Roscoe Churchill and Laura Furtman - Flambeau Mine · Hyperlinking (electronic hyperlinked edition)...

THE REAL STORY OF THE FLAMBEAU MINE

The Buzzards Have Landed!Roscoe Churchill and Laura Furtman

The RealStory of the Flam

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Tell the stories of the past to thisgeneration to protect the earth forthe next generations to come. Anddon’t forget to laugh too, eh?

– Walt Bresette, 1998

BuzzCov_052107.x 5/24/07 7:43 AM Page 1

Copyright ©2007 by Roscoe Churchill and Laura Furtman Copyright ©2013 by Administrator Susan Churchill of Roscoe Churchill Estate, and Laura Gauger (formerly Laura Furtman) All rights reserved. No part of this book may be reproduced in any form without written permission from the publisher, with the exception of brief excerpts for review purposes. Published in hard copy, electronic, and electronic hyperlinked editions by Deer Tail Press, Duluth, MN To order additional copies, go to: http://FlambeauMineExposed.wordpress.com/ ISBN: 978-0-9792599-0-6 (hard copy edition) ISBN: 978-0-9792599-1-3 (electronic edition) ISBN: 978-0-9792599-2-0 (electronic hyperlinked edition) Library of Congress Control Number: 2004112512 Book design and typography by Ken Crocker (www.crockerdesign.com) Ancillary CD production (hard copy and electronic editions) by Greg Furtman Hyperlinking (electronic hyperlinked edition) by Barbara With and Laura Gauger Indexing by Laura Gauger Cover illustration by Susan Churchill Publishing History: Hard copy edition printed in the United States of America by The Printing House, Stoughton, WI, September 2007. Electronic and electronic hyperlinked editions (utilizing original print and ancillary CD files) produced by Deer Tail Press, Duluth, MN, April 2013. First edition

Copyright Disclaimer: Anyone who wants to reproduce and/or distribute pages from The Buzzards Have Landed! in a good way (to promote efforts to protect our water resources) has my permission, as the copyright holder, to do so. All I ask is that you please identify the source as follows: The Buzzards Have Landed! – The Real Story of the Flambeau Mine, Roscoe Churchill and Laura (Furtman) Gauger, Deer Tail Press, 2007. That’s what Roscoe, who passed away in February 2007, would have wanted. And that’s what I want, too. The whole reason behind our writing the book was to help friends, near and far, facing similar battles to protect the earth’s natural resources. Laura Gauger Duluth, MN December 20, 2012

881

Kennecott Blues “This land’s depressed,” said Kennecott,“It needs a shot in the arm.We’ll dig a bit in the Town of Grant,With no environmental harm.”

An active mine’s an asset, causeIt brings so many jobsFor all the unemployed, ruralBackward country slobs.

The multiplier job effectIs certain to apply.They didn’t mention, I don’t guessThat our taxes, too, would fly.

Until our farmers thought theirTaxes would punctuate the sky.

The acid tailings would be caughtAnd held forever by a dikeExcept for a few gallonsThat seeped both day and night.

Eleven farms were dismantledAnd residents, too,Also an old gravel pitWas added to the stew.

Twenty-seven hundred acresnow in Kennecott’s trust,Where it is held securelyFor the days of “boom and bust.”

Kennecott has helped our stateTo make new mining laws.Her influence on the LegislatureIs enough to give one pause.

– Roscoe Churchill

I wrote “Kennecott Blues” sometime in the 1970s,not too long after the mining company had picked upits leases in the Town of Grant and submitted its firstproposal to build the Flambeau Mine. Just like I saidin the poem, the mining company came to town act-ing like it would be the savior of all the “unemployed,rural, backward country slobs” living in Rusk Countyby bringing us “so many jobs.” Fortunately, the RuskCounty Board had enough sense in 1976 to denyKennecott a permit to mine.

The same kinds of stories about how the mine wasgoing to pull us out of our economic slump werespread by Larry Mercando in the late 1980s and early1990s, as Kennecott tried once more to convince thelocal people to let the company set up shop. All thetalk of jobs was fueled by the fact that only one ofWisconsin’s 72 counties (Menominee) had a worseunemployment rate than Rusk County’s in 1990, andonly two (Menominee and Forest) had lower averageper capita incomes. There’s no doubt we were at thebottom of the heap, and people were hungry for goodeconomic news.

Mercando was only too happy to oblige. TheFlambeau News often spoke of how the mine wouldboost the local economy, and the May 31, 1990 issuewent so far as to say the mine “could be the key toRusk County’s economic development future” (Figure119-1). Mercando was quoted in the article as sayingthe people of Rusk County were going to have “theluxury of having up to $4.7 million to spend on find-ing and developing answers to the problems theyface.” And then he quickly added, “Rusk County hasthat opportunity because of the mine.”

Actually, Kennecott didn’t give a hoot if RuskCounty was among the poorest counties in the state

Did the Mine Help Rusk County’s Economy?

C H A P T E R 1 1 9

882 The Buzzards Have Landed

works for the Wisconsin Geological and NaturalHistory Survey in Madison, gave the public the sameline of malarkey. In March of 1991 an article entitled“Mines to boost economy” appeared on the front pageof the Eau Claire Leader-Telegram (Figure 119-2). Thegist of the story was that mining in northern Wiscon-sin “would provide the nearby communities with aneconomic wallop.” And the “expert” who was inter-viewed for the article was none other than TomEvans. As far as I know, Evans has no background ineconomics. Yet, for whatever reason he decided to

and likely to stay that way. The numbers show thatthe few jobs created by the Flambeau Mine and themeasly amount of taxes paid by Kennecott had little,if any effect on improving our economy. All the min-ing company was interested in doing was making aprofit for its shareholders.

I could understand why Mercando wanted thelocal people to believe the Flambeau Mine was goingto chase away Rusk County’s economic blues. It washis job to foist the mine on us. But I really tookoffense when Tom Evans, a geologist who to this day

Figure 119-1. When a min-ing company tries to makeinroads in a community, itwill undoubtedly try to con-vince the local people thatthe proposed mine will bringeconomic prosperity to theregion. Unfortunately, RuskCounty’s experience reaf-firmed that those who reallybenefit from mining are theshareholders of the company(Flambeau News, May 31,1990).

Chapter 119 Did the Mine Help Rusk County ’s Economy? 883

shoot from the hip and clearly did his part to furtherthe myth that mines bring economic prosperity toimpoverished rural communities.

Even Bill Tans of the DNR, with whom I usually dis-agreed on mining matters, contradicted what Evanssaid when he was quoted in the same article as say-ing, “[In Rusk County] you’re adding 40 jobs to thelocal residents plus you’re adding the revenues andincreased economic stimulus from, let’s say, 60 jobs inthe area. Sixty jobs, and I’m not trying to belittle thisat all, but it’s not going to be more than a blip in thelocal economic situation for the Ladysmith area.” AndTans was right.

Before giving you the actual numbers that proveRusk County’s economy was not revived by theFlambeau Mine, I would like to show you howWisconsin Manufacturers and Commerce (WMC)weighed in on the issue in the early 1990s. You mayrecall, WMC was and continues to be the largest pro-business lobbying group in the State of Wisconsin andstarted to push hard for mining as soon as the first oredeposits were discovered in northern Wisconsin. So it

was no surprise that in October of 1991, shortly afterthe construction of the Flambeau Mine had beenhalted due to the presence of endangered species atthe mine site, WMC tried to turn public opinionagainst our successful efforts to stop Kennecott by pro-moting the mine as an economic godsend. To that end,the organization issued a report entitled “ThePotential Economic Impact of Mining in Wisconsin,”authored by Dr. Richard Green, a University ofWisconsin School of Business professor. Consideringthat Green had been paid by WMC to write the report,we fully expected he would conclude that “the poten-tial employment impact of the proposed Flambeaumine in Rusk County could be enormous.” And he did.You can read for yourself in an article that appeared onthe front page of the Ladysmith News (Figure 119-3).

Green also stated in his report that “every milliondollars in ore extracted each year would push upproperty values by roughly $50,000 due to anincreased demand for real estate from the increasedwealth brought into [counties that have mines]” andthat mines would “provide between one and five

Figure 119-2. It was bad enough that Kennecott’s Larry Mercando had misled the public about the economic impact of mining on localeconomies. But it was inexcusable for Tom Evans of the Wisconsin Geological and Natural History Survey, who was not even an economist bytrade, to use his influence to further the myth that mines bring economic prosperity to impoverished rural areas. See CD 119-1 to read the com-plete article (Eau Claire Leader-Telegram, March 25, 1991; republished with permission).

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million dollars a year in revenue to their local units ofgovernment through [taxes and fees].”

WMC President Jim Haney of course wholeheart-edly agreed with Green’s conclusions. He was quotedin the Ladysmith News article as saying that the pro-fessor’s work confirmed the organization’s belief that“responsible mining means significant jobs andopportunities for our people, and that this industrycan provide exactly the sort of economic boost someof our counties need to insure the future for their chil-dren.” The story also devoted a few lines to whatLinda Lybert, the pro-mining head of the LadysmithArea Chamber of Commerce, had to say. She wentalong with Haney and Green’s conclusions and added,“We are already seeing the economic benefits associ-ated with the proposed Flambeau Mine.”

