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What the legislative auditor will — and won’t — investigate about a key PolyMet permit

Legislative Auditor Jim Nobles
MinnPost photo by Erin Hinrichs
Legislative Auditor Jim Nobles said the investigation is focused on “transparency and openness and the degree to which the people at the Pollution Control Agency adequately documented their decision-making process” and interactions with the EPA.

The Environmental Protection Agency and the Minnesota courts are investigating allegations that state regulators hid flaws with a crucial water permit won by Minnesota’s first copper-nickel mine.

In response to the controversy over PolyMet, state lawmakers have also opted to investigate. And to do so, they’re using a favorite tool to make sense of divisive issues: the Office of the Legislative Auditor.

State Rep. Rick Hansen, a South St. Paul DFLer who chairs the Legislative Audit Commission, asked auditor Jim Nobles in late June to scrutinize whether the Minnesota Pollution Control Agency broke from policy or law when it approved PolyMet’s permit in 2018.

The step is noteworthy for a Legislature that includes many PolyMet supporters from both political parties. Yet for now, key political leaders, including Gov. Tim Walz, are only questioning the MPCA’s regulatory process, not its final product. Environmental advocates, on the other hand, have used the investigations to bolster a legal challenge to PolyMet that argues the $1 billion project near Hoyt Lakes could pollute the St. Louis River Watershed and Lake Superior.


Current and former MPCA staff say they followed state rules and maintain standards in the permit are rigorous. 

While Hansen said Tuesday the auditor’s findings could spark legislative action, the office is “not reviewing whether PolyMet should occur or not.” 

How we got here

There are two intertwining debates over the water permit, known as a National Pollutant Discharge Elimination System Permit, which was issued to PolyMet in December of 2018, shortly before Walz took office.

The first issue is whether the MPCA hid comments on the permit made by the EPA. The feds recently disclosed a set of written comments outlining criticisms they had with the water permit. But they were initially read over the phone in April 2018 to MPCA staff, who urged the EPA to avoid submitting them during a public comment period. Some staffers destroyed hand-written notes of the meeting, which was not made public.

State Rep. Rick Hansen
MinnPost photo by Walker Orenstein
State Rep. Rick Hansen
The MPCA says PolyMet opponents are misconstruing one small part of a yearslong back-and-forth with the EPA. Declarations to the Minnesota Court of Appeals say the comments read over the phone had been raised before by the EPA and raised again by others during the public comment period. 

Former Assistant Commissioner Shannon Lotthammer said in a court statement that they asked the EPA to keep comments out of the public period simply because they were working on a draft of the permit they planned to change. Later EPA feedback would be more useful, she said. 

“I am not aware of any MPCA discussions of a strategy to keep EPA’s written comments permanently out of the administrative record,” Lotthammer said. “The only goal I am aware of was that those comments come at a time that would make the permit-development process more efficient.”

The second issue, which WaterLegacy and other environmental advocacy groups have argued, is whether the EPA comments highlight big flaws with the permit. Federal regulators said they worried the MPCA’s permit would allow water pollution from the mine and violate the Clean Water Act. While the permit does require PolyMet to treat the water and has a form of water quality limits, the EPA said it believed the regulations could not be enforced by the federal government, or potentially the MPCA. It could also block lawsuits against PolyMet if there is pollution, the EPA said.


State officials say some of the comments were addressed and they disagreed with the EPA about others. The MPCA maintains its permit is tough and enforceable. The MPCA is also quick to note the EPA has not rejected the permit that was eventually issued. 

But the EPA’s inspector general launched an audit of the situation in mid-June. Then, last month, the Court of Appeals also sent WaterLegacy’s case to Ramsey County District Court to sort out what had happened.

The MPCA permit is just one of many PolyMet has won over a 14-year review by state and federal regulators. The project also received a Permit to Mine in 2018 from the state Department and Natural Resources, for instance.

A state audit

One day before the Court of Appeals order, Hansen asked for the legislative auditor to step in. The DFLer, who also chairs the House Environment and Natural Resources Finance Division, faced pressure by some, including the Star Tribune’s Editorial Board, to hold public hearings on the water permit.

But Hansen said he believes the auditor “will be more thorough and nonpartisan and can probably reach more facts over a period of time than a hearing.” After a report is done, Hansen said the audit commission, which is run by DFLers and Republicans from the House and Senate, can hold hearings on it.

“I felt the better method for inquiry was the legislative auditor,” he said. “Rather than a public hearing, the auditors and staff can look through the documents judiciously and report back to the Legislature in terms of what they find.”

