Update: See end of post to learn of how St. Cloud Republican activist and blogger Gary Gross scooped the Strib by 10 months (and on Minnesota's leading conservative platform). Oops. [end update].
Bluestem loves a crony capitalist scandal as much as the next scurrilous blogger, but we've learned through the miracle of Mr. Google the Magic Search Engine that (on one end of the latest Outrage on the Range article in the Strib at least), there's less for us to puff and puff about.
It's not secret corruption, it's not something that one party's representatives objected to at the time that the other side was feeding at the trough. If anything, once one digs into the public documents, one learns this story is about the normal and casual level of public corruption in Minnesota.
In Publicly funded Iron Range board deep into DFL politics, Star Tribune state writer Jennifer Bjorhus reports
Around 2006, Meyer wanted to move its Brainerd call center and figured it would have “a much more Democratic-leaning workforce” on the Range, said Samargia, who was born in the Range town of Gilbert but now lives in St. Paul.
In June 2006, the IRRRB gave the telemarketer two loans — $125,000 was forgivable if Meyer met certain lease and jobs targets. The second was $500,000 for equipment, also partially forgivable if job targets were met. The equipment was the loan collateral.
Questions about using public money to aid a DFL player were never a topic of discussion, people on all sides said.
At the time the IRRRB commissioner was Sandy Layman, a Republican appointed by Republican Gov. Tim Pawlenty. Samargia said he was “actually fairly surprised” Pawlenty’s administration signed off on the deal.
Layman “knew that at that point 70 percent of our business was Democratic calling,” he said. “We weren’t hiding what we did.”
In e-mails to the Star Tribune, Layman said she couldn’t clearly recall the project, but said a customer list would have been part of business plan review. The company “met due diligence tests and several levels of review,” she wrote. Layman declined to be more specific.
Apparently Layman isn't a hoarder of memories or paper, but the state website guards its public pixels, and we found a board packet that detailed the project online [pdf of full February 10, 2006 board packet here].
From the document:
MARKET OPPORTUNITY:
During the initial years of operation, Meyer focused on local and statewide political fundraising campaigns. The company’s success in Minnesota led to contracts in other states as well as nationally. In addition to telemarketing, the company offers direct mail options for its clients.
Today, the company’s focus is much broader than the political arena. In particular, Meyer considers itself a leading provider of marketing related services to the publishing industry. Delivery mechanisms include telephone, direct mail, e-mail, fax and internet services. Services include circulation audits, subscription sales and renewal campaigns. Meyer also provides lead generation and survey work for its publishing industry clients.
The telemarketing industry continues to grow at an annual rate of 5-10%. Meyer hopes to capture additional revenue by expanding its already successful political fundraising programs (especially during the 2006-2008 period) and increasing its contracts with private sector businesses. To accomplish these goals, Meyer needs to acquire additional space and add employees, continually improve its technology and work to improve the skill and productivity of its existing and new employees. The company will market its services at selected industry trade shows, in trade publications and via its website.
Not only was the IRRRB commissioner a Republican appointee, but state representative Maxine Penas (R-Badger) and Matt Matasich, a Virginia MN Republican who ran against Jason Metsa (DFL-Virginia) in 2014, served on the IRRRB (See page 5 of the pdf of the 2005-2006 Biennial Report here).
Remember: in 2006, Pawlenty was running for Governor for a second time, although Penas had chosen not to run again. There was little incentive any Republican to turn a blind eye to political connections--and Meyer & Associates was quite open about what business it was in.
It's worth remembering as well that not only did Minnesota Republicans control the governor's office, but the state house of representatives as well. With both in the balance that fall, the support for a political call center went unchecked.
Nor was this the first business expansion by the firm assisted by the public dime. Sue Halena reported in in a July 8, 2004 St. Cloud Times article, "Morrison to start 6 projects under JOBZ program":
A Minnesota business expansion in a JOBZ zone can qualify for reduced taxes under two conditions: It must make capital improvements worth at least 10 percent of last year's revenues, or it must increase jobs by 20 percent within two years. p>JOBZ expansions qualify for reduced property, income and construction material sales taxes within a 12-year period.
