State Auditor Rob Sand has asked federal regulators to block Koch Industries’ planned acquisition of OCI Global’s Nitrogen Iowa fertilizer plant in Lee County.
In a January 30 letter to Federal Trade Commission Chair Lina Khan and Assistant U.S. Attorney General Jonathan Kanter, who leads the Justice Department’s Antitrust Division, Sand noted tax incentives totaling some $550 million had supported building the plant, which “was pitched to taxpayers as a project that would encourage future competition and growth for the region.”
Scott Syroka highlighted the problematic sale in a Bleeding Heartland post last month. That article detailed how then Governor Terry Branstad’s administration orchestrated a package including $300 million in federal tax giveaways related to a flood relief program, $133 million in local tax abatements from Lee County over twenty years, and $112 million in state tax credits or forgivable loans.
The auditor’s letter argued that a sale to Koch Industries would likely increase fertilizer costs for farmers. It would also negate the original intent of the deal; the idea that Koch wouldn’t own the new plant justified “the massive commitment of tax dollars in the first place.” Sand said he agreed with comments Branstad made to reporters in 2013, asserting that the Koch brothers “don’t want the competition,” whereas Iowans “want competition.”
Sand is the first Iowa statewide official to contact federal officials about the sale, which OCI Global announced in December.
Appendix: Full text of letter from State Auditor Rob Sand to the leaders of the Federal Trade Commission and the Justice Department’s Antitrust Division
Top photo of State Auditor Rob Sand is cropped from an image that first appeared on his official Facebook page.
9 Comments
Rob Sand
Governor Sand. For 15 years the Rs have neglected real problems, institutionalized religious dogma, and privatized essential services — plus they’ve hoarded tax money to feign excess taxation, then call for tax relief which too many think benefits all, in reality, few, the rich. Reynolds goal is zero income tax.
Gerald Ott Wed 31 Jan 10:31 AM
not clear how this fits in with his duties
I can see how he might have been part of critiquing the initial package, including apparently not putting in safeguards to keep this from happening, and seems like something the Feds should take a look at but putting aside his apparent political ambitions (as Gerald notes) seems like a reach that just feeds into Repuglicans pointing to his straying beyond his given role.
dirkiniowacity Wed 31 Jan 12:22 PM
Retired GP attorney and county atty
. . . to what extent is Iowa’s Attorney General’s office addressing monopoly subjects ?
Jay Howe Thu 1 Feb 8:00 AM
Retired GP attorney and county atty
. . . rural Iowa is “fertile ground” for anti-trust action, for legislative action to fund and staff a robust program to break up business monopolies and to reverse consolidation trends, both vertical and horizontal varieties. . . .
Jay Howe Thu 1 Feb 8:08 AM
you mean this AG?
I agree that this might be an issue for our AG and certainly for the Feds but:
https://www.thegazette.com/state-government/new-iowa-ag-bird-requests-extra-money-to-fight-federal-overreach/
dirkiniowacity Thu 1 Feb 2:12 PM
reply to Dirk
The auditor’s jurisdiction covers the use of state, federal, or local tax dollars. So this is not far afield for him to weigh in on this.
Of course he doesn’t have the power to block the sale himself but it is logical that he would want to warn federal regulators that Iowa taxpayers invested a lot with the idea that Koch wouldn’t own this plant.
Laura Belin Fri 2 Feb 7:48 AM
hi Laura
as I noted I can see how the initial deal might have been open to comment as it clearly didn’t offer protections we might have wanted but are there new tax dollars in play? seems a stretch to call this an “abuse” but I’m not a lawyer.
On a related but broader note anyone really think that Brandstadt was worried about Koch influence?
dirkiniowacity Fri 2 Feb 2:06 PM
I well remember that when the original deal went down...
…the State of Iowa played the stereotypical role of the gullible rube who just fell off the turnip truck.
And as Scott Syroka pointed out, that was thanks to Terry Branstad et al. The other Iowans I talked with ten years ago were just as angry about that massive tax giveaway as I was.
Ordinarily I am very nervous about Democratic officials taking actions that might be regarded as fuel for justified Republican attacks. In this case, however, I partly think that Sand’s letter is justified as part of his official role. And part of me doesn’t even care that much, because I think the letter makes a point that should be made, and I have no doubt that Republicans will come up with other reasons to attack Sand.
I could add several paragraphs about the direct connections between the ways farm fertilizer is typically used in Iowa and the horribleness of Iowa’s water quality. And cheaper fertilizer is even more likely to end up polluting Iowa waterways and the Gulf. That is the sad reality.
PrairieFan Sat 3 Feb 3:07 PM
hi PF
totally agree that the Repuglicans will do what they can to undercut him, my worry isn’t about his electability or the like but how seriously will he be taken by courts or by the Feds and all and I think the closer he sticks to the letter of his job description the better. Yes one would hope the Dept of Ag, EPA, and all will take a close look at what this means for the continuing degradation of our environment and our politics but Lina Khan is certainly our best hope, lord knows Vilsack isn’t likely to step up tho I’d be glad to be wrong.
dirkiniowacity Sat 3 Feb 8:34 PM