So what exactly is the auditor looking at?

Nobles, who heads the office, said the investigation is focused on “transparency and openness and the degree to which the people at the Pollution Control Agency adequately documented their decision-making process” and interactions with the EPA.


“We will not attempt to get into the substance of the environmental reviews and whether or not the project is sound financially, or environmentally appropriate,” Nobles said.

For starters, Nobles said he’s asked for “a lot of emails” at the MPCA to see if they “reveal some sort of attempt to keep the EPA from providing a written document to the state.” Then he said they expect to call in MPCA staff for interviews.

While the auditor’s office has subpoena power, Nobles said there are limitations. For instance, he won’t have jurisdiction over the federal government and EPA staff. Plus, much of the same ground will be covered by the district court, Nobles said. That court will eventually weigh in on the rigor of the MPCA permits.

Paula Maccabee
Paula Maccabee
Still, Nobles said he thinks the investigation is useful. The audit can serve to translate complex court proceedings for legislators and the public, he said.

Paula Maccabee, attorney for WaterLegacy, said the auditor can use whistleblower protections to coax testimony and also look at what reforms could be helpful at the MPCA. The auditor has a track record of inspiring legal change. Its report on child care fraud earlier this year sparked a multifaceted response from the Legislature.

While the legislative audit commission is run by both parties, efforts to reach GOP Sen. Mark Koran, the vice chair, were unsuccessful this week.

Walz told reporters last week that he’s supporting the audit, even though he doesn’t doubt the strength of the permits and said he has “full faith” in the MPCA. “The public has to have trust and belief in a system to make sure those checks and balances are there and that’s why I do support open, robust look to make sure this process was working the way it’s supposed to,” the governor said.

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Comments (22)

  1. Submitted by Phyllis Kahn on 07/11/2019 - 01:26 pm.

    The point I continually make is that all of these projects, particularly a cleanup process must be backed by a bond, not just a financial guarantee from a company that will go belly up at the same time as the performing company. The fact that, if they can’t get a bond or if it is financially prohibitive gives important info about the project.

    • Submitted by Julie Stroeve on 07/11/2019 - 05:29 pm.

      good one, Phyllis! no permit without a billion or two dollar bond that is set aside for god forbid, environmental cleanup or disaster during or after the mining. I’m pretty sure the history of copper-nickel mining points to disaster and we here in Minnesota deserve to insist on clean-up guarantees without bankruptcy as an excuse. the actual numbers on long-term jobs are really sketchy. I support workers, but I think there’s utility in employing unemployed miners in infrastructure jobs as opposed to risky mining jobs that 1) are short-term, and 2) create untold environmental disaster.

  2. Submitted by gloria flor on 07/11/2019 - 03:24 pm.

    Minn Law (6132.3200) states that all mining areas need to be maintenance-free once the project is finished and yet somehow we are at this awkward place where it is necessary to secure bonding for post-mining “issues”–just how did this miraculous quantum leap occur? The door should have been closed again on this industry because it leaves a gargantuan MESS ceremoniously deposited in the host community which requires a legion of angels to pray non-stop that leaking won’t occur. Well, not one sulfide mine exists that does not leak. Read again–not one sulfide mine exists that does not leak. It is the nature of the beast in this type mining. So really all they are down to quibbling over is how large fines will be paid. No mining company argues about fines because their profits far, far exceed the fines and they are happy to pay them. They do not care about the ethics of this because they answer to stockholders, not the community bequeathed the toxic mess in ad finitum.

  3. Submitted by gloria flor on 07/11/2019 - 03:30 pm.

    Sorry–Ad Infinitum

  4. Submitted by joe smith on 07/11/2019 - 04:17 pm.

    Just another delaying tactic, this time by WaterLegacy. Green advocacy groups have been doing this for 2 decades. Thank goodness we are at a place where Polymet should begin mining soon.

    • Submitted by Julie Stroeve on 07/11/2019 - 05:23 pm.

      Joe, no matter where you come down on this permitting process, surely you want to obtain, retain, and maintain a pristine environment (land, air, water) wherever a mining operation is proposed. And you want to hold the mining multi-nationals (in this case Brazil – and perhaps another country that recently acquired the parent company) accountable for any damage they do to our land, air, and water and the clean-up necessary to restore lands, air, and water. You, your children, and your grandchildren expect you to protect our environment. So, no, it’s not a problem with green advocacy groups. It’s incumbent upon Minnesota agencies to uphold the law with no corners cut before risky mining operations commence. We can ask for nothing but adherence.

