North Dakota Obama Appointee Refuses To Give Up Records On Loan To Troubled Grain Mill

I’ve been following the saga of Earth Harvest Mills, a teetering organic grain mill operating in Harvey, North Dakota, for about a year now (here’s an archive of SAB posts to date). Most recently, the Public Service Commission approved insolvency payments out of state indemnity funds for producers and creditors left hanging by the mill.

But what’s been more difficult to track are the millions in taxpayer-backed loans that are still outstanding. I have an article over at Watchdog today about the USDA’s Rural Development office here in North Dakota, headed by Obama appointee Jasper Schneider, refusing to disclose information about two federal loans which a year ago they had no trouble disclosing.

And which they certainly had no trouble disclosing back in 2009 when there was a ribbon cutting ceremony for the mill:

In March, Watchdog.org requested an update on the status of those loans. In response, Rural Development Office Director Jasper Schneider emailed a letter classifying the request under the Freedom of Information Act and indicating the need for a formal decision on the request.

In a letter dated April 23, Rural Development spokeswoman Debra Steinwand denied the request for information about the loans that she had previously disclosed via email.

“We have been informed by The Bank of Harvey that the status of the loans for Earth Harvest Mills be withheld,” Steinwand wrote in the letter, citing sections of federal law which “pertain to commercial and financial information obtained from a business that is privileged and confidential.”

In May 2013, Steinwand confirmed the existence of two outstanding federal-backed loans totaling $8.4 million in response to a simple emailed inquiry. When asked at the time about the payoff amounts on those loans, Steinwand directed the question to the National Bank of Harvey, stating the USDA doesn’t maintain that information.

In 2009, the existence of the loans and their amounts were provided to the Associated Press for a report about a ribbon cutting ceremony for the business.

Funny how that works, isn’t it? Politicians and bureaucrats are always around for the ribbon cutting ceremonies on these economic development projects, but they’re much harder to find when the projects flop and the taxpayers are, potentially in this instance, left holding the bag.

As I note in the article, it wasn’t exactly easy to get information about state-backed loans either:

Earth Harvest Mills has repaid three loans backed by the North Dakota Development Fund and issued through the National Bank of Harvey:

  • A $50,000 loan in 2003
  • A $330,000 loan in 2005
  • A $209,665 loan in 2007

In 2009, a fourth loan was issued for $2.25 million and according to NDDF CEO Dean Reese, who only returned calls to Watchdog after North Dakota’s open records laws were invoked, about $2.1 million is left to pay on that loan. In May 2013, Reese had refused to put a number to the loan’s outstanding balance, citing 10-30.5-07 of the North Dakota Century Code, which allows his organization, a corporation created by the state, to keep the payoff information secret.

“We’re progressing on it,” Reese said of the situation. “Things are moving in a positive direction.”

According to Reese, Earth Harvest Mills is still operating, but not under the previous ownership. He said the NDDF is in negotiations with new ownership to take over responsibility of the loan, but wouldn’t divulge specifics.

What’s amazing is how little coverage this issue has gotten from the state media. An economic development flop potentially costing taxpayers millions (which has already cost taxpayers hundreds of thousands in indemnity fund payments), and public officials something less than willing to stand up and talk about the issue?

Seems like a story to me.

Rob Port is the editor of SayAnythingBlog.com, a columnist for the Forum News Service, and host of the Plain Talk Podcast which you can subscribe to by clicking here.

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