What should Louisiana citizens know about a $12 million real estate deal in Iberville Parish between the Louisiana Department of Economic Development (LED) and a Russian Oligarch involving a proposed fertilizer plant on property surrounding a Louisiana National Guard facility?
Apparently nothing, if one judges from the status updates coming from the Jindal administration since the deal was made back in June of 2013.
Throw in a curious buy-back clause contained in the agreement between the state and EuroChem Louisiana LLC, an option for EuroChem to purchase a second tract in St. John the Baptist Parish, and talk about environmental emission credits that were supposedly promised to Eurochem but then appear to have evaporated into…well, thin air, and you have the makings of political intrigue with an international flavor.
Readers may remember our post last October 20 in which we revealed what appeared to be a sweetheart deal between the state and Vantage Health Plan whereby Vantage was allowed to purchase the former Virginia Hotel in Monroe for $881,000 without having to bother with a pesky public auction and sealed bids.
That transaction was made possible (even though there was another party interested in purchasing the building that had been serving as the State Office Building in Monroe) by Senate Bill 216 (SB 216) by Sens. Mike Walsworth (R-West Monroe), Rick Gallot (D-Ruston), Neil Riser (R-Columbia), and Francis Thompson (D-Delhi).
Well, it turns out there was considerably more to SB 216 (which became Act 127 upon the signature of Gov. Bobby Jindal). We saw the bill in its entirety at the time we wrote our story last October but did not understand the significance of a part of the bill entitled Section 3.
Until now.
Section 3 called for the sale of 2,150 acres of land within the town of St. Gabriel in Iberville Parish to a then unidentified “business entity that enters into a cooperative agreement” with the Department of Economic Development.
Not only was the prospective buyer not named in the bill (contrary to the other part of the bill that clearly identified Vantage Health and the purchase price of the Virginia Hotel), but the bill also contained no mention of a purchase price for the Iberville property. Neither the name EuroChem nor a purchase price is contained anywhere in the bill.
It is understandable that the buyer’s name might be left out of the bill, especially if the sale is still pending and nothing has been finalized. But when considering a proposal to dispose of a 2,150-acre tract of property for industrial purposes, one might be reasonably expected to ask how much money is involved before casting a vote on such a measure.
The bill passed the House by a 96-1 vote and by a 31-1 vote in the Senate. Voting against the bill in the House was Rep. Marcus Hunter (D-Monroe) while the lone dissenting vote in the Senate was cast by Sen. Dan Claitor (R-Baton Rouge). Seven senators and eight House members were absent or did not vote.
The Senate vote was on April 24, 2013, and the House approval followed on May 22. Gov. Bobby Jindal signed the bill on June 5 and the cooperative endeavor agreement was signed on June 14 by LED Deputy Secretary Steven Grissom—even though the bill did not become law until Aug. 1, 2013. 
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The name of the Eurochem representative on the state documents obtained from LED was Ivan Vassilev Boasher, identified only as “Manager.”
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EuroChem, founded in 2001, is a Russian company owned jointly by Melnichenko (92.2 percent of shares) and CEO Dmitry Strezhnev, who owns the remaining 7.8 percent. It was Strezhnev, and not Melnichenko, who joined with Jindal in announcing plans for the $1.5 billion facility.
To secure the project, the state offered the company a competitive incentives package that includes a $6 million performance-based grant to offset the costs of site infrastructure improvements, the announcement said. In addition, EuroChem will receive the services of LED FastStart—the state’s workforce training program. “The company also is expected to utilize Louisiana’s Quality Jobs and Industrial Tax Exemption programs,” Jindal said in making the announcement on July 10, 2013.
“EuroChem is evaluating two final sites for its Louisiana plant,” he said. The Iberville Parish property had been on the market for more than two years through the Office of State Lands, and EuroChem deposited $12 million in an escrow account to buy the property. At the same time, EuroChem also secured an option to purchase a 900-acre, privately-owned tract in St. John the Baptist Parish. “Both Mississippi River sites are being evaluated for construction and logistics suitability, and the company will make a final site decision within the next year,” Jindal said. http://gov.louisiana.gov/index.cfm?md=newsroom&tmp=detail&articleID=4141&printer=1
Well, a year has come and gone and the option on the St. John property, identified by sources as the Goldmine Plantation in the Mississippi River’s east bank near the town of Edgard, which was for 330 days, has expired and was not renewed. No documents requesting permits have been filed with the parishes of St. John or Iberville, the town of St. Gabriel or the U.S. Army Corps of Engineers.
Meanwhile, during the 2014 legislative session—a year after approval of the sale of the Iberville Parish land to an unknown buyer for an undisclosed price—State Rep. John Bel Edwards apparently decided the deal was not a good one in light of the Ukraine crisis which erupted after approval of the cooperative endeavor agreement.
Edwards pushed through House Concurrent Resolution 209 (HCR 209) which requested that LED Secretary Stephen Moret “reevaluate and explore rescinding the cooperative endeavor agreement with the Russian-based company EuroChem.”
Of course the administration promptly ignored the resolution.
The 2,150 acre parcel in Iberville Parish is surrounded on three sides by the Mississippi River and the tract in turn surrounds the Carville Historic District that houses the National Hansen’s Disease Museum, the Gillis W. Long Military Center (Louisiana National Guard facility), and the U.S. Department of Labor’s Carville Job Corps Center. There are no exiting shipping terminals on the tract and the property is prone to flooding during times of high water.
One Iberville Parish official told our sources that he did not believe the project was going to move forward because of relations between the U.S. and Russia over the Ukraine crisis and because of current restrictions in Iberville on air emissions from existing plants which limits the amount of air emission credits available.
