How Groningen got caught up in cronyism by the arrival of Google By Bas Haan (NOS - Dutch Public Broadcasting)
Original Dutch version here: https://nos.nl/nieuwsuur/artikel/2380318-hoe-ze-in-groningen-in-de-ban-raakten-van-vriendjespolitiek-door-de-komst-van-google (translated for nettime by deepl with slight edits) In Groningen in the Northeast of the Netherlands, inexplicable million dollar deals were made by the government in the trade in land and the granting of windmill rights. With these transactions and secret pledges, Groningen Seaports (GSP) acted outside its powers. One family business in particular, Bakker Bierum, made millions thanks to these government deals. But there are also victims. In addition, the cronyism laid a foundation for legal disputes that still drag on. The deals were made over the past decade, since Google began preparations for a mega data center in Eemshaven that opened in late 2016. "The cloud has landed," the province of Groningen proudly reported on September 23, 2014 when it was publicly announced that the data center would be located in the polder at the northernmost tip of the Netherlands. GSP, a privatized port authority with the government as its sole shareholder, closed the deal. Google invested many hundreds of millions in the region. But with the capital came the temptation for far-reaching cronyism. Professor of private and notarial law Leon Verstappen: "That's when the money truck comes driving up. I think that a lot of administrators, a lot of private individuals and a lot of farmers, when they found out about this, thought: well, what can I get out of this?" In Groningen, this causes GSP to fool its shareholders (the province and two municipalities involved). This is evident from a reconstruction by Nieuwsuur based on dozens of (notarized) deeds, purchase agreements, confidential valuation reports, e-mails, and other public and secret documents. Directors acted without authority and flouted their own rules. While civil-law notaries drew up deeds that concealed secret agreements and contained inaccuracies. Nico Wiertsema is one of the farmers who suffered: "It is a confirmation of what you have always suspected. Inside information is being used and nobody is doing anything about it. People protect each other." Wiertsema has been fighting Groningen Seaports for years. He lost his first court case, but even then the judges established in their ruling that Wiertsema had been misled by Groningen Seaports. Since then there has been much more evidence of deceit, deception and unauthorised action. The appeal in the case is still pending. Professor Verstappen on Wiertsema's struggle: "I can imagine that he feels cheated. I can imagine that he thinks: I've really been conned now. And also by the government." The consequences of the nepotism are still visible. At the moment, the favored family business Bakker Bierum is building windmills right next to the Google data center, which they owe to secret agreements with GSP from the period when Google came to Groningen. The tinkering with hierarchies, land trade and windmill rights starts ten years ago. Under the code names 'Orange' and 'Saturn', tech giants Microsoft and Google were secretly negotiating with GSP to place data centers in the area. GSP is in a hurry and wants land. The GSP board, led by Harm Post, is not waiting for formal decision-making processes. Even though GSP has no authority outside Eemshaven, Post is already buying up land for a new industrial area. GSP is offering farmer Wiertseman a good deal: 8 million euros for his farm and all his land, part of which is located exactly on the site where Google wants to build the data center. Wiertsema: "When they came up with the plans, I said to my wife: I am glad that it is the government. Then we don't have to worry. When a project developer comes, you know, he has only one goal: to make a profit. Preferably to get their hands on that as cheaply as possible, on your back. And I didn't expect that from a government." Wiertsema signs the purchase agreement with the government and already buys a new farm. From that moment on it goes wrong. GSP acted too quickly with Wiertsema. For a data center it not only needs land from farmer Wiertsema, but also from other farmers, among others from the family business Bakker Bierum. This company asks much more money for the land than GSP can or is willing to pay. In order to be able to buy the land from Bakker Bierum for an acceptable amount, GSP secretly promises the family company millions in benefits, about which more in a moment. Because first GSP does something else: the already concluded purchase agreement with farmer Wiertsema has to be cancelled. In Northeast Groningen inexplicable million dollar deals were made by the government in the trade in land and the granting of windmill rights. With these transactions and secret pledges, Groningen Seaports (GSP) acted outside its powers. One family business in particular, Bakker Bierum, made millions thanks to these government deals. But there are also victims. In addition, the cronyism laid a foundation for legal disputes that still drag on. The deals were made over the past decade, since Google began preparations for a mega data center in Eemshaven that opened in late 2016. In this comprehensive article you can read all about the case. The reading time is about 20 minutes. A short version, the news article, can be