the middle of the country where they will once again take up plows and livestock and return to the land. In the process, I think some people in Washington, D.C., believe they will restore rural communities and probably gain votes, but those kinds of social programs never seem to work.

In all likelihood, the GIPSA plan to restore competition to livestock markets will end up mired in bureaucracy and the courts for years to come if they manage to get it into place. That may be exactly where the architects intend it to end up anyway. GIPSA Administrator Dudley Butler made his living as a trial lawyer, suing poultry companies in the South and winning big jury trials for producers in areas where there isn’t much love for large corporations. As a supporter of R-CALF and Organization of Competitive Markets (OCM), Butler has often stated his support for regulatory reform of livestock markets. The set of regulations his agency has proposed have been described as a “trial lawyer’s dream.” Given that Butler made his fortune suing poultry companies, they might better be described as “Dudley Butler’s dream.”

Many people and politicians go to Washington, D.C., with the idea that they want to make a difference in this country. In Butler’s case, it seems likely he went to Washington, D.C., to secure his future. Rather than going to work as a lobbyist when he leaves public service, it’s a good bet he’ll end up suing packers, using the same vague and lopsided regulations he is working to pass off on the industry.

He’s already said as much. Speaking in August 2009 at an OCM meeting, Butler told the audience, “There are only certain things a violation of the regulation, if you will, written regulation, that they can fine on. I think a maximum is $11,000 that they can fine, $11,000 a day. But the real money that you are talking about comes from the section dealing with damages, compensatory damages, to other types of damages that DOJ [Department of Justice] can either seek or you can seek in a private right of action.”

The law of the land that the industry will be forced to live with will be Butler’s golden parachute.

As a former GIPSA administrator who helped to write the regulations, Butler would be a valued member of any legal team suing packers for any potential future violation of the competition laws. His services would be in high demand and, undoubtedly, very expensive. It seems likely that he is well aware of that fact, given his statements on the topic. On Nov. 2, it seems pretty clear there will be a massive shift in the makeup of Congress, one that will force the administration, including USDA Secretary Tom Vilsack and GIPSA Administrator Butler, to work closer to the middle of the political spectrum. Perhaps that will force the pair of them to rethink their proposed regulations, or at least their approach to dealing with Congress on the issue. It might also force the duo to start working on that economic analysis they have been trying to avoid. Vilsack has already had egg on his face once during the first half of Obama’s tenure. Having Butler out suing packers under the rules he just wrote might not look so good the next time he decides to look for a political promotion. It was said of ag secretaries during a previous administration that they should be seen and not heard. There have been a lot of changes under the Obama administration; it’s a good bet that’s not one of them though. — JOHN ROBINSON

Sales Calendar

Goto live view to see the calendar