Story Published:
May 16, 2008 at 5:36 PM CDT
Story Updated:
May 16, 2008 at 5:36 PM CDT
SPRINGFIELD -- The nation's largest dairy co-op is investigating how it handles money and who's handling it. The probe follows a revelation of a secret payment of $1 million by the former chief executive officer of Dairy Farmers of America to its former board chairman.
DFA told hundreds of its local farmers that the personal transaction was only discovered recently, and involved Gary Hanman, an executive well known many in the Ozarks.
DFA has 23,000 members nationwide. It moved its headquarters to Kansas City from Springfield a few years ago, after 30 years of growth and consolidation as Mid-America Dairymen.
Hanman ran Mid-Am and DFA for almost 40 years. He has been a key industry insider in keeping dairy farmers happy by getting them a high price for their milk.
DFA revealed that, in 2001, Hanman, then CEO, privately arranged for then-board chairman and friend Herman Brubaker to receive $1 million. DFA says it found what it calls an “unauthorized transfer” while looking at increasing its financial investment in one of its many subsidiaries.
In a letter to its 23,000 members nationwide, the co-op says both men have repaid the million dollars with interest.
DFA admits it has been under investigation in the past by the Justice Department and several state attorneys general over allegations of trying to monopolize the milk market.
A spokeswoman says she does not know if the feds will be investigating the million-dollar deal.
DFA has two board members from southwest Missouri. Both declined to talk to a reporter about the disclosure. A reporter’s efforts to contact Hanman were also unsuccessful.