read here. "The cloud has landed," the province of Groningen proudly reported on September 23, 2014, when it was publicly announced that the data center would be located in the polder at the northernmost tip of the Netherlands. GSP, a privatized port authority with the government as its sole shareholder, closed the deal. Google invested many hundreds of millions in the region. But with the capital came the temptation for far-reaching cronyism. Professor of private and notarial law Leon Verstappen: "That's when the money truck comes driving up. I think that a lot of administrators, a lot of private individuals and a lot of farmers, when they found out about this, thought: well, what can I get out of this?" In Groningen, this causes GSP to fool its shareholders (the province and two municipalities involved). This is evident from a reconstruction by Nieuwsuur based on dozens of (notarized) deeds, purchase agreements, confidential valuation reports, e-mails, and other public and secret documents. Directors acted without authority and flouted their own rules. While civil-law notaries drew up deeds that concealed secret agreements and contained inaccuracies. Nico Wiertsema is one of the farmers who suffered: "It is a confirmation of what you have always suspected. Inside information is being used and nobody is doing anything about it. People protect each other." Wiertsema has been fighting Groningen Seaports for years. He lost his first court case, but even then the judges established in their ruling that Wiertsema had been misled by Groningen Seaports. Since then there has been much more evidence of deceit, deception and unauthorised action. The appeal in the case is still pending. Professor Verstappen on Wiertsema's struggle: "I can imagine that he feels cheated. I can imagine that he thinks: I've really been conned now. And also by the government." The consequences of the nepotism are still visible. At the moment, the favored family business Bakker Bierum is building windmills right next to the Google data center, which they owe to secret agreements with GSP from the period when Google came to Groningen. The tinkering with powers, land trade and windmill rights starts ten years ago. Under the code names 'Orange' and 'Saturn', tech giants Microsoft and Google were secretly negotiating with GSP to place data centers in the area. GSP is in a hurry and wants land. The GSP board, led by Harm Post, is not waiting for formal decision-making processes. Even though GSP has no authority outside Eemshaven, Post is already buying up land for a new industrial area. GSP is offering farmer Wiertseman a good deal: 8 million euros for his farm and all his land, part of which is located exactly on the site where Google wants to build the data center. Wiertsema: "When they came up with the plans, I said to my wife: I am glad that it is the government. Then we don't have to worry. When a project developer comes, you know, he has only one goal: to make a profit. Preferably to get their hands on that as cheaply as possible, on your back. And I didn't expect that from a government." Wiertsema signs the purchase agreement with the government and already buys a new farm. From that moment on it goes wrong. GSP acted too quickly with Wiertsema. For a data center it not only needs land from farmer Wiertsema, but also from other farmers, among others from the family business Bakker Bierum. This company asks much more money for the land than GSP can or is willing to pay. In order to be able to buy the land from Bakker Bierum for an acceptable amount, GSP secretly promises the family company millions in benefits, about which more in a moment. Because first GSP does something else: the already concluded purchase agreement with farmer Wiertsema has to be cancelled. Out of the blue, Wiertsema is told that the government will not buy his farm and land after all. So the sale will not go through. GSP appeals to an article in the purchase agreement that the general board should have approved the purchase, which did not happen. According to GSP this was because of disappointing economic conditions. But in reality GSP never submitted the purchase agreement to the general board. GSP itself wanted to get rid of the deal, so it could make a better deal with Bakker Bierum. That same afternoon Bakker Bierum presented itself as an interested party for our agricultural land. Wiertsema knows nothing about this - the court will later establish that GSP 'misled' him - but he now has a big problem. Because: the sale is not going through, while he has already bought a new farm. Besides, GSP has already told Wiertsema that he cannot earn money from his land with windmills. There will never be any on his land, GSP says. "No data center, no windmill," Wiertsema concludes based on the information from GSP. Instead, GSP informs him that since GSP will not buy his land from him, the best thing he can do is sell it as farmland to someone else. Literally a few hours later a buyer, Bakker Bierum, showed up. Wiertsema: "That same afternoon that we were informed, Bakker Bierum presented itself as an interested party to our broker for our agricultural land." Wiertsema has no choice. Bakker Bierum buys part of Wiertsema's land: including the part needed for the data center which Wiertsema had been told was no longer going to happen, and on which he was also not allowed to put a windmill. Bakker Bierum pays 6.23 euros