Schieffer: DM&E rewarded some, but all offers fair

Subpoenaed but denied testimony, former rail president defends policies

By Kevin Woster, Journal staff | Sunday, January 11, 2009

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The five-day hearing over disputed land-acquisition policies of the Dakota, Minnesota & Eastern Railroad ended Friday without testimony from the man most responsible for those policies.

Former DM&E President Kevin Schieffer attended the week-long hearing of the South Dakota Transportation Commission at Rushmore Plaza Civic Center under subpoena by former Gov. Bill Janklow. Now a lawyer in Sioux Falls, Janklow is representing landowners who say DM&E has failed to negotiate in good faith for their property.

But Janklow never called Schieffer to testify. And when Schieffer asked to make a public statement near the end of the day Friday, Janklow argued that Schieffer, who left DM&E abruptly last October, was a private citizen now and not a direct party to the contested-case hearing before the commission. Hearing officer Robert Miller of Pierre rejected Schieffer's request.

Miller, a retired state Supreme Court justice, said the Schieffer was "entitled to make all the public statements he wants, but this is not the appropriate forum."

During the hearing, which will re-convene in Pierre on Jan. 22 for closing statements by lawyers in the case, Janklow and other critics charged that DM&E's land-acquisition policies unfairly favored landowners who cooperated and penalized those who challenged the company and its expansion plans.

Janklow said DM&E made "secret deals" with some cooperating landowners that were not made available to others. That was one of the examples Janklow used in attempting to show that DM&E has not been negotiating in good faith with landowners. Janklow also challenged the appraisal method used by DM&E, saying it did not accurately reflect land values.

Schieffer said in an interview after the hearing that the appraisal process was accurate and fair. He said there was indeed a price differential in the offers given to those who worked with DM&E and those who refused to cooperate. But that didn't mean that the lower offers were unfair or not in good faith, he said.

"South Dakota law requires a fair-market-value offer, or a reasonable effort to make a fair-market-value offer. We've done that in all cases," Schieffer said. "For the group that worked with us, there were bonus offers above fair-market value. (That) group does have much better offers."

The good-faith question is a key issue to be considered by the Transportation Commission when it reconvenes to consider whether to allow DM&E to use condemnation power to acquire property for the South Dakota portion of its proposed 262-mile rail expansion from Wall to the Wyoming coal fields.

Contact Kevin Woster at 394-8413 or kevin.woster@rapidcityjournal.com