Is the $53 Million Coal Deal a Mistake?

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SALT LAKE CITY (ABC4 Utah) – It seems that no one here in Utah took it seriously; that a landlocked state would get into the port building business, but now in the final hours the $53 million plan, many say is quite possibly illegal, is getting pushed through the legislature.

It was a deal done behind closed doors says attorney and former four-term Republican state lawmaker David Irvine. Irvine questions the legality of the plan that secured $53 million from community impact fees so coal producing counties could buy in to a yet to be built port in California. “There’s been no public hearing on this. There was no public hearing at the CIB level,” said Irvine. “The process by which this loan was approved by the Community Impact Board is at least extremely curious.”

Jeff Holt, the then Chairman of the Utah Transportation Commission, sat on the Community Impact Board (CIB) and was reportedly the mastermind behind this plan. Not only was Holt on the board, his employer is the Bank of Montreal and as such he was contracted to be the consultant for Sevier, Carbon, Emery and Sanpete counties in the port project.

Irvine says this a huge conflict of interest. “One of the questions that aught to be asked, should have been asked by the Community Impact Board and certainly should have been asked by the Utah legislature was what were the terms of the contracts that Mr. Holt had both with the Bank of Montreal, his employer, and with these Utah counties to evidently pay him for his consulting services in making this loan project happen?”

In April, the CIB agreed to loan $53 million to the four coal producing counties so they could invest in the planned port in Oakland. After the loan approval was made public, Holt wrote in an email to CIB board and staff, “…the script was to downplay coal.” Holt abruptly resigned from the Transportation Commission last year.

Irvine said, “There had never been a complete disclosure to the board about what the project really entailed or a risk analysis about what the loan might be associated with or really much about it at all other than this was a very good deal and Utah surely should get on the bandwagon.”

According to minutes of the April 2nd, 2015 meeting the board expressed concern about the legalities of the project, but they were assured the attorney general would be reviewing the project. “The project is contingent on a clean legal opinion to include the attorney generals’ office,” reads the minutes.

The Carbon County commissioner admits the Attorney General’s office never got back to the CIB. Jae Potter told ABC 4 News, “There had been some questions raised in regards to federal law and could it be used that way and everybody was looking to the Attorney General’s office to solve that problem. That hasn’t come forward and we don’t know if we’ll get an opinion.”

Yet in a move that surprised many, with just a week left in this legislative session, Senator Stuart Adams releases Senate Bill 246.

“This is absolutely a fraud on the legislative process.” Irvine not only questions the way the bill whizzed through committee, but the legality of the bill itself. SB 246 would take that $53 million in CIB money put it into the state’s transportation fund and then the state would transfer $53 million back to the CIB.

On the Senate floor, Sen. Adams said, “What we’re trying to do is trade that federal money for state money, because federal money has strings attached to it that we’re trying to alleviate.”

“The money ultimately is coming from the community impact funds and those funds, and all the legal requirements that go with it, are just being wsshh so it doesn’t exist,” said Irvine.

During the debate on the Senate floor Sen. Gene Davis questioned, “I’m trying to figure out the shell game we’re playing here with the money.” Adams responded, “We’re simply trading federal money for state money. That’s their money not ours.”

“I frankly just don’t understand how you snap your fingers as legislators and make what otherwise would appear to be an unlawful transaction, lawful,” said Irvine.

ABC4 Utah left multiple messages with the City of Oakland and with Jeff Holt, but no one returned our calls. As for the Attorney General’s office, they wouldn’t confirm whether or not a legal opinion was issued.

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Glen Mills

Chief Political Correspondent

 Glen is honored to be delivering the news of the day every weeknight at 5, 6, and 10 in his home state. He is an award-winning veteran journalist, who joined the ABC4 News team as a weekend anchor in June 2013. Over the years, he held various positions at the station as he worked his way up to the main anchor chair. He also serves as our Senior Political Correspondent and hosts Inside Utah Politics, which airs every Sunday. The Utah Headliners Chapter of the Society of Professional Journalists has recognized Glen as the best government and military television reporter in the state. Before returning home to Utah, he spent 11 1/2 years developing his journalism skills in other states. He held various on-air and management positions at KPVI in Pocatello, Idaho, WGBA in Green Bay, Wisconsin, and KKCO in Grand Junction, Colorado during that time. Read More...