per square meter, a market price for agricultural land. It is remarkable that Bakker Bierum does not ask for a quality survey of the farmland prior to the purchase. Bakker Bierum buys the land 'blind'. Not much later it became clear why Bakker Bierum was closing a golden deal. The data center will be built after all. And GSP is going to buy the land after all. Bakker Bierum now appears to be willing to sell its land to GSP. For 16.91 euros per square meter, determined by an independent appraiser. GSP buys land from Bakker Bierum for a total of over 13 million euros. On the piece of land alone that Bakker Bierum previously bought from Wiertsema and that it now sells to GSP, the family business makes a profit of almost 900,000 euros. The appraised market value of 16.91 euros will be paid by GSP to all landowners involved. At first glance this seems as it should be: all owners receive from GSP, a government company, the same appraised amount for their land that is needed for the development of Eemshaven. But what the selling farmers do not know is that GSP has already sold their land to Google long before GSP bought it from the farmers. GSP had already concluded a purchase agreement with Google for 48 euros per square meter, three times as much as GSP pays the farmers for the land. When GSP first approached farmer Wiertsema to buy his land, the port authority not only said it was in a hurry, but also that it would buy the land through expropriation if necessary. GSP now denies that it ever threatened expropriation, but it is also what other stakeholders let Newsuur know. Moreover, it is black and white. Not only in the minutes that Wiertsema's broker made at the time of the negotiations, but also in several notarial deeds in which GSP buys land from farmers for 16.91 euros per square meter. Those deeds state that the land price was established "to prevent expropriation", as for example in GSP's deed with Bakker Bierum. The fact that GSP now denies that they ever threatened with expropriation can be explained by the fact that it was a bluff and even an illicit bluff. GSP has never been authorized to expropriate. It has since acknowledged that itself. GSP does not give an explanation why it is in the notarial deed. The land price for which the land was bought from all owners "to prevent expropriation" is based on this valuation report. It states that the "market value" of the land is 16.91 euros per square meter, exactly the amount that all landowners eventually received. But, according to government document requests from NOS Nieuwsuur, there is another valuation report. That report is about the same land and was prepared on the same day by the same appraisers. Only here the "market value" according to the appraisers is much higher: it varies between 26 and 76 euros per square meter. The 48 euros per square meter that Google ultimately pays for the land, three times as much as the selling farmers get, falls into that range. The price difference between 16.91 and 48 euros for land that will be forwarded from the farmers to Google via GSP within a few weeks is explainable, according to GSP, but they refuse to give a breakdown of the costs that would have been incurred. GSP has since acknowledged in court that profit is an important explanation, but exactly how much profit GSP made on the land they bought "to avoid expropriation" they refuse to say. What the selling farmers also do not know is that they all get 16.91 euros, except for one landowner: Bakker Bierum. He secretly receives much more from GSP. Bakker Bierum does not only have the extra advantage of almost a million Euros thanks to the "passing through" of the land of farmer Wiertsema, but besides that advantage Bakker Bierum also closes a secret extra contract of GSP. Verstappen: "Obviously something has to be arranged. Otherwise you wouldn't conclude a second contract as well. You could call that a side letter. Then it seems obvious that people don't want to bring something out into the open." In the settlement agreement, the Bakker family gets commitments for at least six wind turbine rights. Commitments that could earn the family business millions in profits over the years. The contents of the agreement are being kept secret by all parties despite repeated requests from Nieuwsuur. The province says they don't even have the agreement in their possession. Incomprehensible, since it is the government that entered into the agreement. At least, according to the notarial deed signed on behalf of the government, which mentions the existence of the settlement agreement, but not its contents. With this secret agreement, not only GSP but also the notary violates the rules. The benefits that Bakker Bierum gets with the secret agreement are worth a lot of money, and thus should have been mentioned in the deed. "Because the notary has to mention the quid pro quo, or monetary consideration under Article 46 of the Notary Act," said Professor of Notarial Law Leon Verstappen. The land purchases by Google were prepared by law firm Stibbe. The very first agreement, in which GSP director Harm Post sold land to Google for over 20 million euros even before that land had been bought from the farmers involved, was signed at Stibbe's office. Post was not formally authorized for that sale. Nevertheless, that purchase agreement was later ratified by a Stibbe notary. Stibbe and the civil-law notaries involved, who