Companies receiving taxpayer dollars as part of President Donald Trump’s signature food aid program hired a longtime lobbyist to push back on criticism that the government is relying on unqualified contractors, such as an event planner.
“We’re working to take the stories of the impact this is having on farmers, processors, distributors and end users and making sure some positive aspects of the program, from both the economic and social standpoints, are out there too,” said the lobbyist and industry consultant, Dale Apley, who reached out to ProPublica on behalf of the contractors. “It’s not all just certain stories about certain companies that maybe shouldn’t have been awarded contracts.”
The Farmers to Families Food Box Program is supposed to deliver fresh fruit, vegetables, meat and dairy to food banks and other nonprofits. But, as ProPublica has reported, private distributors selected by the U.S. Department of Agriculture through an unusually fast bidding process have raised eyebrows because some of them lack relevant experience or even proper licenses.
At least one contract has already fallen through. Ben Holtz, a California avocado grower who lacked a USDA produce-dealing license, saw his $40 million contract canceled on May 22. The USDA didn’t give a specific reason for yanking Holtz’s deal, but the federal government generally has broad discretion to back out of contracts.
Holtz said he plans to pursue the government’s dispute resolution process to seek USDA compensation for work he’d already done. “They owe me,” he said in a text message.
A USDA spokesman said no other contracts had been terminated and the agency will audit companies to make sure they meet the contract requirements.
Rep. Lloyd Doggett, D-Texas, said the USDA should also cancel the $39 million contract awarded to a San Antonio-area wedding planner called CRE8AD8 after the San Antonio Express-News reported inconsistencies in the company’s representations.
“This contract was issued without a credible background check with a company not licensed to perform and with no work history indicating a capacity to perform at a time of urgent public need for competent delivery,” Doggett said in a May 26 letter to Agriculture Secretary Sonny Perdue. “CRE8AD8 was given until June 30 to complete distribution of the 750,000 boxes in a seven-state region, but to date it has apparently failed to distribute a single box.”
A spokeswoman hired by CRE8AD8 to handle media questions said she was no longer working for the company. The company’s CEO, Gregorio Palomino, didn’t respond to requests for comment.
Lawmakers have also voiced concerns about how the Trump administration is implementing the $3 billion program.
“We share USDA’s goal of providing effective and timely assistance to families, farmers, and food supply businesses like food distributors,” Reps. Stacey Plaskett, Jim Costa and Marcia Fudge said in their own letter to Perdue, dated May 22. “We are concerned, however, that contracts were awarded to entities with little to no experience in agriculture or food distribution and with little capacity to meet the obligations of their award.”
The letter asks Perdue to explain how the USDA wound up picking contractors without relevant experience or proper licenses. Some organizations across the country reported difficulty working with unfamiliar distributors who won the USDA contracts. Meanwhile, well-established firms said their bids were rejected on mistaken grounds.
The Democrats also asked if the USDA thought about apportioning funding to regions based on population. Out of $1.2 billion in the program’s first round, just $46 million is going to the Northeast. Even though the region has the most coronavirus cases, it received the least money of any region except the Mountain Plains, which has almost half as many people. Maine and Alaska were left out of the program altogether. Food banks in the Northeast told ProPublica the imbalance makes it harder to find food for hard-hit communities.
The USDA said it’s evaluating how to reach “underserved” areas in future funding rounds.
The controversy mobilized some contractors who wanted to change the narrative. Apley declined to specify which companies he’s represented or what they’re paying him. He said the companies pay a membership fee to be in the coalition he represents.
While Apley is currently focused on shaping news coverage, he said direct lobbying of Congress could come later.
“Our initial interest right now is getting the story out,” he said. Lobbying “is a possibility being discussed as we proceed.”
Apley’s firm, Black Watch Agribusiness, advises companies on USDA contracting opportunities, according to its website. Apley has been a registered lobbyist on and off for two decades, including as recently as last year, according to congressional records.
Federal contracting rules prohibit using taxpayer dollars on lobbying or political expenses. Contractors are, however, free to use their own funds to lobby, and routinely do.
Trump, his daughter Ivanka and Perdue have personally praised the program. “USDA’s Farmers to Families Food Box Program is an example of Americans helping Americans, and something we should all be proud of,” Perdue tweeted on Thursday.