Star Tribune investigates IRRRB political ties

This morning the Star Tribune published an investigative story by Jennifer Bjorhus exploring political connections between the Iron Range Resources and Rehabilitation Board and the projects under its sway.

Bjorhus paid particular attention to a 2006 IRRRB project funding an Eveleth telemarketing firm that primarily did calls for Democratic-leaning candidates and causes.

For years, prominent Democratic candidates and political groups have used the obscure center tucked among hills and pines to canvass and raise money from small donors. DFL organizations, state and national, have paid the phone bank’s current and former owners about $80 million over the last decade, campaign records show.

The call center relocated to Eveleth in 2006 thanks in part to a $625,000 loan from a unique state agency called the Iron Range Resources and Rehabilitation Board (IRRRB). It doles out about $40 million each year, much of it from a tax on taconite, in the name of bolstering and diversifying the Range economy.

In its first incarnation, the call center on the Range failed to meet job targets, but the IRRRB gave the company, Meyer Associates, more time to repay the loan. It shut down anyway last year. The IRRRB let Meyer’s owner walk away and wrote off the $250,000 Meyer owed, records show.

Then a former Meyer executive reopened the phone bank under the name of his new company. The deal allowed him to pay $50,000 for equipment that had been purchased with $500,000 in IRRRB money. The largest political client for the call center remained the same: a group called Dollars for Democrats.

The Meyer deal was approved under Republican Gov. Tim Pawlenty and his commissioner Sandy Layman. The reorganization of the deal after Meyers went under occurred under the current DFL administration of Gov. Mark Dayton and former commissioner Tony Sertich.

Iron Range political insiders have been nervously awaiting the result of Bjorhus’s work. (I am not certain that she’s alone in peeking into the doings of the IRRRB these days; there could be others). While the details of the Meyer story are unlikely to have significant impact here on the Iron Range, they will continue to stoke a very bad perception of the agency to political watchers and partisans outside the Taconite Tax Relief Area. We’ve already had a number of messy political stories involving Iron Range politicians this year, most of which paint a distinct picture of cronyism and single-industry thinking in our local political structure.

It’s entirely possible that Bjorhus will file more stories on the IRRRB and Range politics in the not-so-distant future. Certainly the agency can expect increased scrutiny from all media going forward, and that could be a good thing.

I’ve long advocated that the IRRRB had committed major missteps during its history, including several of the ones Bjorhus mentions. Frankly, a debacle like Excelsior Energy was such a resounding failure that the people involved should have faced far more consequences than they did or probably ever will. I’ve also said the agency now faces heavy responsibility to modernize its thinking and diversify the Range economy.

Ironically, given the media coverage, the agency has made improvements just recently. During the last four years, under Gov. Mark Dayton, former Commissioner Tony Sertich and now Mark Phillips, the IRRRB enacted significant progress in applying its financial power to the goal of improving education from E-12 up to higher education and workforce development. It also took a step toward ending the dangerous practice of hoarding the Johnson economic development trust in state coffers and moving the funding toward actual support of private sector development in the region. These are important accomplishments that will create observable results in time.

But the agency is still, by design, heavily influenced by politics, too-close connections between developers and board members, and continues to find difficulty in embracing economic diversification because of the power of the mining industry and resulting loyalties. These are factors that have arisen over time, under many administrations, commissioners, and board members. They are not mortal wounds to the purpose of the IRRRB, but they are serious enough to require some metaphorical version of surgery.

My biggest fear here is that these stories will cause shields and swords to be raised up, rather than honest questions and self-assessment. If so, a very miserable year of Iron Range politics will continue down dark holes.