Tag Archives: ethics

The Boundary Waters, Offshore: Luksic in the Pandora Papers

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

Federal Agencies Need to Deliver Themselves from the Legal and Ethical Morass Trump and his Cronies Left Them In

The 15th supplemental release of Boundary Waters documents in my FOIA case against the Department of Interior arrived yesterday. I’ve added the documents to documentcloud. Were I to characterize these records as disappointing, I might only be admitting that I still expect too much from them. Still, this release looks especially untidy, and there may be something going on behind the scenes — some change in staffing, for example — that I am not aware of.

First, the attorney assigned to my case in US District Court contacted me a couple of weeks ago to let me know that this production would be a few days late. When it came, the response letter, which accompanies every release and describes how many pages were reviewed, how many withheld, what exemptions were used, and so on, was missing. (Someone just forgot to attach it to the email, which begins “Attached is the Solicitor’s 15th Production response letter….”). The documents come from Brianna Collier, a career attorney in the Office of the Solicitor — who has been the main custodian of records in this case. We only catch glimpses of what Trump’s political appointees were doing when Collier is in the loop.

The documents themselves are heavily redacted, with deliberative process (b)(5) claimed throughout. Excerpts from Hein’s Legal Research Guides are the only records not redacted. They would be available publicly anyway. What can only be an earlier draft of the 19 page M-Opinion by then-Solicitor Daniel Jorjani dated December 5, 2017 is completely redacted. We know from the timeline that the memo was nearly finished by then, but instead of taking time to redact just those phrases and paragraphs which were still under deliberation, the FOIA officer applied a very broad brush on all 19 pages.

The FOIA officer took a slightly less aggressive approach to an August 7, 2018 memo written by Ryan Sklar on the Forest Service’s application to segregate 234,328 acres of federal land within Superior National Forest. This is the land withdrawn from mineral leasing and development while the US Forest Service completed “the necessary environmental analyses under the National Environmental Policy Act (or NEPA).” The law is clear. Sklar explains in a footnote:

Just one month later, of course, then-Secretary of Agriculture Sonny Perdue would cancel the two-year assessment, claiming that “the analysis did not reveal new scientific information.” So far, we have had to take Sonny Perdue’s word for it; the findings of the cancelled withdrawal study still have not been released. The cancellation meant that any “final decision” on the application for mineral withdrawal would be made without a complete case file — without the complete NEPA document. And without a “final” NEPA document, review would likely be guided by political considerations, not scientific evidence.

Except for an intriguing closing sentence, the discussion section here is fully redacted:

There’s not much to go on here, except Sklar’s final note: discussions of “next steps” around the Rainy River Watershed withdrawal were “ongoing” just one month before Sonny Perdue abruptly cancelled the application. There were, at that point, five months to go in the review required by NEPA, and pressure on Sonny Perdue was at its peak, with Trump publicly directing Perdue to look at the withdrawal “very strongly” and reassuring Minnesota mining proponents that they would “do very well.” Tom Emmer, Pete Stauber, Rick Nolan, and Paul Gosar kept the pressure on Perdue behind the scenes.

It’s unlikely Sklar’s legal memo refers explicitly to that pressure campaign, but it’s also hard to believe that he or anyone working on this issue at Interior was unaware of it.

The agencies now need to deliver themselves from the legal and ethical morass Trump and his cronies left them in. Secretary of the Interior Haaland should ask BLM to request a complete case file from the US Forest Service, with the necessary NEPA analysis, so that BLM can evaluate and review the withdrawal and so that she can make a lawful decision. USDA Secretary Tom Vilsack should release the preliminary findings of the cancelled two-year scientific study, unredacted. He should also ask the USDA Inspector General to review Perdue’s decision to cancel the withdrawal application and NEPA analysis. And though it’s unlikely they will do everything they should to set things right — that’s a tall order, and they’ve inherited a mess —  we can expect some steps in this direction before the end of next month, when the stay in Wilderness Society v. Bernhardt expires.

