Category Archives: The Boundary Waters Reversal

A Shift in Strategy for Antofagasta’s Twin Metals Project

Leave a reply

Chart from opensecrets.org

I usually post the quarterly lobbying disclosures for Antofagasta’s Twin Metals project on Twitter, but I am taking a social media break. So here’s a quick post about what this quarter’s disclosures show.

Q1 2023 disclosures reflect a change in strategy after the actions taken last year by the Solicitor of the Interior, the Bureau of Land Management, and the US Forest Service. Lobbying of the executive branch has shifted to the Department of Energy. The focus of the lobbying is now around the energy transition, positioning Twin Metals as “a world-class project to provide the critical metals that a growing and greener world requires.” (That’s from the latest Antofagasta annual report).

It also looks as if the company is off to a slightly more modest start this year, committing a total of $180,000 for the first quarter of 2023. (In 2022, as I noted back in January, Antofagasta spent over 1 million dollars lobbying the US federal government for its project near the Boundary Waters — $1010,000, to be precise. First quarter expenditures were $200,000; second quarter, $290K; Q3, $280K; and Q4, $240K).

Let’s break down that Q1 2023 number.

  • The Daschle Group, the only group that lobbies directly for the Chilean mining company (and not for its Twin Metals US subsidiary), reports $20,000. This is just a retainer: for this quarter, as in the first and fourth quarters of last year, they report no lobbying activity.
  • Brownstein Hyatt continues to command the lion’s share of the Twin Metals lobbying dollars, and with good reason. Former Secretary of the Interior David Bernhardt rejoined Brownstein Hyatt after the Trump administration came to its ignominious end; and in 2021 the firm poached Wilmer Hale’s Andrew Spielman, who during the Trump years helped shepherd the Twin Metals project through the agency Bernhardt led. Last year, Brownstein pulled in $490,000 for Twin Metals lobbying; $120,000 of that was billed in Q1 of 2022. In the first quarter of 2023, Brownstein Hyatt reports just a little less for its Twin Metals work: $110,000. The firm lobbied the Senate, the House, and the Department of Energy for “supporting development of mining a project in Minnesota” [sic].
  • Wilmer Hale may no longer lead the Twin Metals lobbying efforts, but the firm still reports $50,000 for the first quarter of 2023. They  lobbied the Senate and the House on “mining issues.”

Antofagasta’s three lobbying firms may have to take a slight haircut this year, if this first quarter sets the pattern; but things could pick up again, especially if Antofagasta can get a favorable judgment in federal court. Currently, the project faces some enormous administrative and legal hurdles, enough to trigger a $177.6M impairment in Antofagasta’s accounting. But the Group, as Antofagasta likes to refer to itself, appears to be taking the long view. Administrations come and go, priorities shift, rules change, and Antofagasta needs to keep its American friends close.

Another FOIA Lawsuit? I’m Not Sure

Leave a reply

The latest from the Department of State on my outstanding FOIA requests. I’ve written back asking for clarification on an incorrect case control number used here and in previous correspondence.

Way back in October of 2018, I filed a Freedom of Information Act request with the US Department of State concerning an April 2017 meeting at the US embassy in Chile between Ivan Arriagada, CEO of Antofagasta plc, and Carol Z. Perez, who was then US ambassador to Chile. About a month later, I followed up with a second request for embassy communications regarding Trump’s nomination of Andrew Gellert to be ambassador to Chile.

These documents could help highlight the use of the US embassy in Santiago as a business backchannel for Antofagasta’s Twin Metals project in northeastern Minnesota, and perhaps shed some light on the Trump administration’s (botched) effort to appoint a close Kushner family business associate to be Perez’s successor. With Kushner’s $2 billion deal with the Saudis and the financing of the 666 Fifth Avenue deal under scrutiny, these records might also shed some light on the grey area where Kushner operated, mixing financial and other emoluments with Trump administration policy.

Over four years later, those FOIA requests are still outstanding. After a long delay, several blown deadlines, a denial of my request for expedited processing, then a denial of my appeal of that decision, the Department of State now tells me that I should expect a response to the October 2018 request by November 20, 2023. The November 2018 request is now expected to be completed by May 31, 2024. State complains of a FOIA backlog and setbacks due to the COIVD-19 pandemic, but it’s hard to square those complaints with any reasonable interpretation of the FOIA statute, which stipulates that records will be made “promptly available.” And, of course, these soft deadlines are likely to change again.