And it is those air emission, or carbon, credits that appear to be the key in the entire deal.
One person close to the St. John transaction, told our source that while the prospect of Eurochem’s building a plant in Louisiana is “still alive,” the purchase of the Iberville property “had to do with environmental credits.”
The credits, he said, were available from another company at the time they purchased the Iberville tract but are now gone. He refused to identify the company from whom credits were supposed to be available nor did he say what happened to those credits. “One was the deal (for construction) and one was about emission credits,” he said. “They purchased the Iberville land and continued to do business with us like it never happened.”
A spokesman for the Department of Environmental Quality explained that there are basically two geographic categories when considering air quality standards for permitting: attainment or nonattainment. When an area is considered to be in the nonattainment area, DEQ works with businesses to lower emissions to meet standards through “emissions credits.”
These “credits,” which are provided by the state, are gained by companies that make improvements to their current physical plants in order to reduce oxide and volatile organic compound (VOC) emissions. The credits can be bought and sold much like a commodity on the open market, he explained.
The credits also have to be acquired from companies within that particular designated geographic area that is considered in the nonattainment area.
Because Iberville Parish is within a nonattainment area, Eurochem would have to acquire the credits if planning to make an application for construction and would be required to demonstrate it had sufficient oxide and VOC credits to meet the application approval.
While no one is making any accusations, there is a flourishing international black market for emissions credits that has come under scrutiny by several investigative agencies, including Interpol, which calls carbon trading the “world’s fasting growing commodities market.” Guide to Carbon Trading Crime
http://www.interpol.int/en/News-and-media/News/2013/PR090/
Larry Lohmann, writing for New Scientist, says that the larger carbon markets are “poised on the edge of breakdown.” https://www.academia.edu/3152549/Regulation_as_Corruption_in_the_Carbon_Offset_Markets
Deloitte Forensic, Australia, calls carbon credit fraud “the white collar crime of the future.”
Carbon credits also have become a favorite vehicle for money laundering schemes, according to investigative agencies. http://www.redd-monitor.org/2013/08/06/itv-series-fraud-squad-investigates-carbon-credit-criminals/
http://www.marymonson.co.uk/fraud-solicitors/carbon-credit-fraud/
There are too many unknowns about the Iberville Parish land sale, according to retired Gen. Russel Honoré, leader of the Louisiana Green Army coalition. “The state is broke and we’re making deals with foreign entities who are polluters in their own countries,” he said of the Iberville Parish land sale as well as a recent deal with a Chinese company that has had a poor environmental record.
“As much pollution problems and erosion problems as we have in this state, we don’t need to be bringing in these companies from other countries unless they have clean safety and environmental records,” Honoré said.
Still another unanswered question concerns that buy-back clause in the cooperative endeavor agreement between Eurochem and LED. The side of the ledger favoring EuroChem is the $6 million grant the state gave EuroChem, along with all the other tax incentives it is receiving—should the plant be built. But on the plus side for Louisiana is the clause that says if the fertilizer plant is not built, the state has the option of buying the land back at a reduced price or approving the buyer for re-sale.
Louisiana Voice 
http://atimes.com/atimes/Central_Asia/CEN-01-300713.html
To get a better feel for the international implications of this, read this article published a year and a half ago in the foreign press {the above is not the only place it was published}.
No less a person than Vladimir Putin is opposed to Eurochem’s plans for this Louisiana facility and he, too, has been shunned by Melnichenko who used Dmitry Strezhnev as his front man with Putin (as he did with Jindal). Note the following excerpt from the intriguing article:
“For an oligarch to miss the opportunity of squiring Putin around his property is not only unprecedented in Russian protocol. It suggests that Melnichenko was unwelcome to the Kremlin. At least that, sources familiar with the matter claim, is how Putin feels. Why then, even before his newest Russian mining projects have started producing, would Melnichenko dare to announce this month a US$1.5 billion project in the US state of Louisiana? Last year, Putin explicitly warned against “offshorization” of the country’s capital. ”
This story has it all. Thanks, Tom, for bringing it to the surface and thanks to John Bel Edwards for trying to intervene.
Welcome to Al Gore’s crony capitalist agenda. It’s all about the carbon exchange.
As thorough as this post is, it still leaves me wondering. Why was the 2105 acres purchased if other than a one-time infusion of cash into an otherwise gaping Jindal budget deficit? The Russian Oligarch is not making a charitable gift to the State of Louisiana. So where is his profit on the deal? He doesn’t get the $6 million Economic development package without building the plant does he? Please don’t tell me he already has it. But the real intrigue is the issue of the Carbon Emission Credits. Did the State of Louisiana “give” credits to the Russian that they had available? If so, where and how did they get them? Or, can the state of Louisiana just “print” the credits out of thin air? Who awards credits and then legitimizes them so that they can be traded/sold/bought?
You are off to a great start of an intriguing story with international implications. I hope you will issue sequels to further report and explain what all of this means. As you so often say, “Follow the money” in order that we can learn from you of this matter.
Am I the only person who can’t figure out what’s happening here? All I know is that it sounds scary.
I agree with John. What incentive is there for Eurochem to shell out $12million to Jindal’s administration. I would suspect that if it is carbon credits then it would have to be a significant amount for Melnchenko to have any interest. He is a successful billionaire and would not risk his reputation for a small payout. The “land purchase” as well appears to be completely faked – it seems that little to no effort was made to even pretend this was going to be a viable project. $12 million for a swamp? absurd. There is no smoke without a fire – and here we have a lot of smoke. Further investigation should be done to clarify this situation.