The whole article was enough to make you sick—except for the final sentence in which my friend Rep.Harvey Stower (D-Amery) was quoted as saying thatProfessor Green’s study “ignored the downside of min-ing, the potential harm it can do to tourism and theexemptions mining companies can use to reduce taxes.”That one little sentence contained more truth than theother 116 lines of the newspaper article combined.

As you might expect, Larry Mercando grabbed ontoWMC’s study and used it to further the myth that theFlambeau Mine was going to have an “enormous”positive impact on our economy. In fact, he even putan advertisement in the January 30, 1992 issue of theLadysmith News in which he shared with us “a couple

of highlights from [Dr. Green’s]study,” including the following(Figure 119-4):

When the mine is up andoperating, the average num-ber of unemployed people inthe County each year couldbe reduced by as much as15% to 20%. In otherwords, about 100 of ourneighbors, friends and fel-low Rusk County residentswould be back to work. Andyou know, all the families ofthose workers will benefit,too.

Wow! That was quite an en-ticement to get everyone onboard to support the mine. Butit didn’t fool me for oneminute. In my opinion, all thatMercando was trying to dowas mislead the local people

so that Kennecott could make off with our gold, cop-per and silver. It was as simple as that.

After reading what Larry Mercando, RichardGreen, Linda Lybert, Jim Haney and Tom Evans saidabout the promise of economic prosperity that theFlambeau Mine gave to Rusk County, you might bewondering what really happened to all of us “rural,backward, country slobs” after the mine came totown. Perhaps I can sum it up best by saying this: IfProfessor Green were asked today to look at whathappened to Rusk County’s economy during the min-ing years and grade his 1991 report, I believe hewould have no choice but to give himself an “F.” Here,then is the rest of the story.

As I sit here writing at the kitchen table in Augustof 2005, the Flambeau Mine has been closed foralmost eight years and Kennecott is gone, except for asmall office the company maintains at the mine site tothis day. I can safely say that there is no sign of abooming economy anywhere. We will never know,nor will the State of Wisconsin, how rich the ore wasor how much gold was actually taken from the Townof Grant. Kennecott alone has the records.

You would think that a mine which took out an esti-mated $750 million worth of ore from the groundwould have really shaken up the local economy. Butthat didn’t happen in Rusk County. While the mine wasin operation, there was no real improvement in any ofthe important economic indicators, including unem-ployment rate, average per capita income, number of

Figure 119-3. The title of this article really should have been “WMC study says mining would ben-efit community.” You see, the professor who conducted the study was paid to do so by WisconsinManufacturers and Commerce. See CD 119-2 to read the complete article (Ladysmith News, October31, 1991; republished with permission).

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people living below the poverty level or populationgrowth. For example, before, during and after themining years:� Rusk County’s annual unemployment rate re-

mained among the highest and at times was thehighest of any county in the State of Wisconsin;

� Rusk County’s per capita adjustedgross income remained among thelowest in the state;

� The relative percentage of RuskCounty’s total population living belowthe poverty level stayed about thesame, and the relative percentage ofchildren in Rusk County living belowthe poverty level actually went up;and

� Rusk County’s population did notgrow significantly in size.

While all the rich gold and copper orewas being dug up and shipped to Canadato enrich the mining company’s share-holders, the local economy stayed whereit had been all along—at the bottom ofthe heap. It was a real crime, especiallyconsidering the magnitude of preciousresources we gave away in such a shortperiod of time.

JOBSFor five janitor jobs that might last fiveyears, we are risking the clean water ofnorthern Wisconsin.

– Bob Olsgard, September 1994

Let’s first talk about jobs. When a multi-national mining corporation wants tomove into an area, it will do a very thor-ough study of the local economy.Invariably the company will claim thatthe area in which it has located a mineraldeposit is very depressed and that a minewill provide lots of good-paying jobs tothe local people and plenty of tax relief.That is certainly what we heard in theTown of Grant when Kennecott appearedon the scene. And since the whole idea ofmining was new to us, many people didnot know any better than to believe themining company’s empty promises.

Despite all the hype, however, Kenne-cott did not hire a lot of local people to

work at the Flambeau Mine. According to Ron Vick, thecompany’s human resources manager, only 48 “locals”out of a total number of 60 people were employed byKennecott between May of 1993 and December of1996, during the peak years of ore production (CD117-16). And the talk around town was that the real

Figure 119-4. Wisconsin Manufacturers and Commerce, Professor Richard Greenand Larry Mercando teamed up to further the myth that mining brings prosperity tolocal communities (Ladysmith News, January 31, 1992).

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the likely impact that an early closing would have onthe community (Figure 119-5). We hoped that such acommittee, comprised of both government officialsand citizens, would serve to protect the county’s bestinterests, regardless of what Kennecott tried to do.

I was no longer on the Rusk County Board in 1994,so I needed the help of at least one or two supervisorsto sponsor the resolution and take it to the board fora vote. Fortunately, my friends Gene DuSell, HaroldFlater and Ray Kramer saw the value in what we weretrying to do and agreed to take the resolution to theJuly 1994 county board meeting.

As is often the case with resolutions and bills thatare debated by governmental bodies, our proposalwas modified quite a bit by the county supervisors

number of “locals” working at the mine was evenless—perhaps only 30. You see, the Local Agreementhad defined the term “local resident” rather broadly.Specifically, here is what the contract said regardinghiring practices:

After the start of ore shipments, an average of 75%of the mine workers shall be persons who haveresided in or within 10 miles of Rusk County for aperiod of at least one year prior to hiring, whetherhired directly by Kennecott or by any contractorhired by Kennecott. [emphasis added]

The above clause meant that anyone who moved herein 1991 or 1992 to help with construction of the minesite qualified as a resident by the time blasting startedin 1993! So it’s possible that anumber of the “locals” hired bythe mining company were actu-ally long-term Kennecott em-ployees who had relocated toRusk County early enough toestablish residency.

At any rate, no matter if themining company hired 30 localpeople or 48, it amounted to lessthan 0.7% of Rusk County’s totalworkforce of 7,120 people,hardly an impressive number.And don’t forget! The mineclosed one year early, puttingmost of those people out of workmuch earlier than expected.

By the summer of 1994, notonly were we questioning howmany true “locals” had beenhired by the mining company, butwe were worried about thepotential impact of the mine’searly closing (which had not yetbeen approved by the DNR).Enough was enough! So Evelynand I put together a resolution inJuly of 1994 that called on theRusk County Board to establish alocal mining impact committeepursuant to Wis. Stat. 144.838[renumbered to Wis. Stat. 293.33in 1995] to deal with any issuesthat might arise with respect tothe Flambeau Mine, such asdetermining compliance with thehiring practices specified in theLocal Agreement or investigating

Figure 119-5. Roscoe and Evelyn Churchill drafted a resolution for consideration by the RuskCounty Board that called for the establishment of a local mining impact committee pursuant toWis. Stat. 144.838. The Churchills believed such a committee was necessary to monitorKennecott’s hiring practices and protect the public’s best interest (July 1994).


during the course of discussion. In particular, thewording of the resolution was changed to restrict theproposed committee’s duties to investigating only the“contract and hiring practices” of the mining com-pany (Figure 119-6). But that was better than noth-ing, and we were pleased that not only SupervisorsDuSell, Flater and Kramer were willing to co-sponsorthe amended resolution, but even Len Jablonski andStan Kromrey, who normally voted against me onmining issues.

Unfortunately, however, before the county supervi-sors had a chance to vote on the resolution, RuskCounty’s corporate counsel, Attorney Steve Ander-son, stepped forward to recommend that the boardpostpone action until Attorney William Thiel could beconsulted on the matter. As you know, Thiel had rep-resented Rusk County on various mining matters overthe years, and Anderson, who always seemed a littlescared of rattling the mining company’s cage, thoughtThiel should be consulted once more. The upshot wasthat a motion was made by Stan Kromrey, secondedby Eldon Skogen and passed by the supervisors totable the resolution for one month so that Andersoncould talk to Thiel.

Anderson proceeded to contact Thiel a few daysafter the county board meeting, and of course Thiel,who never stood up to the mining company, recom-mended that the board vote down the resolution. Hestated in a letter to Anderson, “In my opinion, estab-lishment of [a] citizens committee under the auspicesof the county board would duplicate the purview ofauthority of the local mining impact committee,established under Paragraph 16 of the LocalAgreement” (CD 119-3).

Hmmm. The “local mining impact committee” towhich Thiel referred was a three-member committeethat at the time consisted of Rusk County BoardChairman Bernice Dukerschein, Town of GrantChairman Bob Plantz and Ladysmith Mayor RonMoore. And as we had pointed out in our original res-olution, that cozy little committee was “funded by themining company, thus possibly affecting committeedecisions” (Figure 119-5). Surely it made more senseto rely upon a committee of local officials and citizensestablished pursuant to the Wisconsin Statutes, espe-cially when the law specified that the committee’sexpenses could be paid out of the state’s MiningInvestment and Local Impact Fund.

But no! Thiel wanted no part ofit. And to help make the caseagainst the need for the committeewe had proposed, Thiel suggestedin his letter to Anderson that thecounty board direct the existingthree-member committee to: (1)procure information regardingKennecott’s hiring practices at themine site; (2) investigate our com-plaint that the mining companywas not in compliance with theterms of the Local Agreement; and(3) issue a report to the county,town and city regarding thematter.

