My phone keeps ringing, with calls from people who want to talk about Meridian Energy Group, the company that wants to build an oil refinery beside Theodore Roosevelt National Park. I’ve talked to engineers, accountants, investors and salesmen, and all are pretty skeptical about this company’s intent. There’s a common theme: A lot of people stand to lose a lot of money on this scheme by the California slicksters.
WHERE’S THE BIG MONEY?
My latest phone call is from someone who knows about investors, and his message is that, while Meridian has been successful in raising $50 million from unsuspecting individuals over the last 5 years, at that rate, it will take them another 100 years to get the funds together to build their refinery—if they don’t spend it all on highly paid executives in the meantime. As of today they list a CEO, a president, five directors, five executive vice presidents, seven vice presidents, and a senior risk management adviser on their website, and if they all get paid like those I mentioned yesterday, they’re going to burn that $50 million up pretty quickly. Because they’re still more than three years away from selling their first gallon of gasoline.
See, they’ve mostly raised money only from individuals so far, people who have responded to smooth-talking salesmen, like the fellow I wrote about a few months ago who invested his entire 401(k) in company stock.
This caller says those investors have been promised an ownership stake of 25% in the refinery. Their $50 million is about five percent of what the company will need to build the plant, based on their current estimate of what it will cost—about a billion dollars.
Though Meridian has shoveled some dirt around doing some site preparation over the past several years, they have yet to announce they are going ahead with construction of the refinery.
In order to raise the money for construction, my caller says, Meridian is (likely) going to have to access institutional funds from serious professional investors, like hedge funds, private equity funds, banks, and insurance companies. Those are the sorts of investors that have not been “wowed” by the hype that Meridian has been shoveling to date. Those big investors care about the security of their invested funds, and the prospects their investment has, to earn an acceptable return for their clients. Those people want things buttoned down as far as contracts go. In short, they want to KNOW their money will make money before they will part with a dime of it.
My caller knows numbers, and he says private investment banking companies, which Meridian has been counting on to help raise the funds from big banks like Morgan Stanley, have bailed out. Meridian announced with a big splash of publicity in late 2018 that they had signed an agreement with Morgan Stanley, but that agreement expired in December of 2019, and I can’t find anyone to tell me if it has been renewed. My caller is pretty skeptical.
The news I reported on yesterday, about the company not being able to pay their employees, and the $2.2 million lien filed by their engineering firm last winter, can’t be instilling much confidence in big banks with the hundreds of millions of dollars it’s going to take to build a refinery.
The last thing my caller said to me was “I’m pretty sure these guys are headed for the front page of the Wall Street Journal when it all blows up, at the least, but they REALLY deserve to go to prison.”
WOULD YOU HIRE THIS MAN TO BE YOUR LAWYER?
And speaking of people committing crimes and things like that, there’s the strange case of the lawyer who has worked, maybe is still working, for the company, named Frank Goseco.
At various times, Frank Goseco has been listed in various publications, as President, Executive Vice President, General Counsel, Board Member, and Board Secretary, of Meridian Energy Group, Inc. I’m not sure what his title is today.
Most recently, in a filing with the U.S. Securities and Exchange Commission, dated March 4, 2020, Goseco was listed as Board Secretary and Executive Vice President of Meridian Energy Group Inc. and he signed the SEC registration form on a $60 million stock offering on behalf of the corporation.
But Meridian’s page on the website Buzzfile, which calls itself “The Most Advanced Company Information Database,” lists Frank Goseco as the company president, saying you can reach him at (949) 207-3815. I might try calling him one of these days.
He’s not the company’s president today, according to Meridian’s website, although he might have been at one time. Meridian spins through directors and executive officers so fast it’s nearly impossible to keep up with them. It must cost them a pretty penny just to keep their website updated.
Goseco’s name is nowhere to be found on the Meridian website today, except for a press release dated October 10, 2018, which quotes “Frank Goseco, Meridian’s EVP and General Counsel.” Which seems to me he was acting as Meridian’s lawyer at that point.
That’s interesting, because according to the State Bar of California’s website, Goseco’s law license has been suspended, and he has been deemed “not eligible to practice law in California,” since 2015. He was actually disbarred in January 2019.
The website All California Attorneys (there are 260,000 of them—good grief) shows Goseco’s history of problems with the State Bar. It says Goseco’s law license was suspended because of three convictions—two for DUI, and one for “aggravated trespass,” and failure to comply with provisions of his probation. They provide some details. They’re kind of fun, and yet sad, to read, considering he’s been a highly paid executive who wants to build a refinery next to our national park.
The earliest criminal case was a hit and run committed in Irvine, California, the report says. Goseco left the scene of the accident, but the victim was able to give officers a description of his car and its license plate number, and police spotted the vehicle near Goseco’s home a few days later. Goseco attempted to evade officers, but eventually was stopped. As he got out of the car in his driveway, they determined he was under the influence of alcohol. Busted.
In the second case, the report says, Goseco broke into a stranger’s apartment after somehow obtaining a key. The resident called police after finding Goseco eating salami he’d taken out of the refrigerator. In that case, officers encountered him outside in the apartment complex and determined he’d been drinking. There are conflicting reports about whether he was wearing any clothing at the time. Busted again.
The third time Goseco was arrested was in 2013, after a traffic accident. The report says Goseco jogged away from the scene barefoot and was later found at his home, injured and with bloodstains on his clothing.
Repeated probation violations, mostly for failing to complete his alcohol rehabilitation treatments, led to his license suspension and eventual disbarment.
I swear, I am not making this stuff up. You can look it up yourself. Here’s an interesting newspaper story.
And after all that, Meridian Energy Group, which wants to build an oil refinery next door to Theodore Roosevelt National Park, hired this guy to be their President, or Executive Vice President, or General Counsel, or Board Member, or Board Secretary, or maybe all of the above. What kind of company is this? Do we really want them in North Dakota? As neighbors to our state’s number one tourist destination?
I don’t know what Frank Goseco’s employment status is today, but I hope he’s getting enough to eat so he doesn’t have to steal any more salami.
A WORD OF CAUTION FOR DICKINSON
Finally, I just want to throw out a word of caution to folks out in Dickinson, the nearest urban center to this proposed refinery.
Last fall The Dickinson Press reported “The City of Dickinson is investing roughly $1 million in a new pipeline to sell its reuse water to Meridian Energy Group’s Davis Refinery in Belfield.”
Last week the North Dakota Department of Environmental Quality signed off on a permit to allow the construction to go ahead. The “Categorical Exclusion Determination” signed by David Bruschwein, the DEQ’s Director of Municipal Facilities, authorizes the city to apply for a Clean Water State Revolving Fund loan of $1,384,000 to finance the project.
That’s a loan, not a grant. To be paid back by revenue from the sale of water to Meridian—or by the city’s taxpayers. Be careful, Dickinson City Commissioners. You might want to get the cash up front from these guys. They have a history of not paying their bills.
ONE MORE THING
I got this anonymous e-mail a month or so ago and forgot all about it, but it is worth sharing. The person who sent it seems to know something about the project, oil, and refineries. Which is more than anyone can say about the executive team at Meridian, I guess.
Well, there are some updates on the proposed refinery. If I get any more phone calls or e-mails, I’ll keep you posted on what I learn. These people make my job easy.