- Associated Press - Wednesday, September 30, 2015

MINNEAPOLIS (AP) - Two bus companies owned by Transportation Commissioner Charles Zelle received nearly all of the state subsidies paid in the first year of a program for rural bus service, according to a report published Wednesday.

Jefferson Lines and Land to Air Express collected nearly $2.3 million in state and federal grants in 2013, accounting for more than 60 percent of their budgets for operating the subsidized routes that connect small communities with national bus routes, the Star Tribune reported (https://strib.mn/1VrlEXK ), citing Minnesota Department of Transportation figures. Zelle’s companies got 98 percent, or about $441,000, of the available state funding that year.

Zelle resigned as CEO of Jefferson Lines before Gov. Mark Dayton appointed him as MnDOT commissioner in 2012, but he also joined the boards of the two companies, becoming chairman of Jefferson and retaining his ownership roles.

Zelle conceded there’s an appearance of a conflict of interest.

But Dayton on Wednesday said Zelle’s roles were fully vetted before he was brought on board. He acknowledged the companies have received a large share of state subsidies but defended Zelle against any suggestion that the dollars were purposefully steered to benefit him. He called Jefferson Lines the premier bus company in Minnesota.

“If they’re far and away the best company … I would want them to get an inordinate share of the subsidies,” Dayton said.

Mike Schadauer, director of MnDOT’s Office of Transit, said “there’s absolutely no connection” between the state funds and the commissioner’s connections with the companies. Without subsidies, the routes would be unprofitable, he said.

Zelle’s companies were the only Minnesota providers receiving the federal subsidies before MnDOT decided in 2013 to offer state grants to avoid forfeiting unused federal money. One other company has collected the state subsidies, less than $8,000 for Rainbow Rider Transit. An application is pending from Tri-Valley Heartland Express.

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Information from: Star Tribune, https://www.startribune.com


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