Updated 11:05 a.m. MDT 9/27/19
KANAB — In the months before being elected to the Kane County Commission last year, Andy Gant paid a visit to a local advisory committee he would soon start working with. His goal: to introduce himself as the newest official in town.
He had already beat out his sole opponent Shawna Cox in the Republican primary, and, as the presumptive commissioner-elect, he received a warm welcome at the September meeting of the Kane County Resource Development Committee — a group that develops natural and economic resource policy for the county.
But when Gant alluded to a new, under-the-radar project before they adjourned, then-Commissioner Jim Matson asked him to say more, according to a recording of the meeting.
Gant hesitated, and asked if his remarks were confidential.
“It’s a public meeting, but nobody’s here,” said Mary Reynolds, the then-Kane County resource management planner, before offering to turn off the recorder.
Gant consented, and the recording stopped.
In separate interviews with KUER, all six meeting attendees agree on what came next: an overview of Southern Red Sands, a start-up “frac sand” company run by Gant and Chad Staheli, a former general counsel for a national healthcare provider.
But when it comes to the finer points of the discussion, some memories proved sharper than others.
“That’s when he got into a lot of details about who the investors were and that Mitt Romney was one of the investors,” Reynolds said. “But we were not to talk about it.”
Government officials holding a public meeting may not enter into a closed session unless a quorum is present and has a two-thirds vote in favor of closing the meeting, according to state law. Even if a meeting is closed, a complete audio recording of the closed meeting must be archived.
There are several exceptions — such as discussions of an individual’s professional competence — when it is permissible not to record a closed meeting but none of them are applicable here, said David Reymann, a First Amendment and media law attorney. He added that the requirement allows the public to learn what was discussed in the event that a meeting was improperly closed.
“The idea behind the statue is that when conducting the public’s business you need to do that in public,” Reymann said, adding that when the laws are violated, “the public loses the ability to both understand the process and then hold public officials accountable for the decisions that they’re making.”
Where The Start-up Started
The roots of Southern Red Sands reach back to early 2018. The company was originally called Integrated Logistics and was an offshoot of Salt Lake City-based Integrated Energy Companies, which offers services to the oil and gas industry. In July 2018, the company was spun off as Southern Red Sands, according to state Department of Commerce records.
The operation seeks to mine hundreds of thousands of tons of sand per year. The company plans to mine a 100-acre section of land owned by the State of Utah Institutional Trust Lands Administration, or SITLA, 11 miles north of Kanab but holds mining claims across 13,000 acres of the surrounding area.
Kanab City Council Member Byard Kershaw confirmed Reynolds’ account, adding that the other name mentioned was prominent philanthropist Kem C. Gardner, who is also chairman of Integrated Energy Companies. The Gardner Company, an eponymous Salt Lake City-based real estate firm, is Southern Red Sands’ principal investor.
Those connections to the project and concerns of potential conflicts of interest have stirred controversy as some residents worry that without robust government oversight, the sand mine could affect their local water supply and alter the red-rock landscape that draws tourists to this corner of the state.
But the previously unreported whisperings of the project spur additional questions about how the public’s business is carried out in private when companies with strong political ties and deep pockets are involved.
Kershaw said he spoke out because he wanted to be “forthcoming” with his recollections of the meeting. Charlie Saba, Jim Matson and Tony Chelewski each said separately they could not recall specific details of the conversation.
In a text message sent to KUER, a Romney spokeswoman said the senator is not an investor in the project. Romney’s Senate Financial Disclosure statements make no reference to Southern Reds Sands, Integrated Sands or Integrated Logistics — the two names previously used by the company.
Gant said he remembered the moment when the tape recorder got turned off. But when asked specifically about comments on Romney’s investment, Gant said, “I have no recollection of discussing investors ... and if I said it, I was lying.”
When asked whether a sitting U.S. senator representing the state of Utah had a financial interest in Southern Red Sands’ mine becoming operational, Gant said, “You’d have to go higher than me to find that out.” He identified the two people above him as “Kem” and “Chad.”
Staheli, Southern Red Sands CEO, told KUER that the fledgling mining operation has only two investors: Gardner Company and Vere Capital, which Staheli also co-owns. In an emailed statement, he acknowledged that Gardner and Romney are “good friends with a long history of working together,” but said the two have not worked together on this project.
“Mitt Romney has never been an investor directly or indirectly (through a parent company, family member, etc.) in Southern Red Sands or any precursor company,” he said in the email. “Not only is he not an investor, I have had zero conversations with Mr. Romney or anyone who manages his investments regarding this project.”
In a statement to KUER, Kem Gardner said that “Mitt Romney is not now nor has he ever been an investor in Southern Red.” He added that the senator has never even been approached to invest in the project.
Staheli and Gant are related through marriage; Staheli’s wife is Gant’s niece. Both Southern Red Sands employees also are related to Mike Noel, following the former state representative’s 2017 remarriage to the sister of Gant’s wife. Noel serves as the executive director of the Kane County Water Conservancy District, which has agreed to supply the project half of its water.
Local residents have pointed to potential conflicts of interest because of familial relations among key players. Staheli says he welcomes the scrutiny but that the worries are unsubstantiated.
Mine opponents have also suggested that there is not enough separation between Gant’s dual roles as Southern Red Sands employee No. 2 and county commissioner.
But Gant says such concerns are baseless, as the county has little oversight capacities over the SITLA parcel where the company seeks to mine.
“I’d love to have somebody explain to me or point me to where I can do some research on where the two are connected,” he said.
David Fuchs is a Report for America corps member who reports from KUER's Southwest Bureau in St. George.