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Subject: Farm Bureau Controversy Continues
Reply-to: [log in to unmask]
Hi Folks,
The following two articles on the continuing controversy surrounding
Farm Bureau leadership are by A.V. Krebbs from his
AGRIBUSINESS EXAMINER.
Please forward these articles to others, crediting Mr. Krebbs, and
post on chat rooms, etc.
Mr. Krebbs is a long standing, and vociferous, advocate of family
farm agriculture. To receive his electronic newsletter send an
email to: [log in to unmask] To view his website go to:
http://www.ea1.com/CARP/
Kind Regards,
Scotty Johnson
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The AGRIBUSINESS EXAMINER Issue # 79 June 22, 2000
Monitoring Corporate Agribusiness From a Public Interest
Perspective
A.V. Krebs Editor\Publisher
GUEBERT RESEARCH REVEALS: THREE IFBF MANAGEMENT
EXECUTIVES EARN $438,728 FROM IFBF AND AFFILIATES
PLUS $665,096 FROM FARM BUREAU INS. CO.
Recently researched facts concerning the financial arrangements
afforded the executives of the Iowa Farm Bureau Federation (IFBF)
have given added weight to the charges by former IFBF board
member Don Narigon that the state organization's president Ed
Wiederstien and his staff is withholding vital information from the
organization's board and membership.
In addition, Narigon, a former member of the state organization's
budget committee has accused the IFBF executives with not
providing sufficient information about the IFBF's business interests
and "rather than complying with my wishes, they have now
undergone a systematic campaign of misrepresentations and
innuendo seeking to persuade delegates to vote me out of office."
Research by popular syndicated farm columnist Alan Guebert
shows that based on the Internal Revenue Service's Form 990 --- a
detailed financial report that must be made public --- which the
IBFB is required to file each year to keep its tax-exempt status and
Securities and Exchange Commission (SEC) filings by FBL
Financial Group, Inc., a publicly-held insurance company owned
mostly by IFBF, the question remains very much in doubt whether
the Farm Bureau is a farm organization that owns insurance
companies or is it a series of insurance companies that happen to
compose a farm organization.
Writing in his "Farm and Food File" column on June 11, 2000
Guebert points out that according to the Form 990s, IFBF claimed
$114.3 million in revenue in 1996, or about 33 times the $3.9
million it gathered in annual Farm Bureau member dues. Most of
that income, or $99.9 million, was earned when FBL Financial
Group, a holding company owned by 14 state Farm Bureaus
including IFBF, went public.
Because IFBF owned much of the then-privately held insurance
company, it received a large chunk of the sales proceeds when the
company became publicly owned and still owns the lion's share of
FBL's stock meaning that 87% of Iowa Farm Bureau's nearly $610
million in assets were tied directly to the insurance company FBL.
"SEC documents also show three key Iowa Farm Bureau officials
tied just as tightly to the insurance company," Guebert notes.
"IFBF's president, Edward Wiederstein is listed as FBL Financial's
chairman of the board and as a director" while "IFBF's general
counsel and assistant secretary, Stephan Morain, also serves as
FBL's senior vice president and general counsel. IFBF's former
secretary-treasurer, Richard Harris, served as FBL's senior vice
president and secretary-treasurer until last month, when he was
named to an executive position under new American Farm Bureau
Federation (AFBF) President Robert Stallman.
"Serving both masters paid big for the trio. According to the 1997
Form 990, Wiederstein received $81,348 in salary and $21,221 in
benefits and deferred compensation from the Iowa Farm Bureau for
the year ending Oct. 31, 1998. Simultaneously, Wiederstein
received $80,934 in salary and $124,599 in benefits and deferred
compensation from FBL. Grand total:
$308,102," Guebert reports.
Lawyer Morain had an even better year, according to the 990.
Morain received $117,389 in salary and $33,458 in benefits and
deferred pay from IFBF in addition to $312,296 in salary from FBL.
His pay from the two positions totaled $463,143. Harris, the third
dual employee, knocked down $143,114 in salary and $42,198 in
benefits and deferred compensation from IFBF in 1998 while
pocketing $147,256 from FBL. His total 1998 compensation was
$332,579.
"Collectively then," Guebert summarizes, "according to the IFBF's
own documents, the three IFBF officials who compose Iowa's Farm
Bureau Management Corporation earned $438,728 from IFBF and
its affiliates and $665,096 from insurer FBL.
Wiederstein was recently featured in a "60 Minutes" essay on the
AFBF as an example of the generous and often times not reported
executive compensation packages that are part of the AFB's
bureaucratic culture while the essay was noting at the same time
the irony of such profits being in contrast to the steady and
persistent erosion of family farmers income.
Narigon has also charged that "Ed Wiederstien asked me to take
some money and step down but I was counseled to consult an
attorney. I did so and IFBF took the money off the table. In
discussions with my attorney, I did not agree succumb to the
pressure to resign."
