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Timberjay publisher responds to defamatory attack

Steve Altenburg commits libel in false "story" in the Tower News

Posted

I dislike spending time responding to the nonsense that regularly appears in the pages of the Tower News, but the defamatory screed from Tower Ambulance Director and Fire Chief Steve Altenburg that appeared in the Sept. 13 edition of that newspaper requires that I do so.

Altenburg’s piece was dishonest from start to finish, beginning with his claim that he was an “independent journalist.” Mr. Altenburg is nothing of the sort and his “story” violates every tenet of journalistic ethics. The Tower News can claim no better.

Mr. Altenburg falsely alleges fraud by Mayor Orlyn Kringstad and myself over an IRRR grant that the agency provided to the Tower Economic Development Authority in 2017 expressly to loan to Tower Harbor Shores, and suggests that this newspaper is failing to report on it. This, of course, is false. We have reported on Mr. Altenburg’s defamation related to this loan on more than one occasion. In fact, it is Mr. Altenburg and his partner in defamation, Linda Keith, who have kept the facts from the public. The TEDA board, earlier this year, requested to review the “evidence” that he and Ms. Keith supposedly submitted to the state auditor, but Ms. Keith refused to provide it. If Mr. Altenburg has some actual documentation of scandal, why won’t he present it publicly?

Anyone can submit a complaint to the state auditor at any time. The fact that the state auditor opens an envelope or reads an email could be construed as “investigation,” but that’s a far cry from a suggestion there’s any merit to a complaint. Mr. Altenburg’s allegations were supposedly filed back in May, yet four months later, no one who is supposed to be a target of the investigation has even been contacted. It appears that the state auditor has bigger fish to fry.

Here are the facts:

• The handling of the IRRR grant and subsequent loan to Tower Harbor Shores raised no concerns with the IRRR officials charged with its oversight, who closed out the grant and paid out the final amount to the city in August of 2017. The auditors who reviewed the city’s 2017 books mentioned only that the city should do a better job of documenting its handling of the grant because the city clerk provided reimbursement in a way that did not conform to the grant agreement. Lack of proper documentation was a chronic problem during Ms. Keith's tenure as clerk-treasurer and was routinely cited on multiple fronts by the city's auditors while she held the positioin.

It was only after Mr. Kringstad won election as mayor in November of 2018, that Ms. Keith and Mr. Altenburg, mounted their campaign of defamation against the new mayor in hopes of preventing him from restoring order to the chaos that the two of them had inflicted on Tower city government. Defamation surrounding the TEDA loan was one of several ploys the two of them concocted to undermine the new mayor.

• Mr. Altenburg’s claim that the city attorney directed the former clerk-treasurer to submit her loan concerns to the state auditor is false. That has been confirmed in writing from the city attorney.

• Mr. Altenburg’s claim of impropriety rests on his false claim that a single invoice that the city paid for under the loan agreement with Tower Harbor Shores was for the buyout of a project partner, the well-respected architect Dewey Thorbeck. Thorbeck has twice submitted letters to the city stating that the invoice, which totaled $29,060 was for architectural services rendered to the project, not a buyout. To my knowledge, neither Ms. Keith nor Mr. Altenburg has any evidence to suggest otherwise. Ms. Keith, after showing no concern about the invoice for nearly a year and a half, suddenly made an issue of the payment following Mr. Kringstad’s election and then to the auditors when they reviewed the city’s 2018 books this past spring. The auditors recommended that the city obtain more documentation for the invoice to address Ms. Keith’s sudden concern. Mr. Thorbeck provided that documentation through his letters.

• Mr. Altenburg falsely claims that the funds were paid out in violation of the city’s loan guidelines. Clearly, the IRRRB does not agree since they approved of the documentation, including the loan guidelines, submitted by Ms. Keith in closing out the grant and paying out the funds. Nor have the city’s auditors ever stated that the loan was issued in violation of the loan guidelines. Mr. Altenburg is simply inventing this claim.

• Mr. Altenburg falsely claims that I drafted a letter to the city council stating that the loan application from Tower Harbor Shores complied with “all the loan guidelines” and should therefor be approved. I drafted no such letter. In May of 2017, both I and Deputy Clerk Terri Joki-Martin reviewed financial documents from the Tower Harbor Shores project, including profit and loss statements, invoices, and cancelled checks. We reviewed paid invoices for eligible costs under the loan guidelines totaling $91,500, and unpaid invoices totaling $37,900. Under the loan guidelines, Tower Harbor Shores had to demonstrate that they had invested a private dollar on a qualified expense for every dollar in loan they received. While they had not quite reached that point during our review, I noted to the city council that I was confident based on the projected spending in their financial pro forma that “they would expend in the weeks and months ahead, far more than the $125,000 loan amount to be provided by TEDA.” Indeed, the TEDA board had earlier reviewed the company’s financials, which estimated $680,000 in qualified start-up expenses under the loan guidelines.