have since set up their own firm QGM, did not want to answer any questions about the content because of confidentiality concerns. Nieuwsuur also approached civil-law notary Bolken from Delfzijl because of various notarial deeds that passed through her hands: including the deed in which a reference to the settlement agreement between GSP and Bakker Bierum is included, but in which the content of that agreement (the valuable promises for windmill rights) is concealed. News Hour also wanted to ask Bolken about the deed in which the windmill rights are given, in which the conflict of interest of an official of GSP who is also director of the contractor appears. Notary Bolken, however, let it be known in advance that he would not answer questions. GSP is formally in error in this matter in several ways. GSP makes promises for rights on windmills in an area for which it has no authority at all. GSP director Post, and later his successor König, thereby sign documents on behalf of the government without a formally arranged mandate. For every contract of more than 5 million the shareholders, i.e. the province and the municipalities, must give their approval in a formal shareholders' resolution. But there is none. In addition, there is another reason that GSP is acting without authority. This is because the entire area of the Google data center will not be added to GSP's management area until 2019. So GSP made the promises of windmill rights to Bakker Bierum outside the area it had control over at that time. The unauthorized pledges of windmill rights then ensure that Bakker Bierum makes a lot of money. For example, last October Bakker Bierum received 800,000 euros thanks to one such promised windmill right. That eight tons was the outcome of a legal battle with another windmill operator, who also wanted to build a windmill on virtually the same spot. That other party, Waddenwind, had been developing a wind farm for years and had all the permits. But then it suddenly appeared that Bakker Bierum was allowed to build a windmill on the same spot, promised by GSP. Waddenwind then had no choice, to avoid years of uncertain litigation, but to buy off Bakker Bierum. That happened last October. Waddenwind paid Bakker Bierum eight tons. In exchange Bakker Bierum only has to renounce the promise of GSP for a windmill. Extra spicy: this windmill right was promised to Bakker Bierum at exactly the location where farmer Wiertsema had earlier been told by GSP that there would never be a windmill. Farmer Wiertsema still can't get over it when he visits his former piece of land next to the Google data center that has been built in the meantime: "Here on this spot, where we were told at the time that it was not possible to build a windmill, here Bakker Bierum did get the right to erect a windmill. Agreed in secret." The most startling windmill deal that Bakker Bierum received is one with a conflict of interest. A subsidiary of Bakker Bierum, Delta Noord, entered into a contract with GSP in 2017 for the installation of a windmill in Eemshaven on GSP land. The notarial deed of that contract refers to the previous agreements between GSP and Bakker Bierum when everything was settled in the settlement agreement. According to this deed the subsidiary of Bakker Bierum pays 10,000 euros per year to GSP to operate the windmill in Eemshaven. This is a very favorable deal for Bakker Bierum, because the normal price for such a windmill site is somewhere between 50,000 and 100,000 euros per year. One windmill can generate as much as a million euros in electricity per year. This wind turbine provides Bakker Bierum with a benefit of half a ton a year or more just because of the low lease price. What is extra piquant is that there is talk of a 'double cap'. One of the directors of Delta Noord, Mrs. W. Bakker, is in fact also a land agent at GSP. There is not one word about this in the deed. Also an explanation for the far below market value determined lease price is missing in the deed. GSP denies that there is any conflict of interest because Mrs. Bakker would not be authorized to make decisions in leasehold matters. Professor Verstappen: "Of course it is a conflict of interest. And obviously that should have been included somewhere in that decision making." But there is more. The most lucrative deal between Bakker Bierum and the government, it concluded directly with the province. It involves an experimental agricultural project near the dike along the Eemsmond River. For that project, the province needs over fifty hectares of agricultural land, which is owned by Bakker Bierum, in 2017. Because of the social importance of the project, the province could obtain that land through expropriation. The market value of the piece of agricultural land at that time is about 3.5 million euros. But whereas the government previously threatened expropriation in the case of the Google data center, in this case the province decides to pay Bakker Bierum what it wants. "I think the owner has a golden deal here.” Jacques Sluysmans Professor of expropriation law Jacques Sluysmans: "Expropriation is an instrument that we have known in the Netherlands since 1841 and that is used on a very large scale every year, so this reluctance to use it here just seems unjustified to me." According to Sluysmans, expropriation should and could have been used here, and that is precisely what expropriation is for. Consequence