A lot has changed in the years since I made these two requests, and with the Republicans now taking the gavel in the House, a lot more changes are coming. The Biden administration restored the status quo ante when it issued a legal opinion saying that Antofagasta’s mineral leases near the Boundary Waters had been improperly renewed; the Forest Service completed the withdrawal study that Sonny Perdue, Trump’s Secretary of Agriculture, abruptly canceled due to political pressure; and the Bureau of Land Management proceeded with the Rainy River Withdrawal.

As Antofagasta and its Twin Metals subsidiary contest these actions in a yet another lawsuit against the federal government, the mining company has stepped up lobbying efforts.

Republicans now say the administration’s actions leave the US vulnerable and over-reliant on supply chains controlled by China. They say the Twin Metals project and other sulfide mining projects in the Lake Superior region will provide American jobs and help prevent human rights abuses abroad.

It’s clear the Twin Metals project will remain a national political flash point in the 118th Congress and in the 2024 election. But so much has changed over the past few years that it’s hard to say whether the records I’m asking for will be of anything more than limited historical interest. What might they contribute to the larger story I am trying to bring into focus, or the current public debate?

That’s weighing on my decision whether to write another complaint, pay the $400 filing fee, and try to force the State Department’s hand. Any case filed in US District Court now would probably take at least until summer or fall to produce responsive records, at which point the State Department promises, sort of, to have its act together. Or they could just put me off again.

Why I Revised Dan Rapoport’s Wikipedia Page

Leave a reply

Reports of Latvian-American financier and Putin critic Dan Rapoport’s death are rife with contradictions and uncertainties. He fell, or jumped, or was pushed from a building on August 14th in Washington, DC. When Metropolitan Police responded to reports of a “jumper,” they found Rapoport dead in front of his apartment building, wearing orange flip-flops and a black hat and carrying his phone, car keys, and $2,620 in cash.

Entertainment journalist Yuniya Pugacheva was first to report Rapoport’s death, claiming that he had abandoned his dog Boy in a nearby park with a suicide note and some money; Rapoport’s wife Alyona disputes Pugacheva’s account along with the allegation that she and her husband were on the outs and that Dan had been spotted in London in the company of other women.

Alyona is not the only one who doubts it was suicide. Friends of Rapoport have cast doubt on Pugacheva’s account. He was, after all, well known for his criticism of Putin, his support for Alexy Navalny, and his association with other Putin opponents, such as Vladimir Ashurkov, Executive Director of the Anti-Corruption Foundation.

I share these suspicions but I don’t pretend to have any special knowledge or insights into Rapoport’s death. I can, however, speak to some of the sloppy reporting of the story, especially as it concerns Rapoport’s ownership of a mansion at 2449 Tracy Place NW in Washington DC.

That’s the same Kalorama mansion I’ve written about before (e.g., here, here, and here), in connection with Antofagasta’s plans to mine near the Boundary Waters.

Nearly all of the reporting I’ve seen — not just the tabloids, but publications like the Daily Beast and National Review — claims that Rapoport sold his mansion to Ivanka Trump and Jared Kushner in 2016.

That is simply untrue. And now this untruth has been copied, pasted, translated, and spread around the world.

I wrote a long Twitter thread on the subject. You can pick it up here.

I’ve also revised Rapoport’s Wikipedia page — my attempt to create some kind of buffer against this piece of mis- or dis-information. Here’s the rewrite:

This fact check will not do much to stem the tide of sloppy clickbait journalism, I know, but why let it stand? Reaching for scandal, lazy reporters overlook corruption. They erase the true story of how Antofagasta tried to renew its mining leases near the Boundary Waters, or how the owner of that Chilean mining company purchased a luxury property in Washington, DC right after Trump’s 2016 election, then rented it to the new president’s daughter and son-in-law. They give Antofagasta, Andronico Luksic Craig, Ivanka Trump and Jared Kushner a pass.

The Kalorama story has worked this way since 2017, as I remarked on Twitter. Even when it gets the facts right, reporting wants to insinuate that something must be amiss at 2449 Tracy Place NW, but it fails to say what, exactly, and it rarely addresses the serious questions about ethics, foreign emoluments, and government corruption this story presents.

Update, 26 November 2022: having completed its autopsy, the DC medical examiner’s office has listed the cause of Rapoport’s “sudden” death as “undetermined.”

