After Minnesota official took office, his firm got disputed $64,000 for rural bus routes the firm ran

Zelle (StarTrib photo by Glen Stubbe)

"Minnesota’s top transportation official has asked for a review of steps he took to distance himself from his former bus company after the state paid the business $64,000 for work on a contract that had expired," reports Ricardo Lopez of the Minneapolis Star Tribune, who discovered the payment by going through 5,000 emails involving Charlie Zelle, commissioner of the state Department of Transportation. Zelle said he had been unaware of the payment or the request for it.

Zelle resigned as CEO of Jefferson Lines when Gov. Mark Dayton appointed him in 2012 but remains chairman of the family-owned company, which runs rural routes "that would likely go away without taxpayer subsidies," Lopez writes. "Both companies received nearly all of available state and federal grants, or $2.3 million, in 2013, according to a MnDOT report. Those funds accounted for nearly 60 percent of the companies’ budget to operate the subsidized routes that year."

The emails "reveal sometimes deep disagreement over the Jefferson Lines payment and highlight the potential conflicts that Dayton faced in selecting a transportation chief with close ties to a company that still does business with the agency," Lopez reports. "Two officials from MnDOT reviewed the request and rejected it, saying the claim was for work beyond the scope of two contracts that stretched from 2007 to 2011. Just a few weeks after Zelle took over as commissioner, Jefferson again asked the state to be paid for the old contract. This time, they got it, but with it came staff criticism of the unusual payment."

“None of this passes the smell test,” department Audit Director Daniel Kahnke told nine staff members, including an assistant commissioner. "Mike Schadauer, MnDOT’s Office of Transit director, said the situation was the result of an error that should have been caught sooner," Lopez reports.