Author Archives: lvgaldieri

“America is Not a Company”: Lowenthal Questions Nedd on the Boundary Waters

Nedd7Feb2017Email

“…documents that have already been released”: the February 2017 email from Michael Nedd that Representative Lowenthal used for today’s line of questioning.

One of the documents I obtained from the Department of Interior through a Freedom of Information Act Request came up for discussion at this morning’s Energy and Mineral Resources Subcommittee Hearing.

Representative Alan Lowenthal of California kicked off the question and answer period by asking Michael Nedd of the Bureau of Land Management when he first discussed the issues of the Twin Metals mineral leases in Superior National Forest with the incoming administration. Nedd was evasive (as he was throughout the entire hearing, prompting Representative Jared Huffman to remind him, at one point, that he is “not a potted plant”).

A second question from Lowenthal: “do you recall who from the incoming Trump administration first discussed the issue with you?” got an equally vague reply: Nedd said he did not have “a specific recollection.” So Lowenthal offered a reminder:

Well from documents that have already been released, we know that in early February of 2017, you sent out a briefing memo on this topic, which was entitled “Withdrawal Options.”

As the timeline shows, this email is — so far — the first time the Twin Metals matter is raised at Interior after the new administration takes office. It indicates that Nedd was following up on a discussion he had with staff either that day or before that day; and it raises the question why this matter appears to have been a Trump administration priority. Nedd wanted an updated briefing paper, pronto, by close of business on Thursday, February 9th. Why was this matter top of mind for him? Why the quick turnaround? Why the urgency?

Blumenthal also asked for a copy of the original briefing paper Nedd attached, and Nedd was agreeable but non-committal, saying he would take Blumenthal’s request back to the Department of the Interior. We already know that just a few months later, by late April of 2017, this briefing paper would have undergone enough revision so that the Karen Hawbecker could refer to “options we’ve identified for reversing action on the Twin Metals decision.” So that tells us what we need to know about the direction Nedd gave the group for “working together.” They were to reverse what the previous administration had done.

At whose direction? And why? We still don’t have satisfactory answers to these questions.

Here is Lowenthal’s first round of questioning on the Boundary Waters reversal, which includes his exchange with Nedd over his Briefing Paper. (The video here is cued to the start of his question.)

Later in the hearing, at around 1:26, Lowenthal questions Chris French of the US Forest Service on Secretary Perdue’s cancellation of the environmental assessment in Superior National Forest and about the false assurances Perdue gave Representative McCollum, and asks that French provide relevant documents. After that there is some back and forth with Representative Gosar, who complains of executive overreach by the Obama administration, claims the people of Minnesota want these mineral leases renewed, ends by arguing that polling questions can be misleading, and if we had polled people properly back in 1919, we wouldn’t have a Grand Canyon National Park today. I’m not exactly sure how that last argument is supposed to win the day at a hearing on public lands.

For his part, Lowenthal has a strong sense of what’s at stake throughout this hearing. Just consider this excerpt from his opening statement on the Trump doctrine of “energy dominance” that now informs policy at the Department of Interior:

America is not a company. It may seem like President Trump is trying to treat us like one, like many of his other companies, and let us run it into the ground. But America is a country, not a company, and America’s lands are not excess inventory that need to be disposed of. Our natural resources are not reserves that need to be booked, so our stock prices stay high and our investors stay happy. Our public lands are an investment that we’re holding for our grandchildren, and their grandchildren, and generations beyond. They’re an investment that pays off, by allowing them to know, our grandchildren, great grandchildren, what vast stretches of untainted wilderness look like. That lets them see with their own eyes polar bears, sage grouse, mule deer, and caribou, running wild and free. That lets them learn about ancient native cultures without having to go to a museum, and lets some cultures continue to observe and respect the same traditions that their ancestors have. These are all priceless. They’re irreplaceable. And these are all infinitely more important than whatever extra few dollars can line an oil baron’s pocket over the next few years. I just hope our land management agencies still understand that.

A New Boundary Waters FOIA Request

On Tuesday of last week, the Washington, DC-based organization American Oversight filed a Freedom of Information Act request regarding the decision to renew Twin Metals Minnesota’s leases in Superior National Forest, on the edge of the Boundary Waters.

This March 5th request is much broader in scope than the FOIA request I made back in January of 2017, which has so far yielded about five-thousand pages in documents, with more still to come. Slowly but surely, a picture is coming into focus. American Oversight’s question about “outside influence” can already be answered with an unequivocal yes:

Nonetheless, this new request promises to deepen our understanding of how Interior went about reversing Obama era protections for the Boundary Waters, at whose direction they did so, and why the matter appears to have been a priority for the incoming administration.

Three things intrigue me about American Oversight’s request.

First, it extends from January 20th, 2017 to the present. My request for documents from the Office of the Solicitor runs only to December of 2017, when the Jorjani decision was released. So the new request will take us up to the present, and include actions taken by Interior and USDA in 2018.

Second, American Oversight has asked for any communications on this matter from Jared Kushner and Ivanka Trump, from their official White House accounts and from their personal ijkfamily.com email domain, and from anyone using their personal email domain. This will help clarify the role Kushner, Trump, and the Trump White House might have played in the Boundary Waters reversal, and what connections, if any, we can draw between their rental of the Luksic-owned Kalorama mansion and the renewal of Antofagasta’s mineral leases. That may involve a foreign emolument. This aspect of the new request also promises to inform a broader American Oversight investigation into Jared and Ivanka’s roles in the administration.

Third, and perhaps most intriguing of all, American Oversight’s request zeroes in on an April 28, 2017 meeting with Wilmer Hale’s Rob Lehman at the Department of the Interior. I added this meeting to the Twin Metals timeline after discovering it on the calendar of Chief of Staff Scott Hommel (which American Oversight obtained back in June of 2018).