    • Submitted by William Hunter Duncan on 07/11/2019 - 07:30 pm.

      “Thank goodness we are at a place where Polymet should begin mining soon.”

      Good for you, maybe, in the short term. Future generations won’t think it a good thing though, as they pay the price of letting a foreign corporation plunder, pollute and run (as predictable as the rising and setting of the sun). Whatever money put aside now for cleanup is sure to be inadequate, and most likely it will be plundered too before it is needed.

      MAGA!!!

    • Submitted by Scot Kindschi on 07/11/2019 - 08:23 pm.

      Let’s hope not.There will no reason for anyone to spend a nickel in NW MN again. Say good-bye to the tourist trade, which is the only thing holding the economy together up there.

      • Submitted by David Lundeen on 07/12/2019 - 11:08 am.

        Let’s not forget that the support for the polymet mine among older constituents is really just a small segment people in northern Minnesota looking for one last paycheck before they die with no regard of the destruction they leave behind for the next generation

      • Submitted by Jim Marshal on 07/13/2019 - 02:27 pm.

        I always get a kick at how visitors from the twin cities seem to think that arrowhead residents should be grateful for all of the low wage, service sector jobs and inflated real estate values their tourism dollars create. I understand your objection to copper-nickel mining and have a lot of concerns about it but threatening to take your VRBO and gas station business elsewhere if mining commences is just going to fall on deaf ears up here.

        • Submitted by William Hunter Duncan on 07/14/2019 - 10:21 am.

          Jim,

          I get it, tourism does not suffice. Mining that will cost Minnesota more in the long run than we get in wages and taxes, letting a foreign corporation take most of the profits and the resource international, is not the answer however.

          The answer looks more like, look to rebuild local foundations – if water and food are primary and essential, start there. Empower people, not corporations, empower locals, not distant rentier/landlords. That is a question for all America, after forty years of neoliberal globalization. How has that worked for us. most of us? Time to expand the conversation.

        • Submitted by David Lundeen on 07/15/2019 - 08:37 am.

          As a St Paul resident, I’ve never wished for a broad swath of northern Minnesota, or anywhere else, to be left with low-paying jobs. You make a lot of easily disproved assumptions. First, that a mine which will hire less than 200 people, and many of those from inside the company, will provide a financial windfall. They won’t, instead the miners who do work there will be left standing in the unemployment line while executives pocket huge bonuses and the company goes bankrupt.

          I suggest you read what’s happening in Wyoming coal country right now. Many of these companies are going bankrupt and leaving devastation in the wake. These foreign companies couldn’t care less about workers in northern Minnesota.

          • Submitted by Jim Marshal on 07/17/2019 - 09:01 am.

            You’re right Paul. These mining company execs don’t care about the people up here or the environment. The sad thing is that the small number of good paying jobs this mining would create is more than anyone else has offered the people up here in 50 years. If we really want to transition this area and its people away from mining; we need to give them better alternatives and increase capital investment in the area.
            I think if more people actually took the time to drive through some of these range area towns and could see the crumbling roads, dilapidated houses and vacant downtowns, they might not be so quick to judge these people for wanting a new mining project.

  5. Submitted by richard owens on 07/11/2019 - 04:21 pm.

    “The only goal I am aware of was that those comments come at a time that would make the permit-development process more efficient.” (MPCA official)

    “Efficient?” That’s sounds like mining company talk for “FAST.” The public comment period, the EPA assessment and the record keeping for compliance with the Clean Water Act are not designed to be EFFICIENT, but to safeguard the state and federal waters according to the LAW. We fought hard for that law.

    Historically, after asbestos was found in drinking water around Lake Superior, Reserve Mining was told by a federal judge to stop dumping all their tailings in the lake. A favorable appeals court reversed the order, and it took 6 more years to stop the blatant polluting of Superior purely for Reserve Mining’s profits. The Clean Water Act was supposed to stop this practice all over the country, and it came only after after much citizen activism that Reserve was finally stopped.

    OBVIOUSLY there has been an attempt to suppress scrutiny of this permit, and emails indicate the MPCA was working for Polymet. Like Enbridge, it appears these conglomerates have captured our regulators and influenced our politicians to violate their trust. The legislative auditor should not give excuses for a cursory look at the permitting, but rather a thorough investigation should be done, even if it requires the governor set up a panel to do so.

    History should be our guide. This time as well as the last time workers and their jobs are used as hostages to enforce the company’s will over the public’s rights and the law. We do not have to trade clean water for temporary jobs.

