The Minnesota Attorney General’s Office is making an inquiry into Brainerd-based Crow Wing Power after questions have arisen about the sale of an affiliated company more than a decade ago.
Crow Wing Power said in an e-mail Friday that it “has been advised by an assistant attorney general that he has received reports about CWP. The assistant attorney general is gathering information … and we are fully cooperating.”
Crow Wing Power provides electricity to about 38,000 mostly residential customers in Cass, Crow Wing and Morrison counties — the heart of Minnesota lake country. It is one of the state’s many electricity co-ops, which are owned by their customer “members.”
The attorney general’s inquiry surfaced in Crow Wing Power’s monthly board of directors meeting on Thursday, two people who attended the meeting said. One of those people — Gary Bakken, a Breezy Point resident and Crow Wing Power member — said the attorney general’s information requests were largely related to the sale of Hunt Technologies.
The attorney general’s office declined to comment, saying it does not confirm or deny inquiries.
In 2000, Crow Wing Power financially rescued the troubled-but-promising Hunt, a Pequot Lakes company that had around 200 employees at the time.
By 2006, Hunt was a turnaround story, and it was sold to an Australian-led group.
Last month, the president of Crow Wing’s board, Bob Kangas, acknowledged that several directors took $70,000 each in compensation for work connected with the Hunt sale. The director payments weren’t disclosed to co-op members at the time. They have come up only recently at Crow Wing Power board meetings and in two critical letters to the editor published in Brainerd-area newspapers.
Crow Wing did well on the Hunt sale, distributing $12 million in proceeds to members. It used another $5.2 million for improvements on its electric system.
It also invested heavily in a manganese mining venture in Emily, Minn. From 2009 to the end of 2014, Crow Wing Power essentially spent $22.7 million on the mine project, but it has yet to get off the ground.
The Star Tribune reported in August that the Emily mine-sale agreement called for production royalties to be paid to Crow Wing Power’s top three executives.
Crow Wing Power’s board of directors authorized the royalty payments, Bruce Kraemer, Crow Wing Power’s CEO, said at the time. The co-op members were “probably not” told about the incentives, but compensation matters are usually not disclosed to them, Kraemer also said.