Read more about the Boundary Waters reversal here.

A Return to Science and a Push for Responsible Mining — Whatever That Means

New Boundary Waters documents arrived yesterday. I posted a short thread on Twitter as I reviewed them.

These records traverse familiar ground. Most date from January, 2018, when attorneys at Interior were preparing letters notifying the Forest Service and Twin Metals that the Solicitor’s Office had reversed the Obama administration.

For Twin Metals, this would mean that the Department of Interior had rescinded its rejection of their application for lease renewal. Not a green light — that would come more than a year later, in 2019 — but an encouraging sign of new and friendly disposition. For the Forest Service, the reversal would send an early signal that the two-year mineral withdrawal study would either have to favor renewal of Antofagasta’s leases (unlikely), or it would have to be cancelled if it were going to stand in the way of renewal. The issue raised questions about compliance with NEPA, as one heavily redacted exchange suggests:

It would be helpful to know more about how these attorneys saw the problem with NEPA at this time, especially when evaluating the action then-USDA Secretary Sonny Perdue in September of that same year, when under political pressure he abruptly cancelled the planned study.

The document trail invariably takes us back to that critical decision. It deserves careful and comprehensive review. There was some movement in this direction yesterday, when Senator Tina Smith wrote to Perdue’s successor at USDA, Tom Vilsack, and Secretary of the Interior Deb Haaland to ask that the BLM and Forest Service to start a new mineral withdrawal and segregation process and resume the study Sonny Perdue interrupted.

Smith’s letter calls for a return to science but recommends a more limited review than the situation warrants. She wants the agencies to determine whether copper and nickel can be “safely” mined in this area, and she also wants to present herself as a champion of Minnesota mining. It’s a move she seems to have learned from Amy Klobuchar.

Be that as it may, Smith offers Vilsack and Haaland one way forward over the next few months, during the court-ordered 90-day stay in Wilderness Society v. Bernhardt.

We must protect our precious wilderness. At the same time, we must pursue opportunities for both recycling and responsible mining of important mineral resources in the United States. If you believe—as I do— that the United States should lead the way in creating a clean energy future, then we must support public policy which allows for responsibly mining the minerals that this future requires. It is irresponsible and unethical to outsource exploitive [sic] labor practices and environmental degradation to other places while we reap the benefits. However, copper-nickel mining is not right for all places. There are some places too sensitive to mine. This is why we the [sic] mineral segregation and withdrawal study is so essential.

The letter simultaneously recommends precautions for the Rainy River Watershed and “responsible mining” to build “a clean energy future.” Those two things aren’t necessarily incompatible, but it’s unclear how this statement translates to coherent rule-or decision-making. It’s also the same line on mining that Secretary of Energy Jennifer Granholm has taken in recent public statements. How will the new administration determine what responsible mining for the clean energy future looks like? That is going to take some difficult conversations, but it’s not an issue Granholm, Vilsack, and Haaland can or should put off for very long.

Time for A Review

A number of writers — pundits and news commentators, mostly, people with large public followings — have been announcing lately that they are launching substack newsletters. Substack is subsidizing many of these moves with fat advances, but to hear these writers tell it, that’s not what’s motivating them: they are moving from mainstream outlets or starting a newsletter in addition to their regular gig, they say, because they hope the new format will allow them to write more freely, get out from under their editors’ thumbs, break some rules, offend orthodoxies, and tackle a wider range of subjects than they might when writing for mainstream media outlets.

I am pretty skeptical of these claims and read them mainly as marketing ploys, but I can sympathize with the urge, the urgently felt need, to branch out, find a new groove, and explore new topics. That does not mean I plan to switch this blog over to substack. I don’t have many (non-paying) subscribers as is (but I am grateful for those I have); and lacking the big follower counts and public platforms these writers have before they stage their own deplatformings and moves to substack, I doubt I could attract enough paying customers for the move to make much sense, financial or otherwise.

