In the last year, the company PolyMet has made large strides toward building Minnesota’s first copper-nickel mine by securing the state and federal permits needed to move ahead on the $1 billion project.

But as PolyMet marches toward construction, a critical state water permit issued is facing new questions — and a federal investigation. A swirl of leaked emails and newly released documents have drawn accusations that the Minnesota Pollution Control Agency hid serious concerns from the public and that career staff at the Environmental Protection Agency were pressured by political leaders to go easy on PolyMet.

The MPCA has denied the allegations in a series of sworn statements from current and former staff. Yet environmental advocacy organizations are using the developments to bolster a legal challenge to the permit, which argues that PolyMet could dangerously pollute the St. Louis River watershed, which drains into Lake Superior.

If built, PolyMet would tap into reserves of copper, nickel and other precious metals like cobalt in an open-pit mine near Hoyt Lakes. The company, which is owned in part by Switzerland’s Glencore, says the mine would create 360 direct jobs and another 1,000 indirect ones. PolyMet contends that new technology, water treatment and tough regulations can prevent environmental disasters that have occurred at copper mines around the globe.

Here’s what you need to know about the allegations against the MPCA and what they could mean for the project going forward:

What are the accusations?

Last week, the EPA released a set of written comments that outlined major concerns with a draft of the MPCA permit, known as a National Pollutant Discharge Elimination System Permit (NPDES), that was issued to PolyMet in December 2018.

In part, federal regulators worried it would allow pollution, violate the Clean Water Act and hinder lawsuits against the mining company if problems do happen. While the permit requires PolyMet to treat water and has a form of water quality limits, the EPA wrote those regulations weren’t enforceable by the federal government, the public and potentially by the MPCA.

On top of that, opponents of PolyMet argue that MPCA staff worked to ensure EPA comments were hidden from the public and court records. Paula Maccabee, counsel for WaterLegacy, an advocacy group suing to challenge PolyMet’s permit, says she learned the comments existed only after she requested records from the MPCA and through confidential sources in the federal government.

On April 5, the EPA read its comments over the phone to the MPCA staff, some of whom destroyed hand-written notes of the meeting. WaterLegacy obtained earlier notes from the MPCA that suggested EPA had concerns. Maccabee said she later learned through the EPA and sources about the official written comments.

Then, earlier this week, the union representing EPA employees in Minnesota released an email they say was obtained through an “anonymous leak.” The union contends the email shows former MPCA Assistant Commissioner Shannon Lotthammer pressuring EPA staff to suppress concerns by submitting them outside a public comment process.

In a May court statement, the MPCA said it “did not receive written comments from EPA, did not take efforts to keep EPA’s written comments out of the administrative record, or fail to disclose the existence of EPA comments.” The union argued this was a lie.

The EPA’s Office of the Inspector General launched an “audit” of the situation on June 12, says an announcement.

What does the MPCA say?

The MPCA maintains there is no scandal to the EPA’s comments and no cover up to suppress them. In filings to the Court of Appeals, the state agency says WaterLegacy is attacking “one aspect” of a lengthy collaborative process between the MPCA and the EPA.

The MPCA says virtually all of the EPA concerns were raised by others during the public-comment period for the permits, and that it has responded to all those concerns.

Richard Clark, supervisor of the MPCA’s metallic mining sector unit, said in a court declaration that the EPA had raised identical questions “throughout the permit-development process.” Those worries were recorded in other notes and submitted as part of the administrative record of the approval process, Clark said.

In other words, state regulators contend the April phone call with the EPA had no new information. As for the missing notes, Clark said the EPA “read their comments very quickly, and the concerns were all ones that we had heard before.” One staffer stopped taking notes throughout the call and said they weren’t helpful. Another said notes he took were discarded after he incorporated them into legal work exempt from disclosure.

Darin Broton, an MPCA spokesman, said his agency adjusted the permit in many cases but said there were other instances in which they disagreed with EPA concerns.

In the end, the EPA did not object or veto the final permit, Broton said. In a statement to the court, Jeffry Fowley, a former longtime EPA staffer who specialized in Clean Water Act regulations and worked part time for the Environmental Integrity Project in 2018, has argued many problems EPA had were not resolved. That includes the discharge limits.

Maccabee and Aaron Klemz, a spokesman for the Minnesota Center for Environmental Advocacy, said the Trump administration’s business-friendly approach might be to blame. The MCEA is also suing over the water permit.

But Broton said he could assure the public PolyMet did not get let off easy.

“There are really high stringent water quality standards incorporated into PolyMet’s permit at the end of the day,” Broton said. “That’s part of the back and forth we had with the EPA is to make sure that there was tough enforceable language in the permit to make sure that the company is doing what it says it’s going to do. And if not we have a way to actually hold them accountable.”

So why did the MPCA ask the feds to wait until after the public comment process?

In a court filing, Lotthammer, the former MPCA assistant commissioner, said her agency was already planning to make changes to its draft permit after the public-comment period.

“Rather than have EPA send us written comments on the version of the permit that we knew we were going to change, we believed that it would be more efficient — both for us and for EPA — if EPA waited to give us any written comments based on the next draft, in which we had the opportunity to address concerns shared by the public,” Lotthammer said in her statement. Lotthammer is now at the DNR.

MPCA staff said the EPA decides itself whether to submit written comments at any point in the permitting process.

Why is this important?

The MPCA has not promised to reevaluate its PolyMet permit in any way. But the developments could help bolster the legal argument of WaterLegacy and MCEA that the water quality permit is inadequate.

Copper-nickel mining comes with risks that iron ore mining does not, which has made PolyMet controversial. The extraction process can create an acidic runoff and leach heavy metals into water. On its website, PolyMet says they will be “monitoring, collecting, controlling, recycling and eventually treating on-site water to meet water quality standards before it is discharged back into the environment.”

Environmental groups have had some success challenging controversial projects in court.

Recently, the Court of Appeals ruled an environmental review of a proposed oil pipeline known as Line 3 didn’t consider an oil spill in Lake Superior’s watershed. The MPCA and Department of Natural Resources said they wouldn’t take final action on pending permits for the Enbridge pipeline until the Public Utilities Commission addressed the court’s concern with the Environmental Impact Statement.

Klemz noted EPA comments have forced revisions from state regulators in the past and should be widely known.

Maccabee said the recent PolyMet revelations undermine the credibility of the MPCA and its permit, which could affect the court case. “Minnesotans tend to believe that we can trust our regulators, that they’re operating openly and fairly — and if they say a permit is good, we should trust them,” she said. “The way the permit was handled in this case benefits one party: And that’s PolyMet.”

So what happens now?

Water Legacy has asked the appeals court to send its lawsuit back to district court for more fact-finding about the EPA’s comments. If granted, that process could be lengthy, said Klemz, who compared it to a trial. He speculated it could bring testimony from former MPCA chief John Linc Stine and others.

The court has not asked PolyMet to suspend its work toward building the mine, however. PolyMet says it is preparing the construction site, which includes renovations on a former LTV Steel taconite plant.

The MPCA has also promised to work on being more transparent in the future.

In a written statement, commissioner Laura Bishop said she was starting “an agency-wide assessment” to “improve accessibility” for those following major permits.

“This will include an openness for oral written comments from any person or organization during our permitting and rule-making processes as well as other times that stakeholders wish to engage with our agency,” Bishop said. “The MPCA will also improve documentation of, and public access to, communications that form the record of agency actions.”