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Anatomy of a Swindle

Green River, Utah

As you drive across central Utah on Interstate 70, you are likely to be captivated by a golden bulge of sandstone shimmering in the sun to the south. This is the San Rafael Swell, a knot of canyons, domes and cliffs the marks the beginning of the redrock country of the Four Corners region.
The old desert rat Edward Abbey praised the Swell as one of the most austere and beautiful places in the desert Southwest.

Naturally, the Swell, underlain with coal seams and pools of oil, has also been long prized by other less aesthetically-minded interests: strip miners and oil and gas companies.

Much of the area lies under the jurisdiction of the Bureau of Land Management, never known as the greenest of federal agencies. Still, because most of the Swell remains in a roadless and relatively unscathed condition it has been difficult for the BLM to get away with simply opening it up to mining and drilling. Lawsuits and endangered species keep getting in the way. Environmentalists have long sought to turn the area into a wilderness or national park.

Enter Steven Griles, deputy secretary of interior and former lobbyist for oil and mining interests. Already under investigation for bullying the Bureau of Land Management on behalf of his former oil industry clients, Steven Griles, the deputy secretary of the interior, is now at epicenter of a new scandal involving the proposed swap of more than 135,000 acres of land in the heart of the San Rafael Swell to the state of Utah in exchange for parcels of state-owned land totally 108,000 acres.

The deal, which was shelved in late July following a scathing internal review by the interior department’s Inspector General, would have bilked the federal government out of ten of millions of dollars and opened habitat for rare species to unrestricted plunder.

Under a scheme hatched by Utah congressmen Chris Cannon and James Hansen, more than 130,000 acres of BLM land in the Swell would have been handed to the state of Utah in exchange for 107,000 acres of state lands. The congressmen promoted the deal as “fair value exchange,” meaning that the market value of the lands being traded was roughly equal, a requirement of federal land law. To rub salt in the wound, the deal was pitched as an environmentally benign transaction.

But this was a croc and most people inside the BLM knew it. Biologists warned that the federal lands harbored the desert tortoise, an endangered species, and thus could not be traded away. Geologists disclosed that the federal land contained a trove of minerals and natural gas deposits, while the state lands were nearly worthless economically and offered little in the way of ecological value. One BLM officer in Utah noted that the oil, gas, coal and shale deposits alone on the federal lands “could bring in hundreds of millions of dollars.”

Agency land appraisers fired off internal memos saying that the appraisals had been deliberately cooked to make the grossly inequitable deal appear like a bargain for the feds. One memo said that the official appraisal, approved by Griles, was “one-sided and inaccurate.” The appraisal approved by Griles and his cohorts valued the state and federal lands at about $35 million each. But BLM appraisers in Utah determined that the federal lands were worth at least $117 million more than the state lands.

In an internal memo to BLM director Kathleen Clarke, Dave Cavanagh, the agency’s chief land appraiser, pointed out that the deal “generously inflated the value of the state lands to the disadvantage of the BLM.” He also warned that public statements by officials in the Interior department that the deal had been scrutinized by independent appraisers was “potentially misleading to the public.” One of the most astonishing things about this memo is the fact that Cavanagh has himself been under fire from environmental groups for his role in approving bogus appraisals for other land deals.

Clarke dismissed the concerns of her line officers, hid the real numbers from skeptical members of congress, such as Rep. Nick Rahall, the West Virginia Democrat, and pursued the deal anyway. Word came down from Clarke’s office that dissenters were to shut up and to stop putting their complaints about the deal in writing. Efforts to shred the paper trail exposing the deal ensued.

Clarke is a former top aide to both Rep. James Hanson, former head of House Resources Committee, and Utah governor Mike Leavitt, a notorious anti-environmentalist who believes that all federal lands should be turned over to the states.

Clarke has maintained that she recused herself from all matters related to the deal in order to avoid a conflict of interest. But the IG report revealed that in March of 2002, Clarke met with Sally Wisely, the BLM’s top officer in Utah. Wisely told the IG’s investigators that she had requested the meeting in order to relay her fears that the deal was being rushed through without enough attention being given to the concerns of the appraisers and geologists. Clarke told Wisely that it was a done deal.

