Huge Political Story For ND Oil And Gas Industry -- Microsoft Executive Gets ND GOP Governor Nomination By Surprising Margin; Watford City Mayor On Ticket

Updates

Later, 11:59 a.m. Central Time: as big as the original post is, I think this story is even bigger. The GOP nominee for governor named the mayor of Watford City as his running mate, to be the lieutenant governor. Huge. 

Brent Sanford is a Watford City native and has served as mayor since 2010. Prior to that, he also held a City Council seat from 2006 to 2010.

Sanford also touts business experience as owner and president of S & S Motors in Watford City and past CFO of Transwest Trucks, a multi-location truck dealership, financing and manufacturing operation with more than 400 employees.

"I strongly believe North Dakotans are ready to send a business leader to Bismarck," Sanford said in a statement. "With our team, voters get two leaders who understand the changing economy and who will help increase the number of great jobs that keep young people and their families at home in North Dakota."

Sanford holds a bachelor's degree in accounting from UND and is a certified public accountant. He worked at Eide Bailly in Fargo for eight years before joining Transwest Trucks.

Original Post

 

A few days ago, a reader sent me a link to this New York Times article:

A decade ago, then-Microsoft executive Doug Burgum stood before a cheering crowd at a technology conference in Dallas and introduced his boss, company co-founder Bill Gates, by describing what makes entrepreneurs successful.

"Innovators are people who go against the grain" by taking risks and chasing dreams, said Burgum, who'd become a tech star in his own right after selling his North Dakota software company to Microsoft for more than $1 billion. "They've got the ability to think in a counterintuitive way."

Now Burgum is pursuing his most unlikely venture yet: becoming governor of North Dakota in his first shot at elected office and against his party's wishes.

It's not unusual anymore for wealthy business people to try to leap from the boardroom to the governor's office. Rick Snyder and Bruce Rauner did it in Michigan and Illinois, respectively, in recent years.

But Burgum's quest might be the biggest stretch yet: a player in a glitzy, fast-paced industry becoming leader of a state where the cattle outnumber people, only about a dozen towns have a population bigger than 6,000 and many families make their livelihood in agriculture and oil.

Though Burgum is a big name in tech hubs like Silicon Valley and Seattle, he isn't well known in North Dakota outside of Fargo, the state's largest city, where he lives. His opponent in the June 14 GOP primary election is a more typical fit for the job: low-key, longtime state legislator and Attorney General Wayne Stenehjem, who's patiently climbed the political ladder and has the party's endorsement.

I did not post it; the likelihood of Burgum winning seemed too remote.

Today, from Ballotpedia:

North Dakota was one of five states to hold primary elections last Tuesday. Former Microsoft executive Doug Burgum (R) defeated North Dakota Attorney General Wayne Stenehjem (R) in the state's Republican primary for governor by a surprising 21-point margin.

Heading into the election, Stenehjem led in polls and was the party favorite, having won the GOP endorsement at the state convention on April 2. Though it is customary in North Dakota for candidates who lose at the convention to bow out of the primary election, Burgum announced he would run anyway and delivered a resounding win.

The race is currently rated “Safe Republican.” All major party candidates for other offices were unopposed in the primaries. North Dakota is one of 23 Republican trifectas.

It looks like there may be two new pictures on this page.

At age 59, Burgum is a young man; Stenehjem is 63. From the linked NYT article:

Burgum has infuriated the GOP-controlled Legislature with television ads that claim lawmakers squandered the state's oil bounty before the bust hit two years ago. He claims he's a proven job-creator who's uniquely qualified to help diversify the state economy.

Tea leaves: it looks like the "Legacy Fund" is back in play. Burgum says he does not favor tapping the Legacy Fund; his Democratic competitor is on record suggesting that tapping the fund for specific reasons for short periods of time makes sense.

Now look at "The Big Story" over at the AP today:

A North Dakota rainy-day fund that held more than $572 million in January is on the verge of being emptied due to lower-than-expected tax collections from depressed oil and farm commodity prices.

"There are no 'ifs,'" North Dakota Treasurer Kelly Schmidt said Friday. "We will drain it."

The Budget Stabilization Fund, established in 1987, was intended to stash extra tax money from industry booms to be used in leaner times to protect state programs from big budget cuts. The fund had only meager deposits initially but built up over the past decade largely from North Dakota's unprecedented oil activity that is now in decline.

The Legislature's record-high $14.4 billion two-year budget that began in July 2015 was built last year based on faulty economic assumptions for tax collections.

In February, faced with a $1.1 billion shortfall, Gov. Jack Dalrymple ordered a 4.05 percent cut to government agencies and a $497 million raid on the rainy-day fund. But state budget officials said this week that collections continue to fall and almost all of the fund's current $75 million balance will be needed to cover the additional shortfall.

It will be interesting to see Burgum's specifics on how ND "squandered" its oil money. Early on, the state kept its huge Legacy Fund entirely in cash, hesitating to invest it in "America."

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Legacy Fund Update

From the AP article linked above:

North Dakota, the nation's second-ranked oil producer, also has been stockpiling oil revenues in its Legacy Fund that was approved by voters in 2010 to set aside 30 percent of oil and gas tax collections. The Legislature is barred from spending any of the fund's assets until June 2017. After that, a two-thirds vote of the North Dakota House and Senate is needed to spend any of the fund's principal, of which no more than 15 percent can be withdrawn every two years.

Schmidt said the Legacy Fund will hold $3.8 billion with the June transfer of $28.3 million.

North Dakota's Republican candidate for governor, former Microsoft Corp. executive Doug Burgum, has said he does not favor using the fund's principal. His Democratic opponent, State Rep. Marvin Nelson, has said he supports tapping the Legacy Fund's principal to offset budget shortfalls.

I track the Legacy Fund here.

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Wayne Stenehjem In Good Company

After WWII, Winston Churchill was pretty much unceremoniously relieved of his leadership of Great Britain.

A few years after he orchestrated Greek's stunning sea victory over the Persians in 480 BC, Themistocles was ostracized from Athens, and never recovered politically.