THE BLOG

Shadow Elite: Government & "Big Cheese"

11/11/2010 08:32 am ET | Updated May 25, 2011

For anyone concerned about the obesity epidemic, like, say, the First Lady, documents posted on the New York Times website this Sunday make for an infuriating read. They feature a group called Dairy Management Inc., which strategized with Domino's to make a pizza line with 40 percent more cheese; commissioned a study on consumers they dubbed "cheese snacking fanatics"; and heralded 2002's "Summer of Cheese", resulting in the use of more than 100 million pounds of extra cheese.

Most disturbing, however, is that the Times reveals the fact that Dairy Management is not just a garden-variety industry trade group. It is a creation of the Agriculture Department, which is supposedly central in trying to help Americans fight the fat.

Even after reading the Times description of Dairy Management, you might still be left wondering, 'wait, what is that organization, exactly?' To us, though, Dairy Management is an easily recognizable creation of the shadow elite era, as examined in Janine's book of the same name: a public-private hybrid characterized by fuzzy boundaries and sometimes clashing missions.

So what is Dairy Management? Its website -- a dot com, not a dot gov -- looks to be a dairy lobbying or trade association. It states that Dairy Management "helps build demand for dairy on behalf of dairy products" and directs readers to more than a dozen other sites, which are listed as dot com's or dot org's.

It's hard to see a tie to the government, but the Times shows that there is indeed a connection. Reporter Michael Moss describes Dairy Management as a non-profit "marketing creation" of the U.S. Department of Agriculture dating back to 1995:

[Its] annual budget .... is largely financed by a government-mandated fee on the dairy industry. [T]he Agriculture Department....approves its marketing campaigns and major contracts and periodically reports to Congress on its work.

Moss notes that "Although by law the Secretary of Agriculture approves Dairy Management's contracts and advertising campaigns, the organization...has become a full-blown company..." Its longtime chief executive earns three times what the Agriculture Secretary earns. Not bad for a supposed "non-profit".

It's sort of a half-in, half-out hybrid marketing group, a set up that is not at all unusual these days. Janine found in Shadow Elite that ambiguous arrangements and blurring of institutional boundaries seemed to spring up as the Cold War ended, and as government became increasingly enmeshed in business through outsourcing and the injection of management principles into the public sphere. When walls separating functions and ensuring balance of power are weak, players can concentrate and intensify their influence. And the ambiguity of purpose, origin and sponsorship allows those in charge to exploit the connections when it suits them, and distance themselves when controversy erupts.

How does the ambiguity work with Dairy Management? In this case, the fact that the government supports the dairy industry (among other ag industries) helps insulate leadership from the charge that government obstructs private business. But when asked about Dairy Management's role, the Agriculture Department was able to emphasize to the Times the looseness of its connection:

[T]he department said that dairy promotion was intended to bolster farmers and rural economies, and that its oversight left Dairy Management's board with 'significant independence' in deciding how best to support those interests.

Dairy Management can also use the government's imprimatur as a shield when it needs to. When Dairy Management's billing of dairy foods as a diet aid was challenged as false, Moss writes, "government lawyers defended it, saying the Agriculture Department 'reviewed, approved and continually oversaw' the effort."

In the end, perhaps the most troubling statistic in the Times investigation is that Dairy Management has a $100 million plus budget -- while the entire budget for the Department's health-focused Center for Nutrition Policy and Promotion is just $6.5 million.

The Center, and the whole anti-obesity activist community, face a formidable fight. Dairy Management's agenda for the "2010 Dairy Innovation Forum" says it all. One session description for "Dairy's Place in the School Nutrition Landscape" notes that "long-term food preferences are often formed in the school cafeteria -- today's students are tomorrow's dairy consumers." One of the "innovations" they discussed? Domino's success in the school pizza marketplace.