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County Chair’s Coal Plant Vote: Conflicted Interest?

Attorney says action voids a permit for Rogers City project

October 15, 2008 | By Glenn Puit
Great Lakes Bulletin News Service

  Rogers City’s Lake Huron marina is two miles east of freighter docks that a proposed power plant would use to import fuels such as petroleum coke, a refinery waste product.
ROGERS CITY—An attorney writing on behalf of a local township official has asked the Presque Isle County prosecutor to investigate a possible conflict of interest involving the chairman of the county board of commissioners.

The county chairman sits on the board of a utility company that wants to build a coal-fired power plant here; the conflict, according to the attorney, stems from the chairman’s participation in a vote for an official resolution urging the Presque Isle County Planning Commission to grant the company a special use permit (SUP) for the proposed plant.

The letter, dated Oct. 1, 2008, alleges that Presque Isle County Board of Commissioners Chairman Allan Bruder violated the Michigan Public Servant Act when he voted for the resolution because he is financially tied to the company, Wolverine Power Cooperative.

Attorney Krystyn Houle’s letter to prosecutor Richard Steiger also argues that the action by Mr. Bruder invalidates the SUP that the planning commission granted to Wolverine on the day it received the commissioners’ resolution.

Ms. Houle’s letter follows an earlier letter about Mr. Bruder’s possible conflict that was sent to the board of commissioners by the local township official, Ocqueoc Township Trustee Valentine Jaroch, on Sept. 17. Mr. Jaroch asked the commissioners to comment on the appropriateness of the chairman’s actions given his involvement with both Wolverine and with another, local utility that is part owner of Wolverine, Presque Isle Electric and Gas Co-Op.

Attorney Houle copied her letter to the Presque Isle County planning commission, Governor Jennifer Granholm, Michigan Attorney General Mike Cox, state Senator Jason Allen, state Representative Matthew Gillard, and Wolverine. Mr. Jaroch sent his letter to the prosecutor, the planning commission and its chair, and the county zoning administrator.

Neither has received a response, but the letters add to the controversy surrounding the plant, which received tentative permission last month from the state to burn petroleum coke, a fuel that contains more toxic heavy metals and emits more dangerous sulfur oxides than coal. The plant, which the company calls the Wolverine Clean Energy Venture, is part of the coal rush that is sweeping the state; as many as eight companies want to build new coal plants in Michigan.

A Matter of Records
In its own, earlier investigation of the possible conflict of interest, the Great Lakes Bulletin News Service found that Chairman Bruder, who is running a write-in re-election campaign after losing the August Republican primary, received more than $60,000 from Wolverine during the three years before and during the company’s pursuit of a county special use permit for the power plant.

The investigation confirmed that Mr. Bruder was indeed the chairman of the Presque Isle County Board of Commissioners in 2006, when Cadillac-based Wolverine approached the county with its proposal to build a coal plant at the bottom of a limestone quarry in between this city and the Lake Huron shoreline. Records obtained by GLBNS confirm that Chairman Bruder indeed voted for the commissioners’ resolution that supported granting the project a county SUP.

But Wolverine’s federal tax filings from the same year show that, at the same time Mr. Bruder was advocating for the coal plant in 2006, he was receiving $24,200 from the cooperative for sitting on its executive board of directors. GLBNS, however, could not find any indication in county records that Mr. Bruder disclosed the conflict while voting on the resolution.

Mr. Bruder, other Presque Isle County commissioners, and planning commission members contacted by GLBNS did not respond to requests for comments for this news article. Wolverine Power also did not respond to questions sent to its public relations spokeswoman, Nancy Tanner, regarding its payments to Mr. Bruder, Presque Isle County’s most prominent elected leader.

However, an attorney did respond on behalf of Wolverine and Mr. Bruder by sending a letter to the Michigan Land Use Institute, which operates GLBNS. It said that the Institute’s “actions to date have been irresponsible, inaccurate and have bordered on harassment” of the county chairman and added that Wolverine would not respond to further inquiries from the organization.

