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Millions misspent by Irvine-based California Avocado Commission
January 13th, 2009, 6:30 am · 26 Comments · posted by Teri Sforza, Register staff writer
In the “what a crock of guac!” department, we offer this:
The obscure, Irvine-based California Avocado Commission spent wildly and with few controls, dropping nearly $2 million on questionable credit card purchases and employee perks; lavish hotel stays replete with booze, body treatments, massages and facials; season tickets to Mighty Ducks and Angels games; remodeling an executive’s home office; and much more over a three-year period, according to a state auditor’s report.
The report, released Friday by the California Department of Food and Agriculture, recommends major tightening of internal controls, as well as seeking recompense from employees and former employees for personal purchases.
There were questionable charge card expenses of at least $1.5 million, and at least $345,799 of unnecessary employee benefit expenses, the audit said.
It happened on the watch of former Commission president (and current Saddleback Church global outreach leader) Mark Affleck (photo right), and blame is being laid at his feet.
“I’m extremely unhappy that we were hoodwinked. I think our good nature was taken advantage of by our former president and CEO,” said Avocado Commission Board Chairman Rick Shade. “I would like the people to know the board has seized control of this commission and is working very hard to make things right.”
Affleck released this statement through crisis communications consultant Bill Furlow:
“For the past several weeks, my attorney has been negotiating a final agreement with the California Avocado Commission that would resolve all issues to its satisfaction. Most of the matters raised in the audit are issues over which reasonable people can disagree. However, to bring this matter to conclusion, I have offered to accept certain expenses and pay for them personally.”
The audit has been forwarded to the Justice Department for review. Stay tuned.
PUTTIN ‘ ON THE RITZ
Consider, if you will, the Commission’s Nutrition Advisory Committee. It was created in the late 1980s to counter the general perception of avocados as fatty and unhealthy, and it sponsors a conference on the wonders of the genuine California avocado every year.
The 2007 Nutrition Advisory Committee Annual Meeting was at the Ritz-Carlton Laguna Niguel (in Dana Point). The Commission spent $3,702 for massages, nail service, facials and body treatments, the audit found.
Rooms costing $850 per night were enjoyed by two board members (and their spouses) and one of the meetings’ speakers. Another dozen rooms cost $300 per night.
More than $2,000 was spent on alcohol, and another $13,000 on food.
In 2006, the meeting was held at The Lodge at Torrey Pines in La Jolla. Rooms for two board members (and their spouses) and a speaker were $600, $600 and $800 respectively; with 13 rooms at $305 per night.
The bill for massages, facials, body treatments and golf was $2,699 .
Meals and beverages totaled $10,974, including more than $2,200 for alcohol.
A 2006 board of directors planning meeting at L’Auberge Del Mar Resort and Spa in Del Mar saw the bill for meals and beverages reach $16,632, including $3,000 for alcohol.
DO HOME OFFICE EXPENSES INCLUDE CREATING THE HOME OFFICE?
About $17,000 was spent remodeling the garage of former commission president Affleck into a home office. Affleck left the commission in May after 20 years at the helm and is now head of global outreach for Rick Warren’s Saddleback Church. “Paying for capital improvements to an employee’s home appears to be improper and could be considered a gift of public funds,” the report said.
Another $24,000 was spent on equipment for Affleck’s home office - including a plasma TV, IPod, vacuum cleaner, Bose headphones, satellite radio and utility sink. Affleck has reimbursed the commission for some items; others were returned; and negotiations were underway for the rest of it.
WE’LL DO BETTER
The commission spent $14.4 million in 2007, according to financial statements. Its budget this year is 
about $12 million. The commission is funded by avocado growers themselves - who pay 2.6 percent of their sales for its care and feeding.
Some growers are angry that multi-million dollar contracts were granted without competitive bidding, and that the Commission spent $86,629 for tickets to Anaheim Mighty Ducks hockey games, and $36,598 for tickets to Los Angeles Angels baseball games.
