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Tamil Nadu revenue deficit down by Rs 30,000 crore, says FM Palanivel Thiaga Rajan

March 20, 2023 by economictimes.indiatimes.com Leave a Comment

Synopsis

“In accordance with the mandate of the Fiscal Responsibility Act of achieving zero-revenue deficit, the State will adopt a smooth glide path without compromising on our welfare initiatives and developmental priorities,” he said.

The Tamil Nadu government has reduced the annual revenue deficit by about Rs 30,000 crore in the revised estimates of the current year, from about Rs 62,000 crore inherited when the DMK assumed office nearly two years ago, Finance Minister Palanivel Thiaga Rajan said on Monday. Presenting a tax-free budget for 2023-24 in the Assembly, he said the government’s measures have helped to reduce the revenue deficit.

“This was approximately Rs 5,000 crore lower than the level of the pre-COVID year of 2019-20,” he said.

“In accordance with the mandate of the Fiscal Responsibility Act of achieving zero-revenue deficit, the State will adopt a smooth glide path without compromising on our welfare initiatives and developmental priorities,” he said.

Fall in tax revenue in the previous years was the main reason for the fiscal stress faced by the government at the time of assuming office, he claimed.
The State’s own tax revenue (SOTR) is estimated to increase to Rs 1,51,870.61 crore in the revised estimates, as compared to Rs 1,42,799.93 crore in the Budget estimates for 2022-23. In the coming years, the SOTR is estimated to further increase to Rs 1,81,182.22 crore, which is a growth of 19.30 percent over the revised estimates.

The SOTR is estimated at Rs 15,309.40 crore in the revised estimates, similar to the projections in Budget estimates for 2022-23. In the coming years, it is estimated to be at Rs 20,223.51 crore, which is an increase of 32.10 percent over the revised estimates.

Since 2015-16 when the revenue deficit breached the 1 per cent GSDP mark for the first time, the finances deteriorated continuously with revenue deficit increasing in leaps and bounds to reach 3.28 percent in 2020-21.

“This government through reforms of unprecedented scale and scope, has not only managed to arrest but also actually reversed the declining trend by bringing down revenue deficit by record levels to 1.23 per cent of the GSDP, close to the ratio of 2015-16,” the Finance Minister said.

In the coming years, despite the inclusion of an amount of Rs 7,000 crore for ‘Magalir Urimai Thogai’ scheme (Rs 1,000 to women heads of eligible households) — one of the biggest cash transfer schemes implemented by any State government in the history of this country — the revenue deficit of the State has been contained at 1.32 per cent of the GSDP much below the levels of 2017-18, he said.

In the Budget estimates for 2023-24, the revenue deficit is estimated at Rs 37,540.45 crore.

The government has given a further push to the capital expenditure in the State in this budget providing an allocation of Rs 44,365.59 crore. The total capital outlay of the State including net loans and advances is estimated at Rs 54,534.46 crore.

The fiscal deficit has been estimated at Rs 74,524.64 crore. The net borrowings in 2023-24 is projected at Rs 91,866.14 crore.

The revenue expenditure is estimated at Rs 3,08,055.68 crore. The major components include: expenditure on account of salaries to government staff estimated to be Rs 77,240.31 crore, subsidies for power utility TANGEDCO and transfers on account of implementing the ‘Magalir Urimai Thogai’ is estimated to be at Rs 1,22,088.19 crore.

“We are well on our way to becoming a revenue-neutral State again, which will form the ideal condition for investment and growth… I wish to point out that this government has announced new projects and schemes involving expenditure of over Rs 1 lakh crore since assuming office on May 7, 2021,” Rajan said.

He claimed that Tamil Nadu’s growth is higher than the national GDP which is a positive sign, and this growth advantage is expected to continue in the coming year though a potential slowdown in the global economy, as many anticipate, could reduce all growth rates at the State and national level, he pointed out.

The State will attempt to maintain a healthy growth in revenue receipts through resource augmentation and improvement in revenue collection efficiency, the Finance Minister added.

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Risen From the Grave, Keystone XL Pipeline Again Divides Nebraska

April 27, 2017 by www.nytimes.com Leave a Comment

“Make one solid case, one solid point for why this should go through.” — Jeanne Crumly

PAGE, Neb. — The fight seemed over. Plans to bury an oil pipeline in the Nebraska dirt, through hilly grazing land near the Elkhorn River and flat expanses of corn farther south, had been halted. Farmers and ranchers who spent years opposing the project moved on with their lives.

But suddenly the pipeline from Canada to Nebraska, known as Keystone XL , is back on the table. As President Trump promised on the campaign trail, he has cleared the way for the project, which his predecessor had blocked .