The Confusion at Yesterday’s House Committee on Natural Resources Hearing

Leave a reply

There was some confusion around the testimony of Julie Padilla, Twin Metals’ Chief Regulatory Officer, at yesterday’s House Committee on Natural Resources hearing on HR 2794, the Boundary Waters Wilderness Protection and Pollution Prevention Act.

Padilla originally submitted testimony stating unequivocally that “there is no potential for acid rock drainage.” Full stop. The emphasis on “no” is hers:

She then revised or, as she put it, “reframed” her written testimony to omit that sentence.

In her oral testimony, Padilla appeared to stick by her original statement, saying several times that the Twin Metals mine would pose “no” risk — “zero” risk — of acid mine drainage. Note when you are watching her testimony, however, that she is careful to qualify her original “no risk” blanket statement by adding that there is “no risk of acid rock drainage to the Boundary Waters from this project. There is zero risk to the Boundary Waters from acid rock drainage from this project.” I don’t see how that rewording safeguards the original claim, except that it allows for acid rock drainage outside the Boundary Waters.

Supporters of the McCollum bill asked about the inconsistencies and questioned Padilla’s motives, with Betty McCollum saying that Padilla “deliberately” removed the blanket statement. Padilla insisted the sentence was not eliminated, just “reframed,” and acted surprised by the contention. Here are the key exchanges:

Padilla’s complete original written testimony is here. So far, the revised — or “reframed” — testimony has not yet been posted.

What’s Behind Some of the Redactions in my Boundary Waters FOIA Case?

1 Reply

I guess this is what winning looks like.

The b(5) FOIA redactions I contested back in November have all been released in full. I’ve added these unredacted documents to the collection of records from my Boundary Waters FOIA case on documentcloud.

There are no earthshaking revelations here. The emails sent from David Bernhardt’s iPhone turn out to have been sent from his official email account; I suspected the agency might have redacted them to cover his use of a personal account. The redacted paragraphs in the leasing renewal documents from 1987-2005 concern Forest Service consent (or “no objection”) to the lease renewals, with some stipulations about an unresolved reclamation issue. These were public records of past decisions that were treated as if they held closely-guarded secrets.

Then there is the unredacted version of the Twin Metals Talking Points put together by Gary Lawkowski, Counselor to Solicitor Daniel Jorjani and fellow Koch network alumnus. These Talking Points were to accompany the Jorjani M-Opinion, the legal memo that determined Chilean mining giant Antofagasta plc had a non-discretionary right to renewal of its leases near the Boundary Waters. I talked a little about this redaction in a 2020 FOIA webinar. If there is a showpiece among these unredacted documents, this is it:

It’s worth asking why any of this — the letters, the email address, the Talking Points — was redacted in the first place. In previous posts I characterized these assertions of privilege as heavy handed. Interior misused, or abused, Exemption 5 redactions. Some look like a hamfisted effort to protect political appointees, like the full redaction of Lawkowksi’s Talking Points.

Why were these redacted? The Talking Points position the Twin Metals project as a source of critical minerals, criticize the Obama administration, and argue that the Jorjani reversal is “a victory for the rule of law by affirming that the government means what it says when it enters into contracts.” That last claim may be hyperbolical, but hyperbole hardly merits a coverup, and the Talking Points were written for public consumption. Trump himself would repeat the criticism of the Obama administration when he spoke in Duluth. Arguments about regulatory certainty are common enough and would have gotten a friendly reception in the business press. And as we saw just last week, when President Biden issued an executive order and the Senate held a hearing on critical minerals, there is plenty of bipartisan support for onshoring critical minerals production.

So why the sensitivity around Lawkowski’s arguments? Maybe this is just a case of a FOIA reviewer applying Exemption 5 indiscriminately. But why not roll out these talking points, and try to build public consensus around them? I can only guess that it was some mixture of incompetence, or an inability to coordinate a coherent critical minerals strategy (remember infrastructure week?), and arrogance: a sense that they didn’t owe the public explanations.

There is a world in which this could have been a political win, had the administration taken the time to build public support and rally Congressional allies around mining for the energy transition, or a new energy mix, and — this is the kicker — had it found a more legitimate route forward for the lease renewals. Instead, at every turn, they schemed behind closed doors, and they failed.

A Final Batch of Boundary Waters FOIA Records

2 Replies

Last week, the Biden administration determined that Antofagasta plc’s mineral leases near the Boundary Waters had been improperly renewed in 2019.

