Tag Archives: HR 761

Is Corruption at Interior Putting the Boundary Waters At Risk?


On the afternoon of Friday, December 22nd, with Congress in recess and most Americans already starting their holiday celebrations, the Department of the Interior issued a 19-page legal memorandum reversing hard-won, eleventh-hour Obama-era protections for the Boundary Waters Canoe Area Wilderness in northern Minnesota. Signed by Interior’s Principal Deputy Solicitor Daniel Jorjani, Memo M-37049 allows Twin Metals, a wholly-owned subsidiary of the Chilean conglomerate Antofagasta Plc, to renew its leases of Superior National Forest lands where it proposes to mine copper, nickel, and other minerals for the next 100 years.

Even one year of mining would scar the land, destroy wetlands, wreck the forest and fill it with industrial noise, and pollute the water. And this kind of mining — sulfide mining — always risks major environmental catastrophe, long after a mine is closed and the land reclaimed. After a brief reprieve, the Twin Metals project is again threatening this unique public wilderness area, along with the thriving tourist and outdoor economy that has grown up around it.

The reversal was immediately met with allegations of corrupt dealing. In a statement calling the move by Interior “shameful,” Minnesota Governor Mark Dayton cried foul.

A December 22nd headline in the Wall Street Journal offered what appeared to be a straightforward explanation: cronyism. “Trump Administration to Grant Mining Leases That Will Benefit Landlord of President’s Daughter Ivanka Trump.” But Chilean billionaire Andronico Luksic Craig, whose family controls Antofagasta Plc, and who only after Trump’s election purchased the Washington, D.C. mansion Ivanka Trump and Jared Kushner rent for $15,000 a month, claims never to have met his tenants, and says he met Donald Trump only once, at a New England Patriots game.

It’s unclear whether Luksic Craig’s denials can be taken at face value and whether they are enough to dispel the notion that the reversal was made directly to benefit Antofagasta or the Luksic family. What prompted the action? Who directed it? Who contributed to the memo, and who reviewed it? What conversations did Interior Secretary Ryan Zinke, Deputy Solicitor Jorjani, and other administrators have about the reversal, and with whom?

The public deserves clear answers to these questions, and last week, I submitted a FOIA request to the Solicitor’s Office at the Department of the Interior, to see if I might gain some insight into the process behind Memo M-37049. At the same time, it’s worth noting that these are not the only questions worth asking. Luksic Craig and his Washington, DC mansion may make good headlines, tabloid fodder, and Twitter snark, and there is no ignoring the whiff of impropriety about his real-estate dealings with the president’s daughter and son-in-law, who also happen to be senior White House advisors. But that’s not the whole story here. A scandal involving Luksic-Craig and his tenants, or some direct dirty dealing between Antofagasta and Interior, might eventually come to light, but the prospect of such a scandal might also serve to distract us from other, large-scale corruption that continues to put the Boundary Waters — and other public lands and waters — at serious risk.

Put the reversal in context. Consider, for example, the Executive Order, entitled “A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals,” that was issued just two days before the Boundary Waters reversal, and which, like the Interior memo, sets the stage for exploitation of mineral resources on public lands. The EO appeared to be the policy outcome of a U.S. Geological Survey of the country’s critical minerals resources published on December 19th; but Trump’s December 20th order was years, not one day, in the making.

The EO revives Obama-era legislative battles over so-called strategic and critical minerals and declares victory by executive fiat. Back in 2013, pro-mining measures introduced in both the House (HR 761) and the Senate (S 1600) promised to “streamline” the permitting process for multinational companies mining on federal lands, like Superior National Forest. The Obama administration opposed them on the grounds that they would allow mining companies to circumvent environmental review. Proponents of HR 761 called it cutting red tape; the resolution actually tried to shut the public out of the process. It touted jobs, but, as critics pointed out, provided no real strategy for creating them; and it hawked anti-Chinese hysteria of the kind that candidate Trump regularly advanced. (Tellingly, House Republicans rejected a motion that would have barred export to China of strategic and critical minerals produced under the HR 761 permit, in tacit acknowledgment that China drives global demand for copper and nickel.) Coming just two days after this EO, the Boundary Waters reversal looks less like a one-off favor to a Chilean billionaire, and more like a coordinated move in a broader campaign.