But things are changing, Shade said. “The Commission has taken aggressive action in the past six months to evaluate and eliminate office policies and procedures that were inefficient and not in the Commission’s best interests,” Shade wrote in the Commission’s official response, included in the audit.
It has created a Finance Committee “and is currently reviewing and, where necessary, revising administrative policies and procedures. This process has achieved greater transparency, accountability and productivity.”
Shade also says, “The Commission has fulfilled its mandate by increasing the positive profile of avocados in this state and elsewhere which represent billions of dollars in revenue and thousands of jobs to the State of California.”
And there are some killer recipes on its web site.
Here’s more detail on the audit, which found:
- questionable charge card expenses of at least $1.5 million, including
- $60,000 for food and beverages at restaurants, with no detailed receipts to verify the reasonableness of the expenditures;
- $39,000 at clothing stores including Nordstroms, Talbots, Ann Taylor; charged by employees at local grocery stores (all for avocados, no doubt)
- $36,000 for staff appreciation gifts, meals, flowers for birthdays, employment anniversaries, etc;
- at least $345,799 of unnecessary employee benefit expenses over 31 months, including
-
- $100,000 for an “auto benefit plan” that included monthly vehicle, fuel and car-purchase allowances
- $66,000 for employee lunches (in addition to the $79,000 spent for food for board and committee meetings)
- $32,000 for home internet/fax lines for employees
- $15,000 for wellness packages that paid for health club memberships, personal trainers, acupuncture, chiropractic care, vitamins and physical therapy
- $26,351 for toll road transponder fees
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26 Comments
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Disgusting
The board should be held just as accountable as the CFO. They review financials every year and they knew how much was being spent.
Wow. Didn’t these people realize they were working for avocado growers and not the County of Orange? Only County executives are entitled to an “auto benefit plan.”
Another ripoff by hucksters! Saddleback Church better be aware of being ripped off. Those donations to the church are probably being used for First Class foreign travel for a “personal assistant” who can’t type or take notes, a la former Red Cross President. So much for commissions being a benefit rather than a piggy bank for ripoff scammers.
An “Avocado Commission”?? Why are we even paying for this at all?
No wonder the damn things cost $2 apiece at the grocery store!
I always wondered why they were so expensive.
So…
Who’s going to jail for this?
Another great christian. Maybe he can have Rick’s home remodeled with donations from his members.
Big suprise,its been party time-city,county,state-what a cesspool of corruption.
Years ago I had a temp assignment working at the Avocado Commission. As I recall they were preparing for some promotional event that seems to fit with what is described. I don’t remember too much about the event since I wasn’t directly involved, but I do remember that they had avocado cook books which were wrapped as gifts for the participants. And they had a lot of wrapping paper left over.
They also helped promote avocados through store displays and promotional materials such as for 5 de Mayo. And as I recall, they cooperated with other products that often would be consumed with avocados such as salsa, chips, etc and maybe tomatoes, I don’t remember the specifics as I would guess this was over 10 years ago. It might have been 15 or 20 or more years ago.
As I understand it there are several commissions that are apparently mandated by the state for agricultural products. There is the avocado commission, I think there is one for cheese that has run those misleading ads we see on TV about the happy cows (they were sued by some animal welfare group for inaccuracy since most dairy cattle are are not happily grazing in open fields. As I recall, the ruling was that it didn’t matter whether it was accurate or not because they were a state commission or something like that. So truth in advertising didn’t apply to them.)
As I understand it also, producers of the agriculatural products are mandated as mentioned in the We’ll Do Better paragraph above, to contribute a certain amount or percentage of their sales to the commission for their product.
Some producers do not like that and want to be able to control their own advertising and expenses for it rather than pay for generic CA …. whatever the product is.
1. The misspending occurred “over a three-year period”. Shouldn’t all these kinds of commissions undergo an audit every year like public companies so that these kinds of frauds can be discovered and stopped early? And any misspending/audit for over 3 years ago?
2. Shouldn’t the Board be responsible too for failing to supervise the CEO? It seems that these Board members are just lazy and/or incompetent rubber stamps.