I’m nevertheless longing to do new things with this blog, no matter how many people subscribe to or read it, and make it more than a chronicle of my FOIA adventures, which is essentially what it’s become over the past year or so. My focus on that topic has brought me a few new subscribers, but it’s also slowed me down — I’ve allowed the slow trickle of documents from my FOIA lawsuit to set the pace — and boxed me into a single story.

I am restless and claustrophobic, off the page and on, so I don’t like feeling boxed in, physically or intellectually. Besides, I’ve got other stories to tell and other projects that need my attention. Some of them have grown out of the work on industrial development around Lake Superior that began more than a decade ago with 1913 Massacre; some of them (like this post on tribal consultation) arise from new connections I see between my work on industrial development and my interest in models of power and consent (which I’ve talked about under the rubric of The Asking Project); and some of them, thank goodness, have nothing at all to do with those things.

Of course, that doesn’t mean I am done with the Boundary Waters and the Freedom of Information Act — not just yet. My FOIA case in DC District Court is still open; and this week saw some new developments.

First, to celebrate Sunshine Week, I put up a new version of the FOIA webinar I gave back in July. The version that Friends of the Boundary Waters posted on YouTube did not include the presentation slides, because I failed to notice a Zoom prompt asking me whether I wanted to record my desktop until the webinar was over. I synced the slides with the webinar audio and created this new version. It’s easier to follow.

Second, a motion to stay was filed on Thursday in Wilderness Society v. Bernhardt, the main lawsuit challenging the Department of Interior’s renewal of Antofagasta’s leases. It appears that newly confirmed Secretary of the Interior Deb Haaland is less than enthusiastic about the lawsuit she inherited from her predecessor, David Bernhardt. The motion asks for a stay of 90 days so that Haaland and Secretary of Agriculture Tom Vilsack, both of whom have publicly opposed sulfide mining near the Rainy River Watershed, can review the matter. The review looks to be pretty comprehensive, and will cover the government’s current position, the reinstatement of Antofagasta’s mineral leases, and the historical lease files.

A review of that scope is likely to bring a lot of suppressed evidence — the findings of the abruptly canceled mineral withdrawal study, the stipulation of a production requirement, and so on — to light. In a Twitter thread about the filing yesterday. I wagered the review would undo Jorjani’s work:

Or we’ll see the scientific study resumed. Whatever route the review takes, the new Secretaries should also ask their Inspectors General to look into the conduct of the Solicitor’s Office at Interior and the Secretary’s Office at USDA over the past four years. There is plenty of evidence of undue influence, regulatory capture, administrative sabotage, and all sorts of corruption and malfeasance, from contempt of Congress to perjury and violations of NEPA. We need accountability in order to set things right.

If any of the records I’ve published along the way can help reviewers get closer to the truth of what happened, or help bring about a reckoning, then maybe it will all have been worth it.

New Boundary Waters FOIA Complaint Filed Against US Department of Interior

Yesterday, I submitted my complaint against the United States Department of interior to the US District Court in the District of Columbia, asking the court to compel DOI to comply with the Freedom of Information Act and release documents I’ve requested about the Boundary Waters reversal.

As a pro se litigant, I had to petition the court for leave to use the Electronic Case Filing system, so for now I am in the slow lane, waiting for my paper filing to be assigned a case number. [Update, August 2, 2019: Galdieri v. US Department of the Interior has been assigned Case No: 1:19-cv-02253 and Judge James E. Boasberg has also granted my motion for pro se access to Electronic Case Filing.] In the meantime, I thought it would be helpful to post the complaint online.

There have been a number of reports lately about the efforts to hobble FOIA at the Department of Interior; and just this week, Gail Ennis, the Acting Inspector General at the Department of Interior, announced an investigation of the department’s FOIA Awareness Process.

