One of the many signs outside Citigroup headquarters during last week’s shareholder meeting.
A proposal brought by several religious orders at last week’s Citigroup annual shareholder meeting asked the company to report on its policies and practices “in respecting internationally-recognized human rights standards for Indigenous Peoples’ rights.” The proposal (page 125) specifically called out Citigroup’s financing of oil and gas operations in the Amazon, which “pose an ‘existential threat’ to Indigenous Peoples” in the region, and it applied equally strong language to the bank’s $5 billion-plus in financing to pipeline company Enbridge:
Indigenous leaders from the Great lakes tribes have called Enbridge’s line 5 pipeline reroute “an act of cultural genocide.” A 2022 ruling found that line 5 was operating illegally on Bad River Band territory since 2013. Michigan Governor Whitmer canceled Enbridge’s certification in 2020, citing “Enbridge’s historic failures and current noncompliance” as jeopardizing the safety of Michigan residents and the environment. Michigan’s twelve federally recognized Tribal Nations requested President Biden to decommission line 5 in 2021, and the pipeline faces ongoing litigation from numerous plaintiffs. The severity of Indigenous opposition is reflected by the Bay Mills Indian Community formally banishing the pipeline from its reservation, noting Enbridge’s deceptive tactics, poor environmental track record, and risk of “catastrophic damage” to Indigenous rights. Companies like Enbridge, financed by Citigroup, consistently fail to meet the international standard of free, prior, and informed consent (FPIC) with affected tribes.
Here’s audio of the brief discussion of that proposal at the shareholder meeting. Listen closely to Tara Houska present the case for the proposal. What follows is disappointing but no less revealing. Citigroup Chair John C. Dugan tells shareholders the board recommends voting against the proposal; then, after a question about why Citigroup misled shareholders about its financing of Enbridge Lines 3 and 5, Dugan effectively closes the discussion with evasive boilerplate. The board retreats to lawyered statements and specious claims like the one about Enbridge’s “industry-leading engagement policies.” Still, 31.6 percent of Citigroup’s shareholders voted for the proposal — an impressive showing.
P.S. An earlier version of this audio file was not showing up on phones — something to do with the way WordPress converted it, or failed to convert it. Sorry about that. It should work now.
Something else worth noting happens toward the end of this video clip, when Stauber tries to plant a green flag. “If you are at all serious about emissions reductions, you will vote to support H.R. 1. We need to pass H.R. 1 for energy independence and critical mineral dominance.”
There has already been plenty of commentary around the misleading claim that this bill would reduce emissions. Common Dreams published a pretty good rundown. Opponents have labeled H.R. 1 the Polluters Over People Act; the Center for Western Priorities notes that it would reverse many of the Inflation Reduction Act’s reforms to the onshore oil and gas leasing program; and as for the notion that this bill is “serious” about the energy transition, Chuck Schumer called that “laughable,” and declared this “wishlist for big oil” Dead On Arrival in the Senate.
Equally specious is the Trumpian claim that this legislation is a formula for “critical mineral dominance.” This US Geological Survey presentation on global distribution of critical minerals or these maps from The Wilson Center suggest just how infeasible that is. Misleading claims and rhetorical swagger on this score can lead to bad policy at home and serious missteps abroad.
Take a closer look and it’s clear that this is an act of legislative mischief. The stated legislative purpose of H.R. 1 is to “lower energy costs by increasing American energy production, exports, infrastructure, and critical minerals processing”; but when it comes to critical minerals the bill does nothing of the sort. In fact, the piece of H.R. 1 Stauber wrote (the not-so-subtly entitled Permitting for Mining Needs Act, or Permit-MN) would do nothing to help secure “critical minerals dominance.” Instead it would effectively do away with critical minerals.
Permit-MN goes through 30 U.S. Code § 1607, the “Critical Minerals Supply Chain and Reliability” section of the 2021 Infrastructure Investment and Jobs Act, and at every opportunity strikes the word “critical” from the books. It changes the title of the section to “Minerals Supply Chain and Reliability.” It removes the word “critical” from “each place such term appears” in the Sense of Congress section. That section currently reads:
It is the sense of Congress that-
(1) critical minerals are fundamental to the economy, competitiveness, and security of the United States;
(2) many critical minerals are only economic to recover when combined with the production of a host mineral;
(3) to the maximum extent practicable, the critical mineral needs of the United States should be satisfied by minerals responsibly produced and recycled in the United States; and
(4) the Federal permitting process has been identified as an impediment to mineral production and the mineral security of the United States. [emphasis mine.]