A look at the timeline shows that this was an especially busy period for Interior officials working on — or should I say with? — Twin Metals: on April 27th, in preparation for a meeting between Deputy Secretary James Cason and Antofagasta CEO Ivan Arriagada, Raya Treiser of Wilmer Hale forwards some background materials. Among them, the Waxman letter to Solicitor Hillary Tompkins that Interior would use as a blueprint. The very next day, Lehman comes to meet with Kathleen Benedetto, an 11AM meeting. Who else was in the room? We don’t know. We do know that right after that meeting Benedetto briefed her colleagues at the Office of the Solicitor. The purpose of the Benedetto briefing, according to Associate Solicitor Karen Hawbecker, was “to get some feedback from [Benedetto] on the options we’ve identified for reversing action on the Twin Metals decision.”

So by late April, the course appears already set. The options on the table were all for “reversing”; and as if to seal the deal, one week later, Antofagasta CEO Ivan Arriagada and his entourage arrive at the Department of the Interior for a first meeting. What was discussed on that occasion, and whether any assurances were given to Mr. Arriagada, remains unknown. The actions Interior subsequently took speak for themselves.

Cert Denied in MCRC v. EPA

Certdenied4March2019

18-555 among the denied petitions on this morning’s list of Supreme Court orders.

A public agency’s effort to cut a road through the Michigan wilderness for a Canadian mining company has suffered yet another legal setback.

This morning, the Supreme Court published the list of orders from its March 1 conference. The court has denied the petition for certiorari in Marquette County Road Commission v. EPA, the dispute over County Road 595 I’ve been following since 2015. This denial means, simply, that the Supreme Court declines to review the case, without further comment, and the decision by the Sixth Circuit Court of Appeals stands.

The Road Commission’s case turned on the question whether objections by the EPA to the proposal for CR 595 constituted “final agency action.” If so, they would be reviewable by a court. In arguments before the Sixth Circuit, the Pacific Legal Foundation’s Mark Miller insisted that EPA’s objections to the Road Commission’s proposal were tantamount to a “veto,” but his repeated use of that word ended up confusing the judges, and their questions about it exposed the weakness of his argument.. The Road Commission, they reminded him, could always have simply gone back to the Army Corps of Engineers with an amended proposal that took the EPA’s objections into account.

As I’ve written elsewhere, Miller made a lot of other arguments before the Sixth Circuit (and the in pages of the Wall Street Journal) that suggest this case was about more than building a haul road from Eagle Mine to Humboldt Mill. Like others advocating for CR 595, he tried to suggest that the Environmental Protection Agency was in cahoots with environmental groups, and part of an anti-mining conspiracy. These arguments were never intended to go anywhere legally. They were, instead, put forward to raise the profile of the dispute over Country Road 595. They brought in dark money and support from outside groups. They divided people. They helped advance a larger political project.

After a long and fruitless detour through the court system, the Road Commission has come to a legal dead end. But the Road Commission and its allies, within and without Marquette County, still have options. Lundin Mining’s development of Eagle East has extended the life of the mine to 2023 — “at least,” the company says. There is nothing to prevent the Road Commission from revising its proposal, and trying again. The question remains whether doing so would serve the broad public interest, or simply advance the short-term interests of the mining company.

Read other posts about MCRC v. EPA here

What’s Up With the Kalorama Business License?

As of this morning, it looks as if the lawyers for Chilean mining magnate Andronico Luksic Craig decided not to renew, or simply neglected to renew, the District of Columbia business license for Tracy DC Real Estate, Inc., the company that owns the Kalorama Triangle mansion rented by Jared Kushner and Ivanka Trump. (For some background, see this post.) A search for the license on the District of Columbia’s Department of Consumer and Regulatory Affairs site conducted yesterday at 9:43AM — on the day the license was set to expire — showed that it was “ready to renew.”
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Today, the same search yields no records.

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A search for Tracy DC Real Estate’s corporate information on the DC Business Center site shows the same thing: the entity is active, but does not have a Basic Business License or “BBL.”

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So it’s possible that Tracy DC Real Estate is no longer carrying a business license for the Kalorama mansion, and has been unlicensed in DC as of midnight last night. (District of Columbia municipal regulations require all landlords to have a business license. Those without one cannot legally demand that tenants pay their rent and may incur fines.) It seems equally likely that there is something about the way the system processes renewals that accounts for the disappearance of Tracy DC Real Estate licensing information.

I wasn’t able to learn much one way or the other when I called the Department of Consumer and Regulatory Affairs this morning and inquired about the lack of search results. The clerk told me the license had probably disappeared from the search because the license simply had not been renewed, but, he added, there is always a chance the paperwork is still “in the mail” and the renewal just hasn’t been processed.

In the mail? The DCRA site offers online renewal services, and it seems odd that Luksic’s attorneys, or Tracy DC Real Estate’s corporation agent, CT Corporation Services, would not have taken advantage of that. These are not people who let things lapse or go about their affairs in a careless or haphazard way. (Public records show, for example, that they have scrupulously kept up with property tax payments, incurring no penalties since taking ownership. The next tax payment on the Kalorama mansion — $22,540 — is due on March 31, 2019.*)

As the Twin Metals timeline indicates, Tracy DC Real Estate was formed on December 15, 2016, the same day as Department of Interior Solicitor Hillary Tompkins issued her M-Opinion denying renewal of the Twin Metals leases in Superior National Forest. Corporate records show that incorporation was done by Jonathan Cohen and Richard J. Snyder of the law firm Duane Morris LLP. (Filings list the Duane Morris LLP offices on 505 9th Street NW in Washington, DC as Tracy DC Real Estate’s business address.) A Robert M. Snyder, who does not appear to work at Duane Morris, but appears to be a relative of attorney Richard J. Snyder, is listed as the “governor” of the corporation.

