Mont. gov denies state cleanup funds to company

AP News
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Posted: Dec 15, 2009 11:20 AM

Montana Gov. Brian Schweitzer said that a state fund will not pay a Kalispell business' share of cleanup costs at a former timber yard and oil refinery site.

Sen. Greg Barkus, R-Kalispell, proposed an amendment to the state budget bill in April to have the state's Orphan Share Account pay $600,000 of Swank Enterprises' costs for cleaning up the old Kalispell Pole and Timber/Reliance Refinery/Yale Oil Refinery site.

The Orphan Share Account is financed by taxes on metal mines and oil and gas production, and had an $11 million balance earlier this year.

Barkus argued that Swank was not responsible for the pollution on the property, part of which it purchased about 14 years ago. However, in March 2006 Swank did agree to pay 2 percent of the cleanup costs, which at the time was around $20,000, Barkus said. The cleanup is now estimated to cost $32 million, making Swank's share $640,000, he said.

Dean Swank told The Associated Press Monday that his company has already paid $67,878 and the cleanup hasn't even started.

"All of this has been in planning, litigation and testing. Two percent of the total _ it's been a huge amount of money," he said.

After the state refused to pay a $40,000 invoice submitted by Swank in August for part of the costs, Barkus wrote to the Department of Natural Resources saying the intent of the legislation was to help Swank with the cleanup.

Schweitzer said Barkus tried several times to appropriate the money for Swank Enterprises, and it was rejected. Barkus finally included language in the state budget bill that did not mention the company.

The legislation reads that the department "may use up to $600,000 of Reliance Refinery cleanup funds for grants to community partners for the purpose of furthering or expediting remediation or redevelopment activities."

Barkus urged the DNRC to have the Legislative Services Division look over the bill.

DNRC Director Mary Sexton replied that a review by Greg Petesch, the Legislature's top lawyer, states the House Bill 2 appropriation "is to be used by the DNRC for the state share of the cost to remediate environmental damage at the KRY site."

The Schweitzer administration said it would be bad precedent to use state money to bail out viable private parties.

"The bottom line is that during the last session, some Republican senators started acting like they were members of Congress and they tried to earmark money from the taxpayer directly to one private business," Schweitzer said, accusing Swank of having "political clout" because of donations he and his company made to Republican candidates.

Swank said it's unfortunate Schweitzer made it a partisan issue.

"I'm taken back and really baffled by why this happened. It seems to me that having listened to everything he said, it's kind of vindictive because I happen to be a Republican, but that shouldn't be disfavorable to me," he said.

Swank acknowledged that the issue was controversial as it moved through the Legislature.

In a letter to Sexton in September, he said his company's share of the remediation "will far exceed the money allocated in HB2 and cause us financial hardship for a problem we had nothing to do with."