And that’s what happened.Dukerschein, Plantz and Moorequickly met to discuss Kennecott’shiring practices, and they puttogether a report in time for theAugust 1994 meeting of the RuskCounty Board (CD 119-4). Unfor-tunately, however, the three localofficials did a shoddy job, andhere’s what I mean: Kennecott pro-vided the committee with only asingle monthly roster of the mine’s

Figure 119-6. The Rusk County Board considered a resolution at its July 19, 1994 meeting toform a local mining impact committee to investigate hiring practices at the Flambeau Mine.Unfortunately, the resolution never came to a vote (Ladysmith News, July 28, 1994).

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employees (those employed as of July 1994) to estab-lish the company’s hiring practices. In reality, however,by July of 1994 the mine had already been shipping orefor fifteen months, so the committee should haveinsisted on seeing fifteen rosters, not just the mostrecent one. And to make matters worse, all the com-mittee apparently did with the July roster was go overthe names and establish where each employee cur-rently lived. So of course they all lived relatively close tothe mine. What a farce! Another thing that botheredme was that Dukerschein, Plantz and Moore failed todetermine how many of the employees were unionized,which certainly would have given the county board afeel for whether or not the miners were earning adecent wage or being treated fairly. The committee’slittle report was meaningless.

But there’s more. Kennecott’s Ron Vick wrote amemo reviewed by the county board as well, inwhich he discussed the mining company’s hiringpractices. He started out by saying, “Our main prior-ity is to hire qualified persons from the local area forany position that becomes available, including tem-porary jobs filled by college students.” But then hewent on to talk about the criteria that Kennecott usedfor determining whether or not an applicant was“local,” and here is what he said: “Drivers licensesand social security numbers help to verify resi-dency—all local social security numbers begin with39” (CD 119-5). Wow! You know as well as I, my dearreaders, that a person can get a new driver’s licensewithin days of establishing residency in a town.What’s more, many people who were born nowherenear Rusk County have social security numbers thatbegin with 39 (like my friend Laura Furtman, whowas born in a small town north of Milwaukee).Another problem with Vick’s memo was that just likethe report issued by Dukerschein, Plantz and Moore,no mention was made of the number of employeeswho were unionized.

Before moving on, I’d like to give you a little moreinformation about the union status of the workers atthe Flambeau Mine. As far as I know, none of thepeople hired directly by Kennecott to work in the pitwere members of a union. But there was a separategroup of workers brought in by Ames Construction ofBurnsville, Minnesota (just south of Minneapolis),the general contractor secured by Kennecott to helpbuild the mine. And we were told that at least someof those workers were indeed part of the operators’union.

Harold Jenness, the Ames official who was as-signed to oversee the Flambeau project, outlined the

firm’s hiring practices in a memo dated July 25, 1994(CD 119-6). He talked about how Ames’ preferencewas to hire qualified union members who lived in thelocal area, if possible. But then he went on to say thatif necessary, the firm would hire non-union operatorsfrom inside or outside a ten-mile radius of RuskCounty to get the job done. At least he made it clearthat any such non-union workers who were hired byAmes would be required to join the operators’ unionafter a 30 day probation period.

It was good to know that the Ames employees wereprotected by a union. Unfortunately, however, wewere never told the number of employees provided byAmes (unionized) versus the number of workers hireddirectly by Kennecott (non-unionized) or the numberof employees who were hired by Ames for thirty daysand then released before the union’s wage and bene-fit package kicked in. And, getting back to the issue ofthe number of “locals” who worked at the FlambeauMine, the memo from Jenness did not provide us withany hard numbers regarding the proportion of work-ers who truly were local residents.

When we saw the letters written by Jenness andVick and read the report issued by Dukerschein,Plantz and Moore, we were convinced more than everthat the county should establish an independent min-ing impact committee to check into the hiring prac-tices of the Flambeau Mine. It was the only way wefigured we could really find out if Kennecott had hiredenough local people to meet the requirements of theLocal Agreement and whether or not the workerswere being paid according to union scale. But ourhopes were dashed at the August 1994 meeting of theRusk County Board. Despite all the questionableinformation supplied to the county supervisors byKennecott, Ames and the little committee headed byDukerschein, a motion was made by Supervisor AlanRathsack and seconded by Eldon Skogen to table ourresolution for a new mining impact committee indefi-nitely, and the motion carried (CD 119-7).

As a result of the board’s decision, we were neverable to get our hands on any verifiable data regardingthe number of local people employed at the FlambeauMine or the number of workers who belonged to aunion. That is why Figure 119-7, which Laura and Iput together for your perusal, contains so many ques-tion marks. If indeed Kennecott had nothing to hide,why did the company buck us on providing the infor-mation we requested?

Regardless of whether the employees at the minesite were unionized or non-unionized, from Lady-smith or Minneapolis, I would now like to turn your

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attention to the total number of employees who werehired by Kennecott and discuss the impact that themine had on Rusk County’s unemployment rate.

For starters let me say this: If Mercando had beenright and “100 of our neighbors, friends and fellowRusk County residents” had been able to get mining-related jobs, that still would have amounted to just1.4% of the county’s total workforce, and after fouryears most of those jobs still would have ceased toexist. In fact, Kennecott itself admitted that by 1997,the final year of mining, the number of workers at themine site had diminished to just 23 (Figure 119-7).

The only time period during which Kennecottemployed a fairly large number of people was at thevery beginning of the project, from mid-May of 1992until mid-May of 1993. That’s when perhaps up to 150people were hired by the mining company to clearbrush from the mine site and construct the on-site lab-oratory and office building. But that little flurry ofactivity lasted only about a year, and it was notenough to have an impact on the health of the localeconomy (the county’s annual unemployment rateactually increased from 10.2% in 1992 to 11.0% in1993). What’s more, clearing brush so that Kennecottcould more easily rob us of our gold was not what Iwould call a good job. But here’s the real corker:

While the mine was going strong, Rusk County hadthe highest or near-highest unemployment rate of anycounty in the State of Wisconsin!

Take a look at Table 119-1 and Graph 119-1 on thefollowing page and you will see what I mean. Out ofall 72 counties in the state, Rusk County ranked 72ndin its unemployment rate during 1993 and 1994, 70thin 1996 and 71st in 1995 and 1997. All of RuskCounty’s neighbors, including Taylor, Sawyer, Barron,Price and Chippewa Counties, had lower unemploy-ment rates during the same time period, and they did-n’t have a mine! Even Forest County had a lowerannual unemployment rate than Rusk’s, despite thefact that the Crandon mine had not been built (CD119-8).

When looking closely at Rusk County’s unemploy-ment statistics, some might argue that Rusk Countyhad an annual unemployment rate of 11% in 1993and 7.9% in 1997, and so that proves the mine helpedour unemployment rate go down. But don’t let thatfool you. Annual unemployment rates dropped allover the state during that same time period. For exam-ple, Barron County’s unemployment rate droppedfrom 7.0% to 4.8% between 1993 and 1997, TaylorCounty’s went from 7.6% to 5.3% and Forest County’sdecreased from 7.4% to 6.3%. Besides that, even

Approximate Time Period Major Activity

Total Number of People Employed Number of Local People employed Number of Union Workers

According to Kennecott1

According to Verifi able Data2

According to Kennecott3,4


According to Kennecott5


Mid-May 1992–Mid-May 1993

Construction and Preparation for mining 150 ?

120 (


County1 State of WisconsinRusk Chippewa Taylor Barron

Year2 Rate3County Rank4 Rate3

County Rank4 Rate3

County Rank4 Rate3

County Rank4 Rate3

1990 8.2% 71 5.8% 48 6.7% 62 6.2% 54 4.4%

1991 10.6% 70 6.2% 33 8.6% 65 6.8% 43 5.5%

1992 10.2% 71 6.4% 39 7.7% 56 6.7% 44 5.2%

1993 11.0% 72 6.5% 49 7.6% 61 7.0% 52 4.7%

1994 9.8% 72 6.1% 42 7.6% 64 6.4% 49 4.7%

1995 7.6% 71 4.6% 39 6.4% 62 4.8% 45 3.7%

1996 7.0% 70 4.4% 38 4.9% 50 4.5% 43 3.5%

1997 7.9% 71 4.2% 32 5.3% 53 4.8% 42 3.7%

1998 6.0% 63 3.8% 30 5.0% 54 4.3% 43 3.4%

1999 4.6% 59 3.7% 38 3.9% 44 3.9% 44 3.0%

2000 6.8% 68 4.4% 42 4.5% 45 4.8% 53 3.5%

1 See CD 119-8 for a table including data from three additional Wisconsin counties—Forest, Price and Sawyer. 2 The Flambeau Mine was in production from 1993 to 1997. 3 Unemployment rates were obtained from the web page of the Wisconsin Department of Workforce Development (www.dwd.state.wi.us/lmi), January 2002.4 County rank indicates the number of counties in the state with equal or lower unemployment rates. Since there are 72 counties in the State of Wisconsin, a rank of 72 means the county had the highest unemployment rate in the state.

0

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20001999199819971996199519941993199219911990

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t Ran

king

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RuskTaylorBarronChippewa

1 Since there are 72 counties in Wisconsin, a rank of 72 indicates the county with the highest unemployment rate in the state.

