State environmental and health regulators assessed fines of

State environmental and health regulators assessed fines of $152,000 against a prominent northwest Kansas hog operation for ignoring cease-and-desist orders to halt construction of unauthorized animal confinement buildings and waste holding facilities capable of serving tens of thousands of swine.

Documents obtained by The Topeka Capital-Journal show Nelson Farms owner Terry Nelson, working with family and employee partners through limited liability companies created to expand the business empire, failed to obtain permission from the Kansas Department of Health and Environment before starting to build facilities in Phillips and Norton counties. When notified of the shortcomings, public records show, the companies apparently dismissed orders to stop construction.

The Kansas chapter of the Sierra Club filed a series of complaints about KDHE's oversight of construction in a rural area near the Nebraska border. In both locations, neighbors registered procedural and environmental objections while expressing skepticism their opinions would make a difference.

Michelle Tharman, who lives near the Phillips County site, said she wasn't notified about filing of the swine facility's belated application in accordance with state law. She said waste from the hog facility would eventually pollute Prairie Dog Creek and infiltrate waters of the Harlan County Dam in Nebraska. She said odor emerging from the pig complex would find its way to her home and make fresh air a luxury.

"Terry always wins," Tharman said of Nelson. "He is above the law. So, I am not sure why I am wasting my breath. I will not just sit back and let him get his way without those in charge knowing that this is a huge risk."

Almena resident Casey Dole said he was bothered by the Nelson family's plan for swine facilities in Norton County because the site was within the required separation distance of a habitable residence owned by his father. He said water and wastewater lines needed by the hog operation were installed improperly and without necessary permits.

"I am very disgusted that my hard-earned tax dollars pay the salary of the people that will not take the time to do a proper investigation that determines whether everything is up to code before they grant these permits," he said.

Facts disputed

The Nelson family homesteaded the Long Island, Kan., area during the 1870s. The family's sixth generation is involved in a diversified business that includes a feed mill and elevator, swine operations, a 15,000-head cattle feedlot, 9,000 cultivated acres and 15,000 acres of grassland for about 2,000 cows. In addition, the Nelsons own First State Bank, which serves clients in northeast Kansas.

Aaron Popelka, an attorney with the Kansas Livestock Association and legal representative of the Nelsons on the swine projects, said the KDHE fine was being challenged. He declined to discuss specifics of KDHE's conclusions, public complaints about the developments or actions of the Nelsons.

"I can't comment," he said. "These are ongoing issues. There are facts in dispute."

The expansion projects in Phillips and Norton counties hit regulatory headwinds after KDHE inspectors repeatedly documented illegal construction activity at the sites. In October, KDHE Secretary Susan Mosier ordered all work stopped until the state formally approved permit applications, construction plans and waste management programs, including waste retention lagoons or ponds.

Any construction undertaken before KDHE concluded standard processing of applications for the confined feeding facilities was in violation of state law and subject to a civil penalty of up to $10,000 per day for each violation.

Violated statutes

Nelson, with assistance from Kansas Livestock Association staff, submitted planning documents to KDHE in October for a facility named Rolling Hills Pork in Norton County and a complex called Old Stone Pork in Phillips County. Rolling Hills would be able to accommodate 9,300 head, while Old Stone would be capable of handling 24,000 head.

No temporary or preliminary approval for those sites was granted by KDHE. The mandatory public comment period for both applications hadn't been completed, but work continued at both locations. In addition, KDHE notified applicants the Old Stone Pork proposal was incomplete and the plan was deficient because it didn't identify sufficient acreage for spraying hog waste on fields.

In November, KDHE officials reminded Nelson and his business associates in person, by telephone and by email that the lack of state approval of the applications forbade construction of the swine production facilities in both counties. Still, earth work was performed, concrete floors and walls were poured and other construction activity continued. KDHE files include photos of the progress.

That prompted involvement of a KDHE attorney, who again advised Nelson of the legal obligations of permit applicants.

"Construction undertaken before approval of all of these documents is considered to be in violation of the statute," said KDHE attorney Katelyn Radloff.