Republican politicians, many union members and some landowners are cheering the pipeline as a way to create jobs and bring more North American oil to market.

But in spots along the proposed route through Nebraska , including here on the sandy soil of the Crumly family farm, the president’s decision is being met with frustration and resolve to resume the fight.

Jeanne Crumly, who sees Keystone XL as a dire threat to this land, believes Mr. Trump is supporting it without “really giving a hoot of how there are people and livelihoods at stake here.”

“It was going to be where he flexed his muscle,” she said.

State-level permits and easements along the three-state pipeline route are in place in Montana and South Dakota. That leaves Nebraska — where voters overwhelmingly favored Mr. Trump, but where a coalition delayed the pipeline for years during President Barack Obama’s administration — as the best chance to block construction. Nebraska regulators will hear public comment on the project at a 10-hour meeting on Wednesday.

If Ms. Crumly and her allies prevail, several dozen rural landowners will have triumphed over a transnational energy company and the wishes of their president and governor. If they fail, oil will flow through the Crumly property, in a grassy strip between where cows wander and corn grows.


“It doesn’t feel like we’re in that friendly of a political atmosphere.” — Jenni Harrington

BRADSHAW, Neb. — The pipeline opposition here looks nothing like the dispute that emerged last year over the Dakota Access Pipeline in North Dakota, where thousands of demonstrators erected a protest camp near a Native American reservation. There, the National Guard was mobilized, and hundreds of protesters faced arrest.

So far there have been no mass encampments on the Nebraska prairie, no tense standoffs with the police, no highway blockades. But Jane Kleeb, a leader of the pipeline opposition, said the more muted tactics in Nebraska should not be mistaken for a lack of organization or tepid sentiments.

Opponents here managed to delay Keystone XL for years during the Obama administration, challenging state permitting rules and drawing national attention to the pipeline. They have fought with lawsuits and testified about legislation. Here on the Harrington farm, activists built a small solar- and wind-powered barn on the side of a dirt highway, right along the proposed path of Keystone XL. They see it as both a physical barrier to construction and a blunt statement about clean energy.

Some supporters of the pipeline acknowledge the concerns of opponents, but say the pipeline will be safe — and economically beneficial.

“I think the state is ready to move on from this issue,” said Jamie Karl, a vice president of the Nebraska Chamber of Commerce and Industry, which for years has supported the pipeline.

“I think this project shines the light on the fact there’s a large disconnect between energy production and the average American,” said Mr. Karl, whose family owns land not far from a different oil pipeline. “Yes, we all want no risk when it comes to energy production. We understand that. But gas doesn’t magically appear in your car tank. Asphalt doesn’t magically appear on the road you drive on.”

Still, if construction ever begins, opponents say they are willing to participate in civil disobedience. But opponents in Nebraska are betting that they can block the pipeline through other means. The State Public Service Commission , which will decide as early as mid-September whether to grant a permit for Keystone XL, will hold five days of hearings on the project in August.

“I am hopeful,” said Jenni Harrington, one of four sisters who grew up on this farm along the southern portion of the proposed route. “I think people in Nebraska aren’t just pushovers.”


“Environmentally, I’m not worried about this thing at all.” — Robert Johnston

ROYAL, Neb. — Robert Johnston, a fifth-generation farmer and self-described “ultraconservative” Republican, is among the hundreds of Nebraskans who have signed easements for Keystone XL.

Just like the pipeline’s opponents, Mr. Johnston speaks passionately about his land and his family’s history of farming here — 135 years in his case. But Mr. Johnston says he believes that the potential damage from a pipeline leak has been exaggerated, and that Keystone XL’s benefits far outweigh any risks.

“I’m just not going to let something happen to that ground,” said Mr. Johnston, who grows corn, soybeans and alfalfa. “That ground is pretty special to me.”

Mr. Johnston sees Keystone XL as an economic boon for the state, especially a local school district that stands to benefit from additional tax revenue. He also considers the project an opportunity for Nebraska to do its part in expanding the nation’s energy sector.

“We farm. We burn thousands of gallons of fuel every year,” Mr. Johnston said. “That was one of my initial reactions to it: ‘How can they be opposed if they’re driving a fossil fuel-powered vehicle?’”

As Nebraska emerges once again as a national pivot point for Keystone XL, the matter is already settled for most landowners along the route. Years ago, and with varying degrees of enthusiasm, those farmers and ranchers accepted payments and signed papers allowing the pipeline to be built if regulators ever approved.

