Hey, you know that big dairy operation up by Ramona whose management has a history of breaking environmental rules and dodging taxes? Lake County Dairy LLC, managed by Rick Millner?

Guess who's delinquent on Lake County property taxes:

Property tax record, Lake County online database; screen caps taken 2013.04.15 18:00 MDT

The Lake County property tax database lists 416 of its 10,340 tax records as having "delinquent taxes on this parcel". As shown in the records above, the six parcels owned by Lake County Dairy, LLC, are listed twice as delinquent, since apparently no one in manager Rick Millner's office has bothered to pay any of the taxes due for 2011, the first half of which would have been due on April 30, 2012, and the second half of which would have been due on October 31, 2012. These six parcels include the old Swier apartment building at 150 East 4th Street on the south side of Ramona, which I find listed in various directories but not in the Secretary of State's corporate database as "Lake County Dairy Housing."

I checked with the Lake County Treasurer's office. The office assured me there is no clerical error here.

Once again, Rick Millner is not following the rules. He's already stiffed one local contractor for $23,000. Now he's cheating all Lake County taxpayers. Lake County, you were warned.

The South Dakota Supreme Court has closed another chapter in Richard Millner's dairy shenanigans in Veblen. In a unanimous decision issued Wednesday, the justices upheld Fifth Circuit Judge Jack Von Wald's issuance of summary judgment in favor of defendants Richard Millner and Veblen's Multi-Community Cooperative Dairy, which became the environmental-regulation-breaking, tax-dodging, and ultimately failed Veblen West Dairy. The court agreed with Von Wald that the minority shareholders suing Millner and MCC failed to offer prima facie evidence of commercial wrong-doing. The plaintiffs also abused the discovery process by skipping depositions and had to pay Millner and MCC some attorney fees as penalty.

This is one unusual stroke of good fortune for Millner's beleaguered dairy enterprises. His Shortfoot Calf Ranch headquarters burned down last November; the state fire marshall says the cause remains "undecided." And one of his employees just got busted for selling methamphetamines to undercover agents three times in one week, including one sting-sale that took place on Millner's Five Star Dairy near Milnor, North Dakota. Mmmm... might want to check what's in that milk.

I won't spend a lot of time blogging about a reporter reporting on my blogging. But my blogging about the Veblen dairies has become part of the story, as Mikkel Pates includes me in his in-depth coverage of the ongoing saga of Rick Millner.

Of more importance is Pates's account of the developing operations at the Ramona dairy to which Millner is bringing his environmentally, economically, and socially dangerous management. Evidently the major jobs at Millner's new Lake County operation have all been filled by immigrants brought down from the Veblen East dairy. Hmmm... that doesn't inspire confidence.

And evidently Millner has already gotten to the locals:

Neighbors contacted by Agweek say little about the new dairy, wanting to stay open-minded and positive about a new neighbor [Mikkel Pates, "Up from the Ashes," AgWeek, 2011.09.19].

Sorry, Rick. You deserve neither open-mindedness nor positivity. Your track record of violating environmental and zoning rules is clear.

Letting Rick Millner operate a dairy (and apply to expand it) at the head of the watershed that drains directly into Madison and Lake Madison threatens the environmental and economic health of Lake County.

Lake County, watch out: Rick Millner is in the building—the dairy building, that is. In a weeklong series, AgWeek's Mikkel Pates is chronicling the dairy deeds and misdeeds of Veblen's Rick Millner. The first story of that series presents Rick Millner's side of the story of his chronic business failures and environmental violations. Amidst Millner's appalling self-aggrandizing spin (more on that in a moment), Pates supports the warning I gave in June that Millner is revving up to wreak dairy havoc on my beloved Lake County:

"I think we have intentions of rebuilding and re-establishing ourselves," he says. "The only capital we have is intellectual capital."