This subversion of public process is not just the dirty dealing of a few bad actors. It’s also the consequence of weakened institutions; and institutional sabotage — or what Steve Bannon pretentiously called the deconstruction of the administrative state — is the precursor to large-scale corruption. Scott Pruitt might still be the poster boy for putting the fox in charge of the henhouse, but Ryan Zinke appears to be pursuing a similar brief at Interior. Though his bungling of the offshore drilling announcement made him appear incompetent, he is making big changes to favor big mining. The Secretary has made it one of his agency’s top ten priorities to “ensure access to mineral resources” and committed to minimizing “conservation objectives” that interfere with extractive industrial development. His plan to shrink Bears Ears followed a map drawn by a uranium mining company. At Grand Staircase-Escalante and Gold Butte National Monuments, Zinke has virtually surrendered vast swaths of public lands to extractive industry.

The Boundary Waters reversal, too, looks like the work of institutional saboteurs. It settles a lawsuit against the Department of the Interior by conceding that the government should not have discretion over public lands when commercial interests are at stake. Its author, Deputy Solicitor Jorjani, did a brief stint at Interior during George W. Bush’s second term, but it was his high profile job as Executive Director of the Koch Institute that distinguished him as the right man for Ryan Zinke’s Interior. As Polluter Watch, a project of Greenpeace, notes, Jorjani was the Koch Institute’s very first hire, and among the five most highly compensated employees at the Charles Koch Foundation. Now, along with Scott Cameron and Benjamin Keel, Daniel Jorjani works with the team at Interior charged with “reviewing rules their previous employers tried to weaken or kill,” according to reporting by the New York Times and Pro Publica. Similar deregulation teams, “connected to private sector groups that interacted with or were regulated by their current agencies,” were formed at all administrative agencies. The teams put public institutions at the service of powerful patrons, subordinating public protections to private interests.

This capture and sabotage of government agencies compounds and multiplies risk, removing public safeguards and compromising appointed guardians. In the case of the Boundary Waters, the risk of irreversible damage and environmental catastrophe would extend far beyond the mining location, because mining in Superior National Forest would also significantly intensify the cumulative effects of the recent boom in leasing, exploration, and drilling throughout the Lake Superior watershed.

All around the greatest of the Great Lakes, the industrial footprint of sulfide mining operations is expanding rapidly. Just to the southwest of the Boundary Waters, for example, Polymet, a company that has never operated a mine before, proposes building an open pit copper and nickel mine that will require water treatment and tailings dam maintenance “in perpetuity” — that means forever. Meanwhile, Scott Pruitt is dismantling federal rules requiring hardrock mining companies to take financial responsibility for cleanup.

State regulatory agencies are poorly equipped to oversee these new projects. They often fail to give the public a meaningful voice in permitting, or obtain the required prior consent from the region’s Indigenous nations. For their part, many state politicians are racing to deregulate, or at least accommodate, the mining companies. Just this past October, Wisconsin republicans repealed the state’s Prove it First law, which required copper, nickel and gold miners to prove that they could operate and close a sulfide mine without producing acid mine drainage. (They never proved it.) In Michigan, where Canadian mining companies are moving aggressively into the Upper Peninsula, State Senator Tom Casperson has just proposed giving mining companies and other representatives of industry “disproportionate clout” in the review of environmental rules.

Obviously this all goes way beyond doling out favors to billionaire friends or cronies at Mar-A-Lago, and it didn’t start when the Trumps came to town. Until it is called out, voted out, and rooted out, corruption at this scale – coordinated, institutionalized, systemic – will make a mockery of rule-making and oversight, and put our public lands, as well as our public life, at risk.

Postscript: This January 10th article by Jimmy Tobias in the Pacific Standard takes a careful look at Daniel Jorjani’s calendar, which was obtained through a records request, and identifies two meetings with representatives of the Twin Metals mining project: a June 14, 2017 meeting with Raya Treiser and Andy Spielman of WilmerHale on behalf of Twin Metals, and a July 25th meeting with Antofagasta Plc. I discuss these meetings in this follow up post.