Richard J. Snyder’s bio on the Duane Morris site makes it clear that setting up the business end of the Kalorama Triangle mansion is just one of several matters he handles for the powerful Luksic family. For this same “Forbes 100 listed South American family and certain Liechtenstein-owned U.S. entities,” Synder also handled a “$50 million unsecured loan and mortgage financing involving 14 properties in three states with attendant U.S. tax advice.”** He advised unnamed “South American investors” and a “related Lichtenstein establishment” on corporate restructuring of $72 million in real estate and other assets in six jurisdictions, including France, Panama, Peru, Massachusetts, Florida, and Colorado.

I can’t say what these loans and restructurings are all about, and whether they have any connection to the Boundary Waters reversal story I’ve been pursuing. The Colorado matter, for instance, might simply have to do with Andronico Luksic’s home in Aspen. But it’s pretty clear that these South American and Lichtensteinian matters are all Luksic Group matters. The Luksic and Fontbona families conduct much of the Luksic Group business, including their control of mining conglomerate Antofagasta, Plc, and Quinenco, S.A., an investment firm, through Lichenstein-based vehicles.

It seems unlikely, but not out of the realm of possibility, that an attorney entrusted with such grave responsibilities would overlook the simple renewal of a business license. Especially not with such high profile tenants in the mix. If this is indeed an oversight or a matter of waiting for the DCRA system to update, it will probably be corrected in the next few days. If not, it could be a signal that the Kalorama property is going to be put on the market, or transferred to some other entity, and that something else is afoot.

Update 7 March 2019. One week on, and no license renewal. It is hard to avoid the conclusion that the group behind Tracy DC Real Estate, having gotten what it wanted, or all it’s going to get from this administration, no longer sees any need to keep up appearances, or pretend that the rental ever was a legitimate business arrangement. Non-renewal of the business license strongly suggests that the Kalorama mansion should be looked upon as a foreign emolument.

*Update 26 March, 2019. Still no record online of the Tracy DC Real Estate business license renewal, but the property taxes for the first half of 2019 have been paid. And on 20 March, the corporation filed a biennial report with the District of Columbia Department of Consumer and Regulatory Affairs. These reports are due by April 1st of each second calendar year. They appears to be keeping up with everything except the business license.

**Update 5 May 2019. This financing activity may have included the Kalorama mansion. On April 5th, 2018, Rodrigo Swett signed a Deed of Trust for 2.75M on the property at 2449 Tracy Place NW. On the same day, he signed similar instruments for multiple properties in Miami Beach and at least 7 properties in Boston’s Back Bay. That would seem to cover the “three states” (Florida, Massachusetts, and District of Columbia) to which Synder refers in his bio.

Update 9 June 2019. The business license for the mansion was renewed on 31 May, 2019, a full three months after it was allowed to expire.

TracyDCRenewal

What accounts for the three month lapse? An oversight by Luksic’s lawyers seems the most likely explanation. Or maybe, after borrowing against the property in April 2018, the owners planned to change its status, then decided to stay the course.

Read other posts about the Boundary Waters reversal here

A Standing Offer to Steve Kornacki

Last week, Richard Painter tweeted out this clip of an interview he did with NBC’s Steve Kornacki back in April of 2018. At the time, Painter was running against Tina Smith for Al Franken’s senate seat.

Notice what happens just before Kornacki pushes Painter on the credibility of Franken’s accusers — starting around the 1:07 mark here. Painter says that Smith should be “a lot stronger against” Trump on three fronts: first, she should have come out against his trade war; second, she should call for his removal from office, because he is unable to execute his constitutional duties; and

furthermore, we have serious problems in the state of Minnesota where out of state mining interests are coming into our state, large conglomerates, with the support of the Trump administration, seeking to destroy our Boundary Waters and other waterways in the state of Minnesota. Our establishment Democratic, Farm Labor, senators and members of Congress, most of them are not standing up to that. So we need to have — both parties to be fixed; both parties need to be fixed.

Kornacki sums up what he is “hearing”: “I’m hearing trade, I’m hearing impeachment,” and then he rushes headlong into the topic that will dominate the rest of the segment: whether Richard Painter believes Al Franken’s accusers. How is it possible Kornacki didn’t hear the bit about mining interests? It’s all the more remarkable because Painter spent the most time on the mining story, about twice as much time as he did on impeachment, and a lot more time than he did on trade. How could Kornacki simply skip over it? Why no follow up?

The most likely answer is, Kornacki already knew where this interview was heading — back to Al Franken — and the mining story looked like nothing more than a detour. In retrospect, however, it looks as if Kornacki missed a big political story, or several stories, details of which are only now coming to light.

To stick just to the Boundary Waters story for the moment: a foreign mining company and its lobbyists appear to have dictated decisions at the US Department of Interior. As documents obtained through FOIA make clear, these decisions were coordinated at the highest levels of the US government, with USDA, the White House and the State Department all in the loop. And it sure looks as if the fix was in from the very first days of the new administration, with a predetermined outcome guiding the moves federal government officials made behind closed doors, without public input, and with disregard for science, economics, and the law.

I’ve offered to buy Steve Kornacki lunch and walk him through the details of this story. That’s a good faith, standing offer. There is even more at stake here than the just administration of public lands and the protection of waterways. This is also a story about a coordinated effort to sidestep democratic governance and undermine our shared public life. That ought to be of some interest to a national political correspondent for NBC News.

Read other posts about the Boundary Waters Reversal here.

The Architect of the Boundary Waters Reversal

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“Extrinsic evidence” from the 1980s: one of the files from the Milwaukee District Office of the Bureau of Land Management appended to Waxman’s 2016 letter to Hilary Tompkins.

Principal Deputy Solicitor Daniel Jorjani signed the December 2017 Department of Interior memo that re-opened the door to sulfide mining near the Boundary Waters, but he probably should not be considered the legal architect of the Boundary Waters reversal. That dubious honor appears to belong to Seth P. Waxman. Or at least the key arguments in Jorjani’s memo seem to be largely derived from a letter Waxman wrote on behalf of Twin Metals to Department of Interior Solicitor Hilary Tompkins back in July of 2016.