3. Saddleback Church seems to have done a poor job screening its hires. Apparently they did not spot the lack of integrity of their outreach leader. Probably the church elders are as incompetent as the Board of the Commission. They need to retain an auditor to examine all the spendings by Mr Affleck ASAP.
Sounds like Affleck may not have used the best judgment, but it also sounds like the board is throwing him under the bus to cover for their inattention and/or collusion. Remember, it was BOARD meetings that were at the fancy hotels
Rick Shade has been on the board for 10 YEARS - what has he been doing all that time.
These articles are leaving out major details. The employees of the Avocado Commission, especially the current executive employees, are some of the most HONEST, hard working people out there. They are not to be judged and only did what they were told. It would be a huge mistake to replace the current executive employees and would be detrimental to the Commission. I do not work at the Commission, but do know them. The ex-CEO is responsible. I don’t feel anyone should go to jail for this. Rules and regulations were not specific enough to say Mark was embezzeling, just pushing the limit within the boundaries at the time. He was wrong to do so, but it was not illegal. Sounds like rules and boundaries are in place now that Mark is gone and the rest of the staff can run the commission honestly and appropriately. Again, the remaining staff are not to blame and can be trusted without a doubt!
Marketing is good if if keeps people employed. But the product is way over priced. The commission should focus on insuring stores purchase from local growers versus haveing to buy -rap avocados that walmart, costco or Sams club sells from Mexico or other locals.
Just don’t buy if overprice, support your local farmers market, or better yet, buy from my girls who sell huge, creamy, Fuerte avocados from our tree for “two for a dollar”. Or plant fruit trees, and barter with other neighbors around town.
After reading comments from other sites, I must speak of the issue of spending company money on personal items such as clothes. Has anyone ever heard of company uniforms for big events? I’ve worked in many companies where matching outfits with logos were required for specific events. How dare anyone ask the employees to pay for that. I would decline if I was asked. I bet if you dig deeper into why and how the money was spent you’d find those expenses on personal clothing were for these purposes. This is completely normal in business. The same goes for sports tickets. I am always hearing of companies supporting this trend….again, not uncommon or wrong. Supporting food expenses for employees & board members while out on “company business” is expected in this day and age. Now there are limits as to how far to take this, so this is not an issue. Who makes their employees pay for their own hotel while on business & at big events? Everyone knows this is common business etiquette. Birthday gifts, anniversary gifts, baby gifts, etc., is also common, which I’ve seen at every company I’ve worked for, except a cheap Chinese company which was poorly run. Judgements should not be made based on these articles, but should be honesly and fairly looked into.
I think some of these comissions are nothing more than gentlemens clubs that think no one is paying attention to what they’re doing. Do they really need to go to a resort for their big get togethers. You can go to an Embassy suites or Hilton and rent out one of their meeting rooms for a lot less. Or better yet, set up a meeting tent at one of the growers orchards and stay at Best Western. Good job OCR.
The ruling in the Milk Advisory Board case was not that “false advertising didn’t matter because it was a govt agency”. The ruling was that there are some cows that still graze in open fields in CA, and therefore the advertising is not false. It doesn’t represent that all cows in CA are raised that way. If they were, and ate wild grasses, then milk production and taste would fluctuate, and consumers would complain about that. However, I agree that the advertising is completely misleading and that modern husbandry is disgusting at best.
These agricultural commissions are funded via assessments on growers/producers, and they help all of us by increasing sales of California products to outside the state. While I agree they need to be audited, they are hardly a waste or boondoggle as some seem to think.
The EX-CEO was making $500K for years if you count perks. …yes he is a villan but the board and the industry knew that for decades, they just didnt know he was stealing so blatantly. So the Board itself is also guilty - asleep at the wheel like normal Boards usually are:
YOU MAY FIND THIS INTERESTING:
From the State of California California Avocado Commission Charter:
ARTICLE 3 SECTION 67062. The state is not liable for the acts of the commission or its contracts, except for state-directed supervision of the avocado inspection program….