On April 28, 2011, a judge in Fargo, N.D., confirmed a reorganization plan for Five-Star, a 1,630-cow dairy. Some of Millner's old associates have bought a dairy in Ramona, S.D., that he's putting into production and likely to try to expand [Mikkel Pates, "Upside Down Dairy Still Looks Ahead," AgWeek.com, 2011.09.12].

Remember that the old Swier dairy that Millner's pals bought currently holds a Class C concentrated animal feeding operation permit, which allows it to have up to 700 dairy cattle on the premises. if Millner plans to expand, he and the poor saps who keep funding his schemes will have to apply to the Lake County Commission for a Class B or Class A CAFO permit. This Rick Millner is the same operator who has violated county, state, or even federal rules at nearly every dairy he's run. The DENR forbade Millner from acting as a decision-maker in any dairy receiving a general permit for waste discharge from the state. When Millner or his front men come knocking on the courthouse door asking to bring more pollution to Lake County, our default position needs to be "No."

We cannot risk extending a larger CAFO permit to a man who won't take responsibility for his own failings. Millner continues to blame everyone but himself for past dairy troubles. The markets turned against him. The state of Minnesota caused his Excel Dairy to stink. The bankers lied to him.

In a brilliant moment of illustrative tone-deafness, Millner takes responsibility for one slice of the failure of his Veblen mega-dairies:

Millner remembers being adamant the company needed to lock in milk price at $20.66 per hundredweight for 2009, the average on the day of the meeting.

"We needed about $2 million of working capital to pull the contracting off, and we didn't get it done," he says.

...And whose fault was that?

"It was mine," Millner admits. "I should have been more relentless with both the partners and the bank. I felt strong enough about it that I should have been able to get it done. Maybe I should have locked them in the room without food and water," he says [emphasis mine; Pates, 2011.09.12].

In this faux mea culpa, rather than regretting his errors, Millner doubles down on the very characteristics that make him such a danger to rural communities. He says he should have been more relentless, should have pushed people harder to get his way. I'm sure he's joking about imprisoning his investors, but Millner's obtuseness and crassness in making that joke is telling. He admits his "reputation has been destroyed." He says he has to "regain the confidence of people." Yet he makes a statement that shows he believes the route to his financial recovery is to express more of the intimidating arrogance by which he destroyed his own reputation and businesses. (Yes, Rick, drop the passive voice: you did destroyed your reputation yourself.)

Lake County, Deb, Emily, Scott, Kelly, Chris, Dan, and Roger, pay attention. The fox is in our henhouse, and he's hungry as ever.

Update 06:17 MDT: You can be a fan of enviro-green or dollar green to recognize that Lake County should not permit Millner to be involved with the Ramona dairy. Cayuga, N.D., farmers Dana and Sandy Banish say Rick Millner set them back 10 years financially by reneging on $1.2 million in contractual obligations for silage, corn, and late fees. Instead of keeping his word and paying his bills, Millner tried to milk the Banishes further by offering them "equity" in his failing dairy.

The courts are wrapping up another messy parcel of the dairy empire that serial polluter Rick Millner of Veblen mismanaged into bankruptcy. The United States Bankruptcy Court of the District of South Dakota has received the final trustee's report concerning The Dairy Dozen-Veblen LLP. Chapter 7 and Chapter 13 trustee John S. Lovald proposes dividing up the remaining $2,908.31 of the estate as follows:

(click to enlarge -- from Trustee's Final Report, U.S. Bankruptcy Court, District of South Dakota, Case 10-10147, Document 71, filed 2011.08.03)

If I understand this document correctly, those 32 limited partners would include the Korean investors who bought their way into the country by sinking hundreds of thousands of dollars into Rick Millner's now-failed dairies. In for ten million, they now get back a thousand.

Hand Millner $100, get back one penny... that's about the return any community can expect investing in malodorous, polluting confined animal feeding operations.