Sense becomes nonsense. And Permit-MN makes the same move in subsequent sections, striking the word “critical” wherever it appears. In other words, H.R. 1 would extend the special legislative consideration given to critical minerals, because they are “fundamental to the economy, competitiveness, and security of the United States,” to any and every mining project.
Permit-MN has already won Stauber some favorable local press but it only makes a mockery of serious concerns about national security and the energy transition. What really counts here is not the public interest, or making responsible industrial policy to meet the country’s critical mineral needs, but the immediate financial interests of mining companies. And if this is an indication of the reckless permitting reform we can expect from this Congress, then we are better off leaving things as they are.
When American politicians like Bruce Westerman talk about mining cobalt in the United States, they are almost always talking about copper and nickel mining. According to the US Geological Survey, the US has only 4 percent of the world’s cobalt reserves; and with the notable exception of the Jervois cobalt mine in Idaho and some unexploited reserves in Missouri, “any future cobalt production” would be a “byproduct” of copper and nickel mining.
Most of that mining would be done in the Lake Superior region. In Michigan’s Upper Peninsula, Lundin’s Eagle Mine has produced cobalt-bearing nickel concentrate. Rio Tinto-Talon Metals already control copper and nickel development from Ishpeming to the Keweenaw. In addition to this massive 400,000 acre land package in Michigan, the joint venture also controls the 31,000 acre Tamarack project in Minnesota, the state where most US cobalt reserves are located.
Even here, the primary target resource is nickel, followed by copper, as Tamarack’s own estimates clearly show. In 2017, Antofagasta briefly floated the idea in its annual report that its Twin Metals project near the Boundary Waters would be a significant source of cobalt, but this looks like nothing more than an attempt to position the mine as a source of critical minerals, and the company abandoned that posture. (Trump’s Department of Interior toyed with the idea, too.)
In light of these basic facts, Westerman’s arguments look specious and his moral posture deeply cynical. It’s concerning to see the Chair of the House Committee on Natural Resources use the artisanal, small-scale miners of the Congo as a political prop – I use that word advisedly – and trade on serious human rights concerns without any plan to address them. Amnesty International’s Mark Dummet fears this kind of “wholly self-serving” virtue signaling could even harm the people it pretends to protect.
Westerman seems to be taking his cues from Minnesota Republican Pete Stauber, who made the same argument after the Biden administration announced the 20-year mineral withdrawal to protect the Boundary Waters:
Joe Biden banned mining in over 225,000 acres of Minnesota’s Iron Range, and locked up development of taconite, copper, nickel, cobalt, platinum group elements, and more…not even one month ago, Joe Biden signed an agreement [presumably the Minerals Security Partnership] to fund mining projects in Chinese-owned mines in the Congo, where over 40,000 children work as slaves in forced labor and inhumane conditions with no environmental protections.
Stauber has made similar shows of concern about human rights in the Congo in the past. This time, just a couple of days later, the editorial board of the Wall Street Journal repeated the talking point: “The reality is that if minerals aren’t mined in the U.S., they will be extracted in countries with far less stringent environmental and labor standards.”
A small correction: the reality is that even if minerals are mined in the United States, they will be extracted in countries with far less stringent environmental and labor standards.**
The focus instead should be on taking steps to raise those standards, as Dorothée Baumann Pauly of the Geneva Center for Business Human Rights argues in a new white paper. Trying to eschew artisanally-mined cobalt from the DRC is tantamount to “denial of market realities,”* she writes:
global companies buying cobalt need to encourage the formalization and responsible extraction of the mineral rather than engaging in a futile attempt to avoid cobalt associated with ASM [artisanal small-scale mining] — an attempt that also ignores the sustenance that artisanal mining provides to millions of poor people.
In the Mutoshi pilot formalization program studied by Baumann-Pauly, mechanically prepared (open pit) small-scale mines improved safety. “Formalization stopped children and pregnant women from coming to the mine site.” Other measures encouraged women to participate in mining. The pay these women miners earned could double household income, and in interviews they said the extra income helped offset educational expenses for their children, who were now in school instead of working at a mine site. (Though the pilot program ended during the Covid-19 pandemic, a local cooperative continues to try to enforce these new standards at Mutoshi.)