Graph 119-1. Annual unemployment rate rankings within the State of Wisconsin for Rusk County and three of its neighboring counties(1990–2000).

Table 119-1. Annual unemployment rates and corresponding rankings within the State of Wisconsin for Rusk County and three of itsneighboring counties (1990–2000), with special emphasis on the mining years in Rusk County (1993–1997).

The Non-Effect of the Flambeau Mine on Rusk County’s Annual Unemployment Rate

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though Rusk County’s annual unemployment ratewas 7.9% during the last year of mining, it was stillthe second-to-the-worst unemployment rate in thestate! So to look at that isolated 7.9% figure and con-clude that the mine helped to improve the county’sjob situation makes no sense at all.

Another problem with selectively looking at unem-ployment percentages is that the numbers can bouncearound a lot during the course of a year, in part due tothe fact that certain jobs are seasonal. For example,Rusk County’s unemployment rate was 6.0% inDecember of 2000 and 10.4% a month later, inJanuary of 2001—due to seasonal layoffs that typi-cally occur at that time of the year. So to attribute achange in unemployment rate to any single factor is adifficult thing to do. Anyone who throws out monthlyunemployment statistics and draws conclusions fromthem without putting the numbers into perspectivemight very well be trying to mislead you.

Instead, it’s important to look at a county’s annualunemployment rate and compare that figure to whatwas going on in other counties at the same time. That’swhy Laura and I put together Table 119-1 and Graph119-1 the way we did. So to really appreciate the factthat the Flambeau Mine had little or no effect on RuskCounty’s unemployment rate, take another look atthe data we presented, keeping the following thingsin mind: (1) annual (not monthly) unemploymentrates are reported for the various counties of interest;(2) annual unemployment rankings are reported forthe counties; (3) since there are 72 counties in theState of Wisconsin, a ranking of 72 means that thecounty had the highest unemployment rate of anycounty in the state; and (4) since the Flambeau Minewas in operation between 1993 and 1997, that’swhen any impact the mine had on the county’s unem-ployment rate should have occurred.

I cannot emphasize enough that Rusk County’sunemployment ranking relative to every other countyin Wisconsin did not change during the mining years.All you see on the graph is a flat line. In other words,Rusk County’s dubious honor of being the county withthe worst or next-to-worst unemployment rate in thestate did not change while the mine was in operation.That surely wasn’t what Mercando, Evans, Green,Haney or Lybert had suggested would happen.Remember, Professor Green had told us that “usingconservative estimates,” the mine could reduce theaverage number of people unemployed in Rusk County“by at least 15 percent” (Figure 119-3).

I have also included a collage of headlines fromvarious news articles about Rusk County’s unemploy-

ment rate that appeared in the Ladysmith Newsbefore, during and after the mining years. No matterif the story was written in 1992 (before the minestarted production), 1993 (shortly after the minestarted to ship ore), 1994, 1995 or 1996 (while themine was operating full force), 1997 (several monthsbefore the mine closed), or 2000-2001 (several yearsafter the mine closed), the gist of it was the same:Rusk County’s unemployment rate was among theworst if not the worst in the state (Figure 119-6).

The reason I included news articles from 2000 and2001 in the collage is because those who favor mininglike to tell us “backward, rural country slobs” thathaving a mine in the community will spur economicdevelopment not only while the mine is up and run-ning, but into the future as well. For example, inSeptember of 1997 Alan Christianson wrote an articlethat appeared in several different newspapers servingcommunities likely to be affected by the proposedCrandon mine. And in that article he stated that any-one coming to Rusk County would find “living proofthat mining can lift a community, not just while themine is open but for many years after” (CD 119-9).

Hmmm. Later on I will tell you more about Alan’sarticle and show you a rebuttal that I wrote. But fornow, suffice it to say that Christianson would havebeen more accurate if he had said, “Rusk County isliving proof that mining can lift a company’s share-holders, not just while the mine is open but for manyyears after.” You already saw how Kennecott’s parentcorporation, Rio Tinto Zinc, posted record earnings in1994, the year after Kennecott started mining in RuskCounty—and that 53% of the company’s $1 billion innet profits that year had come from copper and gold(Figures 101-14 and 117-12). So it seems the peopleof the Town of Grant did their part to help Britain’squeen have enough income so she didn’t have toskimp for many years to come!

Needless to say, Christianson’s prediction that themine would lift the community for “many years” afterthe mine closed did not come true. As of 2002, thecounty’s annual unemployment rate was still thehighest of all its neighbors and still higher than thatof Forest County. It’s difficult to imagine how anyonecould conclude that the mine had any long-term ben-eficial effect on the job situation in Rusk County. Infact, an article appeared in the April 12, 2001 issue ofthe Ladysmith News entitled “Employment is Topic ofBreakfast Meeting,” and it started out by saying this:“Rusk County employers recently had the opportunityto voice concerns and provide input on how toimprove local employment, education and training

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programs.” Nothing has changed. Employers in thearea still struggle to strengthen the business commu-nity, just like they did before Kennecott came to townand left with our gold.

It’s true that there was a little flurry of increasedemployment in the county in 1998 and 1999, shortlyafter the mine closed. But unemployment ratesdropped all over the state during that two-year timeperiod, to the extent that the overall unemploymentrate for the State of Wisconsin was only 2.4% in Aprilof 1998, a record low (CD 119-11). And a little morethan a year later, in August of 1999, a number of

counties in northwestern Wisconsin, including Rusk,Bayfield, Burnett, Douglas, Taylor and Washburn, allset record lows for their unemployment rates (CD119-12). It had nothing to do with the mine.

In particular, one of the reasons the unemploymentrate went down in Rusk County in the late 1990s wasbecause of an expansion of Weather Shield (a localsash and door enterprise) and CityForest (a localpaper mill). Both of those industries were here andsuccessful long before anyone even thought of con-structing a mine, and both companies expandedsignificantly after the mine closed. Governor Tommy

Figure 119-6. Nomatter if RuskCounty’s unem-ployment rate was4.6% in July of1992, 13.9% inMarch of 1995 or10.4% in Januaryof 2001, the ratewas always amongthe worst if not theworst in the Stateof Wisconsin. SeeCD 119-10 to readthe complete arti-cles (LadysmithNews, September10, 1992, Decem-ber 10, 1992,August 5, 1993,January 13, 1994,November 10,1994, May 4,1995, April 3,1997, May 4,2000 and March15, 2001; repub-lished with permission).

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Thompson even made note of the Weather Shieldexpansion in his State of the State address in Januaryof 1997 when he announced that the Ladysmith plantwould soon be creating 200 new jobs that would pro-vide “significant employment opportunities for thecommunity’s 4,000 residents” (CD 119-13). RonaldMoore, the Mayor of Ladysmith during the miningyears, also confirmed the large-scale nature of localexpansion projects in a letter he wrote to the editor ofthe Ladysmith News in November of 2001. Here iswhat he said (CD 119-14):

Weather Shield’s expansion into the former Conwedplant, along with the addition linking it to the NorthPlant, added about 300,000 square feet of space; thelargest manufacturing project ever. The $60 millionplus price tag on CityForest’s paper mill moderniza-tion eclipsed any previous capital investment. …These projects succeeded primarily due to the indus-tries themselves. [emphasis added]

So that’s where a significant number of the new jobsin Rusk County came from after the mine closed, mydear readers. And when I asked Alan Christiansonabout it, he confirmed what I had believed all along—that neither Weather Shield nor CityForest hadreceived any of the tax revenues generated by theFlambeau Mine or any grant money from the state’sMining Investment and Local Impact Fund Board tohelp with their expansion and modernization proj-ects. So none of the new jobs created by WeatherShield or CityForest had anything to do with spin-offbenefits from the Flambeau Mine.

In summary, about all the mine did for the job sit-uation in Rusk County was give our local people per-haps 30 jobs that lasted four years or less. Period. BobOlsgard was right.

Per Capita IncomeKennecott adds tens of millions of dollars to theeconomies of their communities each year. Not onlydo Kennecott’s companies pay good wages, but theybuy products and services from local businesses andthey contribute tens of thousands of dollars each yearto projects that benefit local charities. Looking at this,I’d say Kennecott people are pretty good people!

– Flambeau Mining CompanyMarch 1992 (CD 119-15)

Besides unemployment data, another important fac-tor to examine when looking at the health of a localeconomy is the annual per capita income. From theget-go, Larry Mercando told us the mine would createlots of good-paying jobs, so there were those in the

community who assumed that a large number of RuskCounty workers would be able to take advantage ofthe situation and make great strides in their annualincomes. But that’s not what happened, as you cansee by looking at Table 119-2 and Graph 119-2 on thefollowing page. The problem was that the mine didnot employ a significant number of local people andthe pay scale was not all it was cracked up to be.

As reported in the Eau Claire Leader-Telegram,union scale wages in the Eau Claire area for mining-related jobs were as follows, as of June 1, 1991 (CD119-1):� $17.10 for miners;� $19.35 for carpenters;� $20.40 for bricklayers andcement finishers; and� $23.17 for heavy equipment operators.

