On the Front Lines of Wisconsin's Big-Money, Small-Town Iron Mine War

The thunderheads loom dark and low as Mike Wiggins Jr. navigates the small motorboat through the shoulder-high grass. “All this,” the Bad River Tribal Chairman says, gesturing at the many acres of wetlands that surround us, “could be ruined if that mine goes in.”

As if on cue, the first low rumble of thunder travels across the water, and a moment later the lightning begins. Wiggins guns the motor, counting seconds between flashes and rumbles. Being on the water during a thunderstorm is one of the few things Wiggins is scared of.

The Gogebic Taconite iron-ore mine is another.

In the heart of northern Wisconsin’s beautiful Penokee Range, two high ridges run parallel to each other 1,200 feet above Lake Superior. The slopes are swathed in hardwood trees, and the valley the ridges form is home to plentiful big game and lined with Class I trout streams — brook, brown, and rainbow. The mineral rights to these 22,000 acres are owned by the mining company Gogebic Taconite (GTAC). Here, outside the sleepy town of Hurley, which literally lies at the intersections of Iron, Copper, Silver, and Granite — the names of some of the town's broad, empty streets — GTAC wants to build what could be the largest open-pit mine in the world, 4.5 miles long and 1.5 miles wide. When finished, the resulting hole would be 1,000 feet deep.

The company says the mine will generate $1.4 billion in tax revenues, a substantial sum in a community where jobs are scarce. But local residents are still divided. Below the range are the wetlands — referred to as Wisconsin's Everglades — that Wiggins fears will be lost to polluting runoff from the mine. They in turn feed into Lake Superior, the repository of roughly 10 percent of the world’s fresh surface water.

In addition to the economic and environmental concerns, the mine project has serious political ramifications. When the Supreme Court's Citizens United decision struck down limits on corporate campaign spending three years ago, corporate donations changed the way elections work in America. In Wisconsin, GTAC and other mining interests spent millions on political donations, resulting in the drastic re-writing of — some would say abolishment of — state mining laws.

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Much of the tract of land leased by GTAC is located in Iron County, and true to its name, it's a region full of people accustomed to mining. A local beer, Widow Maker Black Ale, is served in a silver can with a busty brunette clutching a massive pneumatic drill. Pasties, the pocket sandwiches long made especially for miners, are more popular here than sandwiches at Subway.

But once-busy local iron mines now lay dormant, and the economic fallout has not been pretty. Bob Walesewicz, who owns a convenience store in Hurley, has seen families struggling. “It’s heartbreaking to see the lint-filled change that crosses my counter,” he tells me. “You haven’t experienced it until you stand there and someone is buying a gallon of milk and they’ve got a young one with them and they count out the pennies.”

Today, the unemployment rate among Iron County's 6,000 citizens is 13.6 percent — more than twice the national average. “Our greatest export is our children," Leslie Kolesar, a slim, middle-aged woman who’s the chair of the town’s Mining Impact Committee, says at a Hurley town-hall meeting. "Only 10 percent of high school graduates stay in the area.” Iron County has the dubious honor of being the oldest county in the state, and the median age in Hurley is 51. Kolesar's 14-year-old son doesn’t want to leave, but, she says, “I’m already preparing him, because without mining, there’s no job opportunities.”

Kolesar made headlines last year by drinking unfiltered water straight from an old mine waste pit in Wakefield, Michigan, about 20 minutes from Hurley. In the video later posted on YouTube, she makes her way down to the edge of the lake with a plastic bottle, scoops up some water, and then knocks it back.

“Because of the 85 years of unregulated mining that went on up here, we believe we can have a clean environment and have jobs,” she says back in Hurley. “It’s going to present challenges, but it’s better than what we’re dealing with now.”

Leslie Kolesar drinks water straight from a former open-pit mine.

And so the question for local residents isn't about whether jobs are more important than the environment or vice versa, it's whether or not the mine will or will not negatively affect the environment. As Wayne Nesi, a sturdy man who owns a construction company in Hurley, told me, “We live up here, but we’re not blinded by ‘It’s all about jobs.’ It’s about jobs, but the people up here love our way of life, we love the environment. If people have to choose between jobs and a mine that pollutes, we’ll choose not to have a mine.”

