Ag board tables decision on bid

WASILLA — The state agriculture board voted unanimously Thursday morning to postpone consideration on the lone proposal to privatize the state-run slaughterhouse, officials said.

The sole bidder to take over the lone USDA-certified industrial meat plant plead no contest to two felonies two years ago in Oklahoma, court documents show.

A request for proposal (RFP) on the Mount McKinley Meat and Sausage Plant closed at 4 p.m. Monday afternoon. The Alaska Department of Agriculture manages the plant using funds provided by the Agricultural Revolving Loan Fund. The legislature has put the plant on a year-by-year basis. The Board of Agriculture and Conservation voted to issue the RFP to privatize the plant.

Mount McKinley is the only USDA-certified industrial-grade slaughterhouse in the state. Other operations focus on game processing during the critical fall season, when farmers typically cull herds to avoid higher winter feed costs.

Inlet Processing Company, LLC submitted the lone bid. The listed co-owner of Inlet is Rean Brooks, who was overjoyed to be the lone bidder when interviewed by the Frontiersman Monday afternoon, and who pledged to partner with the University of Alaska Fairbanks to provide genetic research and boost local agriculture.

Brooks has also been prosecuted for embezzlement and writing a bad check in Oklahoma, according to Oklahoma court documents and media accounts.

According to a Nov. 10, 2011 story in the Grady County Express-Star, Brooks drew the charges in November 2011, when he sold a piece of equipment to a customer at Standridge Equipment, where he worked as a salesman. Brooks delivered the equipment, took a check, and endorsed it “Standridge Equipment Co., payable to Rean Brooks,” then took the entire payment himself.

At the same time, he wrote a check to Tom Adams of Amber, Oklahoma, the owner of Standridge equipment on June 23, 2011, and received a $4,000 cash payout, according to the Express-Star. The check later bounced due to insufficient funds.

Brooks eventually pleaded no contest to both charges, but his sentencing was deferred for four years. If he has no problems while on probation for four years, he will not be sentenced and his record could be expunged.

Asked about the prosecutions, Brooks said they were part of a larger whistle-blowing scheme against Standridge, which had dealings with John Deere, the international tractor manufacturer. Federal court filings show Brooks is listed as a relator — or whistleblower — in a federal court case involving John Deere, Standridge, the Chickasaw Nation, and Tom and Linda Adams, who co-owned Standridge.

According to federal court documents, the Adams’s directed Brooks to set up an account with the Chickasaw Nation. The Chickasaws received brand new equipment at discounted prices, which they would then trade in to Standridge via forged invoices. The Chickasaws would get the new equipment, while others vendors would get the traded-in equipment at the original General Services Administration prices. The civil complaint alleges that John Deere, Chickasaw Nation, and Standridge all knew about the scheme and did nothing. When Brooks didn’t receive full commission for equipment sold under the scheme, he reached out to the U.S. Government, according to a complaint filed in the federal case.

According to a judgment issued in June 2016, Brooks’ claims in the civil suit were dismissed with prejudice, meaning they can’t be refiled. The United States’ claims were dismissed without prejudice, meaning they can be filed again at some point in the future.

Brooks said he’d been caught up in a larger case involving fraud on taxpayers perpetrated by a major corporation.

“I’m not a bad guy,” he said.

Amanda Swanson, a loan officer for the state’s Agricultural Revolving Loan Fund, which funds operations at the plant, said she was unaware of Brooks’ Oklahoma prosecutions until asked about it Wednesday by a Frontiersman reporter. The Board of Agriculture and Conservation was set to meet at 8 a.m. Thursday morning to discuss the Cook Inlet’s proposal.

Apart from the prosecutions, at least two members of the local agricultural business community expressed skepticism about Brooks’ intentions.

Alaska State Veterinarian records show Brooks imported about 55 head of cattle from Canada in Fall 2014 and early 2015. Some of the meat ended up at Mike’s Meats butcher store in Eagle River, advertised in part as “Locally Grown in Point MacKenzie, Alaska.”

Some of the language used raised alarms with Alaska farmers, including John Anderson, a Fairbanks-based pig farmer. The Department of Agriculture maintains the Alaska Grown brand, which requires that animals spend 51 percent of their lives in Alaska before being qualified as officially “Alaska Grown.” He reached out to the Division of Agriculture, which had an assistant attorney general review some examples provided. Some of the meat sold in Mike’s and Three Bears must be from Canada, Anderson said.

“He (Brooks) doesn’t have the numbers,” he said.

Robert McFarlane, the assistant attorney general for the Commercial and Fair Business Section, reviewed photos of meat on display at Mike’s Meats, and concluded the advertising employed by the company did not violate Alaska Grown intellectual property.

Greg Giannulis owns Mike’s Meats, and said he must rely on Canadian animals to meet demand. He declined to speak specifically about his relationship with Brooks, saying he could have potential future dealings with him. Giannulis said he never advertized falsely, and if he had, he would fix it immediately. He said a conflict between him and Anderson could end up in court.

“He made a big stink,” Giannulis said. “He needs to manage his own damn business.”

At least some of the beef was acquired from a herd in Homer, and actually was Alaska Grown, Giannulis said.

Neither Anderson nor Gainnulis said they disagree that the plant needs to be privatized. Giannulis said plans to begin construction his own private plant in the Clark-Wolverine Area early next year. The ultimate goal is to undersell Seattle animals, but in the meantime, that’s not possible at local prices, some of which are a dollar or more higher than meat imported from Seattle.

“We need to beat Seattle,” he said. “Is it possible? Yes.”

Despite the ruling, Anderson said the episode leaves a bitter taste in his mouth.

“These guys are not going to follow the rules,” he said. “They’re going to follow the rules for a year or two, however long it takes them to meet the proposal.”

Careful management could allow a privately managed plant to break even, Anderson said.

“The plant doesn’t make money by slaughtering animals,” he said. “Can we get to that point? Yes. This feed lot bringing in Canadian animals is not the answer.”

Mike’s Meats is a rival of Mat-Valley Meats, whose owner, Nate Burris, was the president of a group of local meat processors, Denali Meats, that eventually decided not to pursue management of Mt. McKinley.

Burris said Wednesday in an email to the Frontiersman that Denali had withdrawn in part over angry comments Mt. McKinley Manager Frank Huffman made to the Frontiersman in a story reporting the original RFP. He also blamed the Frontiersman for airing Huffman’s sharply worded comments about the situation.

“He(Huffman)/You accused all of us who were trying to solve a problem with being involved for illegal financial gain,” Burris wrote. “I and my partners do not need to be accused of being criminals before we even put forward a proposal.”