Ronald Weber, who owns land in the same county as Mr. Johnston, said he wished the route had avoided his property. But Mr. Weber still signed an easement, saying that he recognized the benefits of pipelines and that “it’s got to go somewhere.” Neither Mr. Weber nor Mr. Johnston said how much they were paid by TransCanada, which proposed Keystone XL, but both said the company had treated them fairly. Mr. Johnston said he used his easement money, which was below six figures, to invest in irrigation in a field the pipeline would cross.

“Most people would just as soon not have it and prefer it went somewhere else,” Mr. Weber said. “But it’s just like you can’t have electricity if you don’t have power lines.”


“Every post, every water well, every piece of concrete, I put in here.” — Terry Van Housen

STROMSBURG, Neb. — Visitors to Terry Van Housen’s feedlot are greeted with an American flag and a large sign: “NO PIPELINE, NO PROBLEM.”

Mr. Van Housen, who grows corn and raises cattle, is adamantly opposed to Keystone XL, which would run beneath his fields. He says he might testify against the project at hearings this summer and, if it is approved, participate in protests.

“If it goes over our water system, it could just ruin it,” Mr. Van Housen said. “I don’t want it — any way, shape or form. I don’t even want to be close to it.”

But Mr. Van Housen is a registered Republican living in a Republican county in a Republican state. He voted for Mr. Trump for president, knowing full well that his candidate supported the pipeline and that Hillary Clinton did not.

So intense was Mr. Van Housen’s distrust of Mrs. Clinton that he says he never really believed she would stand in the way of the pipeline. And Mr. Van Housen says he believes that the president can be persuaded to oppose Keystone XL.

“I was happy he won,” said Mr. Van Housen, 64, who has never voted for a Democrat and who said he was buoyed by Mr. Trump’s pledge to shake up government and bring back factory jobs. “I thought we needed some changes in the system.”

Most Republican politicians in this state support the pipeline, but the ground-level opposition is decidedly bipartisan. Ms. Kleeb , the president of Bold Alliance , a prominent anti-pipeline group, was recently elected chairwoman of the Nebraska Democratic Party. Along the route, some holdout landowners voted for Mr. Trump, others for Mrs. Clinton, and still others for none of the above.

Mr. Van Housen says he cannot reasonably expect to agree with the president on every issue. But if Mr. Trump ever passes through Stromsburg, Mr. Van Housen says he will offer him a drink from his well. Then he will tell Mr. Trump that Keystone XL is a threat to that pristine water.

“It’s a 36-inch bomb,” Mr. Van Housen said, alluding to the diameter of the pipe. “It could destroy me, my business, the whole family operation, plus the neighbors.”

“The land is worth more than what they offered me.” — Jim Carlson

SILVER CREEK, Neb. — Jim Carlson has lived all of his 62 years along the gravel roads and soybean stubble near the Platte River.

“It’s the only place I know as home,” said Mr. Carlson, who said he had turned down a roughly $300,000 easement offer from TransCanada.

Most landowners along the Nebraska route have accepted payments and given TransCanada permission to build on their land. But about 90 of them, roughly 9 percent, have not. Mr. Carlson said he feared that a leak in the pipeline would imperil the groundwater he uses to drink and irrigate his crops.

Nebraska’s economy depends on agriculture, and Nebraska agriculture relies on the Ogallala Aquifer, the vast underground water source that nourishes crops and livestock on a huge swath of the Great Plains. TransCanada officials have always said the pipeline would be safe . They rerouted the project years ago to avoid the heart of Nebraska’s ecologically delicate Sandhills region. Many politicians here believe the construction jobs and tax revenue make the project worthwhile.

Terry Cunha, a spokesman for TransCanada, said the proposed path through Nebraska “is the safest route possible for the pipeline,” adding that construction would not begin elsewhere until the Nebraska permit was in place. “This project has gone through numerous reviews, and we continue to believe in the value behind it,” Mr. Cunha said.

Doug Zimmerman lives along the route of a different oil pipeline built by the company, in use since 2010, and says he has had no problems. If TransCanada wanted to put in another pipeline on his land, he says he would be fine with that. “They’re more than welcome to dig another trench and put it in here.”

But the route still traverses the aquifer, unnerving other landowners. “It’s the people who are tied to the land,” Mr. Carlson said, “who understand what’s at risk.”

The family ties run deep. Mr. Carlson’s son is the fifth generation to tend these fields.


“If it never happens, it’s fine. If it does, I can accept it.” — Bill Tielke

ATKINSON, Neb. — Bill Tielke, an elected supervisor here in Holt County, helped pass a resolution opposing Keystone XL in 2013. Mr. Tielke said he was trying to reflect the wishes of his constituents, who include some of the state’s most vocal pipeline opponents.