None of this amounts to a perfect solution, but there’s clearly an opportunity to build on what this pilot accomplished, and it’s encouraging that Microsoft’s Michele Burlington, who accompanied Baumann-Pauly on her trip to the Congo, called for a “coalition” to address ASM in the cobalt supply chain.
If Republicans (or Democrats, for that matter) want to address human rights abuses in the DRC, then they should focus on taking constructive steps. And if they are really concerned about China’s outsize influence in the mineral supply chain, then they might want to take a closer look at China’s ownership stakes in companies like Rio Tinto, the very companies that promise to bring jobs and economic development to their own districts.
*This chart from The Centre for Research on Multinational Corporations (SOMO) nicely illustrates the point. ** A briefing from the Business and Human Rights Resource Centre also warns against the complacency behind these arguments: “assumptions [that] localisation of supply of transition minerals and their production in Europe and North America will guarantee respect for human rights and a sustainable, ethical provision of these materials are misguided.”
The report includes lots of information about mining in the Lake Superior region that deserves consideration. The report also notes: “The cumulative impact of mines on the ecological integrity of Lake Superior is not well understood.”
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.
Last week, Secretary of Agriculture Sonny Perdue announced that the USDA would cut short a Forest Service environmental study of the risks posed by sulfide mining in Superior National Forest, near the Boundary Waters in northern Minnesota. The study, which was launched only at the very end of 2016, “did not reveal new scientific information,” Perdue asserted. Those familiar with Perdue’s efforts to slash funding for research at USDA will not be surprised that the Secretary appeared, on this occasion, to demonstrate little regard for science and the time it takes to do good science.
Perdue offered vague reassurances that we can “protect the integrity of the watershed and contribute to economic growth and stronger communities.” After all, the statement goes on to say, northern Minnesota “has been mined for decades and is known as the ‘Iron Range’ due to its numerous iron mines.” That’s certainly true, and it will probably play to the pride people on the Iron Range take in their heritage; but Perdue never once mentions the kind of mining that is now under consideration — copper and nickel mining, or sulfide mining — and the enormous risks sulfide mining always presents. In fact, his statement does everything possible to sidestep the issue and conflate iron and non-ferrous mining.
The announcement was misleading, and it was all but lost amid the very loud noise created by the Anonymous Op Ed that had come out in the New York Times the day before. It is, however, consequential. Dan Kraker of Minnesota Public Radio rightly characterized Perdue’s announcement as “the Trump administration’s second major reversal of decisions made on mining in the Superior National Forest” — the first being the December 2017 legal memorandum on the renewal of Antofagasta’s mineral leases in Superior National Forest discussed in previous posts.
The two reversals are obviously connected and coordinated. Exactly how might be a little harder to say. We can start to trace their connection as early as 22 August 2017, when Department of Interior Principal Deputy Solicitor Daniel Jorjani holds a meeting with two White House officials. The topic: “Minnesota Project.” Here is the calendar entry for that meeting, which I’ve now added to the Twin Metals timeline:
The apparent purpose of this meeting was to bring the White House, specifically the Office of the General Counsel and the Executive Office of the President, into the loop, or to provide the White House with an update on efforts to reverse this policy of the Obama administration.
The meeting included Michael J. Catanzaro, who was at the time Special Assistant to the President for Domestic Energy and Environmental Policy. He is profiled on DeSmog. His lobbying for oil and gas companies and his work with Senator Jim “Snowball” Inhofe and climate change denial campaigns are detailed there. Catanzaro stepped through DC’s revolving door and returned to his lobbying firm (CGCN Group) in April of this year.
The other White House official in that meeting was Stephen Vaden, who in August of 2017 was serving as Principal Deputy General Counsel at the U.S. Department of Agriculture. Vaden had also been a member of the Trump “beachhead team” at USDA. These teams were sent in to sabotage regulatory agencies and, as Steve Bannon put it, deconstruct the administrative state.