Waxman’s name may ring a bell. He has had a distinguished legal and political career. Under President Clinton, he served as Solicitor General of the United States. In the last year of the Bush administration, he made oral arguments before the Supreme Court in Boumedienne v. Bush, to uphold habeas corpus rights for Guantanamo detainees. During the Obama years, his name was even floated as a Supreme Court nominee. Waxman is also a partner at WilmerHale, the powerful DC firm that has led both the lobbying and litigation efforts for Antofagasta, Plc in its bid to renew its mineral leases in Superior National Forest.

Waxman sent his 24 page letter to Hilary Tompkins on July 1, 2016. On the same day, he sent a letter to Secretary of Interior Sally Jewell. Those letters are included among Department of Interior documents obtained through FOIA. The letter to Tompkins appears to have been the most widely shared. It was attached to an April 27, 2017 email from Raya B. Treiser of WilmerHale to Cathy Gulac, secretary to James Cason, confirming a May 2nd meeting with Antofagasta CEO Ivan Arriagada at Interior. You can follow it from there as it gets attached to other email exchanges and forwarded around.

HaugrudLawkowski

A handoff from Interior’s Jack Haugrud to a political appointee: Gary Lawkowski, Counselor to the Solicitor. Attached is Seth P. Waxman’s 2016 letter to Solicitor Tompkins.

Waxman’s argument in the letter to Solicitor Tompkins is that Twin Metals has a non-discretionary right to renewal, as dictated by the terms of the leases negotiated by the International Nickel Company and the Bureau of Land Management back in 1966. This is also the conclusion at which Jorjani arrives, and he appears to do so by carefully following Waxman’s lead. Here, I’m going to highlight several places where Waxman’s influence on Jorjani seems undeniable. (To make it easier for others to follow along, I’ve posted the Waxman letter. Jorjani’s memo can be found here.)

To the layman — and I am one, so anything I say here should probably be read in light of that — the very idea of a non-discretionary right to renewal might seem paradoxical, or at least puzzling. Apparently the federal government, and specifically BLM, can “grant” and has twice granted (in 1989 and 2004) the renewal of these mineral leases, but it has no discretion to deny renewal (as long as the company complies with the law). Hobbled, BLM can say yes but not no. Waxman’s argument easily and cleverly explains why this is so. The terms of the 1966 lease, he says, are both “comprehensive” and “unique”, and those unique terms still “govern” (to use the phrase Jorjani prefers) or (in Waxman’s words) “control”:

One of those terms is a right to renew the lease (in fact, to successive renewals). This right is critical to the parties’ overall bargain: The investment required of the lessee under the leases is enormous. But because of recognized operational problems in the area, producing minerals in the short term would have been impossible. The leases thus would serve no rational purpose absent a non-discretionary right to renew; no company would undertake the necessary investment for exploration and development knowing that it could be unilaterally deprived of any ability to recoup that investment. (p. 1)

Of course, it’s possible to think of a rational purpose mineral leases could “thus” serve absent a non-discretionary right to renew. The leases might afford the company an opportunity to explore a mineral resource on public lands within a specified period of time and on certain terms, assess the feasibility of developing the resource, and provide a right to negotiate successive renewals. We can easily imagine circumstances in which the federal government might reserve discretion, and renewal might be contingent on all kinds of things, like changes in environmental conditions, advances in scientific knowledge, evidence of responsible stewardship, or commensurability with other rights. That all sounds perfectly reasonable. There’s no need to insist that a “non-discretionary right” is the only appropriate arrangement, or buy into the view that preserving discretion over renewal confers on government the power to “unilaterally [deprive]” the company of “any ability.”

This is lawyer’s hyperbole, affecting sobriety and marking out an extreme position: the only “rational” course appears to be one that protects the investment of the mining company, from exploration through development. Having entered into a lease agreement with a mining concern, the federal government is now bound to help the company realize a return on its investment. And that would require going way beyond providing incentives. Surrendering all discretion, the government defers entirely to private interests and agrees to relieve the mining company of business risk.

This Extractive Industry First approach is perfectly congruent with Trumpism and its doctrine of Energy Dominance. We see it reflected not just in the Jorjani memo but in some of the changes Ryan Zinke and David Bernhardt brought to the Department of Interior. Perhaps Mr. Waxman is a man ahead of his time — by about a year, it seems. But let’s grant, for the moment, Waxman’s position that this non-discretionary right is indeed the “unique” arrangement the 1966 leases set out, and focus instead on the area where Jorjani’s memo relies most heavily on Waxman: in reaching the conclusion that the 1966 leases “govern.” Here is Jorjani’s brief restatement of Waxman’s argument:

Twin Metals is entitled to a third renewal. First, the renewal terms of the 2004 lease form do not govern. The form is ambiguous, and the intent of the parties to keep operative the terms of the 1966 leases becomes clear once the BLM’s decision files are examined. (p. 8)

Jorjani adds in a footnote (number 38) that Solicitor Tompkins’ memo did not examine this “extrinsic evidence” — 1980s decision files from the BLM’s Milwaukee office, which Waxman attached as exhibits to his letter to Hillary Tomkins — “because of its underlying premise that the 2004 lease forms were unambiguous.” This, too, echoes Waxman, and builds on an argument about ambiguity and how to resolve it that Waxman sets out repeatedly in his 2016 letter to Tompkins: “Because the renewal provision in the 2004 standard forms is ambiguous,” he writes, “extrinsic evidence [namely, the 1989 BLM decision files] must be considered” (pp. 22-3). Jorjani returns to the theme several times: “the meaning of the 2004 leases is ambiguous” (p. 11), but those Milwaukee files from the 1980s clear everything up.