New documents from the bankruptcy proceeedings concerning the Veblen East industrial dairy in northeast South Dakota shed light on the machinations Richard Millner and the former owners of Veblen East undertook last fall in their failed attempt to cling to the giant, polluting feedlot.

Vista Family Dairies, the front LLC created by Millner and fellow stakeholders to bid for the dairy they bankrupted, applied to bankruptcy court Friday for reimbursement of $500,000 in administrative expenses. Here's their story, as pieced together from the application and supporting affidavits from Richard Millner and business partner Jeff Topp:

Veblen East bankruptcy trustee Lee Ann Pierce submitted a motion on September 3, 2010, to auction off the dairy. The court set the auction date for September 15 and allowed the following conditions:

In order to bid, a potential bidder must: . . . deliver to the Trustee . . . a certified check or cashier’s check in the amount of $500,000.00 as earnest money. . . . In the event Buyer shall not complete the purchase as herein agreed, Buyer shall forfeit the earnest money as liquidated damages, or the Trustee may, at her option, take legal action to assure the performance of the Buyer. The bid of the second highest bidder shall be considered the “back-up bid” and shall be considered irrevocable. The Trustee shall retain the “back-up” bidder’s earnest money until the closing. In the event the Trustee is unable to close the sale or in the event the Buyer is unable to obtain proper DENR and county permitting and zoning within the time period permitted for closing the earnest monies shall be returned to the bidder.

Millner says Trustee Pierce alerted him to her intent to auction the dairy in late August. He says he "recognized a business opportunity" and swung into action, forming Vista to bid on the dairy. He also started a big push to build up a silage pile at his other company, Prairie Ridge Management, to feed the cattle if the bid succeeded. Vista partners Jeff Topp and Robert Jameson financed $1.25 million worth of the new silage pile (see Topp's affidavit); Vista partner Wayne Viessman (remember that name) financed another $1.25 million.

Millner says the Vista effort was motivated in part by creditor AgStar's promise not to bid up Veblen East. Millner contends that between the time Trustee Pierce notified him of the intent to auction and her filing of the motion for auction, the minimum bid was raised from $13.5 million to $16 million. To make matters worse for Vista, Millner contends that two days before the auction, Trustee Pierce imposed on Vista a requirement that Prairie Ridge offer a purchase option on the silage pile to the successful bidder, whether it was Vista or a competitor. Millner contends that making this option a precondition for allowing Vista to bid removed the clear business advantage Vista had created for itself with its silage planning.

Auction day came, and Vista prevailed with a bid of $21.3 million: $17.3 million for the real estate, $4 million ($800 per head) for the cows. Then Vista found out that AgStar had backed Whetstone Valley Dairy's second-place bid. Millner also learned that Trustee Pierce let Whetstone withdraw its backup bid and returned its $500K earnest money. Millner says these secret dealings caused Vista's financier, Cargill, to back out of financing the real estate. (Millner does not address whether Cargill's withdrawal might have been influenced by DENR's refusal to issue a manure permit to any operation with Millner involved in management.) Millner says, "Vista was unsuccessful in procuring the alternative financing in the short time available"---i.e., by the December 1 deadline imposed by Trustee Pierce.

Millner thus contends that Vista is entitled to the return of its $500,000 bid deposit and "such other further relief as this Court deems appropriate."

Millner seems to be working far too hard to convince the court that he and his partners should get their half-million back. Accusations of sneaky financial deals, along with an amusing level of pot calling kettle black, seem to skirt the exact legal language in the bid conditions. It seems it would be simpler for Millner to point to DENR's refusal to issue him a permit. Trustee Pierce's conditions appear to make clear that such a denial warrants return of the earnest money to the bidder.

But such are the sworn statements from Millner, Topp, and their shell company Vista. Now for some idle speculation:

I mentioned Wayne Viessman above. He was in for $1.25 million on that silage pile. Did the Veblen East/Vista stakeholders put up $2.5 million worth of silage last September? Or was that $2.5 million simply the total commitment Viessman, Topp, and Jameson were willing to make to build up that pile at Prairie Ridge Management and support the bid?

