Donation from DAPL company 'unusual,' but a win for ND taxpayers, officials say
BISMARCK — The $15 million donation the developer of the controversial Dakota Access oil pipeline gave to the state of North Dakota was "unusual" but benefitted taxpayers, a top Republican lawmaker said this week.
The money is intended to help offset the heavy costs the state incurred for the response to the monthslong protests against the pipeline. In an interview Thursday, Oct. 5, Gov. Doug Burgum said the state has "no obligations whatsoever" for accepting the payment.
"The Dakota Access Pipeline was under no obligation to give the state any money, so it was really out of generosity that they did it," he said.
Burgum, a first-term Republican, said he wasn't worried about the state looking too cozy with the company and was instead concerned with doing "what's right for the taxpayers." He called it an example of "corporate citizenship" that was similar to Hess Corp.'s $25 million gift for a North Dakota education program in 2011.
Burgum announced last week that Dakota Access LLC had wired $15 million to the Bank of North Dakota to pay down loans taken out by the state Department of Emergency Services. The state has approved $43 million in loan authority from the state-owned bank for costs associated with the protests, and more than $33.8 million had been drawn down as of Sept. 29, said bank spokeswoman Janel Schmitz.
A spreadsheet provided by DES lists costs like National Guard payroll, expenses for out-of-state law enforcement that responded to the protests as well as equipment and supplies.
State lawmakers included a provision in a budget bill this year stating their intent for the Department of Emergency Services and the governor to accept reimbursement "in the form of land, cash or other assets from non-state sources" for costs associated with "unlawful activity" surrounding the pipeline's construction.
Republican Sen. Ray Holmberg, chairman of the Senate Appropriations Committee, said they didn't necessarily expect the money to come from the pipeline company, although it reportedly offered to help pay for the protest costs last year.
"We threw out a wide net to allow the state to be in a position where we could move in any different direction," Holmberg said.
Holmberg called the $15 million a "plus for the taxpayers," although he said the deal was "unusual."
Mark Jendrysik, a political science professor at the University of North Dakota, agreed that the donation is unusual and raises "questions about future enforcement decisions." About 1,400 officers assisted with protest efforts, Burgum wrote to President Donald Trump in April.
"If someone who can't afford to donate that money, are they going to receive the same level of concern and attention from state entities?" Jendrysik said.
But Jay Kiedrowski, a senior fellow at the Humphrey School of Public Affairs at the University of Minnesota, likened it to agribusiness giant Cargill donating money to the university for research that will ultimately help its business. He didn't see a problem with the donation as long as North Dakota officials remained in charge of the police.
"There are a number of instances where private companies make contributions to government for something that benefits them," Kiedrowski said.
In a memo to Burgum, Attorney General Wayne Stenehjem said state law doesn't prevent a private entity from providing a gift to the state. He pointed to language allowing the state to accept emergency management funds from "any person, firm, corporation or limited liability company."
North Dakota law also allows the Bank of North Dakota to receive "deposits from any source," Stenehjem wrote.
Vicki Granado, spokeswoman for Energy Transfer Partners, said they are "thankful for the professionalism and the services provided by" law enforcement. She said the company's CEO, Kelcy Warren, has said they "owe a debt of gratitude to the people of North Dakota for their support over the last several years and we are honored to make this donation."
Dakota Access LLC is a joint venture between Energy Transfer Partners, Phillips 66 and MarEn.
Democratic Sen. Tim Mathern, a member of the Appropriations Committee, said the company should pay the entire bill. He said Dakota Access "proceeded with the pipeline before having final approval," a reference to the easement needed to cross under Lake Oahe near the Standing Rock Sioux Reservation.
"Even though they are a private company they used the government to protect and advance their project," Mathern said in an email. "We tread on dangerous ground when we use government law enforcement to advance private interests."
The $3.8 billion pipeline, which runs from western North Dakota to Illinois, began service this summer after months of protests that resulted in more than 700 arrests. American Indian tribes are still fighting the project in federal court, and in a separate case, Energy Transfer Partners sued Greenpeace and other groups over the protests.
Stenehjem said North Dakota officials are preparing a "federal tort claim" to recoup costs from the federal government. That would be on top of the $10 million grant the U.S. Department of Justice awarded the state recently.
"We intend to make a claim against the federal government for the money," Stenehjem said. "We're assembling the bills right now."