Principal Deputy Solicitor of the Interior Ann Marie Bledsoe Downs found that changes made to the Bureau of Land Management’s standard lease form were irregular and amounted to giving the Chilean firm “special treatment.” She also withdrew the “flawed” Jorjani M-Opinion, M-37049; its specious claim that Antofagasta had a “non-discretionary right” to renewal of its leases, she wrote, “spurred the improper renewal decisions.” The Jorjani opinion led the agencies into a procedural and legal morass.

“As a consequence of the Jorjani M-Opinion,” Bledsoe Downs writes, the Department of the Interior ignored or sidestepped the Forest Service’s statutory consent authority. Jorjani all but eliminated this authority and swept aside the fact that the Forest Service did not consent to a renewal of the leases back in December of 2016. That determination was invalid, he claimed, because the mining company had a non-discretionary right to renewal. Not just the Forest Service, but “the United States” itself had no say. The leases had to be renewed; the Forest Service could make some stipulations, nothing more.

A small batch of Boundary Waters documents that arrived last night — the 19th supplemental release of records compelled by my FOIA lawsuit against the Department of the Interior — does not shed much new light on how these decisions were taken. This is probably the last batch of records, with the exception, maybe, of those records whose redaction I am contesting.

These records are almost entirely redacted. Nothing but black. I added them to the collection on documentcloud anyway, here.

The new records include three (totally redacted) drafts of a BLM News Release announcing the reinstatement in 2018 of Antofagasta’s mineral leases.

They also include two fully redacted memos from Mitch Leverette, Acting Eastern States Director at the Bureau of Land Management, to Tony Tooke, Chief of the US Forest Service. Even the dates are redacted on these! But we know that they must have been written between September 2017 and March 2018, during Tooke’s brief term as Chief.

The dates, but not much more than the dates, are not redacted on two DOJ communications from Lisa Russell, Chief of the Natural Resources Section of the Environment and Natural Resources Division. Russell’s July 10, 2018 memo is addressed to Karen Hawbecker in the Office of the Solicitor at the Department of the Interior; this is followed by a 14 page draft litigation report on the Voyageur v. United States and Friends of the Boundary Waters v. BLM cases. Those cases had just been filed. Another report, from Russell at DOJ to Jeffrey Prieto, General Counsel at USDA, dated January 18, 2017, deals with Franconia Minerals v. United States, the lawsuit brought by the mining company in September, 2016, claiming a right to renewal of the mineral leases.

Though their contents have been completely obliterated, these records still tell us a little something. Both Leverette at BLM and Russell at DOJ are consulting with the Forest Service; the memos may simply bring the Forest Service into the loop of the the legal work being done at these agencies; they might well address the critical issue of its statutory authority; and in Leverette’s case, at least, the memo might reiterate the Jorjani argument that the USFS 2016 non-consent determination was invalid. The redactions make it impossible to say for certain.

When it comes to the three drafts of the BLM News Release announcing the reinstatement of Antofagasta’s leases, we have very little to work with. The news release comes from Leverette’s Eastern States division. The headline in all three cases reads: “Bureau of Land Management reinstates Minnesota mineral leases. Consideration of application for renewal also re-started.” All three drafts are marked “for immediate release.” While one of the drafts is dated May xx, 2018, two of the drafts are dated “February xx, 2018.”

The official date of the reinstatement was May 2, 2018, but we know from records I’ve previously obtained that the February draft of the news release caused a flurry of activity at the Department of Interior. For example:

The language requested by Leverette might well have been some legal justification of the reinstatement along the lines prescribed by Daniel Jorjani: Antofagasta’s leases could be reinstated because, due to a legal error, the Forest Service’s non-consent determination was invalid. Consider this paragraph from Leverette’s May 2, 2018 official Reinstatement Decision memo:

Because the BLM’s prior request for Forest Service consent was based on the legal error that the United States had discretion to decide whether to renew the leases, we informed the Forest Service that its December 2016 non-consent determination was not legally operative. The Forest Service has not objected to that conclusion.

This just leads me back to the question I asked on Twitter. Why didn’t the Forest Service object? Why didn’t it stand by its earlier conclusion? Why didn’t it make an effort to protect the integrity of the scientific study then underway? Or was there an objection that took from February to May to settle? Was that the subject of the two memos from Leverette to Tony Tooke? Did Tooke’s resignation in March 2018 help resolve the matter?