The projects:
St. Cloud-based Meyer Associates Teleservices is moving its downtown Little Falls office this year to the West Side Industrial Park JOBZ zone. It qualifies for JOBZ with a capital investment of $500,000, owner Larry Meyer said. It already had qualified for the city donation of four acres under an agreement to provide 10 new jobs within two years with pay of at least $12 an hour and benefits . (page 1B; Nexis All News Database, accessed February 28, 2015).
Here are the pages of the Meyer & Associate proposal extracted from the larger board packet:
IRRRB February 10, 2006 Board Packet: Meyer & Associates Project
There's an added irony in this tale, related to the Minnesota House District 6B race this year. In House 6B — A True Ranger Battle, Mesabi Daily News editor Bill Hanna reported:
And he also believes his effort to get a co-location of Grades 7-12 in the Virginia, Eveleth-Gilbert and Mountain Iron-Buhl school districts into a new $180 million (construction and interest costs) school in Mountain Iron was worthwhile, even though it failed miserably on a local level and became a divisive issue within the communities.
The funding plan initially included diverting some taconite production tax money destined for the IRRRB Douglas J. Johnson economic development fund into the co-location project. He said he still thinks that would have been an appropriate use of those funds.
“I wanted to throw everything against the wall and see what we came up with,” he said about funding for the project.
Matasich said Metsa was “not thinking” when he pushed that idea.
So while the attempt to create a Range Trust to prevent a raid of the "Johnson Fund" is tied to the clearance sale of the Meyer & Associates facility to New Market that bears more scrutiny, we also have the spectacle of a Ranger DFL who advocated a minor raid on those very funds. Good times.
But a "secret deal" in 2006? Hardly.
Putting the Iron Range in Irony Part 2 (update): Back in December, Senate Majority Leader Tom Bakk was predicting common ground with Republicans while claiming his fellow Democrats wanted to raid the IRRRB's "Johnson Funds," as we noted in Range Trust? Baffling Senate Majority Leader Bakk blames IRRRB fund threats on Democrats:
Reading up on the first steps in the Iron Range Resources and Rehabilitation Board's creation of the Range Trust out of the potentially unguarded Douglas J Johnson Trust fund, we were given pause by Majority Leader Tom Bakk's remarks in a Northland News report, IRRRB approves trust fund protection plan:
But in the last decade, Sertich and Senator Tom Bakk (DFL-Cook) said lawmakers from outside the Iron Range have tried to tap into the 150 million dollar trust fund for other state projects.
"This threat is way more real than you know. I have had Democratic - very, very senior Democratic members of the legislature - come to me when the state was having serious financial problems during the Pawlenty years and say, Geez Tom, don't you think we could borrow ten million from the trust fund to balance the budget?" said Sen. Bakk.
This is a fairly baffling thing for Bakk to say, and the news report says nothing about the attempted open raids on the Johnson trust funds that actually have been attempted and preserved for the record.
Curiously, we didn't find a past history of attempted DFL raids on the funds, while Republicans were well represented. But in the latest story, the Strib reports:
Few Republicans know about Meyer or its links to the Democratic Party and the IRRRB. When told about it, they say it confirms their view of the IRRRB as a DFL slush fund.
“I think it’s outrageous that you’ve got a public entity giving public taxpayer dollars to a political fundraising company that just works with one party,” said state Rep. Jim Knoblach, Republican chairman of the House Ways and Means Committee. “I actually can’t believe that the IRRRB would be so shameless as to do this.”
Few knew--except, of course, the Republican state representatives on the board in 2006, the Republican citizen appointee on the board in 2006, and the Republican commissioner in 2006.
Moreover, it's puzzling that Bjorhus reports that a St. Cloud area state representative had never heard of Meyer & Associates, when a natural language search of the Nexis database for "Meyer and Associates" and "St. Cloud Times" reveals that the paper covered the firm or its employees at least 16 times.
Maybe Knoblach just doesn't read the local paper.
Update: Nor did the St. Cloud-based state representative Jim Knoblach seem to know about Meyers & Associates deal with the IRRRB, despite the fact that St. Cloud area Republican activist and blogger Gary Gross was posting about the second deal for months. While Gross's own blog isn't high traffic, he did cross his stories at the Taxpayer League sponsored True North. Check out the April 2014 post, Corrupt crony capitalism.
Photo: Hot and cold Eveleth.
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