That said, 40 local business owners were excited enough by the prospect of the mine to take out a half-page advertisement in a local newspaper, thanking GTAC just for its interest in the region. And Walesewicz thinks that with a little outside investment, residents in Hurley could turn their economy around. “We have some wood manufacturing here, but right now it just goes out in semi-trucks,” he says. “With access to local rail, who knows what we could do?”

This belief is not lost on GTAC. Over lunch at a steakhouse just across the border from Hurley in Michigan’s Upper Peninsula, GTAC representative Bob Seitz fingers the pressed cuffs of his shirtsleeves. “This could be a game changer for a region of Wisconsin that for 40 years has had pretty rough times,” he tells me. “Most manufacturing goes to places that has infrastructure in place. This mine would bring in infrastructure that can be utilized by other industries — upgrading the rail system, electricity, natural gas. Things that will help the area economically down the road.”

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Caroline Lake on early fall mornings often lies still below wisps of fog that billow through the reeds. Last August, Larry Lynch, a hydro-geologist for the Wisconsin Department of Natural Resources (DNR) who has worked on mining issues in the state for more than 25 years, stood at the edge of the lake watching a small frog make its way to shore. Lynch explained that the GTAC mine would be the first project implemented under Wisconsin’s new mining law. “The biggest changes are dealing with wetlands and navigable streams,” he said. “Under former law, if you were going to have significant adverse impact, you likely wouldn’t get a permit.”

AB 1/SB 1, the state's new ferrous metallic mining law, lessens wetland mitigation requirements, deregulates surface water and groundwater withdrawals, allows deposits in navigable streams, changes DNR oversight over waste material, and shortens the mining permitting process. The only public hearing on the bill was facilitated by State Senator Tom Tiffany, who has received $74,000 in campaign donations from mining interests. At the hearing, neither the US Army Corps of Engineers nor the Great Lakes Indian Fish and Wildlife Commission — the Ojibwe inter-tribal organization that manages tribal resource rights in the region — were invited to speak.

The new law was preceded by an influx of political contributions from out-of-state donors. Wisconsin Democracy Campaign started noticing large payments from mining interests in 2010, when then Governor-elect Scott Walker accepted $10,000 in campaign contributions from the owner of GTAC, Christopher Cline, and one of his executives. This was about the time the company reportedly contacted Walker about the mine project. That same year, several people associated with Cline also contributed more than $40,000 to three pro-mining legislative candidates in the span of two months.

It didn’t take long for Walker’s stance on environmental issues to become clear; when he named his first DNR executive, a woman named Cathy Stepp known for her criticism of environmental regulation, State Representative Brett Hulsey said it was “like putting Lindsay Lohan in charge of a rehab center.” In 2012, Walker raised $200,000 during a single luncheon in Palm Beach, Florida — where Cline lives.

As AB 1/SB 1 became a serious proposition, Walker campaigned around Wisconsin to drum up support, receiving $11.34 million in donations from mining interests — $67,069 of it from Cline himself. And it wasn’t just Walker. Mining interests donated a total of $4.25 million to members of the state legislature seemingly friendly to deregulation.

Cline typically creates limited liability companies for his mines, and his campaign donations in Wisconsin are often done under the names of various entities. Among them, Bailey & Glasser, a law firm with whom Cline does business; Cline Resource and Development Group, which owns GTAC; and Foresight, an asset-management firm majority-owned by Cline. Foresight is part of the controversial Carlyle Group, described by the Economist as a company that "arguably takes to a new level the military-industrial complex that President Eisenhower feared might 'endanger our liberties or democratic process.'"

By 2013, just three years after Citizens United, corporate mining interests had contributed more than $15.6 million to political candidates in Wisconsin. To put that in some perspective, mining interests donated $610 for every $1 donated by environmental interests. Walker signed AB 1/SB 1 into law on March 11, 2013, after it passed the state legislature with a party-line vote.

The Nature Conservancy, the Sierra Club, and many others in the state were upset. “This bill was written by the mining industry to gut the environmental-review and public-input process for proposed mines,” said Katie Nekola, an attorney for Clean Wisconsin. State Senator Fred Risser called the new bill “the biggest giveaway of resources since the days of the railroad barons.”

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John Franke sits on his porch a few miles from the potential mine site, surrounded by ruby-throated hummingbirds. “I’ve been coming here all my life,” he says. He gestures out at the water. “My mother called it the Whispering Pines.”

