"If you are looking for something underhanded here, there isn't," said William Bosshard, president of the Bank of Alma, Wis.
That statement was one of the first things out of Bosshard's mouth when I called to ask him about a deal he'd made with his own bank. The bank owned a foreclosed property along the Mississippi River near Stockholm, which suddenly looked like a potential gold mine when Muskie Proppants LLC showed interest in the land for what they say is a "transfer station" for frac sand being mined nearby.
Last month at a presentation to area residents, a representative of Muskie Proppants said he had an accepted offer -- with the Bank of Alma -- for the land, should the county approve a variance for them to build there.
In fact, court records show that Bosshard formed a company, then bought the foreclosed land from the bank he oversees, in March. He then struck a deal with Muskie Proppants.
"It's simpler not to have it in the bank's name for a lot of reasons," said Bosshard.
You mean, so the bank can appear to be removed from the sale of land to a controversial sand mine company, I asked?
"Sure," said Bosshard. "Bank bashing is very popular. I'm just trying to get my money back on a foreclosed property. I'm not part of any oil conspiracy."
This is the tenor of discussions in southern Minnesota and western Wisconsin as carnivorous sand companies devour the countryside, promising riches for a few and misery for many. The sand on both sides of the river is excellent for a kind of oil mining called hydrofracking, providing an opportunity for covert deals and suspicion that is pitting neighbor against neighbor, business against business.
Did the bank's board approve your deal?
"Sure," said Bosshard.
But won't you make a killing, instead of the bank?, I asked.
"I'll be lucky to get my money back," he said. "There won't be any money made here, sir."
Hmm. Let's see: A guy starts a company to buy a parcel of land, gambling his own money instead of the bank's, but will only be lucky to break even?
That sounds like the second-worst business plan I ever heard. The worst business plan I ever heard was last month, when a representative from Muskie Proppants tried to persuade area residents that his company wanted to build a "transfer station" near picturesque Stockholm -- on top of land filled with incredibly valuable frac sand-- but had no intention, we pinky promise, of attempting to mine that sand.
Worst. Plan. Ever.
Either Bosshard and Muskie are horrible business strategists or, how can I put this delicately: disingenuous.
I might stress here that Bosshard is a bank president, and Muskie is owned by Wexford Capital, a $5.5 billion hedge fund whose CEO owns a 16,000-square-foot home in Connecticut.
Which do you think it is?
Certainly Bosshard knows how much he paid for the property, and he admitted having accepted an offer from Muskie, so he knows just how lucky he's been and isn't sharing.
He did offer that the FDIC was pressuring his bank to shed foreclosed properties, "so I'm in a hell of a vise."
So are many of Bosshard's customers, who fear tourism will die as the mines expand.
Those critical of mining are being called "anti-business." But most of them are business owners who fear that allowing one industry to thrive will mean the end to the others around Lake Pepin.
One is Fred Harding.
"That sure stinks to me," Harding said of Bosshard's deal. "If I was a customer [shareholder] of that bank, I would want to know [who made money.] Then I'd want to know where another bank was located."
Another business owner, Alan Nugent, said after discovering Bosshard's actions he has pulled his business from the bank, as have others. If Muskie wins and starts running sand trucks through Stockholm, Nugent is sure his general store and art gallery will die.
Those in favor of sand mines are either directly profiting, believe a person can do whatever with their land regardless of the consequences to their neighbors, or believe the mine claims about jobs.
Harding lives three houses from the Maiden Rock mine, and opposes expansion. Last week he said he was fired from the local planning commission by a pro-mining village president.
Therein lies a big problem. Decisions that affect the entire region are being made by tiny three-person town boards, where relatively unsophisticated members are making deals with front men for hedge funds and international oil companies. No one higher up in government seems to be asking what's best for the region.
I asked Harding how the job situation was, now that the mine was up and running.
"No one from Maiden Rock works at the mine," said Harding. The license plates in the parking lot are from Mississippi, Illinois and Alabama, he said.
And so it goes in Minnesota and Wisconsin. Covert deals. Phantom jobs. Hedge fund cash machines. A hell of a vise.
"Paydays are occurring," said Harding. "A farmer who has worked hard all his life gets an offer, I get it. I understand this is their opportunity."
"But we live in a community," Harding said. "My job as an officeholder was to protect those who are not profiting. We don't live by ourselves."
(The Stockholm Art Fair is Saturday. Opponents of the proposed sand mine will be giving more information to visitors).
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