October

19, 2015

Secretary Tom Vilsack
United States Department of Agriculture
1400 Independence Avenue, SW
Washington, DC 20250

Dear Secretary Vilsack:

It has come to my attention that the American Egg Board may have engaged
in anti-competitive practices and violated federal law by directing a coordinated
campaign to reduce marketplace demand for Just Mayo, a popular vegan
mayonnaise alternative produced by Hampton Creek, a Silicon Valley based food
company.

As you know, the American Egg Board (AEB) is an administrative body
appointed by the U.S. Department of Agriculture (USDA) to oversee the national egg
checkoff program, which imposes a tax on egg producers in order to fund research
and promotional activities designed to increase demand for eggs and egg products.
According to their website, the AEBs mission is to increase demand for eggs and
egg products through research, education and promotion.

But in carrying out this mission, the AEB is obligated to abide by certain
statutory rules and regulatory guidelines. For example, the law that established the
Egg Board prohibits the use of funds for political purposes. The relevant section of
the authorizing law states: no funds collected by the Egg Board under the order
shall in any manner be used for the purpose of influencing governmental policy or
action. Similarly, the USDAs Agricultural Marketing Service, which conducts
oversight of commodity checkoff programs, issues guidelines that forbid any
advertising considered disparaging or those that depict other commodities in a
negative or unpleasant light via either overt or subjective video, photography, or
statements.

But recent news reports1 have brought to light a series of emails, obtained
under the Freedom of Information Act, that contain compelling evidence that AEB

1 http://www.bizjournals.com/sanfrancisco/blog/2015/09/hampton-creek-just-
mayo-fda-eggs-unilever-lawsuit.html;
http://www.eatdrinkpolitics.com/2015/09/02/hampton-creek-targeted-by-usda-
controlled-egg-industry-program/

leadership, including the Egg Boards President and CEO, may have violated the
federal laws and administrative regulations governing checkoff programs. The 600
pages of correspondence suggest that members of the AEB staff, USDA officials, and
top executives from the egg industry engaged in a strategic, multifaceted campaign
to use the power and resources of the federal government to undermine the
economic prospects of Hampton Creek, based on their fear that the food start-ups
product, Just Mayo, represented a crisis and a major threat to the egg industry.

I am writing to request a thorough investigation into all activities and
correspondence of the American Egg Board related to Hampton Creek.

Will the USDA thoroughly investigate whether the American Egg Boards
appointed board members and alternates abused their position as members
of the board and government appointees?
Will the USDA thoroughly investigate the role that Joanne Ivy, President &
CEO at the American Egg Board, played in coordinating efforts to undermine
Just Mayo?
Who among the members of the board were involved in the conspiracy to
pressure Whole Foods into removing Just Mayo from its shelves?
Was Roger Glasshoff, the National Supervisor for Shell Eggs at the USDA-
Agriculture Marketing Service, appropriately acting within the scope of his
duties and the USDAs ethical standards when he advised the American Egg
Board to contact the FDA with respect to their complaints about Just Mayo?
Is it illegal for the American Egg Board to petition a federal agency either
directly or through an agent to protect its members market interests?
Have any of the American Egg Boards marketing efforts been found to be
disparaging to Hampton Creek or Just Mayo?
What is the penalty when a checkoff program is found to be violating the
advertising standards that the USDA has established?
Did the American Egg Board violate the provisions of 7 U.S.C. Section 2707 in
petitioning the FDA to look into whether Hampton Creek was in compliance
with the FDAs labeling policy?

I appreciate your prompt and complete response to these questions. But
regardless of what we may learn from an investigation into the American Egg
Boards potential targeting of Hampton Creek, the recently released emails raise
important questions about the legitimacy and the fairness of agricultural commodity
checkoff programs generally.

These checkoff programs first began under the Agricultural Marketing
Agreement Act of 1937, which Congress passed in response to the dire economic
conditions and plummeting crop prices of the Great Depression. But today, with an
economy and a farming industry that have changed and improved substantially
since the 1930s, are these programs still necessary?

Is it fair to give a select, though expanding, group of commodity producers

privileged access to the powers of the federal government in order to promote their
products? If these Great Depression era institutions have outlived their purpose,
and if evidence suggests they behave like state-sponsored cartels that intimidate
and handicap their competition, should Congress continue to authorize them?

As the inquiry into the American Egg Board emails proceeds, I look forward to
exploring these questions and others that will help Congress consider the efficacy of
agricultural checkoff programs in the 21st century.

Sincerely,



Senator Mike Lee