And if PRM did not top off that silage pile, could any of that remaining financial commitment from Viessman have formed the basis for the acquisition of the Ramona dairy eight miles up the road from my house by Lake County Dairy LLC, which is based at Wayne Viessman's business address in Gary?

Documents:

1. Vista's application for $500,000 in administrative expenses
2. Richard Millner's affidavit (keep your hanky handy; it's a tearjerker!)
3. Jeff Topp's affidavit

Funny how things come together.

Swier dairy, Ramona, SD, now owned by Lake County Dairy LLC

Floyd Swier's dairy up by Ramona went out of business recently. It was purchased at the beginning of May for $1,505,000 by Lake County Dairy LLC. Don't be fooled by the name: It's not a local outfit. According to Lake County Dairy's articles of organization (filed with the Secretary of State on April 14, 2011), the initial designated office of the company is 215 1st Avenue, Gary, SD.

215 1st Avenue, Gary, SD, is also the business mailing address listed for Wayne Viessman, partner in Vista Family Dairies, LLC. That new company was part of Richard Millner's failed attempt to reorganize his two giant dairies in Veblen. I have reported frequently on Richard Millner's polluting dairies, bad business dealings, and bankruptcies. Viessman has been a business partner of Millner's (Dairy Dozen, Vantage Cattle Company, Veblen West Dairy), as well as a co-defendant in a lawsuit concerning the Veblen dairies.

Lake County Dairy lists as its registered agent attorney Jill R. Radloff of Minneapolis. The articles of organization were filed at the request of paralegal Gail E. Partlow of Minneapolis. Both women work for Leonard Street and Deinard, which has represented Millner, Viessman, and the other equity owners in the Veblen dairies.

Swier's dairy was a beneficiary of the EB-5 investor program, with two Korean investors providing one million dollars to get the dairy going. The same program, promoted by the state of South Dakota, recruited 27 Korean investors to pump $13.5 million into Millner's Veblen dairy operation. Both dairies appear to have created enough jobs to before going under to allow the Korean investors to keep their green cards.

Backhoe on Swier dairy site, apparently amid demolition of old structures

Swier's dairy had a Class C Concentrated Animal Feeding Operation Permit. That permit allows 500 to 999 animal units, which translates into 357 to 700 head of mature dairy cattle. That permit remains in effect: as far as Lake County is concerned, the new owners of the Ramona dairy can bring up to 700 head of dairy cattle onto the premises and start milking whenever they please. They may still have to obtain the usual manure discharge permit from the state Department of Environment and Natural Resources.

There don't appear to be any cattle on the dairy yet; locals report some demolition activity as workers clear some old buildings.

Swier dairy apartment building, Ramona

Lake County Dairy acquired the 320-acre dairy and its farmhouse as well as Swier's apartment building on 4th Street in Ramona. (Yes, wiseguy, Ramona has that many streets.) Under Swier's ownership, that building housed mostly foreign dairy workers. (Seems fair: build with foreign investments, hire foreign workers.) Up in Veblen, Millner also bought up housing to rent to his immigrant (and occasionally illegal) workforce.

No documents that have come across my desk have put Richard Millner's name on the Ramona dairy. That's fortunate for the Ramona dairy, since the DENR declared last fall that it would not issue a manure permit to the Veblen dairies if Millner was a decision-maker with any responsibility for permit compliance.

Standing water on former Swier dairy. This water eventually flows through Madison.

However, the connections between Millner and Lake County Dairy LLC raise a familiar smell. Millner and his associates have raised bad stinks in their past operations. The Ramona dairy sits at the north edge of my watershed. Runoff from the southern half of Section 35, Badus Township, where the dairy sits, runs south to Madison, then on to Lake Madison and the lower Big Sioux River. In 2009, concerned citizens at Big Stone Lake traced brown pollution flowing into their lake 45 miles back upstream to the Veblen dairies.