Ennis is taking this step after several watchdog groups, including American Oversight and the Western Values Project, charged that the awareness review policy at Interior was instituted to protect Trump political appointees from public scrutiny. (EPA instituted a similar policy last month.)

In my complaint, I mention the expansion of that policy in February, 2019, to cover Ryan Zinke and other officials. It seems to have played into Interior’s abrupt cessation of all communications with me, and its apparent decision to withhold responsive documents.

After corresponding with me fairly regularly for almost a year about my FOIA request, providing two document releases, and promising “additional documents” as part of a “rolling response,” Interior went silent on me as soon as I put the documents I obtained online. Since February, when I first published those documents, they have failed to respond to multiple emails and phone calls requesting a status update on forthcoming releases. They even failed to respond to several emails asking whether I had, in fact, exhausted all administrative remedies. I guess their silence is the answer to my question.

I suspect I’ve been blacklisted, or, if that’s too strong a word, at least singled out. My argument here is not just post hoc propter hoc. About a month after I first put the Interior documents online, something else happened to deepen my suspicions.

On March 26th, the Solicitor at the Department of the Interior began to follow me on Twitter.

Jorjani1

This account — which was created in February of 2017, never tweeted, and has since been taken down — appears to have belonged to Daniel Jorjani (DJ). In February of 2017, Daniel Jorjani was Principal Deputy Solicitor (PDSOL) at the Department of Interior: DJ, the PD, at SOL. (I have no idea what the 9999 is about.) He’s now Acting Solicitor and — let’s not forget — he also serves as the Department’s Chief FOIA Officer.

Back in March, the DJPDSOL9999 account was following a number of environmental organizations, like EarthJustice, the NRDC, the Center for Biological Diversity, Defenders of Wildlife, Western Environmental Law, Wilderness Watch, Cultural Survival, and Indian Land Tenure. DJPDSOL9999 was also following Jenny Rowland Shea, who writes about public lands for American Progress, Anna Massoglia, who researches dark money, Aaron Weiss from the Center for Western Priorities, and climate scientist Katherine Hayhoe. The list went on.

At the time he followed me, @DJPDSOL9999 had “liked” only one thing, and that was on March 21st of this year: a retweet with comment by “Matilda Williams” (@katherinewill27) of a tweet by Swing Left of a Washington Post article.

Jorjani2

The article in question is by Julie Ellperin: “Federal Judge Demands Trump Administration Reveal How Its Drilling Plans will Fuel Climate Change.” It’s about a ruling by U.S. District Judge Rudolph Contreras that the Department of Interior “violated federal law by failing to take into account the climate impact of its oil and gas leasing in the West.” Judge Contreras ordered the Bureau of Land Management “to redo its analysis of hundreds of projects in Wyoming.” It was a big loss for BLM. Jeremy Nichols of Wild Earth Guardians is quoted as saying that the ruling “calls into question the legality of the Trump administration’s entire oil and gas program” — which is, of course, Daniel Jorjani’s responsibility.

The lazy false equivalence drawn by Matilda Williams — Obama too! — misses the entire point of Ellperin’s article. “While the Interior Department began to take into account the climate impacts of federal oil, gas and coal leasing toward the end of Obama’s second term, administration officials jettisoned those plans when President Trump took office.” Zinke, Pruitt, and Jorjani himself were enlisted in this fight, and back in March, DJPDSOL9999 apparently felt that they got a bad deal.

In theory, there’s nothing wrong with the Chief FOIA Officer at the Department of Interior operating a stealth account on Twitter. If, however, he’s using it to track people who are making public records requests, that is going to raise serious ethics concerns, especially if he is denying or withholding records on the basis of what those people publish.

Perhaps the Inspector General’s report will shed further light on the matter.

