I would call that a case of the fox guarding the henhouse, except that the barnyard metaphors would become too cumbersome.
This two-year-old controversy was in the news last month, because it complicated one of the Obama administration's appointments to the EPA. According to a brief from the Center for Science in the Public Interest (CSPI):
Former top EPA lawyer Jon Cannon withdrew from consideration as the agency's deputy administrator because of an investigation into the nonprofit America's Clean Water Foundation (ACWF), where he once served on the board of directors. An EPA inspector general's report (.pdf) claimed the now defunct ACWF mismanaged more than $25 million in federal grants by allowing a subsidiary of the National Pork Producer's Council to conduct clean-water assessments on hog farms.Because of my earlier inability to acquire documentation about the federal pork checkoff program's $60 million dollar arrangement to purchase the "Other White Meat" brand from the NPPC, I was interested to read how this newer story also turned on a question about appraising the worth of the NPPC's contract. From the EPA Inspector General's report:
The Foundation did not comply with EPA regulations when procuring contracts and obtaining prior approval for contract costs. The Foundation claimed outlays of $21,107,498 ($12,308,145 under grant X82835301 and $8,799,353 under grant X783142301) for contracts awarded to conduct on-farm assessments. The first contract was originally awarded in fiscal year 1999 to the National Pork Producer's Council (Council). Subsequent contracts were awarded to Environmental Management Solutions, LLC, a 100 percent owned subsidiary of the Council. Environmental Management Solutions, LLC later changed its name to Validus Services, LLC (collectively referred to as Validus). The contract was extended several times through fiscal year 2005.These contracts with industry trade associations should be competitively awarded and documented. I think the operations of the major animal agriculture checkoff programs and their associated trade associations play an under-appreciated role in U.S. food policy.
All of these contracts were awarded without competition and without a cost or price analysis. In correspondence with the Director, EPA’s Grants Administration Division on July 27, 2005 and September 21, 2005, the Foundation’s Executive Director said that it did not perform a cost or price analysis because there were no sources of comparable data for it to use. Title 40 CFR 30.45 states that some form of cost or price analysis is required in connection with every procurement action. Price analysis may be accomplished in various ways, such as comparison of price quotations submitted, market prices and similar indicia.