Controversy is brewing over the allocation of $16 million of CARES Act funding toward grants that supply water for fracking.
Two North Dakota watchdog groups are questioning whether it’s legal for pandemic aid to go to the oil industry.
“It’s supposed to be directly responding to the pandemic, and this one would be kind of questionable,” Scott Skokos said. Skokos is the Executive Director of the Dakota Resource Council, a group whose mission is to “promote sustainable use of North Dakota’s natural resources,” according to its website.
President of North Dakotans for Public Integrity Dina Butcher says it’s “unnecessary favoritism” to the oil industry.
Both groups sent a formal complaint to two commissions part of the funding decisions, the Emergency Commission and Industrial Commission. The letter alleges that the funding constitutes a “gift” to oil companies in violation of the state constitution’s “anti-gift clause.”
“That prohibits gifts being given to private entities unless they’re alleviating poverty,” Skokos said. “I would not consider the oil industry an organization that the original framers of North Dakota’s constitution would consider a group that alleviates poverty.”
The state’s Emergency Commission set aside $16 million of CARES Act money to the Industrial Commission in October. That three-person commission, comprised of the governor, attorney general and agriculture commissioner, approved a grant to reimburse up to $200,000 for acquiring water, and fracking 80 uncompleted wells — a decision that North Dakotans for Public Integrity says lacked transparency.
“I’d like to see the list of recipients. I’d like to know if they are actually going to entrepreneurs in ND, or are they going to out-of-state oil companies, or are they going to other government agencies that need to be billed out or municipals,” Butcher said.
In Tuesday’s Industrial Commission meeting, members confirmed that the grants are all going to in-state companies.
Gov. Burgum has disputed that funding represents “gifts,” and said the groups are unfairly calling out the oil industry, especially at a time when the government-funded many other industries as part of pandemic relief.
“I reject vehemently that these were gifts, as characterized by this letter. When I think about all the money we put in and have put in to help support businesses that were affected by COVID, it’s interesting, that this is applying that argument to one industry and not all the rest,” Burgum said.
The commission members also said at the meeting that the project creates roughly 800 jobs among water suppliers, frack crews and support, helping the industry drive tax revenue, ultimately helping citizens.
State Sen. Tim Mathern (D-Fargo) says the decision should’ve been made in a special legislative session, and the money should’ve gone to those hit hardest by the pandemic.
“We have many individuals who are struggling now without proper amount of money for food, rent, medical bills. This money really should’ve gone to those people,” Mathern said.
Though the letter was a formal complaint, the two groups’ attorney, JJ England, says there’s a possibility the issue could go to court, and the complaint was a “first step.”
