Court Battle: North Dakota Farmer Beats Swampbuster Claim

Dec 13, 2018  | 7 min  | Ep4417

Fraud committed against the USDA occurs every year. The tally goes into the millions of dollars with the cost passed along to tax payers.

Just being accused of breaking the law can be costly for both sides no matter who wins. The fight can be tougher when the federal government alleges wrongdoing and the farmer says they have followed the rules.

You can find more on the topic in a special section of our website -- slash justice.

Colleen Bradford Krantz continues our series with part two of “Justice in Agriculture.“

For months in 2009, Lenny Peterson farmed around the washout that had developed in his LaMoure, North Dakota cornfield. But when his son got the sprayer stuck in the two-foot deep gulley that summer, Peterson asked permission of the local Natural Resources Conservation Service to smooth the edges.

Peterson said he was told the edges could be smoothed as long as the washout’s original depth didn’t change. A local NRCS representative stopped by the Peterson farm to check their progress. The official would later disagree in court about the message he delivered that day.

Lenny Peterson, producer, LaMoure, North Dakota: “I asked him if we could go finish and he goes, ‘As I said, I saw you doing nothing wrong.’ So they went out and finished. And, of course, people who turned us in, they heard about this so they called the state. And that’s when the fun began.”

Peterson is referring to the six-year legal battle which followed the arrival of a letter that fall accusing Peterson and his wife, Patty, of swampbusting – or improperly draining a wetland. Swampbusters are ineligible for farm program payments. The Petersons would ultimately tie-up nearly half a million dollars in the battle, and face more than one sleepless night.

Lenny Peterson, producer, LaMoure, North Dakota: “It’s quite a hair-pulling ordeal to go through…It’s a good thing for seven-dollar corn. All my neighbors were buying land, tractors and machinery. I was paying lawyers.”

NRCS officials came to the Peterson farm in December 2009 to determine whether he had violated the Swampbuster rule. Peterson found agents digging holes in their recently seeded winter wheat. Worried about his crop, he asked the NRCS officials to leave.

Lenny Peterson, producer, LaMoure, North Dakota: “And that was a mistake then too because I got another big certified letter from FSA to pay back all this money…To get the government payments, you have to sign a form that allows them access to your field twenty four-seven, 365 days a year.”

He soon found himself sitting before the LaMoure County Farm Service Agency Committee, a group made up of his fellow producers. The committee voted to restore Peterson’s eligibility for farm program benefits in early 2010, but was overruled by the state FSA office a month later. Additional appeals and government decisions went against the Petersons.

After losing at lower administrative levels, the Petersons decided to skip directly to the National Appeals Division. As decisions in 2011 and 2012 failed to go their way, the Petersons were becoming overwhelmed with legal fees and repayment of tens of thousands of dollars in past crop subsidy payments. Lenny and Patty hit a low point and debated selling the farm.

Lenny Peterson, producer, LaMoure, North Dakota: “There were a lot of conversations. They were kind of one-sided. They were her conversations about giving up, about me being bullheaded, me being stubborn. (Reporter: Are you?) Oh, yes.”

In the 2013, the Petersons sued the NRCS and the case was eventually heard in Fargo. A few weeks after the hearing, Lenny Peterson was in the field when his lawyer called to tell him the judge’s ruling.

Lenny Peterson, producer, LaMoure, North Dakota: “We were combining beans – me and my wife will never forget that – and the phone rang and I got told it. And I just grabbed the radio and told her, ‘We’re going to go out and get bleeping drunk tonight.’ And, yeah, it was really good. Really good news.”

Despite winning the day, the ordeal was far from over. The Peterson’s struggled for weeks to get the government to return the lost subsidies. They were also soon notified the NRCS had pushed the case to the 8th Circuit Court of Appeals in St. Louis. But in early 2015, the NRCS dismissed the appeal just before the court date.

Lenny Peterson, producer, LaMoure, North Dakota: “If they took it to the 8th Circuit and lost, this ruling would have went for all the states in the circuit.”

In the meantime, Mary Podoll had taken over as North Dakota’s state conservationist.

Mary Podoll, NRCS State Conservationist, North Dakota: “So my first day on the job here in North Dakota was meeting producers in the Red River and the eastern part of North Dakota who were angry and frustrated...Everything was being appealed and a lot of things were being managed through lawyers.”

Once the dust had settled, Podoll stopped by the Peterson farm.

Mary Podoll, NRCS State Conservationist, North Dakota: “He really got the feeling it had become personal to some people and I don’t disagree with that.’” …There were some within the agency that had just kind of taken on a whole anti-farmer, if you drain, if you manipulate wetlands, you’re just bad. And that’s not our place. That’s not our role to judge.”

Lenny Peterson, producer, LaMoure, North Dakota: “I was a little leery at first talking to her … We had quite interesting talks. And I give her a lot of credit. And I thanked her for stopping here and listening.”

By 2013, the agency had reorganized compliance teams nationwide, and Podoll pushed North Dakota’s NRCS officials to bring an open mind to their farm visits.

Mary Podoll, NRCS State Conservationist, North Dakota: “It was more: ‘That’s a farmer. Oh, my goodness. You know they’re going to come in and they’re complaining.’ …. You listen to a farmer and they say, ‘I’ve farmed this for 30 years,’ …and you can honestly say, ‘You know, I can see what you are saying here.’”

The Petersons were eventually repaid most of the money they had tied up in the battle with USDA.

Lenny Peterson, producer, LaMoure, North Dakota: “I had to go to a meeting way up in northwest North Dakota and tell about this whole deal. And one guy in the crowd said, ‘So it paid to be bullheaded and stubborn?’ I said, ‘No, it still cost me $150,000 so it didn’t pay. But I won. I got my point across and that was the main thing. It was the principle.”

By Colleen Bradford Krantz,

Grinnell Mutual Insurance