Read other posts about the Boundary Waters reversal here

The Boundary Waters Reversal Makes the Front Page of the New York Times

The story about the Boundary Waters reversal in the New York Times appears to be causing a stir. Hours after its online debut on Tuesday, the article had attracted hundreds of comments and was all over social media; yesterday, it appeared above the fold on the front page of the print edition. What struck me first about public reaction was that Times readers — a civic-minded and educated lot, on the whole — seem to have been unfamiliar with the basic elements of this story until now.

Most of the commenters’ heat appears to be focused on the Kalorama rental arrangement, which finds the daughter and son-in-law of the president renting a mansion from billionaire Chilean mining magnate Adronico Luksic Craig. It’s the most lurid part the story, and hints at some darker deal, or explicit quid pro quo: a mansion for a mine. I still think caution on that point is warranted.

Luksic was easily able to dismiss earlier reporting in Newsweek, HuffPo, and elsewhere on the rental, because it was based on the laziest form of reporting: writing up a (typically colorful) tweet by law professor and Bush administration ethics official Richard Painter about Luksic using “the Boundary Waters as his toilet”.

He stuck with this denial after the Times story appeared.

Luksic’s denial almost always turns on the issue whether he has ever “met” or “knows” the Trumps and Kushners. In the Times story, however, Luksic’s purchase of the Kalorama mansion is characterized in another way: as a soft opening bid, bringing Jared and Ivanka into an inappropriate, ethically compromised relationship from the moment they arrive in Washington. They are senior White House officials living under Luksic’s roof:

…several ethics experts said they would have cautioned Mr. Kushner and Ms. Trump against renting the home, given the Luksic family’s business before the administration.

“There may be nothing wrong,” said Arthur Andrew Lopez, a federal government ethics official for two decades who is now a professor at Indiana University’s Kelley School of Business. “But it doesn’t look good.”

It doesn’t really make the arrangement look any better to say they “decided to lease the home before knowing the landlord’s identity,”as Peter Mirijanian, a spokesman for Kushner lawyer Abbe Lowell tells the Times; and it’s worth noting that Mirijanian “did not directly respond to questions about whether they learned of that identity before signing the lease,” which would presumably have given Kushner and Trump an opportunity to review the matter with ethics officials. Besides, Rodrigo Terré, a Luksic agent, “said both sides were aware of each others’ identities before the rental deal was finalized. ‘We disclosed our name and the name of my boss,’ he said in a telephone interview.” That’s pretty unambiguous.

After asking out loud — again — whether there had been any formal ethics review of the leasing arrangement, I received this reply from one of the Times reporters:

There is additional new reporting here about the rental arrangement and other matters.

We learn, for example, that Charles and Seryl Kushner accompanied Jared and Ivanka on their tour of the Kalorama mansion. That family picture raises other questions, mainly about Charles Kushner’s longtime business associate George Gellert — who along with his son Andrew Gellert has extensive business connections in Chile. This angle seems worth exploring, especially since the White House nominated Andrew Gellert to be ambassador to Chile. (The nomination was quietly withdrawn, without explanation, in August of 2018. For more, see this post.)

Times reporting also appears to confirm that Antofagasta did, indeed, meet with the White House in May of 2017. The emails I had obtained through FOIA only hinted at the possibility of a meeting: “this same group [from Antofagasta] may also have a meeting at the White House,” wrote Interior’s Karen Hawbecker on April 28th.

A key meeting occurred in early May, when Antofagasta’s chief executive, along with other executives and lobbyists, discussed the issue with the White House’s top adviser on domestic energy and the environment, Michael Catanzaro. The company said it wanted to reverse the Obama-era decisions, which it said were illegal and inflicted “undue damage.”

That meeting now appears in an update to the Twin Metals at Interior timeline. As I’ve pointed out in another post, Catanzaro is especially close to the current Secretary of the Interior, David Bernhardt. While at the White House, Catanzaro had a regular weekly call with Bernhardt. The two oil and gas lobbyists often had lunch together as well. This would be yet more evidence, if more were required, that the Chilean mining conglomerate owned by the Luksic family had unbridled access to the highest reaches of the administration, and these public officials were working on the mining company’s behalf.