No member of the commission or alternate member, or any employee or agent thereof, shall be personally liable on the contracts of the commission nor shall a member, alternate member, or
employee of the commission be responsible individually in any way to any producer or handler or any other person for error in judgment, mistakes, or other acts, either of commission or omission, as principal, agent, or employee, except for his or her own individual acts of dishonesty or crime.
No member or alternate member shall be held responsible individually for any act or omission of any member of the commission.
The liability of the members shall be several and not joint, and no member shall be liable for the default of any other members.
We need to urgently pass a county-wide measure that controls the pay and perks for all the higher ups working in the County of Orange Government, from the CEO thru the BOS and down to the Adminstrative mangers.
If they don’t think they get paid too much, unlike what the taxpayers believe we need to immediate start a signature drive that controls their compensation and rids them of perks.
There is a special election in early 2009 so lets do it.
I would say given the current economic conditions and all these stories in the OC REgister regarding the pay and perks of these so called public servants, the OC voters would wait in a hour line just to sign a petition to put this measure to the voters.
Let’s do it … All these Water district execs, county execs, BOS need to cut it out the fat and since they are not willing to cut their pay and their fellow cronies, we need to do it.
If they don’t like it, too bad. They all can try their hand in the private sector or file for unemployment.
Man I’m in the wrong business, that is if I was crooked. Hey Rick, you better start looking at the people that the church is hiring…..
“waste not want not” lays a very good point. Obviously the state wants more rules and regulations. Sounds like things were not very strict before. Past decisions in the company need to stay in the past in a a tactful way, not like this. I’ve heard Mark was a great leader. He probably doesn’t deserve to be judged and brought down like this since regulations were not in place the way the state wants them NOW. Let it go and move forward! Life is too short & precious.
“waste not want not” lays a very good point. Obviously the state wants more rules and regulations. Sounds like things were not very strict before. Past decisions in the company need to stay in the past in a tactful way, not like this. I’ve heard Mark was a great leader. He probably doesn’t deserve to be judged and brought down like this since regulations were not in place the way the state wants them NOW. Let it go and move forward! Life is too short & precious.
LN,
As the article says, the avocado growers are paying for this commission, not you.
LN Says:
January 13th, 2009 at 11:01 am
An “Avocado Commission”?? Why are we even paying for this at all?
I certainly hope that Saddleback Church takes a serious look at this guy. Anyone who thinks that it is ok to spend $17,000 to convert their garage using other peoples money does not hold the same values as the rest of us. To me it would be preposterous to spend someone elses money improving my home. What is stopping Mark Affleck from spending money on his lavish lifestyle using the tithes from Saddleback Church? Especially if he is part of the Global Outreach? How many lavish hotels can he stay in around the world while he is performing his job? And for Truth to state in the comments that the clothing expenses were most likely for uniforms, that is hogwash. Who buys uniforms from Ann Taylor? When I had to work at a convention, I was expected to use my own money to purchase a suit. What a load of baloney. Obviously Truth is employed by the company or married to someone who is. Just because you write it, doesn’t mean the readers will believe it.
Another great expose, Teri!
“Truth,” who are you sleeping with? Uniforms from Nordstrom & Ann Taylor?
$600 to $800 a night hotel rooms? And yes, the board participated in the lavish spending and should be thrown by the members. Since the irregularities were discovered in an audit, everyone is running for cover and pointing the finger.
Amusing comment by Chairman of Board,”“I’m extremely unhappy that we were hoodwinked. I think our good nature was taken advantage of by our former president and CEO,” said Avocado Commission Board Chairman Rick Shade. “I would like the people to know the board has seized control of this commission and is working very hard to make things right.”
Hmmm….. Since Shade & the rest of the board & spouses enjoyed their stays at the luxury hotels, it appears their hands are not clean either! Here are their names:
Good thing I’m on the Ketchup Advisory Board instead of in this guacamole mess. Oops, I’m late to my pedicure - er, I mean important state business meeting.