WEVER – Iowa’s State Auditor Rob Sand has weighed in on the potential acquisition of the OCI Nitrogen Iowa Fertilizer facility in Wever by Koch Industries.
Sand penned a letter to the Federal Trade Commission and copied the U.S. Department of Justices’ Asst. Attorney General for Antitrust Division on Tuesday.
Sand said the deal is essentially OCI Global reneging on its commitment to Iowa taxpayers.
“This is something that we saw and instantly understood to be dangerous to taxpayers,” Sand said Wednesday in an interview with Pen City Current.
“You look at this and go 'hold on a second'. We just put 500 million bucks into this thing as a state and we did that to keep it out of the hands of Koch. We ought to be up in arms about it, so I’m up in arms.”
Sand didn’t know what weight the letter would carry but said speaking up about it could stop a bad thing from happening.
“Who knows? It’s a letter and it didn’t take us long to pen or do the work, but if saying the truth about this can stop a bad thing from happening, then we should.”
Sand cited the more than half a billion in state, federal, and local incentives that were committed to OCI to lure the project to Iowa, that should encourage the owners to do the right thing and maintain their ownership of the facility.
He said putting the facility in the hands of Koch flies in the face of the state’s reasoning for creating the largest incentive package in Iowa history.
“Then-Governor Terry Branstad’s administration put together a package totaling more than half a billion dollars in state, federal, and local incentives to secure the deal. Less than a decade later, OCI Global is cashing out, with Koch Industries seeking to reap the benefits by buying the plant. But the fact that it wouldn’t be owned by Koch was a justification for the massive commitment of tax dollars in the first place,” Sand wrote in his letter.
He said that’s the biggest reason why the deal should be blocked.
“Once we make that investment, it's supposed to bring lower prices. Otherwise, if you only have one person, they can name their price. The idea was to promote competition and that’s a good thing - I like competition. If farmers' prices go up because of consolidation, that will drive costs up for everyone else that they need to pass through.”
Taking a stand and pushing back on the deal isn’t a concern for Sand as far as future economic development in the area because of what the state has been willing to do to attract business and industries.
“No. If they come to the state with their hand out asking for 500 million, then they should be concerned that they would do what they said they would. And if some feel like they’ve got to be quiet about it, then let the watchdog do it,” he said.
“I think this is a terrible idea and I don’t have a problem speaking out about it.”
Sand referenced former Governor Terry Branstad in his letter to the FTC and DOJ, where Branstad espoused the benefit of providing competition in the fertilizer industry.
“In 2013, promoting the largest tax incentive package in Iowa history, Governor Branstad said, 'the Koch Brothers don’t want the competition […] We want competition.' I agree with the former governor. This deal should be rejected.”
Sand said he didn’t have any insight into what the outcome of the pending deal will be, but said opposition to the sale has to be made public.
“I genuinely don’t know what the outcome of this will be. This isn’t a thing where I’m trying to assess probabilities, but trying to make the better outcome more likely,” he said.
“And we appreciate folks down in southeast Iowa contacting us about issues that are important to them, and we encourage them to do so.”
Rob Sand is Iowa's 33rd State Auditor. He was elected in 2018 after serving seven years as Iowa's chief public corruption prosecutor in the Iowa Attorney General's Office.
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