For electric power cooperative Crow Wing Power, the year 2019 started with an explosive revelation of corporate infighting and allegations of administrative impropriety over its management of North America’s most valuable manganese deposit near Emily.
As the year comes to a close, Crow Wing Power finds itself embroiled in investigations by the Minnesota Attorney General’s Office and threats of lawsuits against the co-op that serves 38,000 members in Cass, Crow Wing and Morrison counties.
What happened in between? A whole lot.
Crow Wing Power's conflicts largely came to light with the revelation of a royalty agreement signed Nov. 20, 2008, that stipulated three executives from Crow Wing Power — CEO Bruce Kraemer, former Chief Operating Officer Doug Harren and former Chief Financial Officer Don Nelson — retained royalty interests to a manganese deposit by Emily.
Kraemer later asserted the 2008 agreement became defunct in 2011 after efforts to borehole mine into the deposit proved unsuccessful. Board member Bryan McCulloch — the most vocal and often only dissenting voice on the board — contended that statement was false.
"I can't believe he'd be so bold as to say that. It's absolutely wrong," said McCulloch, who told the Dispatch he was only coming forward after five years of trying to address the issue through the board of directors, the executive staff and other internal channels in Crow Wing Power — all to no avail.
If developed, the deposit has the potential to garner executives millions over the course of the mine's lifespan.
However, the royalty agreement didn't become known to the wider public until the Minneapolis Star Tribune published an article on the subject Aug. 31. Members of the co-op's executive staff along with board directors stated members were not notified of the royalty agreement in 2008 or subsequently.
Prior to that, the sale of Hunt Technologies earned $23 million that's been spent developing the Emily deposit. Since then, public scrutiny has been directed at $490,000 in bonuses doled out to seven board members, as well as revelations Kraemer received $1.9 million with the sale of Hunt in 2006. This, too, was undisclosed to members until mid-2019.
"Before this uprising had occurred, I had been very proud of all the accomplishments I've made for this co-op," Kraemer said after another round of calls for his ouster during the co-op’s annual membership meeting June 8. "The members benefited, everyone benefited. … We were very, very successful and I'm proud of how this all shook out. To tell you the truth, I certainly wouldn't ask the members to give the money back either."
"Where was our approval? When were we ever asked? Never," said Mary Jenkins, a co-op member of Brainerd, at the meeting. "And the nondisclosure? It ends with the sale. You took the money. You did your secret meetings. And now you're justifying and justifying. It is wrong, wrong, wrong."
Ultimately, the participating membership voted to advise the board to fire Kraemer with a 66 to 44-48 tally. But the membership also re-elected three board members up for election this year — Paul Koering, Doris Mezzenga and Gordon Martin — and Kraemer was subsequently retained the following board meeting.
Visit https://bit.ly/2MIJ1l4 for the rest of the Brainerd Dispatch's 2019 Top 10 list.