Group raises conflict of interest concerns in vote on coal port

Source: KSL.com

A Utah group that advocates for greater government accountability is raising concerns that a coal company employee who sits on the state’s Community Impact Board was among those who voted in favor of a $53 million investment in a controversial Oakland, California, export terminal.

The Alliance for a Better Utah is asking the board to clarify whether Gregg Galecki, who represents the Utah Board of Water Resources on the board, disclosed the conflict of interest at the time the approval was given. A letter was sent to the Community Impact Board late Wednesday in time for its monthly meeting Thursday, when the Oakland terminal was to be discussed.

“We ask the chairman to investigate this issue in a timely manner so the (board) and its decisions can be transparent and held accountable by the people of Utah,” said Chase Thomas, policy and advocacy counsel with the Alliance for a Better Utah.

Minutes from the April 2015 board meeting in which the low-interest loan was approved for Sanpete, Sevier, Emery and Carbon counties — pending legal review — do not indicate individually which members voted in favor. Galecki was present, and members Mike McKee and Ron Winterton cast dissenting votes. There was no verbal disclosure by Galecki at the time the vote was tallied.

No money has been dispersed by the board for the planned bulk terminal at the former Oakland Army base. Because of legal questions over using mineral lease money for an out-of-state project, the Utah Legislature last session approved an alternative funding mechanism that swaps Community Impact Board money with transportation funds.

The swap ensures that mineral lease revenue continues to be spent in the counties where they are generated from resource extraction — such as coal mining — and the counties can continue to benefit from tax revenue generated by the industry.

As it stands, Oakland leaders passed an ordinance that effectively prohibits coal from being received at the terminal, but it is not clear if developers will sue to try to get the ordinance overturned.

Utah’s efforts to continue to get access to a deep-water export port for coal and other goods, such as hay and potash, are in limbo, but Carbon County Commissioner Jae Potter has said the Oakland vote will not deter the search.

Coal critics say it is foolhardy for the state to invest money in what they describe as a dying industry, but the leaders of the four counties pushing for the loan said industry dollars are integral for their survival.

“It’s what keeps our schools open,” Sevier County Commissioner Gary Mason said during April 2015 meeting.

In its letter sent to board Chairman Keith Heaton, the Alliance for a Better Utah asks whether Galecki disclosed his conflict. The letter adds that Galecki should recuse himself in further action on the Oakland port.

“His apparent conflict of interest will only raise questions about an already controversial project,” the letter states.

Heaton said Thursday he was not chairman at the time the board voted to approve the loan. He added that he believes the planned investment was so “nebulous” at the time given the legal complexities and the uncertainty of it becoming a realistic venture that Galecki’s position with the coal company was not even an afterthought.

Still, after the Alliance for a Better Utah brought the issue to the board’s attention this week, Heaton said he consulted with the Utah Attorney General’s Office at the conclusion of Thursday’s meeting.

“We will make sure (conflicts) are properly addressed about this and other projects,” he said.

Additionally, the board adopted a due diligence financial checklist that sets up a series of questions or concerns that will have to be addressed in consideration of investment in the Oakland deep-water port or projects of similar size or complexity.

Heaton said the checklist is in recognition that the deep-water port in Oakland presented an array of issues beyond the scope of the board’s expertise, noting that a commitment of funding was still contingent on legal review.

Even with that caveat, two board members were unwilling to sign off on the deal, questioning the use of mineral lease money and the prospect that the loan could turn into a “grant” should the financial return not cover the debt.

Read KSL.com article here.

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