US watchdog to investigate President Trump’s $28 billion farm bailout program
By Alan Rappeport
The New York Times|
Feb 14, 2020 | 6:20 PM
The U.S. Government Accountability Office is opening a review of President Donald Trump’s $28 billion bailout for farmers harmed by his trade war amid allegations that the money was mismanaged and allocated unfairly.
The investigation came at the request of Sen. Debbie Stabenow, D-Mich., who has been vocal in her concern that the aid program was biased, providing more funds to southern states that voted for Trump and favoring large and foreign agriculture companies over small farms.
The Trump administration, which signed an initial trade deal with China last month, said the farm subsidies would end this year. The program began in 2018 as a $12 billion effort to mitigate losses for farmers who lost sales or faced retaliatory tariffs from China, the European Union, Canada and Mexico as a result of the trade war. The program grew to $28 billion last year as Trump’s conflict with China festered.
Critics have faulted the program for the formulas it used to determine payments for certain crops and for providing funds to big corporate farms. The program, which used a Depression-era fund, allowed farmers earning less than $900,000 a year to receive money if they produced one of the agricultural products that faced retaliation. The government also purchased certain products, such as apples, oranges and pork.
“It’s clear that the Trump administration’s trade assistance payments pick winners and losers rather than help the farmers who have been hit the hardest by this president’s trade policies,” Stabenow said in a statement Friday.
Stabenow requested that the GAO study why payments disproportionately went to large farm operations, if the Agriculture Department was effectively preventing fraud, waste and abuse in the program and whether the model the USDA used to distribute payments accurately reflected trade damage that farmers experienced. Democrats have complained that the program paid subsidies to some farmers that did not need them while leaving those that were suffering from Trump’s tariff war with China without benefits.
The GAO is a nonpartisan congressional watchdog that audits government programs. The agency notified Stabenow’s office in a letter transmitted Thursday that it would take up the investigation.
Democrats are not the only ones that have expressed concerns with the farm bailout program.
Sen. Marco Rubio, R-Fla., joined with Sen. Bob Menendez, D-N.J., and Rep. Rosa DeLauro, D-Conn., in asking Sonny Perdue, the agriculture secretary, to investigate JBS, a Brazilian-owned meat-processing company that received $67 million in bailout funds. Lawmakers raised concerns about the payments given the company’s past legal problems: In 2017, two of JBS’ former top executives, brothers Wesley Batista and Joesley Batista, pleaded guilty to corruption charges in Brazil.
Rubio and Menendez also asked the Treasury Department to investigate possible ties that JBS has with the government of Nicolás Maduro in Venezuela, who the U.S. does not recognize as the legitimate president.
In a letter to DeLauro last month, Perdue said that he did not intend ask his inspector general to open an investigation into JBS, noting that the Department of Justice and the Securities and Exchange Commission were already looking into the company’s practices.