I suppose those would have been decent hourly rates,except that not all the workers at the mine site wereunionized, so not everyone was paid according tounion scale. In particular, I got a phone call one dayout of the clear blue from a heavy machinery operatorwho had been hired by Kennecott to work in the pit.When I picked up the phone, he introduced himselfand said, “You don’t know me, but you know my par-ents and I know where you stand on the mine—so Iwant you to know what’s going on over there.” Andthen he told me about how rough he was beingtreated by the mining company. His supervisors actu-ally timed him with a stopwatch while he was operat-ing his rig and kept yelling, “Hurry up! Hurry up!”

I don’t know why this young miner felt compelledto tell me his story, but he did, and you can bet that Ilistened with great interest. He went on to say thatworking for Kennecott was just awful and that he wasmaking less than $14.00 per hour, as compared toconstruction jobs where he had made over $18.00.Before he got off the phone he said, “I won’t be therevery long.” And sure enough he wasn’t. The miningcompany worked him so hard and paid him so littlethat he quit.

I’m sure that at least a few of Kennecott’s employ-ees like Larry Mercando, Greg Fauquier, Tom Myattand Jeff Earnshaw were making good money. And Iimagine the same was true for the other outsiders themining company brought in for the important jobslike chief chemist, human relations manager, techni-cal supervisor and chief water treatment operator.But it wasn’t enough to bump up the true indicator ofhow the average person in Rusk County was doingfinancially. No, the county’s annual per capitaincome, relative to the other counties in the state,

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State of WisconsinRusk Chippewa Taylor Barron

Per Capita Income3

County Rank4

Per Capita Income3

County Rank4

Per Capita Income3

County Rank4

Per Capita Income3

County Rank4 Per Capita Income3

1990 $7,161 70 $9,186 40 $8,934 47 $9,167 41 $12,686

1991 $7,542 70 $10,002 37 $9,246 48 $9,698 41 $13,043

1992 $7,849 69 $10,240 38 $9,514 45 $9,972 42 $13,287

1993 $8,003 71 $10,349 43 $10,367 41 $10,250 44 $13,840

1994 $8,474 71 $10,906 42 $11,350 37 $10,755 47 $14,534

1995 $8,991 71 $11,581 45 $11,841 40 $11,440 46 $15,324

1996 $9,490 70 $12,299 42 $12,297 43 $11,810 46 $16,118

1997 $10,074 70 $13,156 39 $12,993 41 $12,525 48 $17,437

1998 $11,258 70 $14,263 40 $13,893 41 $13,825 42 $18,655

1999 $11,879 70 $15,461 40 $15,248 42 $15,359 41 $20,116

2000 $12,377 70 $16,178 41 $15,409 47 $15,823 43 $20,503

1 See CD 119-16 for a table including data from three additional Wisconsin counties—Forest, Price and Sawyer.2 The Flambeau Mine was in production from 1993 to 1997.3 Annual per capita adjusted gross incomes were obtained from the 1995–1996, 1997–1998, 1999–2000 and 2001–2002 volumes of the Wisconsin Blue Book. Values for 2000 were obtained from the Wisconsin Department of Revenue.

4 County rank indicates the number of counties in the state with equal or higher per capita incomes. Since there are 72 counties in the State of Wisconsin, a rank of 72 means the county had the lowest per capita income in the state.

Table 119-2. Annual per capita adjusted gross incomes and corresponding rankings within the State of Wisconsin for Rusk County andthree of its neighboring counties (1990–2000), with special emphasis on the mining years in Rusk County (1993–1997).

Graph 119-2. Annual “per capita adjusted gross income” rankings within the State of Wisconsin for Rusk County and three of its neigh-boring counties (1990-2000).

The Non-Effect of the Flambeau Mine on Rusk County’s Annual Per Capita Income

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actually dropped a notch during the mining years! Youcan see for yourself by looking at Table 119-2.

Keep in mind that the Flambeau Mine was in oper-ation from 1993 to 1997, so that is when any real eco-nomic impact from the mine should have been felt.But, lo and behold! Table 119-2 shows that through-out the life of the mine, the per capita income of thepeople of Rusk County was lower than that of anyother county in the state, with the exception ofMenominee County in 1993, 1994 and 1995 and bothMenominee and Forest counties in 1996 and 1997.Yes, Rusk County ranked either 70th or 71st out of all72 counties in the state in terms of its per capitaincome. And it didn’t matter if you looked at the sta-tistics from before the mine was built, during the min-ing years or after the mine closed. Nothing changed.

Again, don’t let it fool you that Rusk County’s percapita income increased from $8,003 in 1993 to$10,074 in 1997. Per capita incomes increased allover the state during the same time period. Unfor-tunately, however, Rusk County lagged behind therest. So when you look at a graph that plots theannual per capita income ranking of Rusk County rel-ative to the other counties in Wisconsin, all you get isa flat line (Graph 119-2). Rusk County was and con-tinues to be at the bottom of the heap.

Poverty Levels[It is the belief of Wisconsin Manufacturers andCommerce] that responsible mining means signifi-cant jobs and opportunities for our people, and thatthis industry can provide exactly the sort of economicboost some our counties need to insure the future fortheir children.”

– Jim Haney, President of WMCOctober 1991 (CD 119-2)

Since the Flambeau Mine had a negligible impact onthe annual unemployment rate and per capita incomeof Rusk County, it’s no surprise that the relative num-ber of people in the county living below the povertylevel did not improve during the mining years either.In 1995, at the height of mining, 14.9 percent of RuskCounty’s total population was living in poverty, ascompared to the state average of 8.9 percent (Table119-3). Only two other counties in the state, Men-ominee and Milwaukee, were worse off than us.

When you look at a graph of how Rusk County’spoverty level changed during the 1990s relative tothe other counties in Wisconsin, all you get is a flatline (Graph 119-3). The mine had no effect onimproving things at all. In fact, while the mine was in

operation, Rusk County slipped two notches tobecome the 70th poorest county in the State ofWisconsin in terms of the percentage of total popula-tion living below the poverty level, and it slippedthree notches in terms of the percentage of childrenliving in poverty. Yes, the situation actually got worseduring the mining years.

Take a look at the tables and graphs on the follow-ing two pages, and you can see for yourself. Table119-3 and Graph 119-3 show the grim poverty statis-tics for Rusk County’s total population. And the evenmore disturbing information for the county’s childrenis found in Table 119-4 and Graph 119-4.

I don’t know where WMC’s Jim Haney got off onsaying that mining would help the poor counties ofnorthern Wisconsin “insure the future for their chil-dren.” It seems the cold hard facts of what happenedin Rusk County have caught him in a lie. I cannotemphasize enough that in 1995, when the mine wasrunning full force, 20.8 percent of Rusk County’s chil-dren were living in poverty, as compared to the stateaverage of 13.9 percent (only Menominee,Milwaukee and Sawyer counties had higher percent-ages than ours). If that’s the kind of insurance thatmining companies have to offer for our children’sfuture, anyone buying a policy would have to be nuts.

Not only did Jim Haney have his blinders on whenit came to the financial impact of mining on localcommunities, but so did Alan Christianson. He wasinterviewed for an article about the Flambeau Minethat appeared in the June 22, 1996 issue of the EauClaire Leader-Telegram and actually had the gall tostate, “What’s going on here in Rusk County is aminor economic miracle” (CD 117-12). Minor wasright. Apparently Alan had not looked at the facts.

Certainly the Flambeau Mine was not the panaceapromised by Kennecott. Numbers don’t lie. In fact, it’sclear that the mine benefited no one but Kennecott. Idon’t know what Christianson was talking aboutwhen he referred to Rusk County’s “economic mira-cle” or how people like Jim Haney or Larry Mercandocould look themselves in the mirror after paintingsuch a rosy picture of prosperity for the local people.

As my friend Tom Wilson stated, “The profits and thejobs went out of the country along with the gold, copperand silver they extracted. Especially when one matchesLadysmith’s economic gains with comparable north cen-tral Wisconsin communities over the same period, itbecomes obvious that 20 years of myopic concentrationon one industry, metallic mining, is no substitute forenlightened and comprehensive attention to overall eco-nomic, social and community development” (CD 118-5).

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Percent Living in Poverty3

CountyRank4


CountyRank4


CountyRank4


CountyRank4


1989 16.6 69 10.5 32 12.7 44 11.6 38 10.7

1993 16.6 68 11.3 41 11.1 36 12.6 50 10.9

1995 14.9 70 9.7 43 9.8 45 10.4 49 8.9

1997 14.6 68 9.6 38 10.6 47 10.6 47 9.2

1998 13.6 68 9.4 40 9.8 46 10.7 51 8.9

1999 11.9 68 8.5 41 9.1 47 9.5 49 8.4

1 See CD 119-18 for a table including data from three additional Wisconsin counties—Forest, Price and Sawyer.2 The Flambeau Mine was in production from 1993 to 1997.3 Percentages were obtained from the web page of the United States Census Bureau (www.census.gov/hhes/www/), September 2003. Information was not posted for 1990, 1991, 1992, 1994, 1996 or 2000, so that is why those particular years are not included in the table.

4 County rank indicates the number of counties in the state with equal or lower percentages of people living in poverty. Since there are 72 counties in the State of Wisconsin, a rank of 72 means the county had the highest percentage of people living in poverty in the state.