Of course, there are other explanations for the February-May delay. The federal bureaucracy is a slow-moving beast. Tooke was under siege in the last months of his career at the Forest Service and in no position to dictate terms. And, as Bledsoe Downs points out in a footnote to her legal memo, the decision to reinstate the leases was “concurred in by Joseph Balash, Dep’t of the Interior Assistant Sec’y for Land and Minerals Mgmt.” It may have taken from February to May of 2018 to obtain that concurrence.

What we do know for certain is that on May 2, 2018, on the very day the Bureau of Land Management reinstated these mineral leases, the CEO of Antofagasta plc met with Secretary of Agriculture Sonny Perdue. The pressure only mounted from that point on. Though Jorjani had asserted back in December of 2017 that the US Forest Service had no power to say whether the Chilean mining company’s leases should be renewed, the mining company, the agencies, the White House, and several members of Congress dedicated significant resources over the next year to making sure of that and getting Sonny Perdue to cave to their demands.

You can find all the Boundary Waters records I’ve received to date here.

Read more about the Boundary Waters reversal here.

Our Chronic Legitimacy Crisis Might Turn Acute, Again

1 Reply

In the public comment I submitted last week on the Rainy River Watershed Withdrawal, I made the point that completing the withdrawal would not only help protect the Boundary Waters. It would also serve the interest of good government. A new article by Steven Levitsky and Lucan Way in Foreign Affairs helps set this point in the context of an unfolding American crisis.

“America,” argue Levitsky and Way, “may no longer be safe for democracy, but it remains inhospitable to autocracy.” Even so, the ongoing push toward autocracy is likely to bring a prolonged period of democratic instability and political violence. Even when they do not succeed in their autocratic ambitions, autocrats and their cronies in the public and private sector will destabilize government, undo rulemaking, and undermine legitimacy, as we saw clearly during the Trump era:

Trump proved to be as autocratic as advertised. Following the playbook of Hugo Chávez in Venezuela, Recep Tayyip Erdogan in Turkey, and Viktor Orban in Hungary, he worked to corrupt key state agencies and subvert them for personal, partisan, and even undemocratic ends. Public officials responsible for law enforcement, intelligence, foreign policy, national defense, homeland security, election administration, and even public health were pressured to deploy the machinery of government against the president’s rivals. (emphasis mine)

America’s chronic legitimacy crisis could once again turn acute.

If Trump or a like-minded Republican wins the presidency in 2024 (with or without fraud), the new administration will almost certainly politicize the federal bureaucracy and deploy the machinery of government against its rivals. Having largely purged the party leadership of politicians committed to democratic norms, the next Republican administration could easily cross the line into what we have called competitive authoritarianism—a system in which competitive elections exist but incumbent abuse of state power tilts the playing field against the opposition.

Corruption and political interference at Interior and USDA around a single mining project may not rank among the most serious abuses of state power we’ve seen lately or are likely to see. But documenting and understanding what happened in the case of the Rainy River Withdrawal can help us appreciate where things might be heading.

Public Comment on the Rainy River Watershed Withdrawal

6 Replies

My written comments ran to five pages, so instead of posting them here, I put them online as a PDF, which you can read here. I also made a three-minute comment in the live session hosted by the Bureau of Land Management and the US Forest Service this afternoon. My comments focus mainly on the story I’ve been pursuing for the past few years — a story of corruption. The first couple of paragraphs convey the general idea:

Federal lands in the Rainy River Watershed should be withdrawn from disposition under US mineral and geothermal leasing laws for the proposed initial twenty-year period, if not permanently. This is an overdue decision, grounded in science, economics, law, and environmental ethics.

Why, then, hasn’t it already happened? How did this withdrawal process, which started in 2017, go off track? Agency records obtained through the Freedom of Information Act show clearly that a foreign mining company, Antofagasta plc, acted to prevent the withdrawal; and from 2017-2021, members of Congress and the executive branch ran political interference on its behalf. Decisions taken behind closed doors during that period served foreign private interests, not the American public interest. The agencies now have an opportunity to rectify the situation.

I end with three recommendations:

The announcement on October 20, 2021, that the Biden administration will complete the “science-based environmental analysis” was encouraging. Given all the political interference, the two-year study really ought to have been started all over again, from scratch, in the interest of scientific integrity. At the very least, USDA Secretary Tom Vilsack should release – unredacted — the preliminary findings of the canceled two-year scientific study, so that they can be compared with the new and complete analysis.