Morain said in a June 7 statement that delegates from the 12
southwest Iowa counties Narigon represents had asked for his
resignation because of "internal matters detrimental to Farm
Bureau caused by Mr. Narigon." Narigon, 65, said he was told at a
May 2 meeting of Farm Bureau's 12-member board of directors that
he had 48 hours to resign. He declined and hired an attorney.
In a June 2, 2000 letter to his fellow members (See Issue #78)
Narigon outlined some of the "facts regarding my efforts to
represent the interests of members of the Iowa Farm Bureau
Federation. I have been diligently seeking proper facts about the
proper management of IFBF and its subsidiaries to carry out my
duties as a board member."
"I also have a moral duty to those who elected me to reveal any
problems that I may find," Narigon continued. "The IFBF
membership have the right to know what is happening in this
organization. The leadership of Farm Bureau has been preferred
secrecy.
"From what I have been allowed to see, the numbers vary between
what has been legitimately set by formal procedures and what is
reported to the IRS. I am concerned about where the additional
money is coming from. It is possible that another corporation
exists that is not legitimately controlled by the IFBF and that fails
to report to the board or delegates. Mere access to information
would clear up these questions."
In conclusion, Narigon declared, "I understand that some have said
that I should resign for the `good of Farm Bureau.' I do not believe
that it is proper to resign when I have followed the duties I have to
the membership in this way. Especially when it is unlikely that
any potentially improper activities will go undiscussed after I am
gone."
FARM BUREAU HAILS CROP INSURANCE REFORM AS AFBF
INSURANCE COMPANIES STAND TO BENEFIT
While American Farm Bureau Federation leaders have hailed the
recent Congressional passage of an $8.2 billion crop insurance
package as a major victory for farmers the legislation, as was
pointed out in last week's THE AGRIBUSINESS EXAMINER, was
another apparent political coup by the AFBF.
While the $8.2 billion is slated to go toward reducing premiums on
federally subsidized crop insurance over the next five years while
the same time making a series of changes in the insurance
program designed to get more farmers to buy the coverage from an
insurance industry in which the Farm Bureau has numerous vested
financial interests.
Yet, as Scotty Johnson writes in the Defenders of the Wild Life's
GREEN UPDATES "progressive farmers say crop insurance does
not address the fundamental problems facing agriculture - low
prices. Even conservative Senate Agriculture leader Richard Lugar
(Rep.-Indiana) says crop insurance could aggravate price
depression by prolonging oversupply. So why is Farm Bureau
jumping up and down while their family farmer members want real
solutions to the price problem?"
No one really knows how much Farm Bureau insurance companies
stand to make from increased crop insurance funding. Not even
Congress and the USDA says they will not release that data
because to do so would reveal "corporate strategies." However,
according to RURAL UPDATE research a few basic facts are know
about the AFBF insurance holdings.
1) The Farm Bureau's vast insurance network (currently
54 companies) owns and controls about one-fourth of the insurance
companies approved by the USDA to provide crop insurance.
2) According to USDA documents obtained by RURAL UPDATE
sources, in 1998 Farm Bureau insurance companies wrote $81
million worth of crop insurance premiums. Based on new federal
subsidies reaching approximately $3.4 billion annually, and
assuming Farm Bureau keeps the same piece of the crop
insurance "pie," the Farm Bureau could be writing $161 million
dollars worth of crop insurance premiums this year --- or $800
million over the nest five years, i.e., the duration of "emergency"
funding.
"That's a good chunk of change," Johnson notes. "Especially,
when you figure all the new members they will get. Not to mention
the fact that insurance companies are getting about one-third of the
crop insurance subsidy paid directly to them in so-called
administration and operating expenses. The Farm Bureau's
involvement in the federal crop insurance program is highly suspect.
"One thing is certain: If the Farm Bureau leaders want to remove
doubts about conflict of interest, they should divest themselves of
all affiliation with the
Federal Crop Insurance program. Until they eliminate their stake in the crop
insurance program, they cannot claim they advance crop insurance in the
interests of their non-profit members," he adds.
Currently, Defenders of the Wildlife is spearheading a national effort to get
an investigation of AFBF underway and while the campaign has the support of
many environmental organizations it still needs the solid backing of many more
local and national farm organizations to succeed. Such an investigative
effort, family farm leaders emphasize, must not be seen as renewed conflict
between farmers and environmentalists, but rather as a concerted attempt to
bring long overdue economic and social justice to rural America.
A Defenders report, Amber Waves of Gain, highlights many areas of Farm Bureau
operations and demonstrates that the Farm Bureau is an intricate web of
interconnecting business interests, including insurance companies,agribusiness
giants and banks, linked with the national federation, the 50 state bureaus,
more than 2,800 county bureaus and 4.9 million members,
although 1997 Census of Agriculture figures show that there are
only 1.9 million farms in the U.S.
To obtain a copy of Amber Waves of Gain or a list of the hundreds
of groups joining in the call for action, contact Ken Goldman at
(202) 682-9400 x237. The report is also available in PDF format at
http://www.defenders.org
Scotty Johnson
Rural Community Outreach Coordinator
520 623 9653 X3
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Photographer
University of Iowa
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