Some random thoughts, most of which appeared in an article in the December issue of Dakota Country magazine.
How do you go about summarizing a year like 2021? Try this: It’s December, the year is almost over, and we’re still here. I’m still writing. You’re still reading. Y’know, considering everything, not much else seems very important.
Like me, I’m sure you’ve lost some friends and family this year. I try to write that off as a function of age. I told a friend of mine the other day that the hardest part of growing old (the first number in both our ages is 7) is burying your friends. He replied that he agreed, but it’s better than them burying us.
There are a couple of things out in the North Dakota Badlands I’d like to bury before the year ends — a bridge over the Little Missouri State Scenic River and an oil refinery next to Theodore Roosevelt National Park — but it’s a little too soon to schedule a funeral for either of those. We could start doing a little preliminary planning, though …
I’m taking a little hiatus from writing about the bridge for now because of some legal matters, but the refinery, and the company that says it is going to build it, on the other hand, is fair game. We need to pay very close attention to these boys. I wrote about this a couple of weeks ago, but I’ve talked to a couple of new people recently and want to share some of what they told me.
Because of the lawsuit against them by the engineering firm GATE, there’s some buzz about Meridian Energy Group down in Houston these days. Especially among the legal community. In fact, one of the lawyers I talked to down there called them “Scumbags.”
Meridian will be in court Jan. 3, explaining to a judge or a jury why it hasn’t paid more than $420,000 (with interest) to GATE for work the engineering firm did for the company more than two years ago.
During that time, and for more than five years now, Meridian has been out selling stock to unwitting investors, but it takes more than a few 401(k)’s to build a billion-dollar refinery, and the institutional investors who actually HAVE enough money to do that are aware of these legal matters and are casting a wary eye on the company and its project. The reality is, the company’s in trouble. Big trouble.
As I wrote here a while back, earlier this year the company was forced to shut down all of its offices, in California, Texas and North Dakota (although it really never had an office in North Dakota — just a 911 address with no staff on a barren patch of prairie across the road from where it says it is going to build its refinery).
Meridian is now reduced to operating out of a dropbox at a storefront in a Southern California strip mall, called “Mailboxes and More.” In a recent filing with the SEC, in which Meridian reported it had sold less than $60,000 worth of stock for a billion-dollar project in the last six months, it were forced to reveal their new address, “Suite C-333” in the mall at 92 Corporate Park in Irvine, Calif.
Yeah, Suite C, all right, but the 333 is just Meridian’s mailbox number. It’s a typical low-slung Southern California strip mall, home to a bunch of food outlets (Janny’s Donuts, Yummy Yummy Chinese restaurant, Drips Creamery ice cream store, Mr. Sandwich, etc.), and a couple of nail and fitness salons.
One of the things that’s kept Meridian afloat and able to pay their mailbox rent this year is a pair of the government’s Paycheck Protection Program forgivable loans, totaling $1.7 million. They’re loans in name only, since they don’t have to be repaid. The PPP was conceived at the onset of the pandemic last year to help keep retail stores and service companies and other small businesses afloat, and it has spent billions to do that, successfully.
Not many of those small businesses got $1.7 million, though (the average has been about $107,000), especially those with only about 40 employees, like Meridian. At least Meridian SAYS it has 40 employees. Although with no offices, I can’t figure out where they go to work in the morning, and what they do, since there’s no refinery in sight yet. They’re well-paid though, According to the formula used to calculate how much a company can “borrow,” the average salary at Meridian is $99,957. That included the vice presidents and the secretaries.
While they were able to use taxpayer dollars to pay the vice presidents’ hefty salaries, Meridian remains nearly $3 million in debt to some former employees, and contractors who did the dirt work on the refinery site in North Dakota three years ago, with judgments against it in both Texas and North Dakota.
The company has never really had a presence in the Dakotas, even though it is registered as a South Dakota company because the state offers a host of business incentives to incorporate there. It just maintains an agent in Sioux Falls for that purpose, and it has leveled a quarter section of land as the “future home” of the refinery near Belfield in western North Dakota, with a little cubbyhole office in a farmer’s grain drying operation across the road.
The company which did the leveling has filed a lien against them for $2.2 million in unpaid bills. And one of the former employees who’s part of the $600,000 lawsuit for unpaid wages, and whose job was to just check in at the Belfield “office” from time to time, until Meridian quit paying him, took a job in Minnesota. He hasn’t collected that back pay yet, more than a year later.
There are others left holding the bag in North Dakota. The city of Dickinson, 20 miles east of the proposed refinery site, agreed to spend a million dollars to build a pipeline west of town to send its “reuse water” out to a pipeline Meridian said it would build to connect to it, to provide water for the refining operation. Dickinson spent the million dollars and got its end done. Meridian’s is nowhere to be found.
It’s just hard to take Meridian seriously. I wish North Dakota’s elected and appointed state leaders, charged with protecting our national park, named for our country’s greatest conservation president, could figure that out. All they can think about is we need the jobs, and all the money a refinery will bring to North Dakota. So permits were issued and green lights were turned on.
A bunch of people I thought were pretty smart cookies — we should expect our elected leaders would hire good watchdogs — got sucked in by the press release Meridian issued six years ago: “Many local North Dakota citizens were surprised that those opposing the Davis project were overlooking the long-term advantages to their community and its economy. Eliminating the Davis project would rob the nearby community of the jobs created by the project — from 1,500 to 2,500 including all indirect and induced. These jobs will not be either menial or only serve the interests of Meridian, they will further enhance the quality of life in the state.”
Uh huh. “1,500 to 2,500 jobs.” Wow. That’s a lot of new houses, new cars, new shoppers, new school kids, new taxpayers and lots of other new things. What could possibly go wrong?
Well, now it’s 2022, six years after that press release, and there’s no refinery, and Meridian has not created a single new job in North Dakota. It’s created some pretty high-paying jobs for the company, though. Ten vice presidents, all drawing six-figure salaries, most of them with the first number 2. Despite the fact there is no refinery, and the only money (other than the government) coming into the company is for sales of shares of stock as a result of a boiler room operation the company has been running since Day One.
I can’t tell you exactly how much Meridian has raised in stock sales to unsuspecting seniors who are pouring their 401(k) funds into the company with dreams of pretty instant riches, but it’s somewhere between $40 million and $60 million. And it’s apparently all gone. Which brings us back to “Scumbags,” which is what that lawyer fellow in south Texas called Meridian. “You just can’t believe anything they say.”
Maybe he’s been looking at some of the same websites I’ve seen. Meridian has done a pretty good job of posting on business websites to try to get their name out in front of potential investors.
For example, there’s this website called “Pitchbook” where Meridian describes itself as an “Operator of fuel refineries intended to offer clean crude oil. The company’s fuel refinery produces nearly zero sulfur diesel and jet fuels years ahead of EPA mandates and operates on natural gas, enabling companies to have access to oil for all their various needs.”
Huh? I guess the operative phrase there is “produces nearly zero.” Where would that refinery be located?
Then there’s the venerable Dun and Bradstreet, which surely can be believed. “Meridian Energy Group, Inc. has 32 total employees across all of its locations and generates $6.03 million in sales (USD).” Hmmm. Wonder what they’re selling.
So I’ll close with this: North Dakota’s Department of Environmental Quality renewed Meridian’s Permit to Construct in September, with the caveat that they would be expecting regular progress reports on the plant’s construction. Soon it will be three months since that promise was made. I’ll be calling the DEQ office one of these days to see how construction is going. I’ll report.