Referring to it as a “bailout,” Gov. Brian Schweitzer announced Monday he was blocking an appropriation of state money to Swank Enterprises intended to compensate the construction firm for the cost of environmental cleanup at the former site of the Kalispell Pole and Timber Yard.
Schweitzer called the appropriation, “an extraordinarily brazen and bold attempt to hijack people’s money,” and an example of “some pretty outrageous behavior, that we see legislators acting like they were members of Congress.” The governor went on to tout his rejection of the funding as the fiscally responsible decision at a time when Montana’s projected budget balance is getting slimmer.
At issue is an amendment Sen. Greg Barkus, R-Kalispell, made to the state budget bill in the most recent Legislature to compensate Swank for its share of the cost of environmental cleanup at the site in the amount of $600,000.
The site of the former Kalispell Pole and Timber yard, as well as an oil refinery, near where Wal-Mart in Evergreen currently stands, suffers from soil and groundwater polluted by petroleum and other toxins dumped there for years during the first half of the 1900s.
Aware that it was a Superfund site, Swank purchased the land 14 years ago and agreed to pay 2 percent of cleanup costs, despite bearing no responsibility for the pollution, when total cleanup estimates were $1 million at the most.
Subsequent studies by the Department of Environmental Quality have now raised the total cleanup estimates to $32 million, putting Swank on the hook for about $640,000.
Barkus has long argued that this is unfair and sought to compensate Swank out of a special “Orphan” fund financed by taxes on oil and gas production and metal mining. Defending his appropriation, Barkus noted the state was paying for its share of the cleanup out of the same fund.
“I felt it was an injustice done to a Montana business man and I tried to right the wrong,” Barkus said. “Sometimes you have to put a little trust in government and in this case I don’t think he’s been very fairly treated.”
Because the language in the budget bill says the state “may use up to $600,000” to pay Swank, Schweitzer said he is within his right to refuse the payment, adding that it would set a “dangerous” precedent of using state money to bail out private parties. Noting Swank’s political contributions to Barkus and other state Republican officeholders, Schweitzer sought to portray the appropriation as political back scratching by the GOP for a deep-pocketed donor.
“This is the people’s money, it does not belong to any individual,” Schweitzer said, adding that any assertion that Swank may not have realized how much it would owe in environmental remediation upon purchasing the property originally was, “absolutely ridiculous.”
“When Swank bought this property they knew that there was environmental liability attached to it,” Schweitzer said. “This is trying to act like a Wall Street bank in Montana – too big to fail.”
In a statement issued Monday afternoon, Swank Enterprises said it was not aware the property was being considered for a Superfund cleanup when it purchased the site, noting the company has paid DEQ $67,878 in remedial costs while no cleanup has yet occurred.
“Aside from (Chief Executive Officer) Dean Swank’s support of the Republican Party we didn’t do anything to deserve this criticism from the governor and it is unfortunate that Governor Schweitzer has chosen to make this out to be a partisan issue,” the Swank statement said. “The Legislature thought that Swank had been singled out by the DEQ and was being forced to pay for environmental cleanup costs when we did not contribute to the problem in the first place.”
“To be maligned in this fashion is outrageous behavior on the part of the governor,” Swank added.
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