In Re Motion to Compel Filed by Dudley M. Steele, Jr. And Betty L. Kruger, United States of America v. Dudley M. Steele, Jr. And Betty L. Kruger

The Inspector General’s office of the U.S. Department of Agriculture (the government) appeals from a district court order purporting to be issued pursuant to the Freedom of Information Act (FOIA). The order permits Dudley M. Steele, Jr., (Steele) and Betty L. Kruger (Kruger) to review memoranda of their pre-grand jury statements prepared by inspectors during an investigation into allegations that Tex-Cal Land Management (TCLM) made improper applications of Farmers Home Administration (FmHA) loan monies and improperly withheld from FmHA the proceeds from sales of loan collateral. We reverse and instruct the district court to dismiss for lack of jurisdiction.

I. FACTS

In July 1983, an investigation was initiated by the Inspector General’s Office (IG) of the U.S. Department of Agriculture against TCLM. TCLM is a management company for approximately 7,000 acres of farmland planted in grapes, almonds and kiwi fruit. The investigation was instituted to look into allegations that TCLM and its related companies made improper applications of FmHA loan monies and improperly withheld from FmHA the proceeds from sales of loan collateral. FmHA loans to TCLM totalled approximately $50 million…