But Mr. Tielke, a third-generation farmer, also signed an easement allowing TransCanada to put pipe along more than a mile of his land — through an alfalfa field, across a cow pasture and beneath a creek. He says he is neutral on the merits of the project.

“It’s not a deal where I’m going to go out there and start digging for them,” Mr. Tielke said on a recent morning as turkeys and a whitetail deer wandered through his backyard. “But it’s not a deal where I’m going to be standing in front of it saying, ‘No, you can’t.’”

Mr. Tielke concedes that a leak is possible and could damage the creeks running through his land. But he also says that he believes pipelines are necessary, and that TransCanada intends to operate Keystone XL safely.

“A lot of landowners have given up their property for easements for the betterment of the whole country,” said Mr. Tielke, who declined to say how much TransCanada paid him.

While activists for and against the pipeline gird for a highly public fight, there are many others here who find some merit in each side’s arguments, and who mostly avoid bringing up Keystone XL in polite conversation.

“We don’t go to the bar and talk about why you like it and I don’t, or vice versa,” Mr. Tielke said. “It’s just a subject that you don’t talk about.”

Tensions have simmered for years here in Holt County, a place that is about twice the size of Rhode Island but home to only 10,250 residents. Along Mr. Tielke’s fence line, just feet from where the pipeline would cross, a faded, tattered sign has blown over from a neighbor’s property. “Say NO To Keystone XL,” it reads.


“We kind of consider it beyond price.” — Susan Dunavan, with her husband, Bill.

YORK, Neb. — Susan Dunavan received her first letter from TransCanada more than eight years ago, informing her that a future pipeline might be routed through the cattle pasture just up the hill from her apple orchard. It has loomed ever since. Except for a period of 12 months — after Mr. Obama had blocked it in late 2015 and before Mr. Trump was elected — Keystone XL has been all-consuming.

“We have been eating, sleeping, breathing this pipeline because it affects everything in our life,” Ms. Dunavan said. “TransCanada not only wants to steal our property, they have stolen eight years of our lives.”

Ms. Dunavan became one of the most visible pipeline opponents, speaking to national media outlets, testifying to regulators and suing the governor in a case that was heard by the Nebraska Supreme Court.

“Our vacations for the last eight years have been going to State Department meetings, hearings at the Nebraska Legislature,” Ms. Dunavan said.

The fight could not be more personal.

“We are not rich people,” said Ms. Dunavan, who questions the need for the pipeline and worries it would harm native grasses on her property. “We spent our lives purchasing this land.”

A final resolution could still be years away. TransCanada wants to begin construction in 2018, but Ms. Kleeb, the opponents’ leader, said she expects an appeal and lawsuit from whichever side loses before the Nebraska Public Service Commission. And even if a permit is granted, individual landowners could challenge the eminent domain process in local courts. Ms. Kleeb predicted that the pipeline could still be an issue during the 2020 presidential campaign.

“We’re going to go to the end,” Ms. Dunavan said.

Jack Begg and Doris Burke contributed research.

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Governor of Nebraska Backs Route for Pipeline

January 23, 2013 by www.nytimes.com Leave a Comment

WASHINGTON — The governor of Nebraska on Tuesday approved a revised route through the state for the Keystone XL pipeline , setting up a decision for President Obama that pipeline opponents say will be a crucial test of his intentions on climate change.

Gov. Dave Heineman, reversing an earlier position and brushing aside vocal opposition from some citizen groups, said the pipeline could be built and operated safely and would bring thousands of jobs and hundreds of millions of dollars in new revenue to Nebraska.

The decision came a day after Mr. Obama made an assertive pledge in his Inaugural Address to tackle climate change in his second term. Opponents of the pipeline, which would carry heavy crude oil from tar sands formations in Alberta to refineries on the Gulf Coast, say that the extraction and consumption of the oil would significantly worsen global warming and perpetuate the nation’s dependence on dirty fossil fuels.

Mr. Heineman, a Republican, said in a letter to Mr. Obama and Secretary of State Hillary Rodham Clinton that his state had found in its review that the new route avoided sensitive lands and aquifers. Mr. Obama rejected the previous route last January on the grounds that construction of the pipeline threatened Nebraska’s Sand Hills region and that a spill could contaminate the critical Ogallala Aquifer.

Mr. Heineman said the pipeline’s operator, TransCanada , had assured him and state environmental officials that the chances of a spill would be minimized and that the company would assume all responsibility for a cleanup in case of an accident.

The State Department, which must review the 1,700-mile pipeline because it crosses an international border, is in the final stages of preparing a supplemental environmental impact statement on the project. An earlier version found that it would have minimal adverse effects along its route.

