DM&E: When right and left agree, the middle better listen

"I can't imagine this loan would've ever passed if we had due process." — former Vice President Walter Mondale

"This is a fundamental perversion of the political process.... The only reason we're having this discussion is because of the horrendous corruption that's come about in the last six years." — David Strom, President of the Minnesota Taxpayers League

Former Vice President Walter Mondale and taxpayer rights advocate David Strom don't agree on much. But there is one issue they do see eye-to-eye on: They both oppose the $2.3 billion loan earmarked for the DM&E railroad that was snuck into a conference committee report the day before the House of Representatives was due to vote on the massive Transportation Bill.

There was no discussion, there were no debates, there was no notification to state lawmakers or even other members of Congress whose districts might be affected. It simply appeared as if by magic.

Though it wasn't by magic, it was executed by a well-calculated sleight-of-hand.

"This is the way Kevin Schieffer operates," said an individual with intimate knowledge of the railroad who was in the audience of about 150 Friday afternoon at Minnesota State University Mankato.

Kevin Schieffer is the CEO of the DM&E railroad, which is seeking to build an extension into the Powder River Basin in eastern Wyoming so it can haul coal to power plants in the Midwest. The area is already served by two much larger railroads, the Union Pacific and the Burlington Northern.

Despite earlier assurances that the DM&E could accomplish its desired expansion with private financing, that promise has gone by the wayside. And that's why Sen. John Thune of South Dakota, a former DM&E lobbyist, quietly stuck the wording into the Transportation Bill conference committee report that virtually assures his former employer of the $2.3 billion, collateral-free loan.

While some loan advocates, including Minnesota Congressman Gil Gutknecht, say an upgraded DM&E will enhance transportation options for the agriculture industry, a spokesman for the consulting firm BearingPoint has said, "There is no way in the current market environment that the DM&E can pay it back.... This is not a loan; it's a gift."

"Everybody ought to be outraged" by what Thune did, Strom said Friday. "The process by any measure stinks." Strom, a free market advocate, said that the way the loan was inserted into the bill sets a very bad precedent. It means that "who you know is going to matter much more than what you do... imperiling the meaning of democracy."

"There was an utter imbalance of checks and balances in this midnight deal," said Mondale.

Nancy Brataas, a former Republican State Senator from Rochester, perhaps best summed up the discussion. In her long history of government involvement, she said, the insertion of the DM&E targeted loan into the Transportation Bill was the "most egregious action I have ever heard of."

Relevant articles:

• "Mondale, Strom condemn DM&E loan" — Mankato Free Press
• "Dakota, Minnesota & Eastern Railroad Corporation FRA Loan Creditworthiness Study" — BearingPoint
• "Congress Should Slash $2.3 Billion Stealth Earmark: Taxpayers Could be Railroaded by Largest Ever" — Frontiers of Freedom
• "Mayo Clinic Poll: Public Opposition to DM&E Bailout Climbs to 65 Percent in Minnesota's First Congressional District" — Yahoo! FINANCE
• "Next Stop, Risky Junction: How a Federal Loan to the Dakota, Minnesota & Eastern Railroad Could Take Taxpayers for a Ride" — National Taxpayers Union
• "South Dakota's $2.5 billion railroad jackpot" — CNNMoney.com