One month after this meeting, in September of 2017, Vaden would be officially nominated to become General Counsel at USDA. Legal staff at USDA did not exactly greet the nomination with enthusiasm. According to Politico, morale “plummeted.” There were concerns about Vaden’s lack of managerial experience, his hostility to unions, and his previous work for the Judicial Education Project on behalf of discriminatory Voter ID laws — which turned out to be the main focus of his 2017 nomination hearing. Vaden is still awaiting full confirmation in the Senate, but he is busy working at USDA and would no doubt have briefed Secretary Perdue on this matter.
So the meeting where these two Boundary Waters reversals connect comes a little more clearly into focus: Jorjani, with his strong ties to the Koch Institute, Catanzaro, an energy lobbyist hostile to science, and Vaden, with sketchy views on labor unions and voting rights, talking about a Chilean conglomerate’s mining leases in Superior National Forest.
In response to a FOIA request I made back in April, the Department of the Interior has released Gareth Rees’ 2017 work calendar. Rees has served as Executive Assistant to the Deputy Secretary of the Department of the Interior since George W. Bush’s first term. He did not arrive with the so-called “beachhead” teams brought in by the current administration with the express mission of sabotaging and dismantling the government agencies entrusted to their care. Still, his calendar (which I’ve put up here, on DocumentCloud) adds more pieces to the puzzle.
Rees’ calendar drew my attention to a couple of meetings I hadn’t noticed before and which are now represented on the timeline. There is a June 15, 2017 meeting at Interior with a group called Jobs for Minnesotans — a front for the building trades that is currently lobbying for both the Twin Metals project near the Boundary waters and the Polymet project to the south, near Hoyt Lakes. Jobs for Minnesotans is a 501c4 “social welfare” or dark money organization of the kind I’ve written about in connection with mining projects in Michigan and Wisconsin. As a 2016 Pro Publica report suggests, these organizations are designed for those who prefer backroom deals to sunlight. 501c4s like Jobs for Minnesotans are used to channel money from private interests into public process, and coordinate localized efforts to remove environmental protections and undo regulation through regional and national networks.
A May 2, 2017 meeting with Antofagasta plc has also been added to the timeline. This meeting brought together representatives of the Chilean conglomerate with a large group of officials at the Department of the Interior just one month after Interior appears to have taken up the matter. Apparently meeting with Antofagasta was a priority. The company’s subsidiaries Twin Metals Minnesota and Franconia Minerals had sued the Department of Interior in February of 2017. The complaint makes the mining companies’ position abundantly clear. And yet administration officials seem to have been anxious to sit down with the Chilean parent company and discuss its leases. Why? (It’s not likely that the same courtesy will be extended to the ten Minnesota plaintiffs now complaining that in reinstating Antofagasta’s leases the Department of Interior exceeded its lawful authority and acted in an arbitrary and capricious way.)
The first meeting with Antofagasta, in early May, appears to have set the agenda; the second meeting with Antofagasta, on July 25th, looks as if it were called to reach an agreement. The July meeting with Antofagasta includes all Interior officials present at the May 2nd meeting as well as some important decision makers: Deputy Solicitor Daniel Jorjani, Acting Director of the Bureau of Land Management Michael Nedd, and Edward Passarelli, Deputy Chief at the Natural Resources Section of the Department of Justice.
It is difficult to avoid the conclusion that the Department of Interior worked steadily and closely behind closed doors with lobbyists and mining executives to renew Antofagasta’s mineral leases in Superior National Forest. This would conform to the general pattern at Interior under Zinke’s leadership. “A deeply problematic culture of secrecy…has taken root in the Department of the Interior,” the organization Earthjustice charges, “keeping the American public in the dark about major decisions, important records, and meetings with industry that affect the lands and resources the agency holds in trust for the American people.”
In this case, the mining company ran a full court press; the public was kept almost entirely out of the process. The deed appears to have been done well before the end of summer 2017. The legal review that would result in the Jorjani Memo of December 22nd appears to have been nothing more than an exercise in a foregone conclusion — a sham.
Earlier this week, in Duluth, Minnesota, Donald Trump stated that the reversal of Obama-era protections for the Boundary Waters promised great things “for our amazing people and miners and workers and for the people of Minnesota.” Bizarrely, the president went so far as to claim that mining the Duluth Complex would “make it from an environmental standpoint better,” though it’s impossible to say what exactly “it” might refer to here.