TransCanada’s chief executive, Russell K. Girling, said Washington should now follow Nebraska’s lead.

“Keystone XL is the most studied cross-border pipeline ever proposed,” Mr. Girling said in a statement , “and it remains in America’s national interests to approve a pipeline that will have a minimal impact on the environment.”

Victoria Nuland, the State Department spokeswoman, said Tuesday that the agency would not complete its review of the project before the end of March.

The House speaker, John A. Boehner of Ohio, is a strong advocate of the project. He applauded Nebraska’s action, saying it removed a critical hurdle to the completion of the pipeline.

“Nebraska’s approval of a new Keystone XL pipeline route means there is no bureaucratic excuse, hurdle or catch President Obama can use to delay this project any further,” Mr. Boehner said in a statement. “He and he alone stands in the way of tens of thousands of new jobs and energy security.”

Opposition to the project has been fiercer in Nebraska than in any of the other states along the route, in part because of the ecological value of the Sand Hills and in part because residents organized early to oppose the land acquisitions required for the rights of way.

Those groups are challenging the state’s review process in court, and on Tuesday they were harshly critical of the governor’s decision.

“Heineman turned his back on landowners and citizens who asked for an unbiased review of the risks of this pipeline,” said Jane Kleeb, the leader of Bold Nebraska , a group opposed to the project. She said her group was organizing a protest outside the Governor’s Mansion in Lincoln next Tuesday. “The fight continues, even though Governor Heineman sided with a foreign corporation today and turned his back on our water and property rights.”

A coalition of national environmental groups including the Sierra Club and 350.org have called on Mr. Obama to kill the project, saying it would bring a rapid expansion of tar sands mining and greatly contribute to greenhouse gas emissions.

“The latest pipeline review still ignores the biggest impact of Keystone XL: climate change,” said May Boeve, the executive director of 350.org , an environmental advocacy group. “The tar sands oil that would flow through Keystone XL is the dirtiest form of fuel on the planet, and burning it would have a devastating effect on our climate.”

She said the group was planning a large rally in front of the White House on Feb. 17 to urge the president to reject the pipeline.

“The decision is now firmly on President Obama’s desk,” Ms. Boeve said. “Approving Keystone XL would make a mockery of the commitment he made at the inauguration to take action on climate change.”

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Traces of Montana Oil Spill Are Found in Drinking Water

January 21, 2015 by www.nytimes.com Leave a Comment

HELENA, Mont. — Work crews burrowed through thick ice and set up containment booms Tuesday in a struggle to vacuum up 50,000 gallons of oil that spilled into the Yellowstone River from a ruptured pipeline, contaminating drinking water.

The 12-inch steel pipeline, which burst Saturday morning near Glendive, Mont., about 400 miles east of here, sent light crude oil flowing downstream as far as the confluence with the Missouri River, 60 miles away in North Dakota.

Health officials warned people not to use tap water in Glendive and surrounding towns after traces of benzene from the leak were found in a water treatment plant. Gov. Steve Bullock visited the area on Monday and declared a state of emergency for Dawson and Richland Counties.

The Bridger Pipeline Company, which operates the line, has shut it down, company officials said. The line is part of a system that passes across eastern Montana from the Canadian border.

Federal officials have said short-term exposure to the water was not dangerous. But residents near the spill found the water undrinkable.

“It smells like diesel and it’s oily,” said Lisa Kjelstrup, a real estate agent in town who spent the day trying to determine how to get potable water to elderly residents. “People are panicking right now. I don’t think there was anything on the shelves.”

State officials and local grocery stores began trucking in pallets of bottled water Tuesday, and Glendive residents began making plans to shower and do laundry at the homes of friends and relatives who draw their water from wells.

The spill has led to renewed concerns among environmentalists about the safety of the proposed Keystone XL pipeline , which would pass about 25 miles north of Glendive.

Residents said Tuesday that there should be no conflict between the need for strict environmental standards regulating oil and gas companies and the town’s support for the oil and gas industry.

“Eastern Montana is the energy producer for the state,” said Jerry Jimison, Glendive’s mayor. “People down here deserve the same safeguards for safe water.”

Glendive, near the North Dakota border, sits on the edge of the Bakken Formation, one of the nation’s richest oil-producing regions, where oil and gas production during the past decade has been a boon to the economies of dozens of small, formerly forlorn prairie towns in North Dakota and eastern Montana.

Unemployment has fallen to 2.2 percent, according to the latest federal data, and an increase in home sales and local tax revenues is linked to the money pouring in from the oil fields and related industries.