As agencies work toward a science-based decision on the twenty-year withdrawal, they also need to take additional steps to restore public confidence and guard against undue influence. As a first step, the USDA Inspector General could review Secretary Perdue’s decision to cancel the 2017 withdrawal process and report on scientific independence, ethical conduct, and political interference at the agency.

Finally, the agencies can help raise standards. Industry repeatedly assures us that non-ferrous mining in the Rainy River Watershed and elsewhere can be done “responsibly,” and there are a growing number of calls, from Congress and from within the Biden administration, for “responsible mining” for the transition to renewables. How should government respond? Rigorous and practical guidance for agencies on the law and ethics as well as the technical and scientific aspects of “responsible mining” would be a good start.

Here is a recording of my three-minute live comment, which tracks all this pretty closely. Video is cued to the mark.

The Boundary Waters, Offshore: Luksic in the Pandora Papers

Leave a reply

A chart of Luksic-connected offshore entities included with the CIPER report.

Last week, El Centro de Investigación Periodística (CIPER) published an investigative report on the offshore financial activities of Andronico Luksic Craig and the Luksic family, based on the Pandora Papers — a trove of over 11 million records leaked from tax havens in the British Virgin Islands. The investigation cast some new light on the elaborate network of offshore corporations, foundations, law firms, and corporate services companies involved in managing some of the Luksic family’s vast fortune, and brought me back to some of the records I’d uncovered in connection with Luksic’s purchase of the Washington, DC mansion where Jared Kushner and Ivanka Trump lived while serving in the Trump White House.

Luksic acquired that $5.5 million Kalorama property right after Trump won the 2016 election, right around the time Kushner-Trump were preparing for their move to the nation’s capital and at a critical moment when Antofagasta plc, the Chilean mining company controlled by Luksic, was counting on the Trump administration to reverse policies of the Obama administration (which it duly did). This neat arrangement may not have been a simple quid pro quo, a mansion provided in return for government approvals to mine copper and nickel on the edge of the Boundary Waters, but even to the casual observer it looks an awful lot like a foreign emolument. Unfortunately but not surprisingly, the matter never underwent a formal ethics review. (More on all that here, here, and here.)

While these new documents do not directly shed light on the Kalorama emolument, they provide some insight into how Luksic’s control of Antofagasta is connected to offshore schemes and how the Kalorama mansion might figure into a network of Luksic-controlled US property holdings.

One company called out in the CIPER investigation, FDMDA Corp, looks like a more elaborate version of a company I came across in Boston property records, LDMD Corp, which was registered as the owner of two Avery Street properties from 2011 to 2013. FDMDA carries the first initials of the names of Luksic’s five children, while LDMD appears to have been created solely for the male heirs. (I am assuming the L in LDMD stands for Andronico Luksic, the first-born son, with DMD representing Davor, Maximiliano, and Dax.) Two others, Beacon Eagle Corporation and Avery Eagle Corporation, also look like another iteration of Boston property-holding companies formed by Luksic attorneys, Avery Bicentennial Corp and The Avery Millennium Corp.

These corporations owned and still own condominiums on Avery and Beacon streets in Boston. The Beacon Street property includes a penthouse that Luksic (or, rather, Avery Bicentennial) purchased from quarterback Tom Brady in 2012 — which is right around the time that Luksic says he and Donald Trump “said hello” or exchanged a greeting at a New England Patriots’ game, where they would have been guests of Brady, a mutual acquaintance, or of billionaire owner Robert Kraft. So Brady connects Luksic to Trump — suggesting there might be a little more to the Kalorama mansion story than serendipity. What’s not clear is how the entities formed around the Boston properties, or even Luksic’s Miami and Washington DC properties, might be legally connected with the two Eagle companies mentioned in the Pandora Papers.

On April 28, 2017, FDMDA Corp and Beacon Eagle Corporation were relocated from the British Virgin Islands to Liechtenstein, where they were subsumed under an entity called The Lazare Tcherniak Foundation. (The disposition of Avery Eagle remains unclear.) The Lazare Tcherniak Foundation “provides for the economic furtherance of the descendants of Nadia Malvine Tcherniak” — Patricia Lederer Tcherniak is Luksic’s ex-wife and mother of his five children — “that bear the name Luksic as their first or second name and that are also biological descendants of Andronico Luksic Abaroa [Andronico Luksic Craig’s father]. They are all members of a generally defined and fully discretionary class of beneficiaries.”