Waxman discusses what should be done in such cases of ambiguity: “Where a provision in a contract is ambiguous, courts resort to extrinsic evidence to resolve the ambiguity by ‘determin[ing] the intent and meaning of the parties” (p. 23). Jorjani is on exactly the same page: “where contract terms are unclear or ambiguous, an examination of extrinsic evidence is appropriate to properly interpret the contract in accordance with the parties’ intent” (p. 10). Waxman maintains that “extrinsic evidence must be considered, and it confirms that the parties’ intent in executing the 2004 forms was to re-confirm that Twin Metals has a non-discretionary right to renew” (p. 3). Jorjani, too, discovers the “intent” of the 1966 parties in the 1989 files:

…the meaning of the 2004 leases is ambiguous. Given this ambiguity, extrinsic evidence beyond the ‘four corners’ of the document may be considered to ascertain the intent of the contracting parties. Examining the decision files of the BLM resolves the ambiguity. The record shows that the BLM renewed the leases in 1989 under the same terms as the 1966 leases, and did so again in 2004. (p. 11)

Though both Jorjani and Waxman seize on the same Milwaukee documents to prove intent, neither entertains the possibility that there might be other extrinsic evidence to consider in this case — to illuminate historical context, help clarify why the Milwaukee office took the actions it did in 1989, or throw into relief the different economic and environmental conditions, or different assumptions about public lands and private industry, that obtain in 1966, 1989, 2004, or for that matter now. This isn’t a historical inquiry, after all: it is, instead, a search for proof of intent that will shore up the mining company’s claim. It’s just a little unsettling to see the vast resources of the Department of Interior being marshaled to that purpose, following the lead of Antofagasta’s counsel.

Let’s go back, once more, to this issue of ambiguity. One of the main reasons why the 2004 leases are ambiguous — and why the 1966 leases control, and why the Milwaukee documents are necessary in the first place — is that the 2004 leases lack what is known as an integration clause. A written contract is “integrated” when the parties consider it to constitute their full and complete agreement. Or, as a Jorjani footnote (49) explains, “Integration clauses, also known as merger clauses, are contract provisions that generally state that the agreement as written constitutes the entire agreement between the parties and supersedes any prior representations.” Jorjani cites Corbin on Contracts for his authority; Waxman, Williston on Contracts: the standard lease forms used in 2004 do not “supersede or annul” the 1966 leases (Waxman, p. 11).

As Waxman states at the outset of his letter, this lack of an integration clause is a point Solicitor Tompkins does not “acknowledge” in her M-Opinion (p. 2). Both Waxman and Jorjanil will go to town on this point.

Waxman:

the Opinion asserts (p.6) that the 2004 standard forms are “complete, integrated documents,” and thus their renewal provision governs the analysis here. In making this assertion, the Opinion does not acknowledge the lack of any integration clause in the 2004 standard forms. (p. 7)

And again:

…the 1966 leases control. The Opinion’s contrary view depends on its assertion (p.6) that the 2004 forms are “integrated” contracts. But they are not; the 2004 forms lack any integration clause (a point the Opinion does not acknowledge), and there is no other basis on which to conclude that the 2004 forms— divorced from the 1966 leases that the parties attached—were integrated contracts. In light of this, the Opinion’s refusal to consider extrinsic evidence conflicts with established law. (p. 2)

Jorjani picks up on the same phrase (“complete, integrated documents”) in Tompkins’ Opinion, and appears to paraphrase Waxman:

Rather than being “complete, integrated documents,” the leases attach without full explanation the entirety of the 1966 leases and do not include an integration clause that states that the 2004 lease forms are the complete expression of the parties’ agreement. These facts alone warrant an examination of extrinsic evidence to determine the intent of the parties. (p. 10)

Here, in a footnote (number 50), Jorjani cites a 1999 Second Circuit case Waxman uses in his letter (p. 9): Starter Corp. v. Converse, Inc.. “When a contract lacks an express integration clause [courts] must ‘determine whether the parties intended their agreement to be an integrated contract by reading the writing in light of the surrounding circumstances.” That’s Waxman. Jorjani cites the exact same sentence, using brackets, as Waxman does, to substitute “courts” for “district court” in the original text, and putting the word “must” in italics for emphasis.

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That two knowledgeable lawyers are appealing to the same legal precedents might not be all that surprising. But it seems pretty clear that this citation, too, is part of a disconcerting pattern.

None of this goes directly to the question of legal merits, or which reading of the Twin Metals leases should or eventually will prevail. Yet something here is seriously amiss. The blueprint followed by the Principal Deputy Solicitor at the Department of Interior to reverse protections for the Boundary Waters appears to have first been drawn by the attorney for a Chilean mining conglomerate. That should raise some questions about ethical conduct, about revolving door access and undue influence, and about whether the opinion Jorjani released in December of 2017 should be allowed to stand.

You can read other posts on the Boundary Waters Reversal here.

A New Set of Boundary Waters Documents

In response to a Freedom of Information Act request I made back in January of 2018, the Department of Interior has released over 5,000 pages related to the Trump administration’s rollback of federal protections for the Boundary Waters. These and other documents have allowed me to put together this timeline, which tells a pretty clear story. From the very first days of the new administration, Interior Department officials and mining company lobbyists worked closely together, and with blatant disregard for science and the environment, toward a predetermined outcome that served the business interests of a foreign mining company, and not the public interest.

The latest release arrived on Friday afternoon. It’s a collection of email correspondence and attachments from Briana Collier, an attorney in the Division of Mineral Resources. These documents are now published here.

An email from Collier included in an earlier release had tipped me off to a previously undisclosed meeting at the US embassy between the CEO of Antofagasta PLC and the Carol Z. Perez, the US ambassador to Chile. Any hopes that this latest release would shed more light on that meeting, or make other equally significant disclosures, were quickly dashed when I opened the PDF. About 400 of the 650 pages included here are redacted, many of them entirely, on the basis of attorney client privilege or deliberative process. Almost all date from December of 2017, when the Office of the Solicitor at Interior was finalizing the Jorjani memo — the memo that cleared the way for Antofagasta PLC to renew its mineral leases in Superior National Forest.

