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South Dakota Gave Grants to Safety Violator Adams Thermal of Canton

Last updated on 2013.09.30

Michael Larson finds an embarrassing indication of the quality of oversight in South Dakota's corporate welfare program. Adams Thermal Systems of Canton received two $50,000 economic development grants from the Governor's Future Fund in September and November, 2011. Governor Dennis Daugaard gave Adams Thermal these funds for creating and retaining jobs in Canton. Adams Thermal received similar Future Fund grants in 2004 as part of state assistance that made Mike Adams purchase of the company possible, plus another $5,516 in 2008.

Apparently the Future Fund doesn't ask for refunds when job creation results in worker elimination. An Adams Thermal machine killed worker Larry Michael Kinzer on November 7, 2011. To avoid federal criminal prosecution for Kinzer's death, Adams Thermal agreed last week to pay Kinzer's widow $450,000, to pay the Occupational Safety and Health Administration a $435,000 fine, and an additional $450,000 fine.

Adams Thermal issues corporate propaganda (posted, gallingly, on Thursday, September 5, the day of their settlement with OSHA and the Department of Justice) that "Safety has always been a top priority in our organization." Ha!, says OSHA and anyone else able to read:

An OSHA investigation following the incident revealed that managers at Adams Thermal had “instructed and authorized” employees to bypass the safety guards installed on machines, prompting a criminal complaint with the U.S. Attorney’s Office in South Dakota. Scott Allen, a spokesman for the U.S. Department of Labor, said criminal complaints are “very uncommon.”

“This is quite significant because it had to do with a fatality,” Allen said. “I would put this in the significant category for sure.”

Thursday’s agreement defers prosecution on the criminal complaints.

Less than five months before Kinzer was crushed to death, OSHA fined Adams Thermal $4,500 after an inspection found problems that portended his death. According to the citation OSHA issued on June 17, 2011: “The employer did not furnish employment and a place of employment which were free from recognized hazards that were causing or likely to cause death or serious physical harm to employees exposed to a potential crushing and/or amputation hazard.”

The fine was reduced to $3,150 on July 14.

OSHA returned with a partial inspection the day after Kinzer died. A complete investigation opened on Feb. 6, 2012, found 47 violations — 44 of them classified as “serious” [Jonathan Ellis, "Adams Thermal Fined $1.3 Million for Lax Safety, Worker's Death in 2011," that Sioux Falls paper, 2013.09.06].

If making safety your top priority gets you 44 serious OSHA violations, I'd hate to see how many guys die on the job when safety is only a secondary priority.

And as citizens whose tax dollars funded a company with such callous disregard for safety and human life, we should all feel a little guilty.

p.s.: In December 2011, the Governor's Future Fund gave $2 million to the ever-beleaguered Northern Beef Packers. We have a tough time picking winners, don't we?


  1. Testor15 2013.09.11

    Maybe they can get a economic development grant to pay the fine and award.

  2. Cranky Old Dude 2013.09.11

    It would seem this is another excellent example of why it is a mistake to let government at any level pick winners and losers. When you let politicans make economic decisions, you always get political determinations.
    It is tempting to think that the power and funding that flows from the public trust will be beneficial to a sector or a community but even the best government is usually too corrupt for that.

  3. Jerry 2013.09.11

    To me, without government intervention we would not be able to sit down and crank out opinions that are read immediately by anyone who cares to read them. Yep, the government picked a winner. The winners are supposed to outnumber the losers and in most instances, they do. As much as it aggravates me to see these kinds of abuses, I feel that we must invest in order to advance. To have that many violations of safety though, is terrible and to have them cause a loss of life, criminal.

  4. caheidelberger Post author | 2013.09.11

    Jerry, I'd contend there's a difference between government interventions that create lasting investments, like the Internet, parks, and public schools, and those that just hand money to the private sector and say, "Good luck!" I wonder: when a company violates the public trust the way Adams Thermal appears to have done with its safety violations, should we require them to pay back their publicly funded economic development grants?

  5. Rorschach 2013.09.11

    Mr. Kinzer gave his life in exchange for his paycheck. (Military members also do this, but they volunteer knowing it's a possibility). In the private sector it shouldn't be that way, but accidents sometimes happen. However, this was no accident!

    OSHA found that Adams managers "instructed and authorized" workers to bypass safety guards installed on machines. Mr. Kinzer did as instructed, and paid the ultimate price. "Safety has always been a top priority in our organization." BS!

    What troubles me the most about how the aftermath of this tragedy was handled is the way moneyed interests were allowed to buy their way out of criminal charges - simply by paying what they would have had to pay anyway if they had been sued in civil court by Mr. Kinzer's family and/or the federal government. Settling the civil side of things ought not affect the bringing of criminal charges against Adams Thermal or its managers.

    This is more evidence of the cozy relationship between the justice department and big business that previously allowed Wall Street pillagers to walk on criminal charges in exchange for paying money. The dual system of justice consisting of fines for big business wrongdoers and criminal charges for everybody else needs to end.

  6. Jerry 2013.09.11

    To me, when you have violated safety concerns over and over again to cause the death of an employee. Not only should you be fined by OSHA, your charter should be revoked and you should be forced to repay the hand that fed you. We should be demanding the return of our investment.
    The question now is how to get that done and is it possible?

  7. Jim 2013.09.11

    Under state law, if an individual agrees to forego criminal prosecution in exchange for civil settlement, it is known as compounding and it is illegal. When state does it, it is prosecutorial discretion. In this instance, sounds like someone who should've been punished perhaps skated. The widow was probably on board with agreement and hopefully keeps her entire award. Would have like to see her get more and fine been less.

  8. Roger Cornelius 2013.09.11

    So in essence, the state gave Adams Thermal over $100,000 to offset OSHA fines and to settle the lawsuit with Kizner's family.

    With thinking like that ..........................

  9. John 2013.09.11

    Mike Adams claims that he is a Christian Businessman. What a joke.

  10. Testor15 2013.09.12

    "Gawd grant me the ability to steal from all and I will repent on Sunday, Wednesday if you like"

Comments are closed.