Federal, State Officials Won't Say How Much Of $10.4 Million In Taxpayer Loans Earth Harvest Mills Still Owes

Yesterday I posted a response to a FOIA request from USDA Rural Development Director Jasper Schneider’s office which confirmed two outstanding loans guaranteed by the federal taxpayers totaling $8.4 million made to Earth Harvest Mills, which is facing insolvency charges from North Dakota’s Public Service Commission.

I’ve been working on confirming what balance remains on those loans (and thus what the taxpayers may stand to lose on this venture) but so far I’m not getting a lot of cooperation from either the USDA or the National Bank of Harvey through which the loans were made.

“Since Rural Development is the guarantor,” USDA Management Director Debra Steinwand told me via email in response to an inquiry about the outstanding balances, “a recommendation would be to contact the National Bank of Harvey as they maintain this information.”

I did that, but President and CEO of the National Bank of Harvey Bob Herrington wouldn’t even confirm to me that Earth Harvest Mills has outstanding loans with them. This despite both the USDA confirming that Harrington’s institution handles the loans and the Associated Press reporting the bank’s involvement in a 2009 report trumpeting the “ribbon cutting” on the loans.

It’s disturbing to think that there are potentially millions of taxpayer dollars on the line through the USDA to a company facing insolvency charges, yet nobody at the USDA seems to know what the company might still owe.

Things are only a little bit better at the North Dakota Commerce Department’s Development Fund. I spoke with Dean Reese, the CEO of the development fund, and he confirmed that several of the loans his entity made to Earth Harvest Mills have been repaid.

2003 $50,000 loan, paid
2005 $330,000 loan, paid
2007 $209,665 loan, paid

But while Reese would confirm the existence of a 2009 loan for $2 million, he wouldn’t confirm what remains of that loan to be paid. He said it’s “less than $2 million” but cited 10-30.5-07 of the North Dakota Century Code which allows his entity, a corporation created by the state, to keep the pay-off information a secret. He said he didn’t want to dodge my questions, but that his entity is trying to find new buyers for the company and don’t want this information to hurt that effort.

Mr. Reese appears to be right on the law, but it’s hard to imagine how millions and millions of taxpayer dollars could be committed to a venture like this without the taxpayers being allowed to know the status of repayment. If a company wants to keep this sort of financial information a secret, shouldn’t that company go to private financiers?

As it stands, there are $10.4 million worth of loans outstanding to Earth Harvest Mills between the state and federal governments, and nobody willing to divulge how much of that amount the taxpayers are still owed.

In related news, Reese wasn’t aware of $51,000 in grants given by the Commerce Department to this company in 2009 and 2010, and he’s getting back to me on whether or not those were loans. There were listed on the OMB’s database of spending under “Misc. Grants.”