of the non-expropriation: the province does not buy the land, but takes it on lease for 26 years. In doing so, it pays for the lease more than double what the land would be worth if purchased. And the province pays the entire lease amount at once in advance. This means that Bakker Bierum at a stroke receives no less than 8 million euros for land with a market value of 3.5 million. With the guarantee that after 26 years it will get all that land back in its old state, and can then sell it for millions. "I think the owner has a golden deal here," Sluysmans said. "And that the province, if they hadn't set aside the expropriation tool in advance, could have done this project for a lot less money." The province maintains that the 8 million euros for the lease of 50 hectares of land is a fair price, given the special nature of the project. In addition, the province notes - without actually asking Nieuwsuur - that according to a lawyer consulted by the province, there is no question of illegal state aid. There is no valuation report to support any of that. It was not drawn up prior to the agreement. Sluysmans: "The fact that there is no valuation based on that is almost unbelievable to me. I have seen that you have asked for it and it has been said: it is not there. But that almost doesn't go over well with me." Bakker Bierum would not comment on the issue, just as it would not answer any questions. The only thing the spokesperson for the Bakker family points out is that a lot of tax had to be paid on the 8 million euros. According to professor Verstappen, the fact that things could go so wrong in recent years is connected to the privatization of Groningen Seaports, GSP. That was intended to give the port authority more clout. Verstappen: "But there's also another side to it. There's less supervision because you're at a distance. With all the consequences that entails." Until 2013 GSP was a public company, but it was privatized in July 2013 under the leadership of director Harm Post into an NV, with the government (province and municipalities) as the sole shareholder. In practice, with the privatization, government oversight of GSP's actions disappeared. The deputies with final responsibility regularly signed documents of which they did not know details. And GSP unauthorizedly put signatures to agreements that are highly questionable. Verstappen: "That is the consequence of privatization." Meanwhile, Wiertsema is fighting on in court to get satisfaction for having been misled. Waddenwind also wants to recover its loss of eight tons due to conflicting wind turbine rights in the future. Groningen Seaports, meanwhile, no longer responds to questions from Nieuwsuur. Earlier, in 2019, in response to a WOB request from Nieuwsuur, it did provide an explanation for the large price differences in the purchase and sale of the land. But even then, GSP refused to specify the alleged costs incurred or to indicate exactly how much profit had been made. During a court hearing at the court in Leeuwarden, at the end of April, a representative of GSP did acknowledge that the settlement agreement was necessary to be able to buy the land from Bakker Bierum. He also acknowledged that for GSP making a profit was and is an important motive. GSP did not answer further questions about its unauthorized actions. Also not to questions about the settlement agreement between GSP and Bakker Bierum. As far as GSP is concerned the agreement remains secret. The province could answer many questions, but chooses not to. Just like GSP it refers to the ongoing lawsuit with Wiertsema. The province did search for the settlement agreement between GSP and Bakker Bierum on request of Nieuwsuur, but says that this cannot be found in the province archives. Requesting the document from GSP, the province did not want to do so. Also the crucial shareholder decision, which was required for the purchases and sales by GSP, cannot be found in the archives, according to the province. Mark Boumans, the then deputy of the province who signed the land purchases on behalf of the government, says he was never informed about the secret settlement agreement with Bakker Bierum. He also did not know that the land he was purchasing on behalf of the government had already been sold to Google for a much higher amount at that time. Finally, he assumed that there was a shareholder resolution justifying the purchase. Because he does not have access to the crucial documents, which according to the province are not in the archives, he refrains from commenting and refers to the current provincial administration. He does let it be known that he would "very much welcome" answers to all questions from GSP. Google leaves it at the statement that it has paid market amounts for the land. The company does not answer other questions, such as whether they were aware of the windmill rights that were promised to Bakker Bierum right next to their data center. Former GSP director Harm Post does not want to comment on anything and refers to the current management of GSP. # distributed via <nettime>: no commercial use without permission # <nettime> is a moderated mailing list for net criticism, # collaborative text filtering and cultural politics of the nets # more info: http://mx.kein.org/mailman/listinfo/nettime-l # archive: http://www.nettime.org contact: nett...@kein.org # @nettime_bot tweets mail w/ sender unless #ANON is in Subject:
