Interior managers could be punished in land swap controversy

The Interior Department is considering disciplinary action against federal managers accused of hiding vital information about a proposed land swap from colleagues and lawmakers, a department spokesman said Monday.

In a July 23 letter to Rep. Chris Cannon, R-Utah, Interior Secretary Gale Norton said that's one step she has taken in response to a July 11 report from the department's inspector general concluding that at least three department managers presented senior Interior officials and Congress with a misleading description of a June 2002 land exchange deal between the federal government and the state of Utah. Norton's letter also terminated the deal.

"Although some aspects of this land exchange proposal still have merit, because doubt and uncertainty would cloud future consideration of it, we no longer believe that pursuing this exchange would be in the best interest of the federal or state government or the public," Norton wrote.

The deal, approved by the House in October 2002 but never considered by the Senate because of time constraints, involved a trade of approximately 136,000 acres of federal land in return for 108,000 acres of Utah school trust land in the San Rafael region of Utah. State officials wanted to complete the trade to consolidate the school trust land, distributed in a "checkerboard" fashion throughout the San Rafael region, into a chunk that was outside national park land and, consequently, easier to develop for profit.

Such exchanges are allowed under the 1976 Federal Land Policy and Management Act, Section 206, as long as the land traded is of equal value, or one party pays the other to make up any difference in value.

But Interior Department whistleblower Kent Wilkinson in August 2002 alleged to the Office of Special Counsel that the San Rafael swap, the third largest state-federal land exchange signed in Utah, is far from an equal deal, though the agreement said the lands are each worth $35 million. Wilkinson is a senior appraiser at the Bureau of Land Management's Utah state office.

The federal land granted to Utah state by the exchange agreement contained valuable oil and gas, coal bed methane, tar sands and oil shale, Wilkinson said, unlike the school trust land the government was to receive. Furthermore, federal officials did not have enough time under the deal to fully assess the value of minerals and oil contained on the federal land slated for the exchange, he claimed. The Interior IG report substantiated these allegations.

More importantly, according to Sen. Chuck Grassley, R-Iowa, who requested the IG report, Interior Department managers misrepresented the terms of the deal to lawmakers during hearings held before the House approved the agreement. For instance, the managers led lawmakers and colleagues to believe that the federal government would receive 40 percent of proceeds from development of the Ua-Ub oil shale tract, a plot of land to be handed over to the state school trust as part of the proposed exchange.

In fact, the exchange would allot only 20 percent of the profits from this land to the federal government, giving another 20 percent to the state of Utah and the remaining 60 percent to the Utah school trust. This land is estimated to hold 1.8 billion barrels of oil. When questioned by Interior's inspector general, the managers said congressional staff members should have been able to figure out the exact terms of the deal, without having them spelled out by department officials.

But Grassley was not impressed by this explanation.

"Let me assure you that 'Catch Me If You Can' may be a good movie, but it is not how we conduct business in Congress," he wrote, in an Aug. 6 letter to Norton. "We expect complete and accurate information from government officials."

In her July 23 letter to Cannon, Norton said she is aware that the Interior Department "bears the responsibility for ensuring that we present accurate facts to the Congress, and the public, particularly when we are taking an action that affects our public lands and resources." She also conceded that, "in this instance, we did not live up to that responsibility," but said Interior has "extensive procedural safeguards to ensure that decisions are made in a manner that protects the environment and public interest."

Norton pledged to forward the inspector general's report to supervisors of the officials involved in the concealment, so that they could consider an "administrative action" to address the managers' conduct. These assessments are currently under way, according to Interior spokesman Mark Pfeifle.

The department has already reassigned one of the managers involved, Thomas Fulton, chief negotiator on the land exchange and former deputy assistant secretary for lands and minerals management, to coordinate the Lewis and Clarke Caucus on Capitol Hill. The reassignment was related to the allegations against Fulton stemming from the land exchange, Pfeifle said.

In addition, Interior is reassessing its procedures for conducting land exchanges, Norton said in her letter.

Jeff Ruch, executive director of Public Employees for Environmental Responsibility (PEER), a Washington-based advocacy group that supported whistleblower Wilkinson, said he thinks Interior's actions are a step in the right direction. But he added that he has yet to see the department's official list of actions taken to remedy the mismanaged exchange.

This response is due to the Office of Special Counsel Monday, according to both Ruch and Grassley. But Pfeifle, the spokesman for Interior, said he is not aware of this deadline, or of any required response to OSC. OSC could not be reached for comment.

Even though the July IG report substantiated Wilkinson's allegations, Ruch said that he is worried Interior will continue to retaliate against the whistleblower for his disclosures. The department has treated Wilkinson as a "pariah" for his revelations regarding San Rafael and other previous land exchanges, Ruch said, passing him up for promotions. Wilkinson currently has a retaliation case also pending before the OSC, Ruch said, but the case predates the San Rafael disclosure.

Pfeifle said he does not know of any retaliation against Wilkinson and pledged that the department will protect him.

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