Technicalities Save Banghart Properties’ Class B Grain Buyer License

Last month the Public Utilities Commission deemed the dealings of Banghart Properties, formerly Fearless Grain Marketing, sufficiently shady to justify denying the Gettysburg middleman company a Class A grain buyer’s license. But yesterday the PUC renewed Banghart Properties’ Class B license, with extra reporting conditions, despite Banghart Properties’ apparent violation of the Class B $5M sales cap in 2021 and 2022 and failure to pay its customers within 30 days as prescribed by state law.

Banghart Properties is avoiding punishment for its bad behavior by technicalities:

But because the state law doesn’t provide a penalty for taking more than 30 days to pay, the commission didn’t assess any financial penalty.

…Banghart’s attorney, Robert Konrad of Pierre, however, argued that many of the contracts Banghart Properties held with producers those two years resulted in grain being delivered to customers outside South Dakota. He said interstate commerce fell outside the state commission’s authority.

Commissioner Chris Nelson said there wasn’t legal precedent on how Banghart Properties should be regulated. “We’ve not dealt with this, and state law could certainly be clearer in helping us deal with this,” he said.

…“Banghart developed a workaround, a loophole,” commissioner Gary Hanson said. He too said the Legislature and the commission might need to look at state laws and administrative rules and determine whether to recommend changes [Bob Mercer, “PUC: Banghart Broke Grain-Payment Law, But No Fine,” KELO-TV, 2023.06.21].

Legislators, you heard the PUC: the law has a loophole big enough to drive a grain truck through. Grain buyers like Banghart Properties can thumb their nose at the law, and the PUC has to sit idly by and leave farmers unprotected from reckless business conduct. Put some reforms to the grain buyers statutes on your agenda for 2024.