Table 119-3. Percentages of total population living below the poverty level and corresponding rankings within the State of Wisconsin forRusk County and three of its neighboring counties (1989-1999), with special emphasis on the mining years in Rusk County (1993-1997).

Graph 119-3. Poverty rankings within the State of Wisconsin for Rusk County and three of its neighboring counties with respect topercentage of total population living in poverty (1989-1999).

The Non-Effect of the Flambeau Mine on the Percentage of Rusk County’sTotal Population Living in Poverty

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County Rank4


County Rank4


County Rank4


County Rank4


1989 20.8 60 14.0 33 16.0 51 14.4 35 14.9

1993 21.4 66 15.1 42 14.4 36 16.6 51 15.9

1995 20.8 69 13.9 42 13.8 41 14.6 50 13.9

1997 21.9 67 14.4 41 14.5 42 16.1 50 14.3

1998 18.9 66 14.2 45 12.8 34 15.7 51 13.6

1999 15.7 67 11.2 41 11.9 45 12.2 48 10.9

1 See CD 119-19 for a table including data from three additional Wisconsin counties—Forest, Price and Sawyer.2 The Flambeau Mine was in production from 1993 to 1997. 3 Percentages were obtained from the web page of the United States Census Bureau (www.census.gov/hhes/www/), September 2003. Information was not posted for 1990, 1991, 1992, 1994, 1996 or 2000, so that is why those particular years are not included in the table.

4 County rank indicates the number of counties in the state with equal or lower percentages of childen living in poverty. Since there are 72 counties in the State of Wiscon-sin, a rank of 72 means the county had the highest percentage of children living in poverty in the store.

Table 119-4. Percentages of children living below the poverty level and corresponding rankings within the State of Wisconsin for RuskCounty and three of its neighboring counties (1989-1999), with special emphasis on the mining years in Rusk County (1993-1997).

Graph 119-4. Poverty rankings within the State of Wisconsin for Rusk County and three of its neighboring counties with respect topercentage of children living in poverty (1989-1999).

The Non-Effect of the Flambeau Mine on the Percentage of Rusk County’sChildren Living in Poverty

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I would like to explain why Laura and I chose to compare RuskCounty to Taylor, Barron and Chippewa counties in many of thegraphs that appear in this chapter. When trying to make headsor tails out of the effect that the Flambeau Mine had on RuskCounty’s economy, it just seemed to make sense to compareRusk County’s annual unemployment rate, per capita incomeand poverty level to the corresponding values reported bycounties that: (1) were located close to Rusk County; and (2)had a relatively similar economic base. In that way, we hopedto eliminate some of the regional factors that might otherwiseinfluence the economic indicators. For example, it would nothave been helpful for us to compare landlocked Rusk County innorthwestern Wisconsin to Brown County, which is located ineastern Wisconsin and home to a Great Lakes seaport. Norwould it have made sense to compare the farming communi-ties of rural Rusk County to Milwaukee County with it’s denselypopulated cities and industrial districts.

Taylor, Barron and Chippewa counties, on the other hand, areall located in northwestern Wisconsin. They border RuskCounty, share a similar geography and have evolved to vari-ous degrees in terms of the diversity of their economic base(Figure 119-7). Of the three counties, Chippewa is the leastsimilar to Rusk in terms of the amount of commercial activitygoing on within its borders. It has better farmland, more fac-tories, bigger commercial centers and a larger populationthan Rusk County. As of the 1990 census, Chippewa Countyhad a population of 52,360, as compared to 15,079 for Rusk.Nevertheless, we included information from Chippewa Countyin the graphs because it shows how the economy of one ofthe more highly-developed counties in the area fared duringthe 1990s without the “benefit” of having a mine.

Barron County is also included in the graphs, not onlybecause it borders Rusk County to the west, but because: (1) there is a lot of farming in Barron County, just like inRusk; and (2) both counties reach into the forestland of theBlue Hills. I must say, however, that even though BarronCounty is a closer match to Rusk than is Chippewa, there arestill very real differences between the two. Barron Countytends to have more acres of high-grade farmland than Rusk,and its commercial center, Rice Lake, is much bigger andmore vibrant than Ladysmith. As of 1990, Rice Lake’s popula-tion was 7,998, compared to Ladysmith’s 3,938. In fact, quite often when I need to do some serious shopping, I end up making the 70-mile round trip to Rice Lake becauseLadysmith doesn’t have what I need.

Perhaps the best county to compare to Rusk in terms of itsgeography and economic base is Taylor County. To start,Taylor and Rusk counties are neighbors with similar types andamounts of farmland and forestland. And Rusk County has theFlambeau River, like Taylor County has the Black River. Whenyou look at a map, the two counties look alike in their shape

and size, so it’s no surprise that their populations are aboutthe same as well (15,079 for Rusk vs. 18,901 for Taylor, as ofthe 1990 census). In addition, each of the two counties hasone major business hub. For Rusk County it is Ladysmith, andfor Taylor County it’s Medford, which had a population of4,350 as of 1990. In terms of employment, one of RuskCounty’s biggest employers is Weather Shield, whose parentcompany happens to be located in Taylor County. As you cansee, the two counties have a lot in common.

That’s why information from Taylor County is included in thegraphs that Laura and I put together. We were looking for acounty so similar to Rusk that other variables besides the factthat Rusk County had a mine would not skew the interpreta-tion of the data. And Taylor County was the closest thing thatfit the bill.

In fact, a rural economist by the name of Tim Tynan saw thecommonality between Rusk and Taylor counties and wrote aresearch paper in 1997 in which he determined which of thetwo counties had outperformed the other in economic growthduring Rusk County’s mining years (CD 119-17). I will be giv-ing you some of the details from that study later in the chapter.But for now let me tell you this: Tynan concluded that theFlambeau Mine, which had “promised the world” to the peopleof Ladysmith, had a “negligible impact” on the local economy.

Figure 119-7. To highlight the lackluster effect that the FlambeauMine had on the economy of Rusk County, all you have to do iscompare the unemployment rates, per capita incomes and povertystatistics of Rusk County to those of its neighbors. Every singleneighbor had and continues to have a stronger economy than RuskCounty’s, despite the fact that not one of them had a mine [Figureadapted from map provided by Wisconsin Department ofTransportation, September 2003 (http://www.dot.wisconsin.gov/)].

Why Compare Rusk County to Taylor, Barron and Chippewa Counties?

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Population Growth It is doubtful that the people who live in Ladysmithare residents because they enjoy living near open-pitmines. Until mining is the reason people live innorthern Wisconsin, it will be difficult for miningoperations to add economic prosperity to the region.

– Tim Tynan, rural economist1997 (CD 119-17)

Besides the dismal unemployment, per capita income

and poverty statistics that Rusk County racked upduring the mining years, there was no real growth inthe county’s population either. While some of themerchants in Ladysmith expected more people tomove into the area and spend lots of money in theirshops, it just didn’t happen. The 2000 census showedthat Rusk County’s total population increased by only1.8% between 1990 and 2000 (Table 119-5 andGraph 119-5). Only 6 other counties in the stateshowed a more sluggish growth rate, including

County 1990 Population1 2000 Population1 Percent Change in Population County Rank for Growth Rate2

Rusk 15,079 15,347 1.8 66

Barron 40,750 44,963 10.3 37

Chippewa 52,360 55,195 5.4 58

Price 15,600 15,822 1.4 68

Sawyer 14,181 16,196 14.2 23

Taylor 18,901 19,680 4.1 59

Forest 8,776 10,024 14.2 23

Wisconsin 4,891,769 5,363,675 9.6

1 Data obtained from the web page of the United States Census Bureau (http://www.census.gov/), January 2002.2 County rank indicates the number of counties in the state with an equal or higher percent change in population. Since there are 72 counties in the State of Wisconsin, a rank of 72 means the county had the slowest population growth rate in the state.

Table 119-5. Population growth rates and corresponding rankings within the State of Wisconsin for Rusk County, its neighboring countiesand Forest County (1990–2000).

0%

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WisconsinForestSawyerBarronChippewaTaylorRuskPrice

Graph 119-5. Population growth rates for Rusk County, its neighboring counties and Forest County (1990–2000).

The Non-Effect of the Flambeau Mine on Rusk County’s Population Growth Rate

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Milwaukee, Lafayette, Grant, Buffalo, Price and Pepincounties. On the other hand, all of the counties innorthern Wisconsin, with the exception of PriceCounty, had faster growth rates than Rusk County’s.For example, Sawyer County (bordering Rusk Countyto the north) had a growth rate of 14.2 percent,Barron County (bordering Rusk County to the west)had a growth rate of 10.3 percent and Taylor County’spopulation grew by 4.1 percent. Even Forest County’sgrowth rate was almost eight times higher than RuskCounty’s, even though the Crandon mine had notbeen built!

What’s even more interesting is that if you were tolook at the change in population in the Town of Grantbetween 1990 and 2000, you would see that the townactually lost 80 people, or 9.4% of its population. Yes,the population of the town decreased from 847 to 767,even though that’s where the mine was located! Someof that loss was undoubtedly due to the fact thatKennecott had bought up eleven farms in the town-ship in order to secure the mineral rights. And eventhough some of the 2,750 acres acquired by the min-ing company was rented back to the farming commu-nity, the eleven families who had been living on theland eventually moved away.