He framed these remarks as an announcement, but it’s also difficult to say what, exactly, he was so “proudly announcing.” Those like Daniel Dale who track the president’s speeches have noticed that he tends to present as new and exciting events and initiatives that are long past, or which in fact have failed or run into trouble. This is especially true when it comes to the president’s statements about blue collar jobs, factories, and the economy.
The timeline clearly shows that the Department of Interior started taking meetings with lobbyists and representatives of Antofagasta Plc and Twin Metals in April of 2017, worked closely and steadily with them through the summer and fall, and issued a legal memo favorable to the mining companies in December of that year. Secretary Zinke’s latest action — the reinstatement of Antofagasta’s mining leases in Superior National Forest on May 2, 2018 — was over a year in the making. Almost all of this work was done behind the scenes, without meaningful public participation. Announcements would only have drawn unwelcome attention.
In Duluth, the announcement of “first steps” that were in fact already taken might have been made to pre-empt or drown out the real news of this week: the filing of a Complaint in the US District Court for the District of Columbia by a group of ten Minnesota plaintiffs against the Department of Interior, the Bureau of Land Management, Secretary Ryan Zinke, and BLM’s Brian Steed. The Complaint charges that the reinstatement of Antofagasta Plc’s mining leases in Superior National Forest “exceeds their authority under law and is arbitrary and capricious” and asks the Court “to enjoin them from further consideration of applications to renew the two leases.”
Filed yesterday, just hours after Trump’s Duluth rally, this Complaint is actual news. It will not get one tenth of the coverage Trump’s bluster receives.
There’s little if anything that’s new and even less of substance here. I include the video because it’s helpful to consider where Trump is clearly reading from prepared remarks (which might indicate some actual administrative policy step) and where he is simply wandering off on his own into vague promises of some “better” future. He did the latter for most of the minute he spent on the subject of Superior National Forest, veering off, at the end, into incoherence.
Here is my transcript of his remarks on the topic:
Under the previous administration, America’s rich natural resources, of which your state has a lot, were put under lock and key, including thousands of acres in Superior National Forest. You know what that is, right? Tonight I’m proudly announcing that we will soon be taking the first steps to rescind the federal withdrawal in Superior National Forest and restore mineral exploration for our amazing people and miners and workers and for the people of Minnesota, one of the great natural reserves of the world. And we’ll do it carefully, and maybe, if it doesn’t pass muster, we won’t do it at all, but it is going to happen I will tell you that. It’s gonna happen. And it’s happening fast. We’ve already taken it as you know a long way down the road. And it’s gonna make things better. It’s gonna make it from an environmental standpoint better.
Here, as far as I can tell, is the substance of his prepared remarks.
Under the previous administration, America’s rich natural resources were put under lock and key, including thousands of acres in Superior National Forest. We [have taken] the first steps to rescind the federal withdrawal in Superior National Forest and restore mineral exploration [in] one of the great natural reserves of the world.
The opening jab at Obama, who locked away riches that are rightfully ours, also makes a mockery of the very idea of conservation and environmental protection. But who’s really paying attention? The audience cheers at the mention of Superior National Forest: “you know what that is, right?” Trump clearly does not, but he tries to milk the cheer anyway; it’s a variation on the tired old comedian’s schtick: who here is from Jersey? Anybody? New Jersey!
Superior National Forest is seen here entirely through the lens of extractive industry: a “natural reserve,” a store of minerals. Just as importantly, the statement makes no mention of the risky mining that this will involve — sulfide mining, a kind of mining the amazing people of the Iron Range have never done before, and which has the potential to destroy the very things people in Minnesota prize about Superior National Forest and the nearby Boundary Waters area.
Former Forest Service Chief Tom Tidwell, in December 2016, issued detailed findings of fact concluding it was likely that acid mine drainage from the Twin Metals mine would contaminate the BWCAW and cause adverse effects on the water quality, fish populations, aquatic ecosystems, and animal species. Tidwell further considered the possibility of containment, mitigation and remediation efforts and found that very few would be compatible with maintaining the BWCAW’s wilderness character.
While it appears that the president’s prepared remarks also included some vague gesture toward environmental responsibility, Trump turns that bit into a meaningless jumble, saying at first that the mineral exploration of the Duluth Complex will only go forward if it passes muster, then assuring the audience that “it is going to happen…It’s gonna happen,” and when it does happen, “it” is going to make “it” better. “It” here can mean anything, or nothing at all: he’s not offering the crowd anything beyond the word “better,” which is pretty much all they came out to hear anyway.
