The Packers and Stockyards Act was passed in 1921 in response to concerns that, among other things, the marketing of livestock presented special problems that could not be adequately addressed by existing antitrust laws. The provisions of the act were based, in part, on prior antitrust statutes including the Sherman Act and the Federal Trade Commission Act. The Packers and Stockyards Act prohibits packers from engaging in or using any unfair, unjustly discriminatory, or deceptive practice or device, or making or giving any undue or unreasonable preference or advantage to another party. The act also makes unlawful packer anticompetitive practices that are antitrust-type actions, including a packer’s activities that manipulate or control prices or restrain trade. Within USDA, GIPSA is responsible for implementing the Packers and Stockyards Act. GIPSA initiates investigations and actions to halt unfair and anticompetitive practices by meatpacking companies and by other parties involved in livestock marketing. To prove that such an activity has occurred under the act, GIPSA, in most instances, must show that the purpose of the packer’s action or its actual effect was to carry out the prohibited activity. GIPSA may also choose to treat such activity as an unfair practice, which may be easier to prove than a violation of the act’s antitrust-type provisions. Also, while mergers are a concern because they can reduce competition, the act does not provide USDA with premerger review authority. OGC also has an enforcement role and, among other activities, represents USDA in administrative and court proceedings addressing violations of the act. The Packers and Stockyards Act allows GIPSA to start investigations and administrative actions to halt packer practices that it deems to be unfair or anticompetitive. When an investigation finds and develops evidence to show that a packer may have engaged in an anticompetitive or unfair practice, GIPSA may file a complaint against the packer. The packer has a right to a hearing, which is held before a USDA administrative law judge. If, after reviewing the evidence presented by GIPSA and the packer, the administrative law judge decides that there has been a violation of the act, a cease and desist order may be issued, and a civil fine may be levied. An administrative law judge’s decision can be appealed to USDA’s Judicial Officer, who acts on behalf of the Secretary of Agriculture. The packer, but not USDA, may file a further appeal to a Federal Circuit Court of Appeals. In 1996, GIPSA reported that dynamic changes had taken place in the cattle and hog industries, including increasing concentration and vertical integration—where packers own the animals. GIPSA stated that these changes had reduced the role of the public markets, where terms of a trade are visible to all. That same year, an advisory committee to the Secretary of Agriculture reviewed the concerns of producers and others about changes in livestock markets and recommended, among other things, a review of GIPSA’s efforts to enforce the Packers and Stockyards Act. The Secretary then asked the OIG to review GIPSA’s program. The subsequent OIG report noted that while GIPSA had a credible record in certain areas, it (1) did not have the capability to perform effective anticompetitive practice investigations and (2) faced formidable obstacles to become effective in performing such investigations. The OIG found that GIPSA had not been organized, operated, or staffed for that purpose and stated that GIPSA should employ an approach similar to that used by DOJ and FTC, and integrate attorneys and economists from the beginning of the investigative process. In response, GIPSA completed a major restructuring of its headquarters and field offices in 1999 and hired staff to strengthen its investigations of alleged anticompetitive practices. GIPSA now has regional offices in Denver, Colorado, for its work on the cattle industry; in Des Moines, Iowa, for handling work on the hog industry; and in Atlanta, Georgia, for its work on the poultry industry. Along with those changes there were relocations of staff and the addition of economists and legal specialists to assist with investigations of competitive practices. Because of continued concerns about whether GIPSA was taking sufficient action to protect competition in livestock markets, GAO was requested to review USDA’s efforts to implement the Packers and Stockyards Act. We issued our final report and recommendations for improvement in September 2000. Subsequently, the OIG completed a follow-up review on GIPSA’s administration and oversight of the Packers and Stockyards Programs in January 2006. It too issued a report with recommendations. We identified two critical factors that detracted from GIPSA’s investigative capability, as well as areas where GIPSA could improve its efforts to develop and share key information. First, the agency’s investigations were planned and conducted primarily by economists without the formal involvement of attorneys from OGC. Second, GIPSA’s investigative practices were designed for traditional trade practices and financial issues the agency had emphasized for years and were not suited for the more complex competition-related