‘A Clear Conlfict’
But Rich Robinson, director of Michigan’s non-profit Campaign Finance Network, told the news service that if Mr. Bruder accepted money from Wolverine and voted in favor of the plant, then “it’s a clear conflict.”

“Not only should all of that have been on the table and completely disclosed to the public, but he should have also recused himself from any action or supporting resolutions,” Mr. Robinson, who is based in Lansing, said. “It’s a clear conflict of interest.”

While the Bruder controversy simmers, Wolverine and its supporters and critics are preparing for public hearings at Rogers City High School about the plant on Oct. 29 and 30. The hearings, staged by the Michigan Department of Environmental Quality, will record public comments on the agency’s just-released draft permit to operate the plant.

The hearings are likely to attract strong attention statewide: Wolverine’s draft permit is the first issued by the state for a large coal plant in 20 years, and the proposed plant is part of an unprecedented coal rush in the state. Eight companies want to build new coal plants in Michigan, even though statewide demand for electricity has been flat due to the state’s steady loss of jobs, employers, and residents.

Further adding to the controversy is the recent revelation that the plant would burn far more petroleum coke—a waste product from oil refineries—than coal, because of the soaring cost of coal and pet coke’s relative cheapness. However, the planning commission determined this past July that, in order to switch fuels, the company must request an amendment to its SUP, which would require another public hearing about Wolverine’s Clean Energy Venture.

Adding It Up
Evidence of Mr. Bruder’s possible conflict of interest turned up by GLBNS is highly detailed and covers four years of activity.

Specifically, the IRS records viewed by GLBNS show that the county chairman received $15,900 from Wolverine in 2004, $21,450 in 2005, and $24,200 in 2006, the year Wolverine submitted its application to the county for a special use permit for the coal plant. The same records also indicate that during those same three years, he was afforded an additional $11,000 via his own personal Wolverine expense account.

And, as Mr. Jaroch’s letter implied, questions about Mr. Bruder’s conflict of interest may extend beyond his dealings with Wolverine. According to filings with the Michigan Public Service Commission, Mr. Bruder also accepted more than $27,000 from Presque Isle Electric & Gas Co-Op, which is based in nearby Onaway and is a partial owner of the Wolverine co-op, in 2006 and 2007.

In all, the news service investigation found that Mr. Bruder received $99,550 from the two utilities between 2004 and 2007.

According to the online edition of Business Connections Newsletter, publish by the Presque Isle County Development Commission, Wolverine officials unveiled their proposal to the general public on May 12, 2006.

Wolverine formally applied to the Presque Isle County Planning Commission for a SUP about three weeks later, on June 6. The county board of commissioners, including Mr. Bruder, passed the resolution supporting the project on July 12. The planning commission received that board of commissioners resolution on July 20 and approved the SUP on the same day—just over six weeks after first receiving the application.

Attorney Houle’s letter points out that, given that the board of commissioners appoints all planning commission members, presenting that body with such a resolution is, in itself, a possible violation of law because it could be viewed as imposing duress on appointees.

Her letter concludes that, given both the alleged conflict of interest and alleged duress, the special use permit is void and the company does not now have the county’s permission to build the plant in the limestone quarry.

Although Mr. Bruder did not return several phone calls from GLBNS last month about the apparent conflict of interest, he did respond a year ago to an initial question about the matter. That was in July 2007, when GLBNS was gathering information for an article about the coal plant proposal that it published later that month.

At that time, Mr. Bruder contended that the co-op money he accepted did not pose a conflict for him in his role as a county commissioner.

The day after that news article appeared, however, Wolverine cancelled a promised interview between GLBNS and the firm’s president and chief operating office, Eric Baker.

Veteran investigative journalist Glenn Puit is a policy specialist for the Michigan Land Use Institute. Reach him at glenn@mlui.org.

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