I did recommend that the city council accept the grant from the IRRR but offered no opinion on whether the loan complied with any guidelines, other than the investment requirement, which was based on actual documentation. The information I provided to the city council was exact and accurate.

I also recommended in the email that assuming the loan was approved, “full payment should be made as invoices are submitted to the city with proof of payment.” At that point, it was Ms. Keith who was responsible for determining that appropriate documentation accompanied any requests for payment under the loan. I never even saw the invoices that were submitted for payment, since I had no authority to approve them in either case. Mr. Altenburg’s representation of my email to the council is false, and I am making it available publicly here. Readers can make their own determination on Mr. Altenburg’s veracity.

• Mr. Altenburg claims the loan is in default, but that’s not at all clear at this point. The loan did have to be reissued, but only because Ms. Keith erroneously paid out more funds than the loan agreement allowed for. It’s my understanding that one early payment was inadvertently missed but was later caught up, and that Ms. Keith’s original calculation of the interest was in error, which meant that Tower Harbor Shores had slightly underpaid their interest requirement. It is my understanding that Tower Harbor Shores subsequently paid the difference. The loan was later reissued solely to Tower Harbor Shores and remains current with required interest payments to my knowledge. That’s hardly the stuff of scandal. What irregularities did exist with this loan were the result of Ms. Keith’s errors.

Two final points must be noted. First, no city funds are at risk as Mr. Altenburg implies, since no city funds were ever involved. The IRRR granted the money exclusively to provide gap funding for the harbor town home project. TEDA was simply a pass-through and would have never received the funds had the council not accepted the IRRR grant. Several thousand dollars in principal and interest have since been repaid on the loan, which means the city has already benefitted financially from the grant and loan and stands to benefit far more if the project moves forward.

Secondly, Mr. Altenburg’s true motives have now become clear. He stated months before the filing of his “complaint” that he feared the new mayor was going to discharge him from his employment with the city. And when allegations of his own misconduct were reported by a member of the Tower Fire Department last month, he immediately invoked whistleblower protection as a shield against accountability. It appears he believes the mere act of filing a complaint (even a baseless one) can  protect him from the consequences of his own behavior as ambulance director and fire chief. Mr. Altenburg’s actions represent an abuse of a law intended to protect actual whistleblowers, not cranks desperately seeking unwarranted legal protection from their own failures.

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TaxPayer

www.http://www.osa.state.mn.us-Residents of a local government can petition the Office of the State Auditor to conduct an audit/examination of the books, records, and accounts of a local government. The petition process is established by Minn. Stat. ยง 6.54 for cities, counties, school districts, and towns, and by Minn. Stat. 103D.355 for watershed districts. There are different requirements depending on the type of local government. The requirements and instructions are provided through the link below:

Instructions for Executing Petition for Examination (pdf, 11k)

Petition forms are required to be signed by a minimum number of registered voters for city and county petitions, eligible voters for school district petitions, and resident owners for petitions of watershed districts. The various petition forms are available through the following links:

Petition for Audit/Examination of a City (pdf, 10k) Maybe there is more to this than meets the eye?? Dig in Guys u gots work to do. :)

Tuesday, September 17
Scott Atwater

Is this an editorial or news reporting? I often find that there isn't much difference between the two in the Timberjay.

Wednesday, September 18
jtormoen

Most rational thinkers/readers note the placement of the article ... others still struggle with the unanswered question from months ago.

Wednesday, September 18
Jeff Hill

I have Ten letters of commitments. And have 2 builds going on as we speak for Tiny homes in the City of Tower, I was wondering if I could get 125k loan/grant to explore this idea, I would like to have the City give Tiny Village USA, A Minnesota based LLC some land on the North Hill. I further would want the City to provide water and sewer to this project. I have financing in place for the development and sale of these Tiny home sites.

I would also like to have the City engineer the project, Plat the land out for me in addition to 125k to cover marketing cost of the already 10 letters of intent I have on file.

My family has had a business on the main st for over 100 years., I love this area and have proven tract record in real estate development having owned over 100 parcel of real estate in the Tower-Soudan Lake Vermilion area. Is there anyone at City Hall that could help me with this?. Who should I submit my application to the Mayor or Marshall Helmberger our fearless TEDA Leader and Journalist?

Wednesday, September 18