Gripes about use, oversight of tobacco funds prompt state probe, changes

By Brittany Johnson
UK Rural Journalism class

LIBERTY, Ky. -- Concerns about the management of tobacco-settlement money earmarked for agricultural diversification have prompted a state investigation in Casey County.

The controversy has led to distrust among community members overseeing the money and has highlighted loose state controls other types of money from the 1998 settlement between states and cigarette manufacturers.

Some in Casey County’s farming community want to provide more oversight and accountability, and suggest that until state policy provides firmer guidance, similar situations could occur in other counties, if they have not already.

The chief protagonists in Casey County are Marion Murphy, chairman of the local council that endorses applications from local groups for state grants, and Jim Young, who administers several grants for the Casey County Cattlemen’s Association.

Murphy made nine allegations against Young in a March letter to Keith Rogers, executive director of the Governor’s Office of Agricultural Policy, which manages the settlement money and says it is investigating the charges.

Among other charges, Murphy said Young had refused to check for compliance by farmers who received grants from the association; refused to seek refunds from farmers whose contracts were voided; awarded cattle-related money to people who had no cattle; and violated state policy by awarding agricultural diversification money on a first-come, first-served basis.

Casey County farmer Larry Dalton said in an interview that he got his diversification funding of $4,236 on a first-come, first-served basis. The cattlemen’s association has received $130,180 in diversification funds and awarded $94,059.

Young could not be reached by telephone despite repeated attempts. A reporter left five messages requesting that he respond to Murphy’s allegations.

In a Feb.28 letter sent to the council and state officials, Young asked that anyone who “thinks that any program has been administered improperly. . . to please contact me and explain the reasons for thinking so. Knowing the circumstances for a complaint, I may be able to give a satisfying explanation that the Cattlemen’s Association has acted properly in the administration of cost programs. Any such explanation will be made in writing and for public review.”

First-come, first-serve is allowed in most of the model programs established by the state, including those for cattle genetics and cattle-handling facilities, which Young and the cattlemen’s association handled before getting diversification funds.

But the state now encourages local program administrators to use other criteria, and says first-come, first-serve should not be used for agricultural diversification funding.

When the cattlemen’s association applied for agricultural-diversification money, President John Gossage wrote, “A committee of three to five is anticipated” to consider grant applications.

Gossage wrote, “James Young, one of the 12 directors of Casey County Cattlemen’s Association, will select the members of the review committee and assist the committee in accomplishing its purpose. Mr. Young will also be the person having principal oversight of the program’s administration.”

Murphy said in a telephone interview, “It’s not proper for one man to have all the control.”

It is unclear whether Young has established a review committee. He and Gossage could not be reached for comment despite repeated attempts.

The agricultural-diversification funding is intended to help farmers who previously relied on tobacco for their primary income. The grants are targeted to farmers whose goals are to raise their farm’s income, and are awarded on a reimbursement basis for qualifying items.

The program makes matching grants available for aquaculture, horticulture, forestry, and production of vegetables, herbs, fruit, sweet sorghum, small animals, horses, dairy products and direct-to-consumer livestock.

Only the latter two involve cattle. So how did the Casey County Cattlemen’s Association come to be responsible for administering agricultural diversification funds? Rogers, head of the state office, said, it is “not unusual” for one person in a county to administer several programs.

Rogers said he had not replied to Murphy’s letter “because we are investigating the allegations he made. He will receive a response as soon as we’re finished.”

State oversight in question

The state does not require program administrators to check up on grant recipients to make sure they are using money as it was intended, something Murphy said Young has failed to do. However, Dalton, a diversification recipient, said his operation has been checked on more than one occasion.

While the Governor’s Office of Agricultural Policy allows first-come, first-serve funding in some programs, it reconsidered the policy because of recommendations from the county level, said Kara Keeton, spokeswoman for the office.

