Citing H&I Grain Collapse, Sutton Calls for Reform to Protect Ag Producers

Senator Billie Sutton is making the financial collapse of Hetland-based H&I Grain an issue in his campaign for governor:

Recently, South Dakota’s Public Utilities Commission shut down H&I Grain. Hard-working South Dakotans may lose out on millions of dollars, and this isn’t the first time this has happened to farmers and ranchers in our state. Yet the state government has been unresponsive in providing the adequate safeguards.

Our state needs leaders who will stand up for hard working South Dakota families. We need to change our laws and defend our farmers and ranchers [Sutton for Governor campaign, fundraising e-mail, 2017.08.03].

H&I Grain, which has facilities in Hetland, De Smet, and Arlington, apparently owes ag producers over seven million dollars and has only a $400,000 bond. Owners Duane and JoAnne Steffensen say in a federal lawsuit that the money is missing because their son Jared got addicted to online commodity trading and blew six to ten million dollars. According to a July 21 letter from PUC Grain Warehouse Division Director Jim Mehlhaff, H&I Grain “took deliberate steps to conceal the fact that they were out of compliance with the financial licensing requirements” in 2016. The PUC suspended H&I Grain’s license on June 23 and revoked it on July 24.

Senator Sutton joined a unanimous vote in 2013 to update bond requirements and other regulations on grain warehouses and buyers in the wake of the last big elevator debacle, the collapse of Anderson Seed Company in 2012. Sutton did not get a chance to vote on a 2013 proposal that would have put farmers first in line for compensation from a busted grain buyer or warehouse; the Republican majority killed that proposal in the House.

As in the Anderson case, the PUC is choosing not to seize H&I’s assets because “the risks and costs of doing so would outweigh any benefits to grain sellers and other creditors as all assets of H and I Grain are encumbered by a secured creditor.” The PUC is limiting its further action to disbursing the $400K bond to producers left hanging. The PUC docket includes letters of intent from 36 producers seeking a piece of the bond.

25 Responses to Citing H&I Grain Collapse, Sutton Calls for Reform to Protect Ag Producers

  1. More reform needed here, too. Despite the overwhelming evidence that CAFOs are bad, rotten for the environment, livestock, and people – the corrupt industrial agriculture business model perpetuates socializing and shifting costs to the environment and consumer.

  2. Good article from the Wirsings, John! They’re from Gregory, Sutton’s neck of the woods. Let’s see if they can get Sutton to mention reining in CAFOs among his ag reforms.

  3. Roger Elgersma

    The PUC is supposed to be the watchdog and handle disasters like this. Soooooooooo, they now decide to sit on their hands when a disaster happens and do absolutely nothing. They did not change the bonding rates when the sunflower seed company went belly up, so they had a chance and did nothing to improve the system. This is the definition of conservative. Conservatives like to be responsible and that is very good, but they also have a PUC to keep the other guy responsible as well. Conservatives do not understand this. Maybe they are to old to learn.

  4. mike from iowa

    Big Ag’s environment is air conditioned boardrooms. CAFOs aren’t a problem there. So what is everyone else’s probleMm

  5. Young Mr. Sutton would make a fine minority member of the Utilities Council. It’s not too late for him to switch his ticket. We need a fellow with a good old hat working on the Utilities Council every day.

  6. Henry Red Cloud would not have allowed this to happen the way it has happened. We need more Democrats in positions of power in South Dakota. Billie Sutton is correct in his assessment of how the good old boy network protects those that do us the most harm.

  7. HRC really wouldn’t have had a clue what to do, what he could or couldn’t do, and what he did. Had the longshot 99-to-1 bet come through.

  8. Yep, Henry Red Cloud would have dropped the hammer on these good old boys melon. He would have done the right thing which was to go after the assets and liquidate to satisfy the outstanding debt. Who gives a damn that their kid gambled, we see that excuse a lot for malfeasance. The family broke their fiduciary responsibility or duty to those that entrusted their product to be protected. Henry Red Cloud would have done these folks justice, even as a longshot. Henry knows right from wrong which is one helluva lot more than the bozoheades on the PUC stand for now. I am guessing you meant Henry Red Cloud and not Hillary Rodham Clinton with the HRC initials, no?

  9. I don’t even know what this blogging is about besides the Utilities Council. I didn’t bother to read it because it’s not very interesting to me. I just know HRC couldn’t get his way out of a walmart plastic sack with a rip in the bottom of it.

