Red Wing mayor resigns in face of pressure over frac sand industry role

Two weeks after Red Wing Mayor Dennis Egan insisted that he could ethically work a second job as a frac sand lobbyist, the mayor will step down in the face of a recall effort and a City Council investigation of his business relationship with the Minnesota Industrial Sand Council.
"I think it is the right decision," Red Wing Council Member Peggy Rehder said Saturday. "I just think it is unfortunate that it took this long."
Egan said he could have continued as mayor based on the city's attorney legal interpretation, but will resign by April 1 because his job as the sand council's executive director had become a distraction to the city and his family.
"I believe that a mayor must live to a higher standard than just avoiding conflicts of interest,'' he said. "If a mayor's activities serve as a distraction or roadblock for the city, the public is not well-served.''
Rehder said parameters for a special election to replace Egan, the city's former Chamber of Commerce president, will be discussed at Monday's City Council meeting. The council will drop its initiative to have an independent, private firm investigate the full nature of Egan's business dealings with the frac sand industry, she added. The proposed inquiry was to collect details of when Egan started consulting for mining companies, how much money he was making and what his contract said.
Without knowing any of those details, Red Wing City Attorney Jay Squires had advised the council that he could not see a legal conflict in violation of state statute.
A contentious hearing
But City Council President Lisa Bayley called the dual employment a "pretty massive inherent conflict." Bayley told Egan at a showdown City Council meeting on Feb. 11 that she resented being put in the position of having to take action on a conflict that belonged to him.
Egan, who gets paid $9,800 a year as the city's mayor, has earned a living for years as a professional lobbyist and political consultant. He told the City Council it was unfair for members to ask that he choose between abandoning a client or quitting as mayor. If frac sand matters came up at City Hall, he would recuse himself, he said.
But Kent Laugen, a Red Wing resident and local attorney, said the mayor's argument was "superficial and inadequate." There's no way he could reconcile his city duties against his loyalty to sand companies, Laugen said. He predicted there will be pressure for the mayor to resign immediately, not weeks from now.
The political tension that Egan said he could avoid came to life at the State Capitol last week at a crowded public hearing before a joint Senate and House committee considering frac sand legislation. Rehder testified on behalf of Red Wing that the state should adopt a moratorium on new frac sand developments until a comprehensive environmental review can be conducted. Egan wasn't there, but the sand council testified in direct opposition.
In the wake of that hearing, Rehder said Saturday: "And he [Egan] still says he has no conflict?"
Red Wing resident Dale Hanson had vowed to carry out a petition drive for a recall vote. "I am grateful that [Egan] will resign," he said Saturday. But he said he believes that the city should go ahead with its investigation "to ensure that if there was corruption, ethics violations, or other vital issues that we have an accurate sense of how much damage may have been done."
Red Wing is in the heart of frac sand territory. The rush to mine the ancient quartz started about four years ago with a national oil and gas boom using a technique known as hydraulic fracturing. The spherical, crush-resistant pebbles are vital ingredients in the drilling process.
A debate will start this week at the Legislature over a proposed statewide environmental review of the industry and the possible formation of a regional frac sand board for uniformity in regulation.
Tony Kennedy • 612-673-4213