A special committee investigating the unauthorized payment of $1 million from former Dairy Farmers of America CEO Gary Hanman to former board chairman Herman Brubaker has turned up another one — this time, $185,500 to Mississippi dairy producer Buckey Jones.

Current CEO Rick Smith described the incident Tuesday morning in a telephone call to members of the dairy media. The situation also is discussed in a memorandum now in the mail to DFA members.

“Buckey Jones received a series of unauthorized payments from 2001 to 2005,” Smith said. The payments were $3,500 a month from the spring of 2001 to the fall of 2005, he added.

Former CEO Hanman was aware of the payments, but the payments were not authorized by the DFA board of directors, Smith said. 

"Payments to Jones were funneled through a company owned by a longtime friend and business acquaintance of our former CEO," Smith added in the memorandum to members.  

“We’re going to get that money (back), plus interest,” Smith said. And, DFA has notified the federal Department of Justice of the matter.

“I would point out that DFA was the victim here, and that is how it is being treated,” Smith said.

Jones once served on the Southeast Area Council of DFA. He no longer holds any positions with DFA.  

The special committee was formed last spring after the improper transaction between Hanman and Brubaker was disclosed. The committee hired a law firm and an accounting firm to help with the investigation, which included a review of DFA’s accounting policies, reviews and controls. 

"After this review, the special committee determined that DFA's current policies, procedures and practices are sound, and its internal controls are solid," Smith said.

However, the special committee did discover one additional series of improper payments, he added in reference to Buckey Jones.