Last week, Jim Nobles, Minnesota’s Legislative Auditor, released this report, which is highly critical of the Iron Range Resources and Rehabilitation Board, aka the IRRRB. The IRRRB was created by the legislature in 1941. It’s likely one of the first economic development organizations in Minnesota history. The IRRRB’s mission was to diversify and strengthen the Iron Range’s economy. They’ve failed at that responsibility.
According to Census Bureau statistics, Hibbing’s Median Household Income is $38,112. Hibbing’s poverty rate is 20.6%. Meanwhile, Virginia’s Median Household Income is a paltry $33,143 while their poverty rate is a disgusting 26.5%. By comparison, Minnesota’s poverty rate is 11.5% while statewide Median Household Income is $60,828.
These statistics verify that the IRRRB has failed its mission. Put another way, the average Iron Range family isn’t part of the middle class unless they’re fortunate enough to still have a mining job. These statistics essentially say that there isn’t a middle class on Minnesota’s Iron Range.
Part of the Legislative Auditor’s report lists the report’s “Key facts and findings.” The third finding states that the “IRRRB did not adequately specify objectives, such as job growth, in many loan contracts we reviewed, and it collected insufficient evidence on how well loans met their objectives. Whether IRRRB provided loans to certain applicants that may not have needed them was unclear.”
In other words, the IRRRB made loans to companies that might not have needed a loan. Further, the IRRRB didn’t bother finding out whether the company getting the loan created the jobs it promised to create. The 4th finding states the “IRRRB does not require most companies to report the number of jobs they create using IRRRB subsidies. For companies that do provide job data, IRRRB relies solely on their self-reported data.”
The IRRRB just trusts the companies’ job creation numbers. They don’t verify whether the numbers are accurate.
One of the companies whose IRRRB loans were investigated were made to Meyer and Associates. Meyer and Associates’ office in Eveleth shut down right after the 2014 midterm elections. When they shut down, Meyer and Associates owed the IRRRB $250,000. What’s worse is the company’s closing left 104 people unemployed right before Christmas.
Meyer and Associates in Eveleth participated in a program that was titled “Dialing for Democrats.” The day Meyer and Associates shut its Eveleth office, the company also shut its offices in St. Cloud and Little Falls.
Meyer and Associates was doomed for failure. Here’s why:
“It was a company with direct ties and allegiance to the Democratic Party. After Republican President Richard Nixon’s resignation over the Watergate scandal the business created an ‘…innovative small donor fundraising program called the Dollars for Democrats program,’ according to the Meyer Teleservices website.”
This happened in 2014, long after Howard Dean and Barack Obama used the internet to raise hundreds of millions of dollars for their presidential campaigns. The IRRRB knew that land lines were “decreasing eight to twelve percent per year” by 2014. There’s no justification for a $250,000 loan for a company that operated that type of business.
This calls into question what guidelines the IRRRB uses in granting loans. It’s impossible to think that a telemarketing company that made fundraising phone calls for politicians would strengthen the Iron Range’s economy.