The Free Press takes issue with the opinion pieces presented on this page by Dakota, Minnesota & Eastern President Kevin Schieffer and South Dakota Sen. John Thune.

We don’t often feel the need to challenge the statements of our letter writers, but in this case, we feel it’s warranted if only to give readers a broader picture.

Kevin Schieffer says The Free Press editorial criticizing the way DM&E; and Sen. John Thune worked together to secure a federal government subsidy for the railroad project was written “citing rumors as fact without bothering to check them.”

Sen. John Thune says our editorial writers also did not “check facts.”

Because Schieffer and Thune don’t provide examples — despite being allowed twice as many words as normal letters — it’s difficult to respond to what they are talking about, except to say we see nowhere in the coverage or the editorial where we “cited rumors as fact.”

Rumors, according to Webster’s are “mere gossip.” There is no gossip in The Free Press coverage. We drew conclusions from fact that the South Dakotans can arguably take issue with, but to say we didn’t have facts is just not very “factual.”

Free Press reporter Mark Fischenich spent the better part of two weeks reporting and writing more than 10,000 words on DM&E; and the circumstances surrounding its newly found government partner.

The information he collected for his stories was the factual basis for the editorial. The fact that Thune or Schieffer take no issue with the reporting is telling.

Schieffer further states the editorial took “potshots at people’s integrity based on false speculation.”

Again, Schieffer provides no examples, so we can’t challenge directly, but only say we could see how some think we took issue with Sen. John Thune’s integrity. We stand by our statement that we believe he had a cozy relationship with Congress as a lobbyist and then helped a former employer when he became a senator.

These were the confirmed facts cited in The Free Press reporting.

These are the facts we used in the editorial to state Thune’s tactics were “underhanded” and that he helped pass legislation “sneakily.”

We base that conclusion on the fact that both of Minnesota’s senators and Congressman Gil Gutknecht knew nothing of the legislation that by Thune’s own admission was going to help DM&E.;

Sen. Mark Dayton’s chief of staff, Jack Danielson, told our reporter that the tradition in Congress calls for members to notify each other if provisions in bills affect their constituency. You could argue that’s Danielson’s opinion, but clearly it’s not a rumor or false speculation.

It’s the “on the record” comment of a credible source who should know about the process.

Secondly, Schieffer and Thune deny the program is a subsidy of any kind. We respectfully disagree. We consider the low-interest loans of this program a subsidy. The money for these loans comes from the U.S. Treasury. These are commercial loans that will be offered at approximately 4 to 5 percent over 25 years. The legislation states the loans are to be equal to the government’s cost of borrowing. A bank would not make a loan covering only it’s borrowing cost. The fact that the government is offering loans well below what the private sector would offer is a subsidy.

Congressman Gutknecht and Federal Railroad Administration officials have told The Free Press the program is a subsidy. The rules governing the program also use the word “subsidy.”

We also disagree with Schieffer when he says “This program involves zero taxpayer financing,” and Thune’s assessment that “These loans do not cost any taxpayer dollars.”

If the loans default, the government can take control of assets and sell them, but if it loses money in this kind of high-risk game, the taxpayers will make up the difference. While the railroads participating must pay a loan insurance premium, there is no guarantee such premiums would cover any or all defaulted loans.

Furthermore, officials of the Federal Railroad Administration who will review the program are public employees paid with tax dollars.

And finally, we find it telling that Thune has a lot to say when he can say it unquestioned through a newspaper op ed piece, but he declined to speak to our reporter directly, despite several repeated requests. Schieffer only spoke directly after several days of not returning phone calls.

There were some questions Thune’s spokesman could not and would not answer including: What kind of things did the senator do as a lobbyist for DM&E; to get paid $200,000 while he was running for Senate? He would have been prohibited by law at this time for directly lobbying members of Congress. He could have lobbied federal officials, however. Thune was a congressman before he was a senator.

We were also not able to ask Thune about the timing of his announcement. One would think with a project that had as much popular support as Mr. Schieffer says, it would be in Thune’s interest to announce it as soon possible to garner the needed public support.



For a copy of the original editorial, go to www.mankatofreepress.com. In the search function, type in DM&E.;



Joe Spear is The Free Press Managing editor.