The Hysteria of H.R. 761

The authors of the National Strategic and Critical Minerals Production Act (H.R. 761) complain that we depend on China — can you believe it? China! — for rare earth minerals that are “vital to job creation, American economic competitiveness and national security.” But the Act, which passed in a House Committee on Natural Resources vote on May 15, 2013 with bipartisan support, will effectively ease regulation of foreign multinational mining companies operating in the United States, including those who mine here and market U.S. minerals in — yes, you guessed it — China.

Bureaucratic delay puts “good-paying mining jobs…at the mercy of foreign sources,” according to the Act. Our security and prosperity are threatened from without, so we need to protect ourselves from within; and we are asked to believe that the surest way to do that is to replace careful assessment and regulatory oversight of risky mining operations with new efficiencies. The Act laments the weight of “onerous government red tape”: if only Atlas would shrug.

The authors of this act do not even try to disguise their contempt for the role of government in regulating industry and the “environmentally responsible development” they purport to uphold. Citing a report by international mining consultancy Behre Dolbear Group (with offices in Beijing, Chicago, Guadalajara, Hong Kong, Sydney, and Ulaanbaatar, Mongolia, among other places, where, presumably, its teams of advisors and engineers steadfastly champion the strategic and economic interests of the United States), they note that “the United States ranks last with Papua New Guinea out of twenty-five major mining countries in permitting delays, and towards the bottom regarding government take and social issues affecting mining.”

That last clause about “government take” and “social issues affecting mining” gets sneaked into the sentence here without consideration for the social effects mining operations have: society here is just in the way of business and taxes or takings are just a burden. This is reckless thinking, but it’s carefully smuggled into discussions of the Act with the distracting reference to Papua New Guinea. That line snorts mockery and imperial contempt, and it’s intended to shame and prompt outrage — like the newspaper headlines the ranking inspired: The Wall Street Journal: “U.S., Papua New Guinea at Bottom of List for Mining Permit Delays.” Mineweb: “Protracted Permitting Delays Depress U.S. Mine Investment.” The Hill: “U.S. Wins Race to the Bottom on Mining Permits — Again.” The comparison with Papua even figured into an article by M.D. Kittle in the Wisconsin Reporter: “Wake Up, Environmentalists: Your Cell Phone Was Mined Somewhere Else.”

Needless to say, these newspaper discussions aren’t balanced by any appreciation of the complex social, environmental and human rights issues around mining in Papua New Guinea (or the United States). The promoters of H.R. 761 certainly aren’t going to invite debate on the situation in Papua — where growth in the mining sector has brought corruption, violence, and environmental devastation. Their intention is clear: they want to hold up Papua as one of those foreign and dirty places, a slow, corrupt and silly place, a little, squalid, underdeveloped and dark place. Certainly not an efficient place.

Lest the Chinese enslave us or we end up living like pygmies in grass huts, we have to make it easier for big mining companies to give Americans jobs. That is the hysteria just under the surface of H.R. 761. The legislation is so broadly and poorly written, and either so cynical or so ill-conceived, that any mining operation will be able to claim its protection from regulatory oversight. The “strategic and critical” exemption from government interference and delay will be repeatedly invoked, as it was by Republican Chip Cravaak in 2011, who at the time represented Minnesota’s 8th district in the U.S. House.

Before his defeat in 2012, Cravaak advanced the claim that exploiting the copper and nickel resources of the Boundary Waters Canoe Area in Minnesota would be “necessary for U.S. strategic interests.” According to a 1978 law, those areas can only be mined in case of national emergency; but Polymet, a Canadian company, has been working since 2006 to obtain permits for an open pit mine in Superior National Forest. They negotiated a land exchange and loan scheme to get around the prohibition. Cravaak waved the stars and stripes for them on the Hill. Meanwhile, Toronto-based Polymet made a deal with the Swiss company Glencore to sell its American metals on the global market. At the time, Elanne Palcich noted, demand was especially strong in China and India.