He is not against mining; instead, his reservations about the mine, which would store waste rock near his property, are informed by his 30 years of working for a chemical company. “Being in the chemical industry, I had a real suspicion about this company being formed as quickly as it was by the Cline Group: someone from out of state, notorious for getting what he wanted and for buying politicians.”

Franke and his wife attended one of the first public hearings, during which a representative for GTAC said the company wouldn’t try to alter any laws. Franke shakes his head. “They were already attempting to change current Wisconsin law behind closed doors."

The iron ore in the Penokee Hills is on an angle, making it more difficult to extract. Of all the rock that will potentially be dug from the site, 75 percent or more will be waste, making the mine’s operating costs comparatively expensive. The rock will eventually be crushed into powder, and then the magnetite — the actual iron product — will be removed with a series of magnets. After the iron is removed, Franke says, “The waste product is going to be de-watered and thrown down on 3,000 acres of Iron County forest crop-land directly north of my deer camp.”

GTAC has said that the piles of powdered waste rock will eventually reach heights of several hundred feet. “When you ask these guys what they’re going to do, they say they’re going to plant trees,” Franke says. “Well, you don’t plant trees in talcum powder. It just doesn’t make sense.” No iron-ore mine has ever used this kind of dry processing before.

Because GTAC has not publically announced the full details of its mine proposal, many facts — like how local groundwater will be impacted — are still unknown. The company has proposed using a closed-loop system, keeping all the water from the mine contained indefinitely in order to alleviate concerns about contamination.

“At some point, even with a closed-loop system, you have to purge,” Franke says. “Then where is [the water] going to go? That’s going to end up in Caroline Lake.” He stops talking, his eyes welling up. For a moment the only sound is the thrum of dozens of hummingbird wings. “It just means so much to us,” Franke continues. “There are so many ifs, but the key is water. If we lose the water, everything is lost.”

Geologists for the DNR have determined there are natural asbestos and sulfide-forming minerals in the area, raising questions about acid runoff and potential health concerns. Mesothelioma, for example, is a rare cancer linked to asbestos exposure and seen with unusually high frequency in miners and family members of miners. A recent study by the University of Minnesota showed that iron-mining communities in northern Minnesota have a rate of mesothelioma more than 70 percent higher than the rest of the country. Following the discovery of similar asbestos-forming minerals in the Penokees, GTAC mining engineer Tim Myers said that asbestos and acid runoff were simply "issues in the media.”

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GTAC’s avoidance of environmental concerns and their disdain for the Army Corps of Engineers may prove short-sighted. In December, the Corps told Wisconsin’s DNR that the new mining law’s shortened timeline would prompt the Corps to conduct its own independent investigation — likely making the overall process of getting the mine up and running longer and more expensive. The price of iron has been steadily in decline for several years. Chinese stockpiles are as high as they have ever been, and iron-ore prices are expected to continue to drop precipitously thanks in part to record supply from both China and Australia.

Given the poor quality of the ore in the Penokee Hills, the comparatively expensive mining operation that would be needed, the presence of sulfur and asbestos, and the glut of global iron, GTAC certainly doesn’t appear to be motivated by easy profit. So why has there been so much legislative maneuvering and donation-giving to green-light a mine that appears to be somewhere between hopeless and unprofitable?

“I have no evidence to point to any ulterior motives — I just know that they’ve handled a marginal project very oddly,” says the Bad River Tribe’s environmental specialist, Cyrus Hester.

Other mining concerns currently have a keen interest in Wisconsin. Hydraulic fracturing — or fracking, which has transformed parts of North Dakota and Pennsylvania into Gold Rush-esque boom towns — thrusts a mix of chemicals, water, and sand down deep wells in order to release trapped oil and gas. Fracking a single well requires up to 1,600 tons of “frac sand,” and not just any sand will do. Pure quartz with round granules formed in ancient seas is best, which is why that kind of sand can cost as much as $300 a ton.

Wisconsin’s sandstone formations happen to have this kind of sand in abundance. Five years ago, there were fewer than 10 frac sand mines in the state. Since then, more than 131 have been developed.