Richard Millner has been cited for environmental and permit violations at the Veblen dairies and nearly every other dairy he's touched. If there is any chance he is involved with this dairy purchase in Lake County, my neighbors and local officials need to pay close attention the Ramona dairy's resumed operations.

A couple of interesting court documents same across my desk this week concerning the legal aftermath of the bankruptcy sale of the Veblen mega-dairies, which we can all hope Riverview's Fehr brothers are running more cleanly and honestly than dairy destroyer Richard E. Millner ever did.

First, Veblen West Dairy bankruptcy trustee Forrest C. Allred has been trying to get the bankruptcy court to compel Millner's lawyer Bryant D. Tchida and law firm Leonard, Street and Deinard to withdraw from representing Millner's Prairie Ridge Management and Vantage Cattle Company. In a reply to objections, trustee Allred this week filed a pretty damning argument about Leonard Street's conflict of interest, having represented Veblen West during bankruptcy proceedings and now representing former owners and partners against the bankruptcy estate.

Even more interesting is Allred's outline of how Millner and his lawyers apparently misled the court during the bankruptcy proceedings last fall. Allred notes that, in objection to motions for bankruptcy sale, Millner's lawyers contended that Millner's Veblen dairies were operating on a break-even basis and paying all of their operating expenses.

f. In reality, it is now obvious Millner and the other equity owners – represented by Leonard Street – seriously misled this court. The Vantage application for an administrative expense of $834,689.56 is a particularly egregious example. As explained above Millner – as part of the group calling itself “Certain Equity Owners of Veblen West Dairy, LLP”, and represented by Leonard Street – represented to this court on multiple occasions that Debtor was operating in the black since the date of filing. Now, Millner – operating through Vantage and again represented by Leonard Street – claims an an unpaid operating expense averaging over $100,000.00 per month since this bankruptcy case has been pending. A significant part of litigating the Vantage administrative claim is expected to involve matters and financial records that pre-date the bankruptcy filing, including times when Leonard Street was representing Debtor, or Vantage, or both, and the course of dealings between Vantage and Debtor.

g. As stated above, Leonard Street prepared Schedule B herein, signed by Millner under penalties of perjury. Substantially all of the personal property listed on schedule B has been sold, but the purchaser has discovered that significant items of personal property listed – valued at well in excess of $100,000.00 – either never existed or were not in fact owned by Debtor. The estate has potential claims arising out of this issue, claims relating to documents that Leonard Street preprared [Forrest C. Allred, Chapter 11 Trustee, Reply, U.S. Bankruptcy Court, In re: Veblen West Dairy LLP, Case 10-10071, Document 597, 2011.04.11].

Wow: telling the court you're paying your bills, then asking the court to squeeze your old estate for bills you didn't pay to yourself... making over $100K of property disappear... sounds like some strange magic going on in Veblen.

The second document of interest is #605, an objection to Allred's motion to compel withdrawal of counsel from Charles Baus, of Baus Oil Company in Sisseton. In a hand-written note to the court, Mr. Baus says (I transcribe verbatim):

It is felt that there is major clean up to be done on Greenman Street-Ballard Street, the city storm sewers and all plugged culverts do to tons of rotton feed that has not been cleaned up for many years. This is not the responsibility of the City of Veblen or Riverview [Charles Baus, objection, U.S. Bankruptcy Court, In re: Veblen West Dairy LLP, Case 10-10071, Document 605, 2011.04.13].

I'm not sure the court discussion of the propriety of Leonard Street representign Millner against the very dairy it represented just last year is the appropriate venue for a discussion of the environmental clean-up claims Mr. Baus makes here. But it's too bad Millner and his lawyers can't magically make their continued environmental problems go away as easily as the ephemeral personal property Allred mentions.