In these documents, we mainly see officials crossing ts and dotting is in the memo before its release. There are some emails exchanged at the last minute regarding the first footnote in the memo, on the Weeks Act, which establishes the Secretary of Interior’s statutory authority for the disposition of minerals. The footnotes for an important section of the memo (pp. 11-13), arguing that BLM previously renewed the leases on 1966 terms, are the subject of another last minute exchange. One footnote in particular, which is number 65 in the draft under discussion (but not necessarily in the final version, given all the last minute changes) “raises issues we do not want to address.” What issues are those?

Twin Metals continues to work closely with Interior. When Bob McFarlin, Government Affairs Advisor for Twin Metals, comes to DC with Anne Williamson, Twin Metals Vice President of Environment and Sustainability. for a “quick meeting” on December 15th with Tony Tooke, the new US Forest Service Chief, he writes to see whether he might arrange a “short visit” while he’s in town with Kathleen Benedetto. Benedetto and Williamson had met — when exactly, we don’t know — during the summer of 2017. McFarlin asks that Mitch Leverette, Eastern States Acting Director, Bureau of Land Management, join them.

There is ongoing concern over coordination with the Forest Service, from the drafting of a letter announcing that BLM will no longer consider the Forest Service’s non-consent to lease renewal valid, to the very minute the memo is released. Correspondence with the Forest Service’s Kathleen Atkinson is almost entirely redacted. And Interior’s efforts to coordinate with Forest Service only add to the confusion around plans for a news release. At what appears to be the direction of David Bernhardt’s office, work was done on a “relatively short” Minnesota-only press release. Even that is eventually cancelled, and it’s decided that Interior will deal with this only “if asked.”

Before that, however, and at the request of Interior Communications, Gary Lawkowski, Counselor to the Solicitor of the Interior and another Koch veteran, forwards a “one-pager of talking points on the Twin Metals opinion” to Daniel Jorjani and Jack Haugrud for review. He has put them together “given [or with an eye to] today’s focus on critical minerals.” (Recall that “strategic minerals” were a central theme of Ivan Arriagada’s April 17, 2017 letter to Secretary Zinke as well.) In a second email circulating the talking points to Deputy Director of Communications Russell Newell, Lawkowski elaborates: “One thing you all may want to note — the Forest Service has indicated that they believe there are potentially cobalt and platinum deposits underneath Superior National Forest….Cobalt and platinum are on the list of 23 critical minerals released by USGS earlier this week.” Eureka.

As I continue to comb through this latest release, I will add more details to the Twin Metals Timeline. If something here catches your eye, let me know in the comments below, or send me an email (my Twitter handle is also my gmail address). And if you have documents that can add color or contrast or depth to the timeline, please get in touch.

You can read all my posts about the Boundary Waters reversal here.

A Meeting in Santiago about Mining in Minnesota

I’d like to focus, in this post, on what is so far a unique entry in the Twin Metals timeline: an April meeting at the US Embassy in Santiago Chile, with Ivan Arriagada, the CEO of Antofagasta Plc, and Carol Z. Perez, the US ambassador to Chile. We know about this meeting only through documents obtained by Freedom of Information Act requests, and specifically from just one email dated 26 April 2017, sent by Briana Collier to Jack Haugrud:

BrianaColliertoJackHaugrud

Intriguing: but for now, the best I can do is provide a little context.

As the timeline shows, the meeting at the US Embassy in Santiago, Chile in the week of April 26th took place during a period of intense activity around the Twin Metals project. It was held just a little over a week after Mr. Arriagada had written directly to then-Secretary of the Interior Ryan Zinke, requesting an in-person meeting in Washington, DC, on either May 2nd or 3rd. (Arriagada would come to Interior for the first time on the 3rd. Internal emails show that he met on that occasion with several officials at the Department of the Interior, but Zinke is not among them, at least not on the calendar entries I have seen; and if Arriagada met with Zinke separately on May 3rd, there is no entry for any such meeting on Zinke’s official calendar.) So perhaps the embassy in Santiago serves as a way station of sorts, a first stop for Arriagada on his American tour.

It was probably here, in Santiago, that Arriagada first started to make the case he would make in Washington, DC. The letter to Ryan Zinke lays out the appeal the mining company would make at Interior, and it also helps us gain an impression of what this meeting at the embassy was about. It opens with Arriagada declaring that he is “proud” to associate himself and his company — which has never operated a mine in the United States — with “the development of strategic minerals in the United States.” Here in the US, Arriagada clearly understands, minerals acquire “strategic” status when mining companies run into permitting delays and other difficulties. It is, as I’ve noted elsewhere, code for overriding and rolling back environmental regulations. (This leads me to suspect that Arriagada’s letter to Zinke was actually written by the lobbyists at WilmerHale. Whether they played a role in arranging the meeting at the US embassy is impossible to say, given the evidence we have.)

Arriagada’s letter goes on to explain that Antofagasta has already spent “upwards of $400 million in investment” on the “exploratory phase” of Twin Metals. The company frequently brandishes this figure, but I’ve never seen it broken down. Interior’s own Kathleen Benedetto will repeat the $400 million figure a week later, on April 25th, when she briefs Zinke in preparation for his 26 April meeting with Representatives Emmer and Nolan; and the number will be repeated in news stories as well. I am not sure what “upwards” means here, but it seems to be doing an awful lot of work. Principal Deputy Solicitor Jorjani seems to believe caution is warranted: near the end of his December 2017 memo, he notes only that the company “has asserted that it has spent over 400 million in exploration activity.”

For what it’s worth, $400 million is not a number Antofagasta uses in its communications with shareholders or in its financial statements. (See, e.g., here, here and here.) The number routinely associated with the Twin Metals project in these communications is black, not red: $150 million — the value PWC, Antofagasta’s auditor, assigns to the project as an “intangible asset.” When it comes to investments, both the 2015 and 2016 Antofagasta annual reports note a decrease in exploration and evaluation costs, reflecting a “general decrease” in exploration activity “at the Centinela District in Chile and the Twin Metals project in the United States.” There is the added minor discrepancy that this letter characterizes Twin Metals as a “mineral development project, currently in the exploratory phase,” while in the 2016 and 2017 annual reports, the project has already advanced from the Exploratory phase to the Evaluation phase. It appears shareholders and US government agencies are being told two different stories about Twin Metals. In any case, the big round $400 million number is the thing that sticks. It’s used to intimidate and spook. A year later, Zinke will tell Representative Betty McCollum that the Obama administration’s decision exposed taxpayers to “hundreds of millions of dollars” in takings litigation. He was probably recalling Arriagada’s number, or Benedetto’s spin on it.