On Tuesday, residents complained that they had not been properly notified by either Bridger or local officials about the spill and the subsequent contamination of the treatment plant. Some people said they had learned about it via Facebook posts from other residents.

“I’m O.K. with the pipeline,” said Tracey Rod, who works in the local court system. “It’s what’s making jobs around here.”

But, she added, “I think the city should have told us more and the city should have been quicker.”

Some restaurants and other businesses that rely on city water decided to shut down. Some parents were planning to keep their children home from school, Ms. Kjelstrup said, even though school officials tried to reassure parents that they had plenty of bottled water for cooking and drinking.

Lana Warner was serving coffee and lattes at Crazy Woman Espresso, using purified water that she buys outside Glendive. But she said she could not make frozen drinks — ice was off-limits — and could not wash blenders or dishes using tap water. On Tuesday morning, she said, she washed her hands and immediately noticed a petroleum odor. She decided there was no way she would drink — or serve — anything using municipal water for now.

“I can’t get rid of it,” she said. “It’s made it kind of tough because everything you touch smells like that. As long as I smell it there’s no way I’m drinking it. And right now it’s very, very strong.”

Other residents said that while they were taking precautions, they had noticed no problem with their tap water and believed the news of the spill was stirring up overreactions and hyperbole.

Kathleen Rowell, manager of the Riverside Inn, said she set out a jar of water overnight and noticed no sheen of oil or odd smells the next day.

“I think everybody’s going a little overboard,” she said. “I made coffee yesterday with regular tap water. It tasted fine. I showered. My kids all showered today and last night.”

Environmental groups, however, said the pipeline rupture was an omen.

“Every barrel of oil that spills into the Yellowstone River is another reason to reject Keystone XL,” said Jamie Henn, spokesman for 350.org , an environmental group opposed to Keystone, which is being built to transport crude oil from Canada to refineries in the United States. “Pipelines are inherently unsafe,” Mr. Henn said. “If they’re not spilling oil into rivers, they’re still spilling carbon into the atmosphere.”

At nearly 700 miles, the Yellowstone is the longest undammed river in the lower 48 states. To many conservationists, it is a symbol of the fragility of the wilderness it traverses. The river courses from northern Wyoming through Yellowstone National Park before emptying into the Missouri River outside Williston, N.D. — the center of North Dakota’s Bakken shale oil boom.

In November, Bridger received a warning letter from the federal Transportation Department, which regulates pipelines, for a relatively minor violation related to its inspection of the pipeline.

The last major oil spill on the Yellowstone occurred in 2011 , when flood-borne debris ruptured an ExxonMobil pipeline running just beneath the river west of Billings, releasing about 1,500 barrels, or 63,000 gallons, of oil.

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CrossFit Owner Fostered Sexist Company Culture, Workers Say

June 20, 2020 by www.nytimes.com Leave a Comment

When Greg Glassman resigned earlier this month as chief executive of CrossFit, Inc. , excoriated for comments about George Floyd’s death on Twitter and in a Zoom meeting, people who have worked there were surprised that his downfall was tied to accusations of racism.

They had assumed that the reason would be routine and rampant sexual harassment.

Interviews with eight former employees, and four CrossFit athletes with strong ties to the company, reveal a management culture rife with overt and vulgar talk about women: their bodies, how much male employees, primarily Mr. Glassman, would like to have sex with them and how lucky the women should feel to have his rabid interest.

According to the dozen interviewed, Mr. Glassman, 63, has verbally demeaned women, pulled at their clothes to try to peek at their cleavage and aimed his phone’s camera to snap photos of their breasts while they traveled with him for work (sometimes pressuring them to consider sharing hotel rooms or borrowed houses with him).

Through a company spokesman and spokeswoman, Mr. Glassman denied such conduct. The spokeswoman said Mr. Glassman has treated her only respectfully. She suggested that people speaking out against Mr. Glassman are doing so to lessen the worth of his company and then buy it from him. “There is a collective effort to devalue the company and buy it for scraps,” she said.

The former employees say reporting the harassment was not an option. Mr. Glassman is the sole owner of CrossFit, Inc. Perhaps the most powerful female executive there, Kathy Glassman , the affiliate director, is Mr. Glassman’s sister, and they were reluctant to complain to her. There was no human resources manager until 2013. That manager left the company in January and has not been replaced.

A Devoted Community

Now headquartered in Scotts Valley, Calif., CrossFit was created in 2000. It is privately held and currently employs 72 people full-time, down from 137 two years ago. A shift in the company’s focus from competitive games to health initiatives, and the pandemic, have resulted in layoffs. Most departing workers receive severance only if they signed nondisclosure agreements.

