A gathering storm over a bad idea that got big (UPDATED)

The bulk of my thoughts will be published in a column I am preparing for my Sunday column in the Hibbing Daily Tribune. Here is the first paragraph (UPDATED TO REFLECT CORRECTIONS TO TAXPAYER MONEY TOTALS), to set the mood:

This column has a simple message. Between 2001-2003, the Iron Range bought into the hype of a startup company called Excelsior Energy and its Mesaba Energy Project. As a result, today more than $20 million in Iron Range, state and federal tax dollars may have been wasted. Most people involved had the noblest of intentions. Many had no idea what was going on. Lobbyists, free steaks and booze were paid for by money that could have just as easily paved streets, fixed sewers or helped dozens of local small businesses. Now there’s very little that can be done to restore the funds. While supporters of the project will surely disapprove of my choice of words, the people of the Iron Range should be outraged over this wasteful failure.

Tomorrow’s papers will feature the reactions to the audit from the company, agency and citizen groups opposed to the project. I’ll share those as I see them.

UPDATE: I’ve revised a line to better reflect the timeline of the original loans.

UPDATE II: Here’s the Friday morning story from the Duluth News Tribune. (REUPDATED) It hints at the fact that Excelsior was lobbying with this IRR loan money, essentially using your money to get more of your money. They also included the statement from CAMP (Citizens Against the Mesaba Project) that detailed the lobbying problem.

Here’s the Mesabi Daily News story which includes other information. The MDN has been an early and vocal backer of this project on its editorial pages and, one could argue, has never seriously questioned some of the project’s claims. This story focuses on the roughly $40,000 that needs to be returned by Excelsior Energy. The bigger story is the fact that an unknown amount of money was spent on lobbying. The auditors, as you see in this story, saw what many of us saw a year ago … that the loan agreement was vague and that this money was used to fund almost all the fundamental costs of creating and advocating for this startup company from its earliest stages. Oh, if only the rest of us could get that kind of capital investment in our big ideas.

I’ll post the Hibbing Daily Tribune story when they update their webpage. Mike Jennings tends to dig a bit deeper into this issue than others. His previous assignment was in Kentucky, so he knows more about coal projects than your average Range journalist.

UPDATE III: Here is the Hibbing story by Jennings. Slightly more detail, but the fundamental issue — lobbying with public money– remains unexplored in all three stories. This is the big story and the subject of my upcoming column.

UPDATE IV: I am amending the column and the result is the unfortunate removal of a paragraph I liked but that was not necessary. Blogs are great for just such verbage.

Once again it seems that the problems of the IronRange and the United States of the early 21st century aren’t entirely different from those of the early 20^th century. Fat cats and fast talkers are having their way with regular people just trying to do their jobs and raise their families. You see it on Wall Street, you see it Washington, D.C. and you see it here. With so many other positive developments going on, we must use this lesson to chart our way into a new IronRange century. In this century, developers must bring more to the table than promises and spin to be rewarded with our leaders’ trust or the people’s money.