--- begin forwarded text 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 ~~~~~~~~~~~~~~~~ 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 --- end forwarded text -- ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Rex L. 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