The message from an early meeting, according to an attendee who spoke on condition of anonymity, was that officials should prepare for a change in direction.

Parse that carefully. It’s one of the most intriguing paragraphs of the entire story, and it calls into question the administration’s claim — which it is currently defending in the US District Court for the District of Columbia — that the Boundary Waters reversal was made merely to correct an error in Solicitor Tompkins’ 2016 M-Opinion.

Read more about the Boundary Waters reversal here.

A Note on the Jorjani Confirmation Hearing

The way Interior has acted under the Trump administration is the textbook definition of a political cartel, using state resources to help the special interests. And it sure looks to me like Mr. Jorjani has been a key member of the cartel.
-Senator Ron Wyden

Jorjani_ConfirmationWhen asked by Senator Manchin whether he could set aside political allegiances and provide “forthright legal analysis,” Daniel Jorjani offered assurances, but his confirmation hearing on Thursday kept circling back to the question.

Senator Cantwell said she was “trying to get an understanding of your commitment to what is the law and whether you will help follow the law. That’s the key thing I’m after.” Senator Wyden wanted the other nominee in the room, Mark Greenblatt, to give him written specifics about how as Inspector General at Interior he would maintain his independence, “and keep these political appointments”  — people “like Mr. Jorjani,” he added — “from interfering with protecting the public.”  Senator King wanted to know whether Jorjani has had any contact with people associated with Freedom Partners or the Koch Brothers since taking his post at Interior. Jorjani was not prepared to say he had not, and at the end of the hearing promised to go back and check.

When her turn came, Senator Hirono said it was “hard to believe” that Jorjani’s work for the Koch Brothers between 2009 and 2017 “does not influence [his] opinions.” She cited his M-Opinion on “incidental take,” according to which oil companies that inadvertently kill migratory birds (in a spill, for instance) will no longer face penalties or prosecution. Hirono wanted to know why Jorjani issued that opinion.

Hirono: A lot of these challenges under this law have come from, have been lawsuits involving the oil and gas industry. So who benefits most from your opinion that totally stopped prosecutions for incidental take under this law? What industry most benefits from your opinion?

Jorjani: I’m not aware of any particular industry that benefits from this. I’d like to think that he American people benefit from a restrained approach.

Hirono: Yeah, I’d like to think so too. But you cannot escape the conclusion that the people you used to work for before, the Koch Brothers, this is one of their biggest issues that they wanted to have done away with….. I would say the oil and gas industries are the biggest beneficiaries.

Senator Manchin summed up what appeared to be the skeptics’ view:

as Acting [Deputy Solicitor General] you came in and overturned 7 of the 8 [Tompkins] opinions….Those things were basically approved as the previous administration was outgoing. We found also these had been exhaustively studied and Ms. Tompkins was well regarded and following the rule of law. And in all honesty the observance I have is that basically that your political ideology overtook…the rule of law.

For his part, Jorjani made the striking claim that a directive from the president’s Chief of Staff authorized him “to review every regulation and every opinion,” including previous M-Opinions by his predecessor, Solicitor Hillary Tompkins.

The directive in question appears to be the Memorandum for the Heads of Executive Departments and Agencies issued by Reince Priebus on January 20, 2017, which put in place a Regulatory Freeze, affording Trump’s political appointees “the opportunity to review any new or pending regulations” and specifically any “questions of fact, law, and policy they raise.”

This is the first time I have heard anyone at Interior publicly and directly connect the overturning of Tompkins’ M-Opinions with this directive. Jorjani seems to have read it expansively, virtually as carte blanche.  He called it the “catalyst” for his multiple reversals of Tompkins. It now has a place on the Twin Metals timeline.

Read more about the Boundary Waters reversal here.

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

The Architect of the Boundary Waters Reversal

1989 files

“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.

jorjaninote50

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.