The commission is bankrolled by mandatory fees collected from the state's 6,000 avocado growers. Its activities are overseen by the California Department of Food and Agriculture, which referred the matter to state Atty. Gen. Jerry Brown's office for further investigation
Michael Jarvis, a spokesman for the agriculture department, said only, "The audit speaks for itself." Food and Agriculture Secretary A.G. Kawamura was unavailable for comment, Jarvis said.
Critics of the state's complex system of quasi-governmental agricultural commissions said the audit provided more evidence of the need for heightened oversight of state-backed promotional programs for dozens of California specialty crops such as apples, raisins and walnuts.
The government-backed marketing groups were created in 1937 to help farmers boost prices during the Great Depression. Nowadays, the groups' focus has shifted to doing crop research, generic promotion and setting standards for produce size and condition that some experts consider anti-competitive.
Indeed, the avocado commission is just the latest agricultural panel in which state auditors in recent years have found improprieties, including conflicts of interest, poor accounting and possible federal tax law violations. Investigators also uncovered problems at the Kiwi Fruit Commission, the Tomato Commission and the Mendocino Winegrape & Wine Commission.
The administration of Gov. Arnold Schwarzenegger should be lauded for beginning a regular program of auditing the state's crop-specific boards, said Harry Snyder, a Marin County-based consumer advocate and former West Coast director of Consumers Union.
Many growers are more interested in the prices their produce fetches and "don't look behind the curtain to see what's going on at the commission," he said. "That allows the CEO of the commission to be a little king in his own fiefdom."
Some avocado growers say they are troubled by the report.
"It's incredibly blatant," said Mike Reardon, who has 140 avocado trees in Fallbrook, a town in northern San Diego County. "They're supposed to be working for us and doing it with integrity and reasonable fees and costs."
Reardon, as all avocado growers, pays the commission 2.6% of his sales as fees.
The fees fund most of the avocado commission's $11.8-million annual budget. Advertising and promotion accounts for $7.3 million, $2 million covers administrative costs, and the rest pays for research and industry affairs.
