Heavily Subsidized Organic Grain Mill Could Cost North Dakota, Federal Taxpayers Millions

I have an article at Watchdog.org today about Earth Harvest Mills, an organic grain mill near Harvey, North Dakota, that has gone belly up. You may recognize the name from recent news reports about the Public Service Commission paying out nearly $1 million from a state indemnity fund to grain producers who got stiffed by mill, but missing in that reporting is the fact that the mill has received millions in state and federal backed loans since 2003.

Three loans backed by the North Dakota Development Fund have been repaid, but a fourth loan (not to mention two loans from the feds) are still outstanding, and state/federal officials are reluctant to talk about it:

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, approximately $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 says the NDDF is in negotiations with the new ownership to take over responsibility of the loan, but wouldn’t divulge specifics.

“We hope to have a resolution on this situation in the next 60 days,” he said.

The status of two other taxpayer-backed loans issued through the U. S. Department of Agriculture’s Rural Development Office in North Dakota is unknown.  In response to a request for information made last week by Watchdog, Rural Development DirectorJasper Schneideremailed a letter indicating the need for a formal decision on the request.

“In accordance with Executive Order 12,600, Rural Development is required to notify submitters of commercial and financial information when it receives a FOIA request for records they have submitted to the Government,” the letter states. “We expect to hear from the business submitters by April 16 2014, and a decision on your request will be forthcoming.”

Such formalities previously weren’t required.

In May 2013, spokeswoman Debra Steinwand, who works under Schneider, confirmed the existence of two outstanding federal-backed loans totaling $8.4 million. 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.

Bob Herrington, CEO of the National Bank of Harvey, declined at the time to provide the payoff amounts or even acknowledge their existence despite the fact the loans had been announced in a USDA press release.

Isn’t it funny how these economic development projects are always heralded by the politicians and bureaucrats who back them when they’re new? We get all sorts of press releases and ballyhoo when “investment” of taxpayer dollars is made. But try getting information out of these people when things have gone belly-up.