We now know that Zinke and the Department of Interior were doing Arriagada’s bidding all along, and they’d gotten started well before this letter was written. (And if WilmerHale did in fact draft this letter, then it’s really just some stage business, to create a paper trail for a meeting to discuss an ongoing effort coordinated by WilmerHale.) Interior officials appear to have been less concerned about the exposure of US taxpayers than about the risk the mining company had taken on: “our past and future investment now hangs in the balance,” Arriagada writes in April of 2017. He asks to meet with Zinke to discuss “a viable path forward” for the Twin Metals project. The letter lists three obstacles the Obama administration put in Antofagasta’s way: the M-opinion issued by solicitor Hilary Tompkins; the decision by the Bureau of Land Management to rescind the Twin Metals leases, based on the M opinion; and the withdrawal of thousands of acres of Superior National Forest from mineral development initiated by BLM and the US Forest Service. Remarkably, before Zinke resigned in disgrace, he, Deputy Solicitor Daniel Jorjani, and other officials at the Department of the Interior (and the Department of Agriculture) came through for the Chilean mining company on all three counts.

How any of this work on the mining company’s behalf at Interior bears on the meeting in Santiago, Chile, and what any of it has to do with Carol Z. Perez, the US ambassador to Chile, is hard to say. It’s still not clear why Arriagada thought he should stop first at the embassy in Santiago. A courtesy? An opportunity to get some pointers on how to deal with the new administration? Or something even more specific? To get a better idea, I’ve filed two FOIA requests with the Department of State for communications and documents that will help illustrate the meeting Perez had with Arriagada, but the State Department has labeled the requests “complex,” and I have yet to receive any responsive documents.

We know that Briana Collier briefed Perez, so Perez was looking at the Twin Metals project through the lens of the briefing document Interior provided. And if this briefing was anything like the one page briefing prepared around the same time for Zinke by Kathleen Benedetto — if that April 25 briefing represents the general position of Interior at that point in time — we can observe one thing at least. By April, the US government had completely set aside the previous findings of the US Forest Service and any consideration of the serious environmental risks posed by sulfide mining operations on lands adjacent to the Boundary Waters. The Benedetto briefing makes no mention whatsoever of these concerns. In fact, when Doug Domenech took a briefing on the Twin Metals project for the White House a little over a month later, on June 1, 2017, he apparently read what Benedetto sent him and needed some clarification on this point. That much is clear from Benedetto’s reply:

Benedetto_to_Domenech1June2017

Sic. And with that sloppily written gesture, which barely manages to disguise its contemptuous disregard, Benedetto relegates all science and science-based policy that would caution against permitting sulfide mining in this region to what “people opposed to the project believe.” (The only risk Benedetto appears to consider worth mentioning is the exposure of the American Taxpayer — the initial capitals are hers — to takings litigation, adding that BLM values the Twin Metals deposit at $49.48 billion. The figure is based on a 2014 BLM report that assumes a 44% rate of return. That $400 million investment sure has grown.)

The meeting at the embassy in Santiago needs to be seen in the context of this coordinated push to overturn Obama era decisions, sideline science and environmental protections, and turn Antofagasta’s much-touted investment to a tangible asset — a working mine. Without some response to the Department of State FOIA requests, context will have to substitute for content. Why should the State Department have been asked to intervene in the Twin Metals matter?

Perhaps the aim of this meeting was not to involve the State Department at all. That may not make a whole lot of sense, on the face of it. Perez made her career in the State Department, serving in various posts around the world since the 1980s. She worked for Condoleezza Rice, did a brief stint in Italy, and coordinated State Department anti-drug trafficking efforts before President Obama appointed her US Ambassador to Chile in 2016. She appears to enjoy no special favor with the Trump administration, and she was slated to be replaced by a Trump nominee: Andrew Gellert, who was nominated to the post on January 4th, 2018. And Gellert would be much more closely aligned with the White House than with foreign service officials in the State Department.

This is one last piece of context to consider. We don’t know why Arriagada brought the US embassy in Santiago into the loop on the Twin Metals project. It seems tolerably clear, however, that the US embassy in Santiago would have remained in the loop, and in much closer communication with the Trump White House, had Andrew Gellert been confirmed as US ambassador to Chile. As was noted at the time of his nomination, Andrew is the son of George Gellert, a longtime business associate of Charles Kushner. The Gellerts and the Kushners have done business together for decades, often by nothing more than a handshake — no contracts. Andrew is President of the Gellert Global Group, a food importing conglomerate that does some dried fruit and nut business in Chile, and also counts among its holdings and investments “numerous real estate ventures” with the Kushner Companies. After Charles Kushner’s conviction and imprisonment a decade ago, George Gellert started working closely with Jared Kushner on a number of deals, including the disastrous 666 Fifth Avenue deal. It seems worth noting — even if it’s hard to figure out whether it amounts to anything at all — that back in August of 2018, just a couple of weeks after Brookfield Asset Management paid $1.3 billion to rescue Jared Kushner and George Gellert from 666 Fifth Avenue, Andrew’s nomination to be ambassador to Chile was quietly withdrawn.

Palmater on the Right to Say ‘No’

The very first post I wrote for The Asking Project set out always take no for an answer as a cardinal rule of asking, and I’ve revisited that rule a couple of times since, drawing connections with Margaret Gilbert’s ideas of joint commitment, looking at the way saying no turns the ethical spotlight back on the person doing the asking and — most important of all — sets conditions for new respectful relationship.

