One Man, Two Boards.

For those who don’t know, the Itasca Economic Development Corporation (IEDC) is found on the non-profit list in Tax Exempt World. The IEDC receives money from Itasca County to ostensibly further our economic interests. Unknown to most people, Rusty Eichorn, one of our County Commissioners, is also on the Board of Directors for IEDC.  Please take a moment to look at the list of the Board of Directors, and note the connections some of these people have. We will be looking at them in the future.

Does it appear to you that someone on the County Board, which votes to supply money to the IEDC, and is also on the Board of Directors of the IEDC, presents a conflict of interest? It looked that way to the Itasca County Attorney’s office. They wrote a letter to the County in 2009 expressing their concerns about this situation. Here are some excerpts, along with the text of applicable Minnesota Statutes:

“Upon review of MInn. Stat. sections 382.18 and 471.87, review of caselaw, the written Opinion of this Office from February 2003, and information from the IEDC website, it is my opinion that a conflict of interest exists, and therefore, a commissioner should not be a director of the Board of IEDC.

A primary concern is the fiduciary duty a director of the governing board of the non-profit has to the organization, and the fiduciary duty a commissioner has to the County. As a director of the non-profit, the director’s duty is to ensure continued funding to support the organization. As you set forth in your request, IEDC receives funding through the County’s annual budgeting process.


Finally, as it pertains to Minn. Stat. 382.18 and 471.87, and caselaw, the Commissioner would be involved in the contract between the County and IEDC, where the consideration for the contract is payable from the County treasury. Not only would the contract be void, but also the commissioner would be subject to criminal penalty.”

As you can see, referring to, in part, Minnesota Statute, both in 2003 and 2009 our own Attorney’s Office determined that it was a violation of the State’s laws regarding conflict of interest for a County Commissioner to sit of the Board of a non-profit which receives money from the County. Now, here are the statutes themselves, as entered into the letter from the Attorney’s Office:

Minn. Stat. 382.18 is entitled: OFFICIALS NOT TO BE INTERESTED IN CONTRACTS; PENALTY. It provides: “No county official, or deputy or clerk or employee of such official; and no commissioner for tax-forfeited lands or commissioner’s assistants, shall be directly or indirectly interested in any contract, work, labor, or business to which the county is a party or in which it is or may be interested or in the furnishing of any article to, or the purchase or sale of any property, real or personal, by the county, or for which the consideration, price, or expense is payable from the county treasury…..Any violation of the provisions of this section shall be a gross misdemeanor.”

Minn. Stat. 471.87 is entitled: PUBLIC OFFICERS, INTEREST IN CONTRACT; PENALTY. It provides: “Except as authorized in section 471.88, a public officer who is authorized to take part in any manner in making any sale, lease, or contract in official capacity shall not voluntarily have a personal financial interest in that sale, lease, or contract or personally benefit financially therefrom. Every public officer who violates this provision is guilty of a gross misdemeanor.”

The author of the letter goes on to state, “In reviewing the exceptions as set forth in Minn. Stat. 471.88, it is my opinion none apply under the current circumstances.”

So now we have a County Commissioner, Mr. Eichorn, sitting also on the Board of Directors of IEDC, even after he was advised, along with the rest of the Itasca County Commissioners, by the County Attorney’s Office that this was a violation and subject to criminal penalties. I have some questions about this:

  • How can a Commissioner, having taken an Oath of Office to faithfully discharge his duties to the best of his judgement and abilities, continue to maintain a situation that he was advised was a conflict of interest and a criminal violation without violating his oath of office?
  • How can the other four Commissioners, knowing of this situation and its implications, sit by and allow it to continue without also violating their oaths of office?
  • How does the County Attorney, being aware that a high level infraction is taking place in the county, justify the failure to take further steps to either stop or prosecute the action?

I hope that I am not the only one asking these questions. These people are supposed to work for us. They are supposed to obey the laws that they expect us to obey. They are not the county’s ruling class, they are public servants. Let us hold them to that.


6 thoughts on “One Man, Two Boards.

  1. J

    This is a heavily taxpayer funded organization whether it be by the county or the supposed nonprofit and corporate sponsors. The reality is if this is such a natural profit center it should be sponsored by supporting businesses not the county or nonprofits also enjoying large tax breaks at the community expense. This is an organization that must be put under independent performance scrutiny if they contimue to enjoy this large county and city funding as they have in the past. Yes, they can tell us all the jobs they have created, really? There own brochure published in 2008 shows since it’s inception the average per job wage had dropped to 30% below the State average from higher than the State average in 1980. By all measure this appears to be not working. Don’t you think it’s time for some oversight or stop throwing money at it. Take the time to follow the money trial that lead to the IEDC obtaining the closed Ainsworth site


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