While Beacon Eagle appears to be bound up with US-based real estate investments, FDMDA Corp. serves Lazare Tcherniak Foundation beneficiaries by managing and distributing stock dividends. Records reviewed by CIPER describe the source of FDMDA Corp’s funds as “mining activities in the Republic of Chile. The funds are mainly dividends indirectly received from Antofagasta plc, a public company listed on the London Stock Exchange.” Here, “indirectly” probably indicates that there is an entity — a partnership — to which the Antofagasta plc dividends are paid before they are distributed, in whole or in part, to the Liechtenstein-based FDMDA Corp.

Of course, all of this appears to be perfectly legal, as Andronico Luksic himself pointed out in a tweet responding to the CIPER report.

While technically true (“Liechtenstein is NOT a tax haven” because Chilean tax authorities don’t include it in their list of tax havens), this statement was rapidly ratioed. Along with President Sebastian Piñera’s own exposure in the Pandora Papers, Luksic’s exposure and his carefully lawyered response just provide more fodder for the debate over inequality in Chile.

Luksic’s  October 6 statement also prompts questions about corporate governance, the extent of the Luksic Group’s reach, and its attendant responsibilities. With a controlling interest in Antofagasta plc, the Luksic Group can easily thwart any shareholder resolutions not to its liking and effectively determine how the company and its subsidiaries are run, all from behind the scenes and with little accountability. That is shadow governance, and it’s the very model of corporate governance that Antofagasta brings to its Twin Metals project near the Boundary Waters.

Postscript. Oct 20, 2021. The same elaborate network of Luksic foundations, offshore companies, tax havens, and investment vehicles is evident in the disclosures filed by Antofagasta’s three lobbying firms: Brownstein Hyatt, Wilmer Hale, and The Daschle Group. I addressed the topic in this Twitter thread:

Read more about the Boundary Waters reversal here. 

The Latest Records in my Boundary Waters FOIA Case

1 Reply

This morning, after some prodding, Interior sent the 18th supplemental production of records in my Boundary Waters FOIA case. This release numbers only 108 pages. I reviewed the documents this morning in this Twitter thread.

At the moment, the biggest takeaway for me is that we still don’t know nearly enough about coordination among the Department of Interior, the Trump White House, and the USDA, and how politics — and pressure from the mining company — played into the Trump administration’s decisions around Antofagasta’s mineral leases near the Boundary Waters.

Today’s release shows that legal memoranda from the mining company on the mineral withdrawal circulated at Interior just days before Solicitor Daniel Jorjani met with David Bernhardt’s close associate Michael J. Catanzaro, then with the Executive Office of the President, and Stephen Vaden, an attorney at USDA who seems to have been charged with keeping Sonny Perdue apprised of developments on this front.

Perdue had promised Representative Betty McCollum in May of 2017 that “we are absolutely allowing [the mineral withdrawal study] to proceed.” By August of 2017, the mining company had offered a whole host of legal arguments that would help Perdue move away from that declaration. But remarkably enough, he didn’t take that route. Instead, in September of 2018, after a year-long pressure campaign, he abruptly cancelled the two-year mineral withdrawal study, then in its eighteenth month, and declared the Rainy River Watershed open to new exploration. Why? Probably because Trump had publicly fingered him, on a May 2018 visit to Duluth: “It’s now up to Secretary Perdue, and I know he’s looking at it very strongly.” It was clear enough what Sonny Perdue had to do. Where legal arguments had failed, coercion succeeded.

I still believe Secretary Vilsack ought to ask the USDA Inspector General to look into the matter, because there’s pretty clear evidence that Perdue acted corruptly, or at least arbitrarily and at the caprice of the president, but it’s seeming less likely Vilsack will do the right thing. Secretary Vilsack has steered clear of making any comments about mining near the Boundary Waters, citing ongoing litigation in Wilderness Society v. Bernhardt and the review of the matter that Interior is undertaking in connection with that litigation — which is now supposed to be completed by October 22, according to court filings. But as I have said repeatedly, the Secretary as head of a federal agency has an independent obligation to the American public and does not need permission from another agency to investigate corruption at the one he leads.

The new records are here.

And all the Boundary Waters FOIA records I’ve obtained to date are here.

Read more about the Boundary Waters reversal here.