But Clarke is just a stooge for Griles, who is for all practical purposes running the BLM like a private fiefdom. Since taking office Griles has pursued a course of privatizing the federal estate through land swaps, where federal lands rich in timber, minerals and oil are traded away for beat-over private and state lands. After the transfers, the lands, now free from the uncomfortable burdens of federal environmental laws, are easier for extractive industries to exploit with dispatch.

Griles is already under investigation for his role in squashing an environmental review of a natural gas leasing plan in the Powder River Basin of Wyoming. The leases, worth tens of millions of dollars, would be held by former clients in Griles’s old lobbying firm. A provision in Griles’s buy-out contract allows him to be paid more than $2 million from the firm’s profits over the next two years.

Griles’s lieutenant in the Utah land exchange was Thomas Fulton, the deputy assistant secretary of Interior for Lands and Minerals Management. Fulton handled the negotiations with state of Utah and the congressional delegation. Fulton may end up being the fall-guy in the affair. The IG report fingers Fulton for providing false information to other Department of Interior officials (ie., Interior Secretary Gale Norton) and members of congress. Fulton has been removed from his position and is now in bureaucratic exile planning the BLM’s commemoration of the bi-centennial of the Lewis and Clark expedition.

In the summer of 2002, BLM appraiser Kent Wilkinson went public with his objections to the deal. The whistleblower said that the swindle was one of the most one-sided land deals since the sale of Manhattan. “This is like Enron all over again,” Wilkinson wrote in a broadcast email to journalists, which accompanied his analysis of the deal. “They’re cooking the books and it’s all to the detriment of the public.”

Wilkinson’s revelations prompted an outrageous fit from Rep. Chris Cannon, the pudgy Utah congressman. Cannon called Wilkinson a publicity-seeking liar and a stooge of environmentalists. He summoned the appraiser’s boss to his office and demanded that “strong measures” be taken against the whistleblower for insubordination. “I want to make sure they get slapped hard, because they’re acting inappropriately,” Cannon blustered.

With a congressional bounty on his head, Wilkinson brought his concerns to Public Employees for Environmental Responsibility, a whistleblower protection group and one of the worthiest environmental outfits inside the Beltway.

PEER went on the offensive against Cannon and recruited help from Jack McDonald, the former chief appraiser for the BLM in Utah. “This is just another rip-off,” McDonald told the Washington Post last year. “What does it tell you when an agency suppresses its own professionals? The agency’s got something to hide.”

But none of this stopped Cannon from proceeding with the deal. The measure was pushed through the House last fall without debate, but Congress adjourned before the senate could act on it.

The question now is how far will the investigation go up the Interior Department food chain. Another IG report has been launched into Clark and Grille’s conflicts of interest in the deal, which now appears to be dead.

Don’t look for any prosecutions, though. Ashcroft has already taken a pass at pressing any criminal charges against Griles, Clark and Fulton for the swindle.

But the land exchanges go on, many with similar accounting hi-jinks and lopsided appraisals. In the next year alone, more than a million of acres of federal land will be secretly traded away to states and corporations. This is the dream of the Sagebrush Rebels finally come true: the federal estate is steadily being turned over to private hands unencumbered by noisome environmental regulations.

“Despite some pretty damning revelations of what these people have done, you don’t get a very good idea of what’s going to happen to them,” says Janine Blaeloch, director of the Seattle-based Western Lands Exchange Project, the only group in the nation fighting these rip-offs (and one of the best environmental groups of any kind). “This case shows how poisonous these land deals are, especially in places like Utah where the politicians want to privatize all public lands.”

 

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Jeffrey St. Clair is editor of CounterPunch. His new book is Bernie and the Sandernistas: Field Notes From a Failed Revolution. He can be reached at: sitka@comcast.net or on Twitter  @JSCCounterPunch

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