Update: At his October 2019 rally in Minneapolis, Trump offered essentially the same package with some new variations. The clip is here.
The Washington, D.C. mansion rented by Jared Kushner and Ivanka Trump.
We know this much. In December of 2016, just after the election, Chilean billionaire Andronico Luksic Craig bought the Kalorama Triangle mansion that Jared Kushner and Ivanka Trump now rent in Washington, D.C.. Just about six months later*, records show, the Department of Interior began drafting the December 22nd, 2017 memo that would reverse Obama-era protections for the Boundary Waters and renew the lease of lands in Superior National Forest held by Twin Metals, a wholly owned subsidiary of Antofagasta Plc, the mining conglomerate controlled by the Luksic family. Headlines have hinted at corrupt dealings, as I’ve noted in previous posts, but no hard evidence has come to light.
Maybe it’s all just a happy coincidence of the kind that frequently befalls the world of billionaires, mansions, and yachts. In any case, Andronico Luksic Craig, Jared and Ivanka’s landlord, is clearly a master of such coincidences. Journalist Horacio Brum dubs him “el gran titiritero de Chile,” the great puppetmaster of Chile. He is “a man who does not need to do politics,” writes Brum, “because he makes politicians.” The role Andronico Luksic Craig played in the scandal known in Chile as “el Caso Caval” — The Caval Affair — is illustrative.
The Caval Affair involved a $10 million loan for a shady real estate scheme undertaken in late 2013 by Natalia Compagnon, the daughter-in-law of Chile’s president, Michelle Bachelet, and 50 percent owner of a company called Sociedad Exportadora y de Gestión Caval Limitada. El Caso Caval was a drawn out and complicated affair, and charges of corruption and influence peddling would dog Compagnon and the Bachelet family for years.** Just one feature of the scandal needs to concern us at the moment, and that’s the timing of the loan itself.
In the months immediately preceding Bachelet’s election, Compagnon had been trying to secure a line of credit for her company to purchase three plots of land in Machalí, in the O’Higgins Region in central Chile. Compagnon and her husband, Sebastian Davalos Michelet, met with the Vice President of Banco de Chile to discuss the project on November 6th, 2013. This was about ten days before the elections, which were scheduled for November 17th. The loan was approved on December 16th, 2013, just a month after Michelle Bachelet was elected to the presidency. The Vice President of the Banco de Chile who made these timely financial arrangements for the daughter-in-law of the new president elect was none other than Andronico Luksic Craig.
This time-lapse illustration produced for the news organization 24 Horas lays out the whole scandal in less than three minutes. Even if your Spanish is rusty, you can follow the story. Luksic first appears around 1:26.
The pattern looks familiar. When questioned about the loan, Luksic Craig at first denied meeting the young couple more than once. (This is classic Luksic, who claims never to have met his first family tenants, and only to have said hello to Trump himself once, at a Patriots’ football game in 2012.) Only later did he admit to various meetings and contacts between him and Compagnon, including one the day after Bachelet won the election. As the scandal grew, Andronico Luksic Craig managed to retreat back into the shadows and to keep himself and the Luksic family out of the headlines.
So far, the almost daily revelations of Jared Kushner’s far-flung attempts to bail out his family’s foundering real estate empire have not turned up anything that connects Kushner’s business troubles to Chile’s Grupo Luksic or the Luksic family. But it would not be terribly surprising to learn that there is more to the Kushner story and that Kalorama mansion than Luksic Craig claims. The president’s son-in-law is a quo looking for a quid, and when it comes to making that sort of delicate arrangement, Andronico Luksic Craig appears to be a real pro.
*Since writing this post, I have reviewed documents obtained through FOIA request that show the Department of the Interior working on the reversal of Obama administration protections for the Boundary Waters as early as February, 2017, just weeks after the inauguration.
**The affair assumed such importance in Chile that it derailed the Bachelet constitutional reform project, notes political scientist Claudia Heiss: “La amplia agenda reformista del segundo gobierno de la Presidente Bachelet enfrentó una serie de dificultades, lo que sumado al denominando ‘caso Caval,’ terminó relegando la propuesta de cambio constitucional al segundo plano.” (¿Por Que Necesitamos Una Nueva Constitución?, p. 48)
Rusting boats at the port of Chinde, where Rio Tinto proposed to barge Riversdale coal via the Zambezi River.