Dave Castro, a longtime deputy of Mr. Glassman’s who has taken over as the company’s chief executive, declined to speak for this article.

The spokespeople noted that the CrossFit Games, a professional competition introduced by the company in 2007, rewards men and women with equal prize money, and that the method encourages women to celebrate strength and fitness regardless of body type or weight.

Even those critical of CrossFit’s culture praised its rigorous exercise method, which is taught in thousands of mom-and-pop gyms around the country that have licensed the CrossFit trademark. For some of its devotees, CrossFit is a near-religion .

“There is so much positive in the CrossFit community,” said one female former employee who, like many others interviewed for this article, was granted anonymity because she fears legal retribution from Mr. Glassman. “Do you want to be the person who ruins people’s hopes and dreams and even their businesses? CrossFit is not just about fitness. It becomes your friends, your family, your community. People create their entire lives around it.”

Away from the local gyms where he is venerated, though, the picture of Mr. Glassman clouds quickly. “There was a constant narrative about women,” the former corporate employee said. She described his using vulgarities frequently to refer to women, enumerating which he wanted to have sex with and which he wouldn’t. He “was always descriptive in nature about it,” she said, “bragging about sexual escapades.”

This attitude was so entwined with operations that the Wi-Fi password at a company office in San Diego used to be a sexist obscenity, according to three former employees.

Male employees would rank female professional CrossFit athletes according to how much the men wanted to have sex with them, according to an email from a current CrossFit employee to a former one that was reviewed by The New York Times. (Mr. Glassman denies this, his spokeswoman said.)

One former male employee, who requested anonymity because he didn’t have permission from his current employer to speak to the media, defended Mr. Glassman. “I’m not into painting someone into an evil person just because he might have been misogynistic,” he said.

In 2012, Mr. Glassman agreed to pay a financial settlement to Julie Kelly, a former employee whose lawyers threatened to file a sexual harassment lawsuit, according to three people in the CrossFit community with direct knowledge of the situation. Among other incidents, they related, during a company get-together at a bar, Mr. Glassman stood next to Ms. Kelly and made a vulgar and obscene comment about her to another man. (Mr. Glassman denies this, the spokeswoman said, and would not comment on the settlement.)

Also that year, Mr. Glassman was being driven to the airport by Andy Stumpf, a former Navy Seal with five Bronze Star medals and a Purple Heart who oversaw CrossFit, Inc.’s partnership with Reebok and also worked as Mr. Glassman’s pilot.

“We were in the car and he was chuckling,” said Mr. Stumpf, in an interview. “I asked why he was in such a good mood and he said, ‘I finally finished up with the bullshit with Julie; I had to pay that whore.’”

Ms. Kelly declined an interview request.

‘A Very Elegant Solution’

In an interview, Lauren Jenai , Mr. Glassman’s ex-wife who founded CrossFit with him, said that the employees and athletes were accurately describing the corporate atmosphere she witnessed before divorcing Mr. Glassman in 2013. She also confirmed that Mr. Glassman entered into a financial settlement with Ms. Kelly to avoid a sexual harassment lawsuit. (Ms. Jenai received $20 million from Mr. Glassman as part of their divorce settlement, in exchange for her ownership of the company.)

“He’s the father of my kids. I care about Greg and about CrossFit,” Ms. Jenai said, “but this should be addressed.”

Of the constant sexualized assessment of women, she said, “100 percent. That happens every day, all day.”

Ms. Jenai said the vulgar Wi-Fi password was also used in the home she shared with Mr. Glassman, and was in keeping with the office patois. “They are nasty about women and they talk freely in front of them and it does make my skin crawl,” she said, but not always. “I think it does need to be said that both Greg and I, and our friends, have raw senses of humor. There is a lot of that banter that I don’t find offensive but the difference was, I was in a position of leadership so my job didn’t depend on how I responded to those remarks.”

Ms. Jenai said people were punished for challenging the culture. “If you didn’t agree with Greg, you would be ostracized, especially if you were a female,” she said. “For me, the bigger problem than the language is the culture behind it. If you speak out, you’re out. I’ve seen it firsthand, over and over and over.”

The CrossFit spokeswoman said that Ms. Jenai was motivated to lessen the company’s value so she could buy it. The spokesman forwarded an email sent by Ms. Jenai to Matt Holdsworth, CrossFit, Inc.’s chief financial officer, on June 15, less than a week after Mr. Glassman had resigned.

“My interest and intentions are solely based on wanting to help with current issues CrossFit is facing. I do not want to see the company or brand suffer,” Ms. Jenai wrote. “I’m looking at $50M as an offer — or thereabouts. Is this something CrossFit Inc would consider?”