There’s a strong connection between this (ethical) rule of asking and (legal) considerations of consent. This is complex territory, so an illustration might be useful. Consider, for starters, this piece Pam Palmater wrote back in October on the indigenous “right to say ‘no’,” as enshrined in the doctrine of free, prior and informed consent.

A little background. After a Canadian court ruled against the Trans Mountain pipeline expansion, the Trudeau government announced that instead of appealing the decision, it would undertake a consultation process with First Nations. Palmater accused the government of conducting a charade, of “using” or abusing this process “to force the expansion of this pipeline.”

Regardless of whether the new consultations are led by a former Supreme Court justice or Trudeau himself, Canada has already decided that the pipeline will be built, before ever talking to any of the impacted First Nations, including those that have asserted Aboriginal title. This renders our constitutionally protected Aboriginal rights meaningless. What legal value is the federal government’s constitutional obligation to consult, accommodate and obtain the consent of First Nations before taking actions that would impact our rights and title, if “consent” is interpreted as the right to say yes but excludes the right to say no? It makes no logical sense to interpret the law in such a way, especially to a constitutionally protected right.

Imagine if consent was interpreted this way in both the ordinary and legal understanding of the word “consent.” When a school sends home a permission form seeking a parent’s consent to allow their child to take a field trip, if the parent does not give consent, the school cannot allow the child to participate. Similarly, if a patient refuses to give consent to an operation to have their hip replaced, then the doctor cannot perform the operation. The absence of consent means no — in other words, a veto that has real legal power and meaning. Imagine if consent was interpreted in this illogical and diminished manner for sexual relations as it is for Aboriginal rights. Imagine if sexual consent in law meant that a man could consult with a woman on whether she wanted sexual relations, and was even willing to accommodate (“where appropriate”) her wishes about how to have sexual relations, but she had no right to say no — no veto over whether or not sexual relations occurred? That is called sexual assault and it is a crime.

The greatest injustices that have ever been committed against First Nations in Canada have resulted from denying the sovereign right of our Nations to say no. The right to have a real veto over infecting our blankets with smallpox; from scalping our people; from stealing our children and raping, murdering and torturing them in residential schools; sterilizing our women and girls; from the forced adoptions of our children into white families during the Sixties Scoop; to the murders and disappearances of our women and girls; to forced human trafficking and now the destruction of our lands and waters for profit.

The right to say no is an inherent part of the legal concept of consent. To interpret this concept otherwise is racist, discriminatory and self-serving, not unlike the doctrines of discovery and terra nullius. Surely, even the Supreme Court would not interpret their own decisions in such an impoverished manner. To do so would render Section 35 [of the Constitution Act, protecting First Nations rights] an empty shell of a constitutional promise.

The Burgundy Ribbon Rule

BurgundyRibbonsCalPERS

Another rule, and for the time being, at least, I am happy* with the wording here: an abuse of asking almost always presents an abuse of power.

Take the case of burgundy affair at the public pension fund CalPERS, as documented by Yves Smith over at Naked Capitalism.

This past fall, documents obtained by Smith show, CalPERS CEO Marcie Frost “asked the CalPERS senior leadership team to wear burgundy to show their support for her” as she faced questions about representations she had made regarding her educational background before and after she was hired. Burgundy ribbons were set out in break rooms with messages urging the “Team” to wear one in a show of support. “No pressure and no problem if you do not want to do this,” the message reads, “it is completely voluntary.” Completely.

“This is obviously inappropriate,” writes Smith,

since a request made by a CEO is effectively an order. CalPERS executives and employees are civil servants, not Frost’s personal retainers. As an expert on managerial and political conduct reacted:

I don’t even know what category to put this in. A scandal-plagued boss orchestrating support by inventing gang colors and pressuring employees to wear them? What happens to the employees who don’t perform this ritual of fealty? Should they be polishing their resumés and practicing their swimming skills?

These incidents smack of underlying panic. Frost is working overtime to shore up her position as CEO in the face of fully deserved questions regarding her long history of misrepresentations about her background, which include committing perjury in Washington on a gubernatorial questionnaire. Not only is Frost pushing her subordinates far too hard to back her up, since they can only do so much for her and coercing them will diminish their good will, she is also showing a lack of a sense of professional boundaries….

Frost’s burgundy campaign may well have crossed the line into creating a hostile work environment. One senior staff member who came to the office and saw the “dress burgundy” request too late to comply issued a written apology. Similarly, when “asked” to wear burgundy to an offsite, one [employee] who wears only black and white felt compelled to buy a burgundy outfit to comply…

…word clearly got around quickly, including the notion that non-compliance was risky.

I am still fussing over the word “presents,” and I’ve considered “masks” and variations in that direction, as well as “declares,” “represents” or “signals.” That one abuse (presenting an order as a request) almost always carries the other with it — almost always, because I don’t want to get caught up right now in handling exceptions — is the essential thing.

You can read my other posts about asking here.

*Postscript: On reflection, I might prefer this much more straightforward and concrete formulation: when someone presents an order as a request, look for an abuse of power. That way, we don’t have to worry too much about motives, or figure out whether the person doing the asking is trying to get away with something. It falls to the person being asked to watch for abuse, and conduct herself accordingly. (Being asked for something, or to do something, turns the ethical spotlight on you, or at least requires you to share it with the person doing the asking. This is your moment.) In a case like the present one, and in most superior-subordinate relationships, calling out abuse may be impractical. Subordinates will bury grievances, reluctantly comply, or pretend not to have been aware of the request. The subordinate’s dilemma in this case registers a failure of governance; a failure of governance at the highest reaches makes itself manifest at even the lowest levels and in the most trivial matters (the wearing of a ribbon). More immediately, presenting orders as requests hijacks power, creates distrust (after all, we can’t help but wonder about motives), and makes people prone to dissemble. All this thwarts collaboration, or the power to do things (to act) together.