Iowa lawmakers rammed through $1.36 billion in tax incentives for an Indian conglomerate's steel plant in a single day, less than two weeks before early voting begins in one of the nation's tightest swing districts.
The special session Friday saw the Iowa House vote 75-17 and the Senate 28-19 to hand Mesabi Metallics — owned by India's Essar Group — a decade of tax credits worth roughly $777,000 per permanent job promised. Gov. Kim Reynolds signed it into law that night. The rush came after President Trump announced the deal Monday as the "largest steel plant in U.S. history," catching the very lawmakers who'd have to fund it completely off guard.
When Commerce Secretary Howard Lutnick told reporters at the White House "the deal is done" on Monday, Iowa lawmakers still hadn't received details to review, according to CBS News. They got less than a week to consider over a billion dollars in commitments before Friday's vote.
The plant is proposed for Lee County, population 32,000, in Iowa's 1st Congressional District — where Republican Rep. Mariannette Miller-Meeks won her 2024 recount by just 798 votes. Sabato's Crystal Ball recently moved the race from "toss up" to "leans Democratic." The timing isn't subtle.
Protesters at the statehouse carried signs reading "No Steel Steal!" The $1.36 billion breaks down to about $777,000 per permanent job over 10 years. Proponents say that math leaves out roughly 6,000 construction jobs, but those are temporary by definition.
The company behind the pitch has a track record that should give any taxpayer pause. Essar Group announced a $1.6 billion mine and steel plant in Nashwauk, Minnesota, in 2008, promising more than 700 permanent jobs. The steel mill plans were dropped in 2015. Essar Steel Minnesota filed for bankruptcy in 2016, reemerged as Mesabi Metallics, and later came back under Essar's control. The India-based Essar has also received billions in loans from Russian state-owned bank VTB, according to local media reports CBS News has not independently verified.
KCCI reported the legislation expands Iowa's MEGA program, doubling the investment tax credit cap from 5% to 10% for one qualifying project in a rural county. The bill includes clawback provisions allowing the state to recover incentives for fraud or misrepresentation, and requires jobs to pay at least 140% of the state's qualifying wage threshold. But the memorandum of understanding between the state and Mesabi hasn't been made public — neither side provided a copy when asked.
CBS News highlighted the company's bankruptcy history, the Russian bank ties, and the swing-district political calculus. KCCI focused on the legislative mechanics and the safeguards. What neither outlet could answer is whether those safeguards mean anything when the deal was already declared "done" before lawmakers saw a single page.
Nobody in Iowa wants a repeat of Foxconn. In 2017, Trump and Foxconn promised a $10 billion Wisconsin plant with 13,000 jobs. By 2021, the plan had collapsed.
Iowa taxpayers are now on the hook for a billion-dollar bet on a company that already went bankrupt on a similar promise — and they're supposed to trust the fine print of a deal they aren't allowed to see.