For the past two years, the office has required annual reports on non-model programs. Model programs report quarterly. Asked if the reports make local administrators more careful about their spending, Rogers said, “I think it is. It’s the first step.”

State officials say they are still catching up with initial programs, and will keep a tighter rein on new ones. They said their next step is wrapping up old programs so it can be more involved in situations like the one that has arisen in Casey County.

“As we get caught up with close outs, we will do spot checks and start to audit on individuals and programs like this,” Rogers said.

In February 2004, the office imposed a lifetime limit of $15,000 that any one recipient can get from any one model program except diversification, for which there is no limit, and cattle genetics, which has a lower limit. The goal was to ensure that the money is spread around and does not only go to a few individuals.
Some members of the Casey County Agricultural Development Council want to focus on the settlement money’s original purpose, to help tobacco farmers recover from the declining tobacco market.

“ I just want to help as many tobacco farmers as possible,” said council member Betty Lou Weddle.
But some Casey County farmers who have never grown tobacco are being funded, according to Murphy.

Money for cattle, goats, pastures

In addition to the diversification, cattle-genetics and cattle-handling-facilities grants administered by the Casey County Cattlemen’s Association, the county’s share of settlement money have also gone to the Central Kentucky Meat Goat Producers Association for goat diversification and to the Casey County Soil Conservation District for forage improvement and utilization.

The programs were approved by the state after being given priority by the county agricultural development council.

After a debate at the council’s March meeting, when Murphy objected to Young’s broad authority to award money, the council agreed to meet only when it has an application to prioritize.

”I don’t know why we even have a board. It has no power, it seems,” said Murphy.

The council was reminded of its limited authority after it sent a list of 26 questions to GOAP Project Analyst Maggie May regarding several issues, including its oversight responsibilities.

“The county council is not responsible for money that is awarded to farmers,” May wrote. “This is the administrators’ responsibility.”

May said if the council has questions about grant recipients’ compliance with regulations, it should first review the regulations with the local program administrator. Then, if questions arise, the GOAP can schedule a meeting with the administrator to review files. The GOAP may, at any time, request to view the administrator’s records when there is evidence of conflicting reports.

The council is made up of six members, each representing a particular agricultural group. Ernest Lynn, of Liberty and Terry Mullins of Yosemite represent the county extension council. Murphy and Weddle, both of Liberty, are representatives of the county Farm Service Agency committee. Brent Ware of Waynesburg and Roger Weddle of Liberty represent the soil conservation district.

Once this six-person council was formed, these members chose two young farmers, under the age of 40, to represent a new generation of `agriculture. Cheston Wilson and Greg Goode, both of Liberty, were chosen to sit on the board.

Here’s a look at each grant recipient in Casey County and the funds each has received through February 2005, other than for diversification:

Goats: The Central Kentucky Meat Goat Producers Association has received five grants totaling $183,149. The program is administered by Ed Lanham and Joyce Cardenas of Lebanon, in adjoining Marion County, who could not be reached for comment despite repeated attempts.

All told, the association has received $564,306, in funds that were allocated to Casey, Nelson, Washington, Marion, Taylor, Green and Adair counties. Casey County funds account for almost a third of the total and are the largest county allocation.

Forage: The Casey County Soil Conservation District has received $415,500 for the forage and utilization program. Pat Williams of the local office of the Natural Resource Conservation Service (NRCS), which serves as the district’s staff, is the program administrator. The forage and utilization program is to improve fertilization and seeding of pastures and feedlots.

The forage program funding has a limit of $5,000 per person per grant and requires a lengthy application process as well as a soil sample. The program currently has a long waiting list for funding, said Valerie Floyd, secretary for the Casey County office of the NRCS.

Cattle: The Casey County Cattlemen’s Association has received $233,000 for improvement of cattle genetics, and has awarded $189,406 to producers. It has received $577,249 for cattle-handling facilities and has awarded $441,334.

For a Casey County News report on the same issue, click here.



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Last Updated: June 25, 2005