On Saturday morning, Ms. Jenai confirmed this. “I was approached by an investment company who wants to back me in buying CrossFit,” she said. “In people’s minds, including mine, it would be a very elegant solution. I don’t want to see this thing go down the drain. I’ve talked to reporters because if I say nothing I’m complicit. If I talk to people and don’t tell the truth, I’m a liar.”

‘A Metric Ton of Inappropriate Behavior’

CrossFit’s first workouts were held in a garage in Santa Cruz, Calif. The county sheriff’s department was among Mr. Glassman’s earliest clients. The method has been popular among the police and the military, including those assigned to elite teams like Green Berets and Navy Seals, enhancing the fitness program’s credibility.

At the beginning of 2020, there were more than 14,000 affiliate gyms , according to Justin LoFranco, founder of Morning Chalk Up, a newsletter that covers the CrossFit community. Affiliated gyms pay CrossFit, Inc. an annual fee of $3,000 or less.

The company also draws revenue from CrossFit Games and sponsorships, like one from Reebok, which was valued at about $100 million over the last 10 years.

By the time the deal with Reebok was struck in 2010, CrossFit, Inc. already had a reputation.

Lindsey Johnson, a CrossFit athlete hired by Reebok to train its executives, turned down an opportunity to do additional work for CrossFit, Inc.

“I had heard too many stories about too many things I didn’t want to be a part of,” Ms. Johnson said, including “straight-up bullying and sexual harassment of women. We’ve heard this story before, this isn’t a brand-new situation, someone at the top with a God complex.”

After Mr. Glassman’s inflammatory tweet and comments about Mr. Floyd, Reebok announced that it would not renew the CrossFit deal. Morning Chalk Up reported that more than 1,200 affiliates had plans to disassociate themselves from the CrossFit brand. (“Greg thought Reebok was a terrible partner. He has been dying to get out of” the contract, the spokeswoman said. The spokesman added that only 450 affiliates have officially deactivated, some because of the pandemic.)

Last week, scrutiny of the company intensified after Mr. Stumpf, a speaker on leadership, devoted an entire episode of his podcast, “ Cleared Hot ,” to what he saw while working for CrossFit, Inc. from 2010 to 2014.

“I cannot count the number of times that derogatory and specifically sexual comments were made about female staff members directly in my presence,” Mr. Stumpf said, urging Mr. Glassman and the company to release former employees from nondisclosure agreements.

The CrossFit spokeswoman said that Mr. Glassman believes that Mr. Stumpf is working with his ex-wife to try to buy the company. (“I want nothing to do with CrossFit for the rest of my life,” Mr. Stumpf said, “and no amount of money and no position offered to me would change my position.”)

The former employees interviewed by The Times said much of the mistreatment happened openly, which made them question their own reactions and wonder if they were being too sensitive. Some worried that speaking out would cost them their jobs.

“There was a metric ton of inappropriate behavior but even worse, there was a systematic problem of undermining women,” one former employee said. “The systematic way they chip away at your self-confidence, I had never experienced anything like that.”

CrossFit, Inc. also sometimes flaunted a raunchy attitude toward women in its own promotion.

In a podcast interview for the CrossFit Journal conducted in January 2018, Sevan Matossian, a longtime deputy of Mr. Glassman’s, interviewed Stacie Tovar , an affiliate owner in Omaha, Neb., and a popular, retired professional CrossFit athlete.

Mr. Matossian asked her if she was sexually active with her husband and if she took birth control pills. He told her he preferred a bathing suit photo of her on her website to one showing her in athletic competition. “Your body is freakishly amazing,” he said. Lamenting changes brought about by the MeToo movement, he said, “You can’t even ask your significant other for” oral sex anymore.

“A fitness industry is different from an accounting firm,” the CrossFit spokeswoman said, regarding the podcast.

That summer, the company hosted a CrossFit Health Conference in Madison, Wis. A blown-up poster on social media and near the entrance of the conference featured an illustration of a doctor with money coming out of his white doctor’s coat, surrounded by scantily dressed, buxom women, including one with dollar bills coming out of her short-shorts as she grasps the doctor’s crotch.

Ms. Jenai, who now runs Manifest, which provides testing kits and personal coaching to help people deal with chronic health issues, said that Mr. Glassman’s putting Mr. Castro in charge will not solve CrossFit, Inc.’s problems, since Mr. Glassman retains ownership.

“He is a yes man,” she said of Mr. Castro. “I believe Dave being put in this position, there is no change. It is the status quo.”

The CrossFit spokesman said it was untrue that Mr. Glassman would still be calling the shots. “He wants to retire and home-school his kids,” he said.

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