St. Paul hearing will examine 'procedural irregularities' in PolyMet water permit

The Minnesota Pollution Control Agency destroyed the computer of its outgoing chief in 2018, an act that may have lost evidence environmentalists are seeking as they challenge the agency's handling of a crucial permit for PolyMet Mining Corp.

The computer wipe, which the agency defended as standard practice, came to light in court documents reviewed by the Star Tribune ahead of a hearing Tuesday morning to examine what have been called "procedural irregularities'' in the PolyMet permit case.

The case will look closely at two calls that are at the heart of the matter.

In March 2018, the chief of the Chicago office of the U.S. Environmental Protection Agency got a call from Minnesota. It was John Linc Stine, head of the MPCA, which was drafting a key water quality permit for PolyMet Mining's proposed copper-nickel mine in northern Minnesota.

Stine knew that EPA scientists had raised serious concerns about the permit, and he asked that the Chicago office not submit them in writing during Minnesota's public comment period — a move to "promote efficiency and preserve resources," the agency said later. A few weeks later, after the public comment period closed, EPA officials read the comments to Minnesota regulators during a long telephone call, and they were never entered in the written public record.

The case has only gotten more complicated.

After the judge gave mine opponents permission to conduct a forensic search of MPCA computers, they discovered that the agency had wiped information from the ones used by Stine and the agency's mining section director, Ann Foss, one month after they left the agency.

Stine's computer was destroyed, and a backup file held just one document.

Mining opponents have now accused the agency of fresh misconduct — destroying or failing to preserve evidence, known legally as spoliation.

The MPCA insists it fully complied with its records retention obligations and that wiping computers was "routine data protection practice."

It didn't put a so-called litigation hold on the documents because it didn't expect the current type of litigation, and document holds are a strain on agency budgets.

The MPCA's current document retention schedule shows that any documents related to processing water pollution permits are supposed to be held from 25 years to permanently, depending on the type, the Star Tribune found.

"I've been involved in these issues more than 30 years and I've never experienced anything like this," said Don Arnosti, the recently retired head of the Izaak Walton League's Minnesota division. "I think that should be a red flag to the public."

MPCA officials insist their handling of the PolyMet case was perfectly routine — and that in the end, they incorporated the EPA concerns into the final permit.

But a victory for the mine's opponents could throw yet another major roadblock in PolyMet's marathon effort to win regulatory approval for the mine, and it would cast an unflattering light on Minnesota's reputation for tough and professional environmental regulation.

"MPCA's conduct is akin to a fraud on the public, a fraud on [opponents], and a fraud on the Court of Appeals itself," mine opponents said in prehearing court documents.

At the center of the dispute is a state permit that would regulate pollutants such as arsenic, mercury, lead and sulfate that PolyMet can discharge in the wastewater from mining and processing ore.

Mining opponents say that permit is crucial because PolyMet would be Minnesota's first experience with copper-nickel mining, a process that can produce particularly toxic water pollution.

The hearing, which could last up to 10 days, will focus on a list of alleged procedural irregularities in the handling of the permit.

They include directing the EPA not to file its written comments during the public comment period, having the EPA read its written comments over the phone, discarding notes from important meetings, and failing to produce public correspondence when requested under state law.

On Tuesday, the opening hearing is expected to include testimony from Kevin Pierard, former chief of the water quality permitting branch in the EPA's Chicago office.

A veteran EPA regulator with a penchant for documenting things in writing, Pierard followed PolyMet's water permit from its beginnings. He's retired now and will testify remotely from New Mexico.

Just days before the MPCA approved the permit in December 2018, Pierard wrote a detailed memo about it, which he placed in the EPA's PolyMet file.

The memo surfaced only because it was leaked to the Star Tribune by a union for EPA employees, after multiple records requests by various groups including the Star Tribune failed produce it.

Pierard's memo detailed 29 concerns EPA scientists raised about PolyMet's water permit and said only six were fully resolved in the final permit.

Among the most important concerns was that the permit did not include a form of stringent numerical limits known as Water Quality-Based Effluent Limits, or WQBELs.

He wrote: "The permit does not include WQBELS for key parameters and appears to authorize discharges that would exceed Minnesota's federally-approved human health and/or aquatic life water quality standards for mercury, copper, arsenic, cadmium, and zinc."

The MPCA says it followed routine practices in negotiating with the EPA Chicago office, which oversees Minnesota's enforcement of the federal Clean Water Act. Lawyers for the MPCA say the public was fully engaged in the process and that the opponents' "entire case hinges on unfounded speculation."

They also argue there is no clear definition of procedural irregularities and the court should consider only what is actually unlawful, not simply unusual.

When the MPCA asked the EPA staff in Chicago to hold off submitting written comments, it was simply to save time and effort, the MPCA said, because the agency knew the draft permit would be revised.

The request was consistent with a longstanding Memorandum of Agreement between Minnesota and the EPA, the agency said.

MPCA attorneys also say it was the EPA's decision to read the federal comments over the phone, and that the EPA's actions are outside the jurisdiction of the Minnesota court.

Perhaps most important, the MPCA insists it addressed all of the EPA's concerns about the permit, and that Stine was not pressured to push it through. "Specifically, Mr. Stine was not subject to any attempts to influence the outcome of the NorthMet permitting decision from Governor [Mark] Dayton, members of Congress, or member of the state legislatures," the agency said.

Because this week's hearing is so unusual, lawyers hesitate to predict just what the judge might order.

But whatever the outcome, it comes amid a string of court challenges to recent MPCA decisions, and environmental attorneys say it signals a period of heightened scrutiny of the performance of Minnesota regulators.

"As the agencies try to rush the decisions through to get to yes, they are more likely to face judicial scrutiny," said Kathryn Hoffman, CEO of the Minnesota Center for Environmental Advocacy, a nonprofit law firm. "I think that's the trend that we're seeing here."