Dirk’s Dirty Money


After serving for five years as Interior Secretary in the Bush Cabinet, Gale Norton, protégé of James Watt, quietly stepped down from her post overseeing the ruination of the American West. Norton’s sudden exit was almost certainly hastened by the widening fallout from the corruption probes into Jack Abramoff and his retinue of clients and the politicians and bureaucrats he held on retainer. Abramoff, it will be recalled, performed some of his most extravagant shakedowns of clients, many of them destitute Indian tribes, seeking indulgences from the Interior Department.

To date, Norton has escaped being directly implicated in Abramoff’s crimes of influence peddling and bribery. But her former chief deputy, super-lobbyist J. Steven Griles, who oversaw oil and gas leasing on federal lands at the same time he remained on the payroll of his lobbying firm, may be entering in the crosshairs of the Abramoff investigation.

In a series of emails remarkable for their braggadocio and name-dropping, Abramoff advised his clients to donate money to an industry front group founded by Norton that promotes the privatization and industrialization of federal. In return, Abramoff bragged that he could offer them unfettered access to the top officials at the Interior Department, where their fondest desires would a favorable hearing from people like Griles. In one instance, Abramoff claimed that Griles promised to block an Indian casino proposal opposed by one of Abramoff’s clients. If Griles goes down, Norton may soon follow him into the dock.

To replace Norton, Bush called upon his old pal Dirk Kempthorne, the Idaho governor and former US Senator, who once cherished notions, fantastical though they may have been, of the occupying the White House. In picking Kempthorne, Bush has once again demonstrated that mindless consistency which will be one of his hallmarks as president. Far from moving to clean up an office sullied by corruption and inside-dealing, Bush tapped a man, who has over the course of his 20 years in politics, taken more money from timber, big ag, mining and oil companies than any governor in the history of American politics.

Unlike many other western conservatives, Kempthorne doesn’t hit up the religious right for money. He goes to straight to the corporations who want something done in Boise: JR Simplot, the potato king; Boise-Cascade, the timber giant; mining companies, such as ASARCO, Hecla, and FMC Gold; and the power companies. And Kempthorne gives them what they want. Kempthorne is Jack Abramoff without the middleman, decision-maker and lobbyist rolled into one.

Over the years, one of Kempthorne’s most loyal political patrons has been the Washington Group International, a Boise-based company that functions like a mini-Bechtel. During Kempthorne’s tenure as governor, WGI has contributed more money to the politician than any other interest. The company got immediate returns on its investment. With an assist from Kempthorne, WGI won the lucrative contract to manage Idaho’s highways. The federal government scuttled the deal, saying the contract had been awarded illegally. The contract went up for bid again and, miraculously, Kempthorne once again picked WGI for the job.

With Idaho mired in a decade-long drought, water has become as contentious a political issue as oil in Alaska. Farmers, ranchers and Idaho’s powerful sportsfishing industry formed a rare coalition last year intent on reforming Idaho’s archaic water laws to give more water to ranchers and salmon. The bill moved through the state legislature with surprising speed, much to the irritation of the Idaho Power Company, the state’s biggest water hog. Even Idaho Power’s threat to jack up electric rates by millions of dollars didn’t stall progress of the bill. So the company turned to Kempthorne, who flattened the bill with a veto. Idaho Power is Kempthorne’s second largest political contributor.

The phone giant Qwest is Kempthorne’s fourth biggest contributor. In 2004, Qwest approached Kempthorne with an urgent plea: the deregulation of pricing for landline phones in Idaho. When Kempthorne sent a message to the Idaho state legislature urging it to bow to Qwest’s desires, it was met with a certainly measure of hostility by Idaho residents, who viewed with some skepticism the phone company’s contention that such a move would save them money in the long. Even members of Kempthorne’s party balked and the bill went down to a narrow defeat. Over the next few months, Kempthorne disciplined recalcitrant Republicans and when the session opened in early 2005 the Qwest bailout bill sailed through and was signed into law by the governor.

This is run-of-the-mill quid pro quo politics. But Kempthorne has been implicated in a more pungent scandal that may yet lead to criminal indictments of political and business associates. In 1999, a group of investors with close ties to Kempthorne fronted a scheme to build a satellite campus for the University of Idaho in downtown Boise. The project was named University Place and it called for the construction of three large buildings on prime real estate in the heart of the city.

Questions about the economic viability of the University Place project were swept aside by two of Kempthorne’s closest friends, Phil Reberger and Roy Eiguren. All three men were University of Idaho alums and members of the University of Idaho Foundation, responsible for financing the development. At the time of the University Place deal, Reberger, who had managed every one of Kempthorne’s political campaigns, was governor’s chief of staff. He also had a seat on the foundation board and had been appointed by Kempthorne to the Idaho State Building Authority.

Eiguren, who is one of Kempthorne’s top individual donors, served as the Foundation’s vice-president at the same time he worked as a lobbyist for the project in the state legislation. He is also a senior partner in Givens Purlsey, a top Boise law firm that represented Capital Partners, the California construction company picked to build the project.

Financing was a problem from the beginning for the cash-strapped university. So Kempthorne, Reberger and Eiguren hatched two schemes: first they would get the Idaho legislature to approve $163 million in state-backed bonds to fund the construction. Then they would ensure that the Idaho Department of Water relocate into one of the buildings, as a prime tenant and a key element in the viability of the project.

Both of these maneuvers may have skirted state and federal laws. A 2003 investigation by the state attorney general’s office determined that the bid to move the Water Department into University Place may have been rigged from the top.

Meanwhile, the project proved to be a financial catastrophe, which compelled the university’s president, Robert Hoover, to resign in disgrace and left the University Foundation $26 million in debt. The debt was mysteriously repaid in a secret settlement earlier this year. The federal Department of Justice has quietly opened a criminal investigation into the affair.

Kempthorne’s nomination was momentarily blocked by Florida Senator Bill Nelson, who begged for the governor’s assurance that he not open the Florida coastline to oil drilling. Kempthorne told the senator he would make no such pledge. Indeed, he brayed that his top priority would be to expand drilling for oil across all federal lands, including off shore reserves. Nelson wobbled and the Democrats Maginot Line crumbled once again. Kempthorne sailed through the committee without a vote against him and scarcely one probing question about the corruption scandal that shadows his every footstep. A week later the entire senate took a test vote on his nomination: only eight Democrats voted no. A few minutes later his nomination was approved on a voice vote without dissent.

And that’s how Dirk Kempthorne, one of the most environmentally hostile visigoths in the West, came to occupy the office once inhabited by the legendary swindler Albert Fall.

Kempthorne should feel right at home.

JEFFREY ST. CLAIR is the author of Been Brown So Long It Looked Like Green to Me: the Politics of Nature and Grand Theft Pentagon: Tales of Corruption and Profiteering in the War on Terror.





Jeffrey St. Clair is editor of CounterPunch. His new book is Killing Trayvons: an Anthology of American Violence (with JoAnn Wypijewski and Kevin Alexander Gray). He can be reached at: sitka@comcast.net.

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