Yesterday, the Securities and Exchange Commission brought a complaint in New York City against Rio Tinto, charging Tom Albanese, the former CEO of Rio Tinto, and Guy Elliott, his Chief Financial Officer, with fraud. According to the complaint, Albanese and Elliott actively misled the Rio Tinto board, audit committee, auditors, and the investing public about their acquisition of the Riversdale coal business in Mozambique in 2011.
The fraud that Albanese and Elliott are accused of perpetrating looks awfully familiar to those who have followed the development of Eagle Mine and the controversy over County Road 595. Having noticed the parallel between Mozambique and Michigan back in 2013, when Tom Albanese was forced to step down, I now have to wonder whether prosecutors will take the company’s representations around the Eagle Mine into account when building their case.
In Mozambique, they told investors, coal would be transported by barge to the Indian Ocean port of Chinde. Although their technical advisors “highlighted the ‘showstopping’ risks” associated with the barging proposals before the acquisition, Albanese and Elliott blundered recklessly ahead. Then eight months later, the Mozambique government denied Rio Tinto a permit to transport the coal by barge down the Zambezi River. Suddenly, the coal business they had acquired for $3.7 billion appeared to be worth a negative $680 million. According to the SEC’s complaint, Albanese and Elliott “concealed and glossed over” the fact that they had no viable haul route for the 30 million tons per year they projected in their business plans, and misled investors as they raised $5.5 billion in US debt offerings.
In that very same period, Rio Tinto was also promoting Eagle Mine to investors and promising economic renewal in the Upper Peninsula, though they had not yet secured a transportation route — a haul route — for Eagle’s sulfide ore. In Michigan, it appears, the company took the same cavalier attitude toward planning and risk that the SEC complaint says got them into trouble in Mozambique.
Way back in 2005, John Cherry, who was then a Kennecott Minerals project manager and is now President and CEO of the Polymet project in Minnesota, characterized Eagle as a “direct ship” operation, “meaning that the rock would not be processed on site, thereby avoiding the storage of highly toxic debris left over, called tailings.” Presumably this is what Michigan DEQ’s Robert McCann had in mind in 2007, when he told The Blade that Kennecott’s permit “would require them to keep the ores underground, put them in covered rail cars, and ship them to Ontario for processing”; the Marquette Monthly told roughly the same story that year, only now there were trucks in the picture: “ore would be transported by truck and rail to a processing site in Ontario.” This seems to have been nothing more than a cover story.
Everything changed in 2008, when Rio Tinto bought the Humboldt Mill. Those permit requirements the DEQ’s McCann touted back in 2005? They were quickly abandoned. Covered rail cars come into the picture only after the ore is crushed, ground into a slurry, floated and rendered into concentrate at Humboldt Mill. A glossy 2010 company publication promoting Eagle Mine includes not a single word about how Rio Tinto and Kennecott plan to travel the 30 kilometers from mine to mill: “Happily, processing of the nickel and copper can take place in Humboldt, around 30 kilometres [sic] away, at a previously abandoned iron ore plant.” By 2011, the company had “considered more than a half dozen transportation routes” from mine to mill, according to a Marquette Mining Journalarticle by John Pepin published in February of that year, but they still had no viable haul route.
A good prosecutor with a rigorous and thorough discovery process would probably be able to determine whether the evasions and misrepresentations perpetuated on the public over the Eagle Mine haul route also amounted to fraud, or were part of a larger pattern of deliberately misleading statements. It’s clear Rio Tinto never came clean — and perhaps never really had a firm plan — on mine to mill transport at Eagle before it sold the works to Lundin Mining in June of 2013 and decamped. As long as regulators in Michigan continued to be more accommodating than those in Mozambique, the company seems to have been content to let the people of Marquette County fight out the haul route issue among themselves.
In response to a FOIA request I made back in April, the Department of the Interior has released Gareth Rees’ 2017 work calendar. Rees has served as Executive Assistant to the Deputy Secretary of the Department of the Interior since George W. Bush’s first term. He did not arrive with the so-called 
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