The night Walker was elected governor, he told a crowd of supporters that Wisconsin was “open for business.” The words are now featured on all the state’s highway welcome signs. In January, the DNR issued the company AllEnergy Silica permits — permits that would not have been approved had previous environmental regulations still been in effect — for a sand facility that will change the course of two sections of a nearby creek, discharging fill material into several acres of wetlands.

All across the country, and especially in places where resources are extracted, cash-rich organizations are having a dramatic impact on local governance. Last March, Charles and David Koch and their super-PAC Americans for Prosperity mailed out two sets of fliers to Iron County residents in anticipation of the April 1 County Board of Supervisors election. Considering Americans for Prosperity spent $120 million on the 2012 national elections, the cost of mailing fliers about a northern Wisconsin county board election to 6,000 people is small change. But the impact this kind of economic influx has on local elections is difficult to overstate.

Montana Governor Brian Scheitzer wrote of the effects on state elections bluntly in a 2012 New York Times op-ed, saying that Citizens United allowed “corporate front groups [to] funnel cash into our legislative races.” Supreme Court Justices Ruth Bader Ginsberg and Stephen Breyer have suggested that given the “huge sums currently deployed to buy candidates’ allegiance,” the Supreme Court should reconsider its ruling.

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“The next step is the one that worries me more than any, because of the security [GTAC] got and what they intend to do,” Pete Russo, chairman of the Ashland County Board, told me one afternoon as we sat on a farm over which two bald eagles swooped. After an altercation with members of the tribe, who’d set up a protest camp near the mine site, GTAC hired an Arizona security company to patrol the area (even though the company didn’t have a license to operate in Wisconsin at the time). The security force posted at the site carried machine guns, which made Russo nervous. “There’s going to be a disaster up there, you watch.”

Hester, the environmental specialist for the Bad River Tribe, later echoed Russo’s concern. As the sun set over the ridgeline of the Penokee Hills, he scuffed his cowboy boots in the dirt and sighed. “I don’t doubt that people could die over this.”

There’s already bad blood between GTAC and the Bad River Tribe. Bill Williams, the president of GTAC, used to work at a mine in White Pine, Michigan. In 1996, tribe member Butch Stone led a group of men from the Bad River Tribe who successfully prevented the White Pine mine from sending sulfuric acid via railroad across the reservation. Following the protest, the White Pine mine was shut down.

This fall, sitting in one of the tribal office buildings in sunglasses and a cut-off Harley-Davidson shirt, Stone said things have changed since 1996. “The state is wide open for mining. Back then, the laws for mining were a lot more stringent.” So far, even though a protest camp against GTAC has been set up close to the mine site, the protesters’ official stance is one of peaceful civil disobedience. But in the end, Stone said, “We’ll be fighting every step of the way.”

After Stone left, Hester, who’d been listening quietly, said, “It makes me nervous. A lot of young warriors look up to him. Follow his example. People are willing to give their lives for this.”

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A few miles away from the reservation, Wiggins drops to his knees on the earthen floor of a birch-bark wigwam. In a sheltered grove along Caroline Lake, a group of elders has gathered to consider their next moves against GTAC. The crickets stop chirping as the old men settle into a steady rhythm, pounding drums. After a few minutes, the sky darkens, and in the distance there is once again the low rumble of thunder. Almost simultaneously, a cloud of dust signals the approaching car of a sheriff’s deputy who's coming to investigate. Once he’s reassured that nothing is wrong, he leaves. “The drums are powerful,” Wiggins says. “They called the thunder, and they also called the cops.”

After a contentious tribal election, Wiggins has been re-elected chair of the Bad River Tribe. He continues to fight the mine. “We’re at a point where the mining company is running a PR campaign posturing as science,” Wiggins told me earlier this week. “Our next goal is to get federal oversight and objective scientists up there into the Penokee Hills.”

Wiggins has spent the last year working to stop the mine — from crashing a private fundraiser for US Senator Tammy Baldwin to try and rally her to his cause, to gathering data for a federal lawsuit — and the work has taken its toll. Some days Wiggins jokes that he just wants to retire and open Custer’s Last Ice Cream Stand. Other days are darker.

Late one afternoon last fall, he slumped into a booth in a dim roadside café and rubbed his eyes beneath his glasses. "I want to fight someone, but there’s no one to fight,” he said. "There’s just mountains.”

Follow Lois Parshley on Twitter: @LoisParshley