Editor's note: This story was produced for the ear and designed to be heard. If you're able, WCMU encourages you to listen to the audio version of this story by clicking the LISTEN button above. This transcript was edited for clarity and length.
Gabe Schall: A bitcoin mine in the eastern UP is at the center of a lawsuit with a K-12 school. The school says the mine is too noisy and is making it hard for students to focus.
For months, the operators of the mine have been shrouded in mystery. But now, WCMU has learned more about the web of companies operating the mine and the man whose name is on the permit.
WCMU's AJ Jones spoke with news director Rick Brewer.
Rick Brewer: AJ, can you remind me, what exactly is this dispute all about?
AJ Jones: So, Rick, Lake Superior Academy is a Montessori K-12 school in Dafter Township that focuses on outdoor learning. They are suing the owners of a bitcoin mine running 24/7 across the street. The school says the noise hit about 70 to 75 decibels at one point. That disrupted school activities, the school says. The school held off on an expansion project that would have added 40 new students because of the noise. They told us in June it made special needs students cover their ears, the noise from the Bitcoin mine, that is.
And Lake Superior Academy is suing, seeking to end the noise emanating from the mine.
The companies say that they have attempted to mitigate the noise. They put hay bales up against the Bitcoin mine, that's sort of the outer lining of the Bitcoin mine. And they say that brought the noise down a little bit. The companies reject the claims of damage done to the academy, so they're currently in litigation.
The thing is the operators of the Bitcoin mine were mostly not well known to the locals. Superintendent Susie Schlehuber told us back in June that the mine operators were not forthcoming about their employers.
Susie Schlehuber: “The longer we learn about them, the less we know, the more questions we have.”
AJ: She said two men who maintain the site appeared at a township meeting but weren't clear about who their employer was. We reached out to Lake Superior Academy and the Dafter Township Supervisor, Bob Brown, but we didn't hear back for this story.
RB: Well, AJ, what can you tell me about the companies who operate this mine? You've learned a lot more about them.
AJ: So, there are two companies. One is Alpha Watt, who is operating the physical data centers and leasing the land. The other is Odessa Partners, LLC, who own the land itself. Alpha Watt were, according to court documents from the lawsuit, incorporated in Delaware, principally based in the state of Florida, but they recently incorporated in the state of Michigan. They incorporated here on July the 9th, well after the lawsuit had started. The landowner, Odessa LLC, they are based in the state of Florida. And Odessa's Florida business listings link to a number of active and inactive companies registered in the state of Florida.
The name that shows up on the business filing documents for these companies is Michael Carbonara, whose name is on the permit for the land used for the Bitcoin mine. Neither company responded to a request for comment, but Alpha Watt has made many statements defending the mine. They say the Bitcoin mine promotes jobs, business growth, and contributes to local tax revenue. I have a direct quote from one of their statements.
"Alpha Watt is empowering residents to build careers and contribute to the region's economic vitality. In addition to job creation, Alpha Watt is boosting local businesses by partnering with regional suppliers and service providers for facility maintenance, equipment, and operational needs."
RB: AJ, you've learned a little bit about Michael Carbonara, who again appears on many of the permits and applications in connection to this operation. We didn't know much about him when we first reported the story back in June, but what more have you learned about him?
AJ: Well, we know he's running for Congress in Florida.
Michael Carbonara: “Washington doesn't need more career politicians. It needs people who know how to fix things. I've seen innovation, hard work, and personal freedom lead to success. But that's exactly what's under threat. Our economy, our families, our liberties. crushed by bloated bureaucracy and out of touch elites.”
AJ: He's a New York businessman who is based in Miami. And Mr. Carbonara is now running as a Republican in Florida for the U.S. House of Representatives in a district in South Florida. He is big on crypto. His FEC filings show his campaign is mostly self-funded. At the time of us doing this, he's loaned about $700,000 to himself. His campaign is just over $889,000 altogether. And what's interesting is that Michael Carbonara is investing in cryptocurrency to increase the worth of his self-made investments.
His company, Ibanera, was sued in the Bahamas by a bank who accused them, Ibanera, of withholding funds that it was meant to transfer to the tune of over 20 million. Now, Ibanara rejects the claims and a Florida court rejected the Bahama-based bank's efforts to freeze the company's assets. That was a win for Ibanara. Mr. Carbonara's campaign did not respond to a request for comment, but he has spoken to a lot of podcasts with influencers in the business and cryptocurrency space discussing the future of cryptocurrency and his political stances.
RB: Bitcoin mining operations seem to be cropping up in Michigan. Why are companies looking to build these in our state?
AJ: So, there are a lot of Bitcoin mining operations in the state of Michigan. It's ideal for Bitcoin mining here because it's cold a lot of the year and these Bitcoin mining operations generate a lot of heat. Also, the energy costs are lower in this region in particular.
So Alpha Watt, for example, cite a partnership with Cloverland Electric. Alpha Watt says they use excess electricity during off hours to avoid waste. Cloverland, who said this in a statement on their website, say that large business industrial companies like Alpha Watt help offset the decline in membership. As people move away, there are less members. And having partners like Alpha Watt helps keep costs low for the rest of the co-op's membership. I should be clear, Cloverland has said that they have nothing to do with the actual operation of the Bitcoin mine. They just provide the power.
There's a similar story to this one downstate. Hamlin Township in Eaton County, officials there issued a cease-and-desist order over a Bitcoin mine over noise. In Mackinac County near Dafter Township, there is another community, Clark Township, where local officials put a moratorium on all Bitcoin mining activities in response to the controversy over this mine.
RB: And AJ, as the story continues to develop, what are you keeping your eyes on?
AJ: Well, the case is still very much active. With these stories, you're sort of in a holding pattern while the litigation plays out, so I'll be keeping an eye on just where the story goes.
As I mentioned, there might be more Bitcoin mines coming to Michigan in the future. That's something to look out for, and I will definitely be keeping an eye on Florida's 25th Congressional District race.
RB: AJ Jones, thank you so much for your reporting on this story and for this update. We thank you.
AJ: Thank you.
