The North Dakota Spud Scam...

Do you remember a news story that started in 1985 about a Red River Valley potato sale to Honduras? Anyone who grows potatoes in the state should recall this newsmaker. It caused all kinds of ramifications for numerous people, including the state of North Dakota.

The entire scenario started out innocent enough when the Ag Department’s marketing director Laurence McMerty made his best attempt to set up a major seed potato deal with Honduras. But McMerty later got into legal trouble and was charged with bribery, although he later pleaded guilty to a misdemeanor charge of unlawful compensation for assistance in a government matter.

McMerty had good intentions in the beginning, but then got mixed up with William Messner, a Canadian living in Miami who played the middle man in the potato deal. The 1986 sale involved 4 million pounds of potato seed to a Honduran cooperative.

McMerty admitted taking $3,200 in cash from Messner and claimed the money was reimbursement for expenses. Again, innocent enough, perhaps? But then the plot thickened when it was learned that McMerty was accused of accepting a Caribbean cruise.

The bribery case was based almost entirely on circumstantial evidence, and that the evidence suggested that McMerty was “duped” by Messner. Deputy Attorney General Bruce Quick considered it a case of criminal bad judgment.

The botched potato deal also ruined the political career of Agriculture Commissioner Kent Jones, a Republican who was denied endorsement for a third term because of the lingering scandal.

Jones got involved in the controversy when he and the former president of the Bank of North Dakota, Herbert Thorndahl, signed a $300,000 note meant to help finance the deal. Messner later sold the note to a Miami bank for $264,000 and put $180,000 of the money in his personal bank account to cover overdrafts, according to Attorney General Nick Spaeth.

At one point, Spaeth questioned the financing of the deal and that the state was never paid $104,000 that was due for the only 400,000-pound potato shipment that was delivered.

Messner, who was considered “a flashy Canadian with a checkered financial past,” called North Dakota officials a bunch of idiots, and boasted that he had made and lost millions of dollars.

The state’s potato business was directed to Messner’s company, Petrolear Holdings Ltd., Inc., then barely a year old. Petrolear was a small company based in the Caymen Islands.

That bunch of idiots proved to be too much for Messner because he later pleaded guilty to bribing McMerty. In addition, he agreed to $60,888 in restitution to the state of North Dakota for its out-of-pocket expenses in buying and shipping the potatoes to Honduras. Messner told the Bismarck Tribune he pleaded guilty because he wanted to live a normal life and have a normal business.

Messner, who had no prior criminal record, qualified as an indigent when he was arrested and was given a court-appointed attorney. Even though he told the judge he had the ability to earn money once he got out of jail, his case was filed with him considered indigent.

American Express Bank of Miami then sued Messner, PetroLear, McMerty, Jones and Thorndahl seeking to enforce the $300,000 note used to finance the potato deal.

Messner tried to argue that the cruise for McMerty was a mistake and that he was using his clout with the travel agency to get a good deal for McMerty. He maintained that

McMerty was going to pay him back.

A business partner of Messner’s, however, said the cruise was given to McMerty because he had been very helpful in getting business for PetroLear.

(Marvin Baker is a news writer for the Kenmare News and formerly Foster County Independent.)