In December, construction was twice observed by state inspectors at the Rolling Hills Pork and Old Stone Pork locations.

Sanctions appealed

John Mitchell, director of the environmental division at KDHE, signed orders in January sanctioning Nelson and his business associates $76,000 for violations of state law at the Rolling Hills Pork site and $76,000 for infractions of Kansas statute at the Old Stone Pork site. Mitchell and his bosses at the time, KDHE Secretary Mosier and Gov. Sam Brownback, have all left state government.

Both financial sanctions handed down by KDHE are being appealed, said agency spokesman Gerald Kratochvil. The Phillips County project eventually received the green light from KDHE, but the Norton County development hasn't.

Craig Volland, chairman of the agriculture committee of the Kansas chapter of the Sierra Club, said the fines ordered by KDHE amounted to a slap on the wrist to Nelson Farms.

"Kansans, especially rural landowners, should be concerned about political influence over the agency that is supposed to be protecting our health and environment," Volland said.

Nelson, who contributed at least $3,400 to Brownback's political campaigns since 2010, endured a catastrophic hog barn fire in June that killed 2,000 sows and 7,000 piglets at the Husky Hog facility near Long Island. The insurance losses ran into the millions of dollars.

In a swine-profitability conference speech in February at Kansas State University in Manhattan, Nelson said firefighters fought the blaze while listening to the screams of thousands of hogs trapped in barns and burning to death. Firefighters saved 4,500 hogs in nearby confinement buildings.

He said the tragedy at the sow complex led to reconsideration of the family's preference to avoid large-scale growth of their swine business. Ultimately, Nelson said, the decision was made to invest in a substantial expansion project.

"If you're not growing, you're dying," Nelson said. "If you're not growing, you better figure out when to grow or you better figure out when to sell it."

In the aftermath of the fire, KDHE took less than one week to accept Nelson's plan for rebuilding Husky Hogs' swine facilities in Phillips County.

Ownership split

Nelson decided to gift the undamaged barns to a limited liability company led by his son and daughter-in-law, Clarke and Julia Nelson, called Prairie Dog Pork. Nelson would continue to run Husky Hogs at the site and handle operations of Prairie Dog Pork. The ownership division was calculated to allow the two-owner complex to secure regulatory approval for a 60 percent increase in the number of confined hogs, a prospect prohibited for a single entity because of its proximity to a body of water.

Volland said the dubious ownership scramble undermined state law balancing interests of a private business with the public's environmental and quality-of-life interests. The Sierra Club appealed the administrative order granting the side-by-side business arrangement and expansion of hog capacity at Husky Dog-Prairie Dog Pork.

"We can't allow this precedent to continue. It eviscerates Kansas law," he said. "This legal fiction favoring large hog factories will threaten the quality of life and property values of every rural resident in the state."

In early December, KDHE inspectors concluded the Husky Hog-Prairie Dog Park operators pumped wastewater into a new waste lagoon, which hadn't yet received a permit from the state. KDHE authorized those permits as of Dec. 12.

The Nelson family's decision to rapidly expand swine operations in Kansas amplified the challenge of finding enough farm laborers. The solution was an agreement with the Kansas Department of Corrections that provides 25 inmates from the Norton Correctional Facility, Nelson said.

Julia Nelson said she didn't want to be interviewed about the family business and referred questions to Popelka, the attorney at the Kansas Livestock Association.

"I appreciate you calling," she said. "I just feel he would be better able to answer."

Popelka said his review of KDHE regulations and consultation with legal counsel at KDHE led to the conclusion the division of assets by the Nelsons to allow expansion of the business model was permissible under Kansas law.

A new conflict emerged March 29 when KDHE conducted an inspection of Nelson's proposed site of a new gilt, or immature female pig, development facility. KDHE environmental inspector Dan Wells discovered dirt work was ongoing, despite lack of a plan approval. Wells said in an agency memo that he explained to Nelson it could take two or three months for the agency to complete the review process for the facility.

"Terry did not like this answer and said he needs to begin construction in 30 days," Wells said. "I told him the permit engineers do their best and it would depend on the number and complexity of the plans submitted before his."