  10. Perhaps we can get Red Cloud to run again and join Sutton in his critique of the PUC and an explication of what specific policies they’d offer that would either better address the trouble caused by H&I Grain’s failure to pay its debts or perhaps have prevented such a mess in the first place (the latter strikes me as much more difficult than the former).

  11. Indeed, that sounds like a very good idea. It seems to me that when a Democrat runs and looses, they do not run again, whereas a republican has another go or two at it. I think of Herseth being the only one that came back to the arena for another go on the Democratic side. Thune came back from a loss and now he is a little better than a number 2 in the Senate. Red Cloud should indeed speak out on this matter as a voice of what we missed and how this can be changed even retroactively. I fail to see why the investor is protected on this as surely there is a risk to any investment. The elevator should be foreclosed on and the debt paid.

  12. Roger Cornelius

    Billie needs to turn these fund raising emails into press releases so all of South Dakota can understand his position.

  13. True that Roger. Letters to the editor maybe.

  14. Just another sad pathetic SD corruption story. You would think SD would get just downright sick and tired of hearing about these scandals all the time.
    Well South Dakota, just like in all of your other corruption scandals, you won’t be allowed to see the financial audit that the state ordered for H&I b/c of closed record laws. You see, the republicans that you vote to run your state don’t believe in open records laws and vote against them all the time.
    You may not know it, SD, but you need a guy like Billie Sutton that will fight for you and not just look the other way when the latest scandal happens.
    Take a chance and vote for a Democrat for checks and balances.
    One party systems are not good and the corruption is getting worse and worse. :(

  15. Mr. Red Cloud should most certainly run again.

  16. I honestly wouldn’t be able to live in a state like SD where its politicians do absolutely nothing to try to curb it’s corruption. It really wouldn’t be good for my physical and emotional health. I just don’t understand how people put up with this.

    (Since I know the pro-life stance is so important to South Dakotans, I want to remind you all that Billie Sutton is pro-life also, so don’t be afraid to vote for a democrat)

  17. Porter Lansing

    Hear, hear Jenny

  18. Nick Nemec

    I ran for PUC in 2012 and made the Anderson Seed bankruptcy the primary issue of my campaign. The GOP candidates that year, Chris Nelson and Kristie Fiegen, tried to minimize the issue and brought forth a package of minor tweeks to the law that they said would address the problem. Apparently those tweeks did not fix the law. At that time I proposed implementing a, temporary, as needed one cent per bushel grain checkoff on all grain sold in South Dakota. With one billion bushels of grain sold in the state each year this checkoff could raise $10,000,000 per year. The money to pay the farmers who were never paid for the grain they sold to H&S could be raised in 10 months. After raising the needed funds the checkoff would be stopped and placed back on the shelf to be used again as needed.

    This proposal is attractive because it doesn’t involve regular tax dollars. It’s more akin to the reaction of farmers and ranchers when there is a prairie fire, all the neighbors show up and work until the threat has passed. It remains to be seen if the PUC and the Legislature will make any meaningful changes to the law. I am doubtful.

  19. Why is South Dakota such a hotbed for white collar crime like this, the bigger the heist, the better? I don’t expect a Democrat will ever be elected governor in this state for at least another 20 years, but maybe that’s the topic Billy should address here. What is it about the watchdogs in the administrative and legislative branches of state government that makes crooks think they really can get away with it in South Dakota? It’s not like we lack recent examples.

  20. Heck of a plan, Nick, and very much in the neighbor-helping-neighbor tradition of agriculture. Sutton should shout about that plan on the campaign trial right now and put someone in the chute for PUC to amplify that message.

  21. The PUC clearly dropped the ball on the H&I grain heist. H&I grain is still stealing from farmers till this day and no one is stopping them. They are shipping grain daily that was brought in by local farmers and are not paying them. If you steal $7 million someone should be pounding rock. Clearly the whole H&II grain family are crooked bastards. Indite them and lock them up.

  22. Let’s encourage Nick Nemec to run

  23. What say you Mr. Nemec? Your platform has already proven itself to be correct..twice now. Tell voters that they should not want to see the third strike. Brookings would be a good place to launch with clarity.

  24. How many farmers have to get fleeced, how many Indian kids have to be robbed, how many public officials need to kill themselves, before South Dakotans finally get the sense that we need changes in management?

  25. Cory- The answer my friend is blowin’ in the wind. Someone clever with a sense of music needs to turn your questions into a song. Music gets people’s attention like nothing else.