The 2000 census also showed that Ladysmith, theclosest trade center to the mine, had 6 less people in2000 than it did in 1990, a loss of 0.2% of its popula-tion. What a contrast to the City of Medford, nextdoor in Taylor County, which grew by 68 people dur-ing the same time period for a gain of 1.6% in totalpopulation!

In addition, an article appeared in the LadysmithNews in August of 2005 entitled “City lost populationsince 2000.” It talked about how Ladysmith’s popula-tion as of January 1, 2005 was 3,715, which repre-sented “a loss of 217 persons (5.52 percent) since the2000 census when the population was 3,932” (CD119-20). The article also mentioned that theWisconsin Demographic Services Center had pre-dicted Ladysmith would lose another 6 percent of itspopulation over the next 20 years and that RuskCounty’s overall population would “grow by only 3.9percent [as compared to] an estimated populationincrease of 17 percent for the state.” The news articlestated, “Rusk County’s population growth has been atbest stagnant,” and it looks like that trend will con-tinue for many years to come. So where are all thepeople that Professor Green, James Haney, LarryMercando and Alan Christianson suggested wouldmove to the area because of the Flambeau Mine?

All I can say is this: Even though Rusk County was

the only county in the State of Wisconsin with a goldmine during the 1990s, the allure apparently wasn’tgreat enough to draw new people into the area tojumpstart the local economy.

Failed Planning Strategies forResurrecting Rusk County’s EconomyToday, after all the fuss and struggle, Rusk County canlook back on its mine and decide if it was really thebonanza that Kennecott promised the local people.The county is as much or more in debt now than itwas before mining began. The major school systemsin the area are all struggling to find ways to tax thepeople to pay off debts and improve services.Ladysmith could hardly be called a thriving city. Infact, it is deteriorating. What was once our downtownarea, full of locally owned businesses, is now full ofempty buildings and vacant lots where buildings havebeen torn down. The center of town does not have agrocery store, a drug store or a dime store anymore.All have closed. In addition, several of our restaurantshave gone out of business, and the last car dealer inthe downtown area moved to the outskirts of the cityin 2001.

I cannot say that the Flambeau Mine brought aboutthe decay of the once charming little city ofLadysmith or that it caused the county-wide problemsmentioned earlier in the chapter. But the mine cer-tainly didn’t help the area to flourish, and to suggestotherwise would be a lie. Maybe Ladysmith is dyingbecause it’s a natural phenomenon for small towns tobe declining at this time. But there is no denying thatthe city is in worse shape now than it was beforeKennecott appeared on the scene. Maybe, just maybe,the buying up and closing out of those eleven farms inthe Town of Grant by the mining company helped toclose out some of the businesses in the downtownarea. After all, each one of those farms had a familythat used to come to town to buy something, provid-ing income to the merchants. I guess the LadysmithArea Chamber of Commerce hadn’t really thoughtabout that when it came out in support of the mine.At any rate, Rusk County’s economy is at the bottomof the barrel, our precious natural resources are gone,and all we have to show for having had a mine is agrassed-over waste dump sitting next to theFlambeau River.

Yet, Alan Christianson had the audacity to tell thepeople of Forest County in September of 1997 that oureconomy was in great shape because of the FlambeauMine! I am talking about the article I mentioned

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earlier that he sent to several newspapers in theCrandon area. In particular, Christianson stated thatRusk County had received so many economic benefitsfrom having a mine that the success stories were “toonumerous to list.” And then he boldly stated, “How didwe do it? In a word, planning” (CD 119-9).

It’s interesting that Christianson, who to this day isthe city planner for Ladysmith, would feel so stronglyabout the wisdom of his ways, especially since therecord clearly shows that his strategy for how toinvest the mining revenue from the Flambeau Minedid little or nothing to resurrect Rusk County’s failingeconomy. You’ve already seen the hard economicdata, my dear readers, but there is even more to tellyou by way of a research paper written in 1997 byrural economist Tim Tynan. The name of the paperwas “When Mines Enter Minds: An Investigation ofLadysmith and Medford, Wisconsin and the EconomicImpact of the Flambeau Mine.”

Before getting into the specifics of Tynan’s paper,I’d like to mention that I first met the author in 1995,when he was a student at the University ofWisconsin-Madison. He came to Ladysmith thatsummer with seven other university students as partof a three week intersession class on “TheSocioeconomic Impacts of Mining in Wisconsin.” Thecourse, which was offered by Dr. William Freuden-burg of the university’s Department of RuralSociology, entailed researching the relevant litera-ture and talking to people on both sides of the min-ing issue. Here is a sampling of who the studentsinterviewed: Tom Evans (Wisconsin Geological andNatural History Survey), Bill Tans (Wisconsin DNR),Tom Myatt (Kennecott), John Styczinski (RCCAG),Jerry Goodrich and Don Moe (Crandon MiningCompany), Mary Dorch (North Central RegionalPlanning Commission), Ron Smith and Tim Randall(Mole Lake Ojibwe), Attorney Kevin Lyons (Town ofNashville, Forest County), DuWayne Johnsrud(Wisconsin Assembly Natural Resources Commit-tee), Evelyn and myself.

I still remember when the students came out to thefarm to interview Evelyn and me. We could tell theywere good kids who were eager to learn the real storyof what mining meant for rural economies. Theyasked all kinds of questions, and we answered themas best we could. I might add that later on the classissued a report of its findings to the WisconsinAssembly Natural Resources Committee, and a storyabout the whole thing appeared in the September 15,1995 issue of Wisconsin Outdoor News (CD 119-21).Evelyn and I received a copy of the students’ report as

well, and you can imagine how pleased we were tosee how the report confirmed what we had believedall along. In particular, the students drew the follow-ing conclusion (CD 119-22):

The notion that mining will guarantee local economicprosperity has not, to date, been borne out in theresearch on rural communities. In fact, recent researchsuggests that resource extraction does not cure ruralpoverty, but rather is highly associated with it.

As I already mentioned, Tim Tynan was one of thestudents who took Dr. Freudenburg’s intersessionclass in the summer of 1995. And I think the wholeexperience must have really affected him. You see,Tynan proceeded to become an advisor to the MiningImpact Coalition of Wisconsin, and that’s when hewrote “When Mines Enter Minds: An Investigation ofLadysmith and Medford, Wisconsin and the EconomicImpact of the Flambeau Mine.”

Tynan started out his research paper by explainingwhy he had chosen to compare Ladysmith’s economyto that of Medford in Taylor County. Here is what hewrote (CD 119-17):

To determine if the presence of the [Flambeau Mine]had any affect on the economy of Ladysmith, a simi-lar town in the region can be used as an example ofwhat could have happened to Ladysmith if there hadnever been a mine. Medford, Wisconsin was chosenbecause it is the only urban center in neighboringTaylor County and, like Ladysmith, is in the jurisdic-tion of the Northwest Regional Planning Com-mission. Before the mine entered Rusk County,Ladysmith and Medford had almost identical popu-lations, wage rates and resource availability. Moreimportantly, however, since 1989, when [Kennecott]was aggressively seeking permits, Medford and Lady-smith have had very similar amounts of tax revenueevery year. How this revenue was spent in each city isa good indicator of the planning priorities whichwere prevalent during the permitting, constructionand operating periods of the Flambeau Mine.

Tynan proceeded to compare Alan Christianson’sstrategy for investing local tax revenues (includingmining revenues) to that of the Medford planners.After listing the breakdown of expenditures by thecities of Ladysmith and Medford between 1989 and1996, here is what he concluded:

It is apparent that Ladysmith planners have seeneconomic development as the number one priorityand have rated school spending and other residentialconveniences as second. Medford planners, on theother hand, have rated school spending the highest,followed by highway construction and pedestrian

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amenities [such as sidewalks, street lights andstorm sewers]. …

Given the enormous amounts of moneyLadysmith residents are paying (via taxes) for eco-nomic development, one would expect, if nothingelse, that a prosperous Flambeau Mine would at leastpush Ladysmith out of economic disparity into eco-nomic competition with the other urban centers innorthwest Wisconsin. [emphasis added]

Tynan was right about Christianson’s priorities. Whenmining tax revenues finally started to show up in thelocal municipalities in the mid-1990s, Christiansonhelped convince the city fathers to invest much of themoney in ventures aimed at attracting new businessesand factories to the area. In fact, Christianson himselfstated the following in his little newspaper article (CD119-9):

Our goal was to produce long-term jobs, and we didthat largely by investing mine tax revenue to con-struct or renovate buildings for sale or lease to busi-nesses. In many cases, matching grants helped usleverage mining dollars to pay for projects we nevercould have funded on our own. Our successes are toonumerous to list here, but a few stand out.

And then Christianson went on to list a number ofbusiness ventures that had been financed with either:(1) mining tax revenue (“first dollar” and “countyadditional” payments); (2) Local Agreement money(paid directly by Kennecott to the local govern-ments); or (3) grants awarded by the Mining Invest-ment and Local Impact Fund Board. It’s interesting tonote, however, that the amount of mining tax rev-enue and Local Agreement money received by thelocal governments was such a pittance that Chris-tianson ended up asking both Rusk County and theTown of Grant to pool their mining revenues with thecity’s so there might be enough money to really dosomething. The county went along with it, but I don’tknow how much, if anything, the town contributed. Iremember speaking out against it at a town meetingwhere I said, “Ladysmith has annexed our land,reduced our tax base and used us as a waste dump.And now that we have a little money, they want totake that, too.”