    That is a false dichotomy. The effects will be more permanent than the veins of sulfide rock crushed to talcum powder consistency and washed to create copper, nickel, and sulfuric acid that will change the pH and the life that is supported by those waters.

  6. Submitted by Elanne Palcich on 07/11/2019 - 04:28 pm.

    Everyone following PolyMet knew that Glencore was going to take over. A penny stock company (PolyMet), which has never run a mine, could in no way afford to open a $1b project. Yet our politicians/legislators have been willing to turn huge swaths of land in northeast Minnesota over to foreign mining conglomerates. The reason? To get the labor vote–the various unions tend to vote together as a bloc.
    Ironically, the Democrats lost the “Iron Range” vote to Republicans– President Donald Trump and 8th District Rep. Peter Stauber. So the MPCA and DNR, under Democrat Mark Dayton, pushed through a type of mine project known for its polluting record–and one which should never have been permitted in the wetlands and waters of northeast Minnesota–with no political mileage. This was done based on a record showing that the iron mining industry has never been forced to meet existing environmental standards–thus knowing full well that sulfide mining would not be regulated–and the leaked emails and concerns of the EPA indicate such.
    “While the permit does require PolyMet to treat the water and has a form of water quality limits, the EPA said it believed the regulations could not be enforced by the federal government, or potentially the MPCA. It could also block lawsuits against PolyMet if there is pollution, the EPA said.”
    This whole permitting process has been politically, not scientifically driven, and the ones who will bear the full costs will be those the generation(s) to follow. Not only will these costs include taxpayer dollars for clean-up–but the greatest cost will be the loss of the clean water resources of the headwaters of our region.

  7. Submitted by Eric Snyder on 07/11/2019 - 04:41 pm.

    When Glencore can get away with environmental crime, it does so:

    So. Africa: Parliamentary filing claim over 115 mines flouting water use permits on preventing waterways pollution; several companies’ comments
    https://www.business-humanrights.org/en/so-africa-parliamentary-filing-claim-over-115-mines-flouting-water-use-permits-on-preventing-waterways-pollution-several-companies%E2%80%99-comments

    This is just the tip of the iceberg of Glencore’s treacherous history. Which apparently means in MN that they’re well qualified for doing business here.

    This entire process has been a semi-sham with a pre-determined outcome, and it has effectively destroyed my confidence in the legitimacy of either political party or our environmental laws overall.

  8. Submitted by Scot Kindschi on 07/11/2019 - 08:19 pm.

    This should all have taken place in public since the very start. When done in “secret” there will always be plenty to be suspicious about. All that got from any of this is that they still don’t want to allow their constituents to know anything, or have a say in any of this. Something is rotten here. That is quite plain and simple.

  9. Submitted by William Hunter Duncan on 07/12/2019 - 07:52 am.

    Industrial, corporate Agriculture has polluted 3/4 of the state, while exterminating pollinators. Yet throughout this decision making process for mining in sulfides in northern Minnesota, we hear repeated again and again, Minnesota has some of the strongest environmental regulations in the world.

    Clearly it is all about optics management at this point. No matter how false a thing might be, if that is what gov/corp want us to believe, repeat ad nauseam and it becomes “real”.

    That is how it is widely perceived that Minnesota waters are getting ever more clean, when in fact they have never been more widely polluted. And now in that delusional thinking, we are led on a path more polluting than anything yet seen in our history, while assured that in the manner of “progress” and “growth”, technology and financing will make this mining a net-positive for the state.

    It breaks my heart that the State of my birth so willingly walks into a trap, so willing to lie to itself in the name of progress and growth, placing so much faith in the faithless.

    • Submitted by William Hunter Duncan on 07/12/2019 - 08:38 am.

      There is an article in the NYT about how because fresh water is getting more scarce, that makes it a great investment!

      So now I get it, these perverse incentives. Pollute the waters, which makes fresh water more “valuable”, which makes a few people even more rich – even and especially the same people who do/allow the polluting.

      Genius!

  10. Submitted by David Lundeen on 07/12/2019 - 10:39 am.

    This is proof that Tim Walz, who ran on a Minnesota that works for everyone, his values learned from teaching and the military, is simply a fraud. He supported this mine during his campaign and has no intention of reversing this despite mountains of evidence that it is a terrible deal for Minnesota taxpayers. It’s too bad Rebecca Otto did not win the nomination as she actually had courage say how bad this mine would be.

    Tim Walz is, for all purposes, is a Republican and has no intention of standing up for what is right. It’s time old white men men are removed from office because they simply lack a spine and will do anything to appeal to the business class.

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