Minnesota Brown: Range boondoggle now poses test of character, leadership

The implications of Peter Passi’s Duluth News Tribune groundbreaking investigation into the squandering of $41 million in public money by Excelsior Energy on the Iron Range continue to unfold. The story now appears to be the biggest fiscal disaster in Iron Range economic development history, but there’s more yet to explore. Karl Bremer at Ripple in Stillwater digs into what I think will bring this story to a head: Excelsior’s massive lobbying and campaign contribution operation at all levels of government, in both major parties. You should read Bremer’s post.

In addition to the company regulars, one key figure at the center of this Excelsior Energy influence ring is former DFL State Sen. Doug Johnson, who has been one of the central lobbyists for Excelsior and whose influence in Range political circles is very strong. He’s the political mentor of Sen. Tom Bakk, Johnson’s successor who is now the Senate Minority Leader and the lead apologist for Excelsior in the Passi story.

Johnson and Bakk have long labored in the good graces of Bill Hanna, the editor of the Range’s largest daily newspaper and a man very much without a political party. Hanna’s Mesabi Daily News has has maintained radio silence over the project’s failures and the Duluth investigation after a string of pro-Excelsior front page stories and glowing editorials in the mid- to late-2000s. Hanna has a great deal of sway in Range media circles. Few politicians, save Tom Rukavina (a noted Bakk/Johnson rival within the delegation), seem willing to take Hanna on for fear of him painting them as anti-job or anti-Range, his favorite things to do to politicians.

Rukavina, however, also voted for Excelsior legislation at every turn, along with most of the DFL-dominated Iron Range legislative delegation. State Sen. David Tomassoni (DFL-Chisholm) has used this project as his legislative priority for most of his time in the Senate. Sen. Tom Saxhaug (DFL-Grand Rapids) has also dedicated great amounts of time to defending the project against early questions and keeping its dealings as quiet as possible. Iron Range state senators continue to publicly support the project in the face of the damning information found in the Passi DNT report.

In the House, along with Rukavina, defeated former Rep. Loren Solberg (DFL-Grand Rapids) and Rep. David Dill (DFL-Crane Lake) carried most of the legislation for the company over the last decade. Former Rep. Tony Sertich, who had supported the project early on, is now the IRRRB commissioner charged with executing the agency’s loan agreement with Excelsior. Even Sertich’s successor Rep. Carly Melin (DFL-Hibbing) and Carolyn McElfatrick (R-Grand Rapids), who beat Solberg, had a chance to break away from the pack this last session, but both ultimately voted for a pro-Excelsior amendment anyway. So, too, did the entire House GOP majority caucus!

The only Iron Range legislator who has not voted for Excelsior language, who also hasn’t taken any money from Excelsior, its officers or lobbyists and who has clearly stated the numerous problems with the Excelsior project at every turn has been Rep. Tom Anzelc (DFL-Balsam Township).

As I’ve disclosed before, Tom Anzelc is a personal friend and fellow Balsam resident. I’ve run each of his successful legislative campaigns in District 3A, a vast territory including the western Iron Range, northern Itasca County, Koochiching and Lake of the Woods counties along the Canadian border. We are in many ways different people, from different Iron Range generations and political traditions, but we very much share our position on this project and the need for a new direction in Range economic development and government strategies. I believe there are others who share this view and I know they will join the fight. Indeed, they must.

To be clear, on this blog I speak only for myself. The Iron Range must do better. There is no acceptable defense of the status quo in the context of this story. Those who persist to ignore facts and advance the causes of private interests over the public good are enemies of the people of the Iron Range and should be treated as such.

In private conversations, I know many leaders on the Iron Range know of the troubles with this project and share my assessment of its failures. I know some of these people well and believe them to be of good will. They are paralyzed by the fact that admitting there will be no project means admitting the fundamental error of the initial IRRRB loans, and never getting back the $9.5 million in Iron Range money, which mostly paid for Excelsior’s salaries and legal fees. Everyone on the Iron Range faces an important decision in coming months. Will we learn from this terrible mistake? Or will we bury our heads in the sand.

If it is to be the latter, the voters should rightly bury the rest.

Reform disclosure rules so people know how their money is spent.

  • Reform loan agreements so that developers share risk with taxpayers.
  • Focus public-private partnerships on smaller projects with clearer, less politically-dependent plans and more specific expectations.
  • Focus public spending on public good: education, redevelopment, and needed services and infrastructure that the private sector can’t or won’t deliver.

This post was written by Aaron J. Brown and originally published on Minnesota Brown. Follow Aaron on Twitter: @http://twitter.com/minnesotabrown

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Comments (1)

  1. Submitted by rolf westgard on 08/31/2011 - 09:22 pm.

    IMO Aaron Brown is THE writer who has the pulse of the Iron Range.
    The Mesaba Project coal power plant may have begun with good intentions, but the flat demand for power, along with some mismanagement, has turned it into the boondoggle Brown describes.
    But that project is now overshadowed by the large non ferrous mining projects that are proposed for the Range.
    There is a growing guaranteed world market for those minerals, and the coming controversy will push Excelsior and its foibles to the back pages.

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