A number of the projects in which Christiansoninvested mining revenue did not take off—and that’sputting it mildly. There was just a trickle of activityhere and there, and as I write my book some of theprojects are doing absolutely nothing. For example,one of Christianson’s ideas was for the county toinvest in three new industrial buildings to be locatedat Bruce, Weyerhaeuser and Glen Flora in Rusk

County. Here is what happened to each of them:� The industrial building at Bruce burned shortly

after being built. The county did not repair thestructure and eventually sold it to a private party.As my book goes to print, the building is occupiedby Barry’s Builders Supply, which I believe employsno more than 3 or 4 people;

� The building at Weyerhaeuser was rented for ashort time by Piccard Medical Corporation, awheelchair manufacturer. But the business, whichwas incorporated in the State of Minnesota ratherthan the State of Wisconsin, was far from success-ful and soon closed its doors. As far as I know, thecounty never found another tenant and to this dayis trying to sell the building; and

� The building at Glen Flora was leased to a com-puter salvage and recycling firm by the name of 5RProcessors, a company that originated in Catawba,Wisconsin in 1989 (that’s about 30 miles east ofLadysmith in Price County) and later expanded toinclude facilities in Tennessee, Minnesota, Georgiaand New York. I believe the Glen Flora plant,which operates to this day, originally employedsomewhere between twenty and forty people, butI’m told the wages are not very high.

Rusk County’s economy scarcely benefited from allthe money that was sunk into the three industrialbuildings at Glen Flora, Weyerhaeuser and Bruce. Yetthose were the kinds of examples that Christiansoncited when trying to make the case that mining “canlift a community, not just while the mine is open butfor many years after.” He mentioned a few otherRusk County businesses in his newspaper article aswell, and I have listed them on the following pagesfor you to see. You will also notice that beneath eachof Christianson’s examples of economic prosperity, Itook the liberty of telling you the real story of whathappened. Here’s a summary of the high points:

Out of the eight individual businesses singled out byChristianson as somehow benefiting from revenuegenerated by the mine, at least four of them were aliveand well in Rusk County before Kennecott came totown, including Flambeau Litho (a printer), ADF (amanufacturer of acrylic store fixtures like eye glass dis-plays and snack bins), Conwed (a manufacturer ofoffice furniture) and Weather Shield (a sash and doormanufacturer). Those companies didn’t need the mineto stay in business or expand the size or scope of theiroperations. Yet, Christianson somehow tried to creditthe mine with either saving or creating 377 jobs asso-ciated with those independent and already successful

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Alan Christianson

“Mine taxes paid for two 12,000 square-foot industrial build-ings in Glen Flora and Weyerhaeuser. The Glen Flora buildingis leased to a computer salvage and recycling firm; theWeyerhaeuser building houses Piccard Medical, which makessupplies to aid people with physical or medical infirmities.New jobs created totaled 40, and both firms plan to expand”(CD 119-9).

The Real Story

The Bruce building: Christianson failed to mention in his arti-cle that a portion of the county’s mining revenue wasinvested in a third industrial building outside of Bruce in RuskCounty. That particular building had a fire shortly after beingbuilt and was sold “as is” to a private party that to this dayemploys perhaps 3 or 4 people.

The Weyerhaeuser building: Piccard Medical (incorporated inthe State of Minnesota) occupied the Weyerhaeuser buildingfor a short time. But the company was far from successfuland quickly went out of business. As far as I know, the build-ing at Weyerhaeuser has stood empty ever since.

The Glen Flora building: State records show that 5RProcessors, which occupies the Glen Flora industrial buildingto this day, employed between 20 and 49 people in 2005. Iam told, however, that the wages are not very high.

Alan Christianson

“Mine revenues helped Ladysmith and Rusk County renovatean old industrial site in the city, turning an eyesore into anattractive modern building that now houses ADF [a manufac-turer of acrylic products like product displays and snack bins],Flambeau Litho [a printer]; and the Sign Shoppe [a sign-paint-ing business]. The three firms employ 50 people. Lease rev-enue from the building is about $50,000 per year” (CD 119-9).

The Real Story

Two of the three businesses mentioned by Christianson (ADFand Flambeau Litho) existed long before the Flambeau Minewas built, and the third (the Sign Shoppe, which employsthree people) has been in the area since about 1997. The cre-ation of these three businesses had nothing whatsoever to dowith the Flambeau Mine. In late 1997, when Christiansonwrote his article, they just happened to be located in a buildingthat had been renovated with mining revenue (the renovationwas known as the Fritz Avenue project). So for Christianson toinfer that the mine was somehow responsible for creating orretaining those 50 jobs was not only misleading, but an insultto the ingenuity of the business owners who were the realforce behind creating those jobs. What’s more, ADF moved

out of the Fritz Avenue building in 1998 and relocated toanother part of town. I don’t know if the space vacated by thecompany was ever leased to anyone else, but as my bookgoes to print, the only thing you can find in ADF’s old quartersis some outdated computer equipment in storage.

I might add that the Fritz Avenue project was funded, in part,with federal dollars that had nothing to do with the FlambeauMine. And in terms of the $585,900 grant awarded by theMining Investment and Local Impact Fund Board to the Cityof Ladysmith in 1996 to facilitate the project, let me say this:The board had no business awarding that grant. It was asleazy deal. As discussed in Chapter 118 of my story, Wis-consin law is clear regarding the legitimate distribution ofmoney from the mining impact fund. The board was sup-posed to keep enough money in reserve so that the local gov-ernments would be assured of receiving their “first dollar”and “county additional” payments for each year of mining,and only then, if any money was left, was the board to awardany grants. What’s more, the only types of grants authorizedby law were those meant to help mining communities dealwith problems caused by mining. Since the Flambeau Minedid not have any effect on Rusk County’s unemployment rateone way or the other, the pretense of using mining impactmoney to create new jobs for displaced workers was notvalid. Not only did the Fritz Avenue project fail to qualify as alegitimate use of mining impact money, but awarding thatmoney to the City of Ladysmith contributed to the fact thatnot enough money was left in the mining impact fund in 1999to distribute any “first dollar” or “county additional” pay-ments to the three local governments for the gold shipped toCanada in 1997.

Alan Christianson

“Mine payments to the city and county covered nearly halfthe $1.3 million cost of the Ladysmith/Rusk CountyEnterprise Center in the Ladysmith Industrial Park. This build-ing provides seven manufacturing spaces from 1,400 to10,000 square feet, specially designed to appeal to wood-working businesses. These spaces are now available forlease” (CD 119-9).

The Real Story

I don’t know if Christianson was ever successful in rentingout those spaces, but even if he was, it certainly had no realimpact on Rusk County’s unemployment rate, per capitaincome or any of the other important economic indicators.You saw the flat-line graphs. To this day Rusk County is atthe bottom of the heap, just like it was before the “enterprisecenter” was constructed.

What Alan Christianson Said about the Financial Benefits of theFlambeau Mine versus the Real Story of what Happened in Rusk County

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establishments. And with regard to the four new busi-nesses that came to Rusk County after Kennecottshowed up on the scene, including Norse BuildingSystems (a Minnesota-based company that buildsmodular homes), the Sign Shoppe (a local graphicdesign company), Piccard Medical and 5R Processors,let me say this: The sixty or so jobs that Norse brought

to Rusk County in 1997 and the three jobs created bythe Sign Shoppe were not legitimate spin-offs fromthe mine, as Christianson implied. Sure, to this daythe companies are located in buildings that were ren-ovated with grant money from the mining impactfund. But as discussed in Chapter 118 of my story, thegrants were improperly awarded by the mining

Alan Christianson

“I wish those critics [of the mining industry] would comehere and look for the poverty, unemployment and economicdepression they attribute to mining communities. What theywould find instead is living proof that mining can lift a com-munity, not just while the mine is open but for many yearsafter. First and foremost, the Flambeau mine was environ-mentally clean throughout its four years of operation. … NowFlambeau Mining Company is reclaiming the mine site in acareful and responsible manner” (CD 119-9).

The Real Story

Like I said, if anyone wants to see the real impact of theFlambeau Mine on Rusk County’s economy, just go back topages 890, 894, 896 and 897 to see how Rusk County’seconomy fared before, during and after the mining years. Andin terms of Christianson’s claim about how “responsible”Kennecott was in its reclamation of the mine site, you mightwant to turn ahead to page 1025 for just one example of how“careful” Kennecott was to prevent groundwater pollution.

Alan Christianson

“The Discretionary Payments Program administered by thestate’s Mining Impact Board paid more than 90 percent of the$3 million cost of a new plant for Conwed, an office furnituremanufacturer. This helped Ladysmith retain 100 jobs, and thecompany has already added 30 more. The relocation of Conwedhelped provide space for window manufacturer Weather Shieldto expand —and create 100 to 200 new jobs” (CD 119-9).

The Real Story

There are three things wrong with how Christianson creditedthe mine for being responsible for the expansion projectsundertaken by Conwed and Weather Shield: (1) Just like inthe case of the Fritz Avenue project, Conwed’s new plantshould have never been built with mining impact moneybecause the project had not

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