One reason Governor Mark Dayton enumerated for vetoinng the ag and environment omnibus finance bill was a provision that allowed "granting amnesty to regulated parties that self-report violations of environmental regulations."
An exploration of the genesis of this particular provision--first introduced as an amendment by Representative Dan during the April 15 and April 16 markup of an earlier version of the bill by the House Environment committee--reveals yet another single instance of an action by the MPCA triggering an overhaul of law.
Fabian's amendment appears to be fueled by political campaign contributions by Digi-key to the Northwest Minnesota lawmaker, the HRCC and to the coffers of the Minnesota Chamber of Commerce's PAC. Tony Kwilas, the state chamber's environmental policy director, testified on behalf of the amendment on April 16.
During the April hearing (the discussion of Fabian's amendment is embedded below), committee chair Denny McNamara characterized the company as a computer "refurbisher."
In fact, Digi-Key is a distributor of electronic components with annual sales of $1.6 billion shipped out of its sole distribution center in Thief River Falls. The seventh largest electronic components distributor in the world (it does not engage in manufacturing itself), Digi-Key also maintains customer service call centers in the Netherlands, Hong Kong, Japan and Korea, according to a 2010 report on Minnesota Public Radio.
Digi-Key's $25,000 fine for four generators
On January 27, 2014, the Minnesota Pollution Control Agency (MPCA) issued a press release, Digi-Key in Thief River Falls pays fine, corrects air emission permit/reporting issues, that described the action:
Electronics distributor Digi-Key Corporation has paid a fine and taken corrective action to ensure that generators in its Thief River Falls facility are operated according to state requirements.
In spring 2013, the Minnesota Pollution Control Agency (MPCA) determined that the facility had failed to obtain a state permit for a generator that was installed in 1990 and provide required annual emission reports. The company also failed to obtain a permit required when two generators were added in 1999 and 2002 and a Prevention of Significant Deterioration permit (for significant sources of NOx) after the fourth and largest generator was installed in 2009.
The permits and reporting requirements are designed to limit emissions of nitrogen oxide (NOx) air pollution. NOx, a byproduct of combustion, can cause respiratory problems in people, contribute to acid rain and cause other environmental problems.
Digi-Key has four generators in Thief River Falls that are used during power outages and three of them provide electricity to a local utility during peak energy demand periods.
The company is in the process of obtaining the permit required for the generators and has submitted emission inventory reports for the years 2004-2012. It has also paid a $25,000 penalty.
When calculating penalties, the MPCA takes into account how seriously the violation affected the environment, whether it is a first-time or repeat violation, and how promptly the violation was reported to appropriate authorities. It also attempts to recover the calculated economic benefit gained by failure to comply with environmental laws in a timely manner.
In the hearing, McNamara suggests that the company was fined for one unpermitted generator--or rather, for lacking "a piece of paper" for one generator. This is a notion that's about as accurate as calling firm a computer "refurbisher."
McNamara also suggests that the $25,000 fine might drive the company into the arms of South Dakota or some other locale, but other reports suggest that a greater issue is affordable housing for new hires or finding workers at all, given the robust economy in North Dakota. The Wall Street Journal has called Thief River Falls a "job island."
Here's the April 16, 2015 discussion of Thief River Falls Republican Dan Fabian's A3 Amendment to HF846:
Following the money
So what drives the hyperbole in the words of the politicians standing up for a poor little rich company with over 3,000 employees and yearly sales of $1.6 billion that received a $25,000 fine after operating four generators without a permit?
According to records on file with the Minnesota Campaign Finance and Public Disclosure Board, Digi-Key executives gave $15,575 to conservative candidates, party units and PACs in 2014:
Stordahl, Ronald 10-28-2014 HRCC $5,000.00
Larson, Mark 10-10-2014 Minn Chamber of Commerce Leadership Fd $3,000.00
Stordahl, Ronald 10-06-2014 Johnson, Jeff R Gov. Committee $ 2,000.00
Trontvet, Rick 08-18-2014 Minn Chamber of Commerce Leadership Fd $1,200.00
Larson, Mark 10-06-2014 Johnson, Jeff R Gov. Committee $1,000.00
Stordahl, Ronald 10-17-2014 Kiel, Debra (Deb) L House Dist. $750.00
Stordahl, Ronald A 10-09-2014 Fabian, Daniel E House Dist. 750.00
Larson, Mark A 05-10-2014 Fabian, Daniel E House Dist. $500.00
Trontvet, Rick 10-07-2014 Johnson, Jeff R Gov. Committee $350.00
Trontvet, Rick 08-17-2014 Minn Chamber of Commerce Leadership Fd $300.00 (a gift card)
Trontvet, Rick 08-25-2014 Minn Chamber of Commerce Leadership Fd $250.00
Trontvet, Rick 10-06-2014 Johnson, Jeff R Gov. Committee $250.00
Trontvet, Rick A 04-29-2014 Fabian, Daniel E House Dist. $125.00
Note that the company's leaders ponied up $4750 for the Minnesota Chamber of Commerce Leadership Fund; in its turn, the Chamber testified in favor of the Fabian amendment.
The Chamber was only $250 behind the HRCC (the Minnesota House Republicans' campaign committee)as a recipient of the company's political generosity.
The executive spouses of the Digi-Key executives also gave to conservative political candidates. Jean Larson gave Dan Fabian $500; Karmon Trontvet contributed $225.
Was this a clear quid pro quo? It's unclear, since Digi-Key was also a poster child for the very real problems in Thief River Falls related to affordable workforce housing.
Whatever the case, those tuning in to the April 16 omnibus finance bill mark-up didn't hear about the money trail, the real number of the un-permitted generators and the length of time that they were unpermitted--or even the nature of the company itself, only that the fine was oppressive.
Perhaps the amnesty provision needed a bit more sunlight; the Governor made a good call on including this in his veto letter.
We're finding one thing fascinating as we dig into the money behind the bad policy that House Republicans (and Senate conferees) were attaching to these funding bills. That's the willingness to hold Minnesota poultry farmers, the Governor's buffer initiative and departmental budgets hostage in order to cram special interest favors into bills.
A dairy owned by a big funder asked for more environmental review by the MPCA's Citizens Board? Get rid of the board. A billion dollar plus company fined for running four generators? We'll make sure that doesn't happen again. The public interest? What checks has that written recently?
Photo: Dan Fabian and Denny McNamara, via Don Davis's Capitol Chatter blog.
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