Lawsuit seeks to stop Nebraska Environmental Trust’s $1.8 million grant for ethanol pumps

Source: By Martha Stoddard, Omaha World Herald • Posted: Monday, October 12, 2020

LINCOLN — Critics of the Nebraska Environmental Trust board’s decision to award $1.8 million to a project installing ethanol blender pumps and storage tanks at gas stations are taking their fight to court.

Two of those critics, W. Don Nelson and Jon Oberg, have filed a lawsuit in Lancaster County District Court asking for an injunction to stop the award. The suit names the trust board as the defendant.

The legal challenge claims that the trust board lacked the votes to approve the award, either at a Feb. 4 meeting when the ethanol project was added to a list of proposed recipients or at a June 11 meeting when the list of awards was approved.

According to the lawsuit, eight votes, or a majority of the 14-member board, are required to take action under Environmental Trust bylaws. At the February meeting, the vote was 7-2, with two members abstaining. At the June meeting, it was 7-2 with three members abstaining.

Mark Brohman, the trust’s executive director, said earlier that the board traditionally requires only a majority of the board members present to take action. On Thursday, he said he could not comment on pending litigation.

The lawsuit also said state law bars Environmental Trust grants from going to projects “which provide primarily private benefits” or projects whose beneficiaries could “afford the costs of the benefits without experiencing serious financial hardship.”

In this case, the plaintiffs claim, private fueling stations would be the beneficiaries and the grant at issue was made without considering the station owners’ ability to pay for their own pumps and tanks.

Controversy over the grant began in February, when the trust board made a preliminary recommendation to switch money away from five projects that had been ranked more highly for environmental benefit. Those projects included efforts to preserve saline wetlands and duck marshes and help finance a conservation easement in the Pine Ridge.

The board redirected money from those projects to one sponsored by the Nebraska Department of Environment and Energy and Green Plains Inc., one of the nation’s largest ethanol producers, that sought to help rural gas stations purchase and install blender pumps. The board’s grant committee had recommended against funding the ethanol project.

The Environmental Trust gets about half the proceeds from the Nebraska Lottery and distributes the funds as grants for projects like dredging fishing lakes and promoting recycling. The rest of the lottery funds are used for educational grants and to support the Nebraska State Fair. The trust board makes decisions about how to use the lottery money and allocates almost $20 million a year.