concerns it was addressing. While not of a critical nature, we also found that despite prior dynamic changes in the livestock markets, GIPSA’s efforts to periodically update the industry and Congress on competitive conditions and emerging fairness and equity issues were lacking. At the time of our review, OGC attorneys did not usually participate at the start or throughout the agency’s investigations. Assignment of OGC attorneys typically occurred after GIPSA performed an investigation and forwarded a developed case file to them for review and action. Thus, the agency’s investigations were planned and conducted primarily by economists, most of whom had limited investigative experience. GIPSA relied on OGC attorneys mainly for legal advice, and its OGC reviewed the results of GIPSA’s investigations to determine if violations of law might have occurred. In contrast, we noted that DOJ and FTC utilized integrated teams of attorneys and economists to perform investigations of anticompetitive practices. Attorneys were assigned to lead and conduct investigations from the outset so that officials with a legal perspective focused on assessing potential violations of law. Economists were routinely assigned as an integral part of the investigation teams. This approach ensured that a legal perspective was brought to bear on the interpretation of law, development of evidence, and preparation of cases for presentation in administrative and judicial proceedings. We also reported that OGC officials provided GIPSA with only limited informal assistance which had declined over the years as the number of OGC attorneys assigned to assist GIPSA decreased. In fact, the number of OGC attorneys assigned to GIPSA cases had decreased from eight to five because of budget constraints, according to USDA’s General Counsel. These attorneys were also not all assigned full-time to GIPSA’s financial, trade practice, and competition cases; some had responsibilities in other USDA areas as well. We concluded that GIPSA’s program needed additional steps to become more effective and efficient in performing investigations and recommended that GIPSA develop a teamwork approach for investigations with GIPSA’s economists and OGC’s attorneys working together to identify violations of the law. We also recommended that the Secretary reassess current OGC staffing needs relative to current GIPSA investigations, assign attorneys to lead or participate in more complex investigations, and increase the effectiveness of legal specialists by providing them with leadership opportunities and better supervision. We also found that GIPSA’s basic investigative processes and practices were not designed for addressing the complex anticompetitive practices it had begun to encounter in recent years—instead they were designed for the more traditional trade practice and financial issues that the agency had emphasized for years. In comparison, DOJ and FTC had processes and practices specifically designed for guiding investigations of similarly complex competition-related issues. DOJ and FTC emphasized establishing the theory of each case and the elements necessary to prove the case. At each stage of an investigation, including selecting the case, planning, and conducting the investigation, regular reviews by senior officials-attorneys and economists--focused on developing sound cases. For example, DOJ and FTC required their attorneys, with the assistance of economists, to establish a theory explaining how a company’s (or companies’) behavior may be a violation of the law. The case theory and evidence were reviewed early on by senior officials, and periodically as the factual underpinnings of the case came into focus. In contrast to DOJ and FTC, GIPSA does not require investigations to be (1) planned and developed on the basis of how a company’s actions may have violated the law and (2) periodically reviewed as they progress by senior officials with anticompetitive practice experience. GIPSA also did not have specific requirements for approving an investigation or an investigation plan. These conditions were reflected in the comments of GIPSA’s regional office managers and economists, who said that they often had questions about how to interpret the law and how best to scope and perform investigations. Also, OGC officials told us that anticompetitive practice cases that GIPSA had forwarded often had weaknesses that needed to be addressed before they could determine whether a violation had occurred. Both OGC and GIPSA officials said that OGC’s reviews of GIPSA’s cases led to disagreements about the interpretation of the act and the sufficiency of evidence. Finally, we found that GIPSA’s investigative guidance manual had not been revised since the agency’s reorganization and did not contain specific guidance for anticompetitive practice investigations, such as the contents of an investigative plan, the information needed for approval of an investigation, or the frequency of reviews of the investigations. GIPSA periodically made educational outreach efforts and shared information via its Web site and annual reports. GIPSA also held and participated in numerous town hall meetings and conferences with producers and state and industry officials.