NRCS wins CSP ruling, appeal to be filed

By BRUCE HOTCHKISS
Senior Editor

EASTON, Md. — In its legal assault on three prominent Eastern Shore farming operations, the USDA’s Natural Resources Conservation Service has won Round 1.
But the door was left open, a crack perhaps, if not for victory, then a draw, in Round 2.
The Hutchison Brothers and Mike Elben in Cordova and Sonny Eaton in Queen Anne and the 12 farmland owners for whom they till the land, were notified by letter and document Jan. 14 that they will have to repay a total approaching $1 million to the USDA, money they received under five-year-old NRCS contracts.
That crack in the door could lead to what is called “equitable relief,” under which repayment would not  be demanded.
The contracts were drawn and signed in the Talbot County NRCS office in 2006 under the now defunct Conservation Security Program and the on-farm conservation work, which the grants funded, was all performed as specified. In 2007, the Office of the Inspector General audited the some-500 CSP contracts drawn in Maryland, but found fatal flaws in only those 15 in Talbot.
The OIG ruled the contracts invalid because, its auditors said, the contracts for the landowners should have been included in the Hutchison, Elben and Eaton contracts, and not drawn separately.
All right, said Talbot NRCS officials. They called in the farmers and redrew the contracts to conform to OIG’s ruling.
Not so fast, said the OIG.  The contracts were ineligible from the beginning in 2006 since they did not properly delineate the agricultural operations involved in them.
Hutchison Brothers, Elben and Eaton employed renowned agricultural law attorney Robert Serio of Arkansas and filed appeals.
Karen King, a hearing officer for the USDA’s National Appeals Division, held a three-day hearing in Easton in November.
In her determination filed Jan.14,  a five-page document and  a blow-by-blow account of the case, she wrote this:
The law governing cases like this provides that an appellant bears the burden of proving that an agency’s adverse decision is erroneous by a preponderance of the evidence. In this case, appellant did not meet this burden. The agency decision is not erroneous.”
However, as part of her 16-point “findings of fact,” she appears to clear a path to “equitable relief.”
She wrote:
“Appellant questioned whether it was eligible for CSP before applying. It discussed eligibility with Agency officials, laying out its organizational structure, including its relationship with landlords.
“In 2006, Agency determined Appellant and landlords were each eligible to participate in CSP. In making the eligibility determinations, Agency state officials, conferred with Agency National office officials. In 2006, Agency thought it correctly awarded separate CSP contracts to Appellant and landlords. It now acknowledges it erred in awarding separate CSP contracts.
“Agency, at the National office level, admitted Agency erred in allowing Appellant and landlords to either exclude land under their control or enroll land which they did not control when they delineated their agricultural operations. Appellant fully implemented all items in its CSP contract.”
Even acknowledging the NRCS officials, at both the state and national levels admitted they were wrong in counseling the farmers and their landlords in the drafting of the contracts and, presumably, in advising them to sign them, King nevertheless found substance in the OIG allegations.
But even then, she pointed to the crack in the door.
King, under the law, cannot grant equitable relief.
That can only be accomplished through the NRCS national headquarters in Washington, D.C.
King included, with the transcript of the hearing and her determination, full instructions on how to appeal for equitable relief.
It also appeared to some who read the document, that, in her wording, she made a strong case that relief should be granted.
At no point, though, was the possible reinstatement of the contracts mentioned.
The contracts were drawn for 10 years and had four years more to run when they were lifted.