BISMARCK, N.D. — Republican North Dakota House leaders on Friday signaled a reluctance to fully support a proposal to would funnel $10 million to a troubled intermodal rail facility — a move that is increasingly is being viewed and criticized as a bailout for some banks, including one partially owned by GOP U.S. Sen. John Hoeven.
The legislation under consideration would allow an economic development group to buy the Minot shipping facility from banks that bought its assets through foreclosure. The nonprofit group — not the state — would own the facility.
The plan received near unanimous approval in the Senate, but House Majority Leader Chet Pollert told The Associated Press on Friday that it will “no doubt” undergo significant changes in his chamber.
Rep. Jeff Delzer, who chairs the powerful House Appropriations committee, agreed.
“It’ll be different, but I don’t know what it will be,” Delzer said.
Hoeven said Friday he did not know about the bill until the AP asked about it this week.
“I have not been involved in this proposal,” he said. “I really have to stay out of it to avoid any conflict of interest.”
Under the legislation, the Bank of North Dakota would get a 49% share of the buyout, First Western would get 34% and the State Bank and Trust of Kenmare would get the rest.
Hoeven, who served as North Dakota’s governor from 2000 to 2010, is part owner and serves on the board of directors of First Western, which was started by his father. He’s also a former president of the Bank of North Dakota, the nation’s only state-owned bank.
Delzer’s committee heard testimony on the bill this week. Supporters said they believe the Minot facility will reduce shipping costs and increase markets for the state’s farm products and other commodities. Critics said attempts to rescue the facility is a waste of taxpayer money that would only benefit banks.
Delzer said no action on the measure likely will be taken for at least a couple of weeks.
An increasing number of lawmakers and political observers believe Hoeven’s ties to the legislation are troubling.
The Republican-led Legislature “has lost its conservative values and is willing to use millions and millions of dollars to bail out cronies,” said Dustin Gawrylow, managing director of the North Dakota Watchdog Network, which keeps tabs on how public money is spent.
“The idea of a private-public partnership in North Dakota is just a pseudonym for crony capitalism in North Dakota,” said Gawrylow, a longtime critic of business subsidies.
Since North Dakota’s oil bonanza that made it the No.2 oil-producing state behind Texas, lawmakers in the conservative state have increasingly shown a willingness in recent years to spend taxpayer money on private projects — or to bail them out.
In 2015, for example, North Dakota took over the Lewis And Clark Interpretive Center in Washburn from its financially troubled foundation, along with the nearby replica of Fort Mandan, which was the winter home built by members of the Lewis and Clark expedition during its 1804 journey west. The state, which already owned the land and the interpretive center building, bought the center’s art, artifacts and other assets for $2.1 million. It is now funding it at more than $1 million per biennium.
Also that year, lawmakers approved $746,000 to purchase a boat marina at Lake Sakakawea and $100,000 to purchase famous band leader Lawrence Welk’s boyhood home, after its owners found no private buyers.
Although the spending represents only a drop in bucket in North Dakota’s more than $14 billion two-year budget, critics say it shows lawmakers have had the appetite to spend on such things that may have not been considered in leaner times.