House Speaker Ron Richard wants the legal issues clouding a grain fraud case to clear away a bit before he appoints a task force to study the issue further.
Rural members of the House , alarmed by both the fraud case emerging in east-central Missouri and the grain elevator bankruptcy in northwest Missouri, quickly put together legislation to address the issue ( HB915 ). A bill increasing the bond required of grain dealers and elevators and making it a misdemeanor for a licensed grain dealer to act outside the scope of his license passed the House, but failed to move in the Senate.
Speaker Richard, a Republican from Joplin, tells the Missourinet the cases raised questions he believes need to be addressed.
"We want accountability to make sure that if people are selling or buying grain they are insured, bonded," Richard says.
During the legislative session earlier this year, Richard had said he would appoint a task force to study the problem. Now that federal and state criminal charges have been filed against Cathy Gieseker of Martinsburg, he says he would like to see the case work through the legal process before considering appointing a task force.
Richard expects to gather rural legislators together during the Veto Session in September to discuss whether a task force should be formed.
"I’ll probably wait until Veto Session and have a meeting with all the ag guys and say, ‘Where do we go from here?’" says Richard.
Two cases shook rural lawmakers at the Capitol during the legislative session. The Gieseker case was beginning to surface, with estimates that it could grow to a $15 million dollar fraud case. Federal and state charges have been filed. The total has grown to $27 million with federal prosecutors speculating that it could grow to $50 million. Even as worries centered on the east-central Missouri case, another development took place across the state in northwest Missouri’s Gallatin. The Gallatin Grain Company went bankrupt. In February, Danny Froman voluntarily surrendered his warehouse and grain dealer licenses to the Department of Agriculture after an inspection of the company. Both cases have left hundreds of farmers will little hope of recovering millions in losses.
The major legislation discussed by lawmakers has been an increase in surety bonding requirements. The maximum bond a grain dealer or elevator has to carry in Missouri is $300,000. One bill sought to raise that to $1 million, but industry leaders stated that that high a bond could force elevators out of business. A revised measure sought a maximum bond of $600,000 and a minimum of $50,000. Bond requirements would be based on the amount of business handled by a grain operation.
Some legislators expressed frustration on how to attack the problem. They noted that even a bond of $600,000 wouldn’t come close to compensating farmers for losses and they pointed out that addressing a fraud case is different from addressing an elevator bankruptcy case.