USDA refuses to provide info on loan to troubled grain mill

By Rob Port | Watchdog.org North Dakota Bureau

BISMARCK, N.D. — The U.S. Department of Agriculture’s Rural Development office in North Dakota has denied a request for data about a loan freely provided in 2013 to a troubled grain mill.

Earth Harvest Mills, a grain mill operation specializing in organic products located near Harvey, has $11.4 million in state and federal backed loans. Last year, the North Dakota Public Service Commission filed insolvency charges against the company.

Last month, the commission voted on those charges, approving $948,952.69 in payments to grain producers who had more than $2.4 million in unpaid claims against the mill.

The status of the taxpayer-backed loans has been difficult to determine.

In March, Watchdog.org requested an update on the status of those loans. In response, Rural Development Office Director Jasper Schneider emailed a letter classifying the request under the Freedom of Information Act and indicating the need for a formal decision on the request.

In a letter dated April 23, Rural Development spokeswoman Debra Steinwand denied the request for information about the loans that she had previously disclosed via email.

“We have been informed by The Bank of Harvey that the status of the loans for Earth Harvest Mills be withheld,” Steinwand wrote in the letter, citing sections of federal law which “pertain to commercial and financial information obtained from a business that is privileged and confidential.”

In May 2013, Steinwand confirmed the existence of two outstanding federal-backed loans totaling $8.4 million in response to a simple emailed inquiry. 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.

In 2009, the existence of the loans and their amounts were provided to the Associated Press for a report about a ribbon cutting ceremony for the business.

Earth Harvest Mills has repaid three loans backed by the North Dakota Development Fund and issued through the National Bank of Harvey:

• A $50,000 loan in 2003
• A $330,000 loan in 2005
• A $209,665 loan in 2007

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

You can reach Rob Port at rport@watchdog.org