U.S. government continues to stiff Montana

Published April 1, 2002

In the summer of 1996, President Bill Clinton traveled to Yellowstone National Park to announce that his administration, in concert with environmental groups, had killed hundreds of jobs in southern Montana and northern Wyoming.

The New World Mine, a world-class ($650 million) deposit of gold, silver, and copper in an area heavily mined since Europeans came west, would never open. Crown Butte Mines agreed to ensure the reclamation of the land, which had experienced decades of mining activity by other companies. In exchange, Crown Butte was promised $65 million worth of federal property.

But federal officials could not identify any such property, so Congress appropriated the funds to pay Crown Butte instead. Recognizing that Montana, the nation’s poorest state, had been dealt a severe economic blow by the mine’s failure to open, Congress mandated some recompense. The Secretary of the Interior was to give Montana either $10 million in federal mineral rights as agreed to by the Secretary and Montana’s Governor, or all rights in 533 million tons of federal coal in the “Otter Creek tracts.”

Then-Governor Marc Racicot told then-Secretary Bruce Babbitt that Montana wanted the Otter Creek tracts within Powder River County, one of the nation’s most productive coal mining regions. Babbitt refused, saying the congressional mandate created a “windfall” for Montana. Undeterred, Racicot pressed for transfer of the Otter Creek tracts.

Attorneys promise he’ll comply

In 1998, landowners near Ashland, in Montana’s poorest region, sued to force Babbitt to comply with federal law by transferring the Otter Creek tracts. They argued that Babbitt’s well-publicized characterization of the coal transfer (Babbitt told a U.S. Senate committee what he told Racicot) proved Babbitt had no intention of complying with the law.

Federal attorneys asserted that negotiations had begun, that negotiations were continuing, and that Babbitt would comply with federal law on or before New Year’s Day 2001. Given these assertions, a Washington, DC federal district court, in September 1999, dismissed the case as not ripe; that is, Babbitt had not yet violated the law and had indicated he would comply.

On December 22, 2000, Secretary Babbitt wrote to Governor Racicot advising him, once again, that Babbitt had no intention of transferring the Otter Creek tracts to Montana and would not, under any circumstances, do so. The letter did not arrive in Montana until after Inauguration Day 2001. By then, Montana had a new governor, Judy Martz, who went to Washington, DC for President George W. Bush’s swearing in.

While there, Governor Martz met with Gale Norton, Secretary of the Department of Interior, to whom she communicated Montana’s request for immediate transfer of the Otter Creek tracts. Governor Martz repeated that request in a letter dated February 1, 2001. A year after that letter was signed, Secretary Norton has yet to transfer the Otter Creek tracts to Montana, a year and a month after the transfer was to have taken place.

Blackmail in the courts

Meanwhile, on January 25, 2002, the Northern Cheyenne Tribe filed a lawsuit in Washington, DC to prevent Norton from doing what Babbitt should have done in 1998, or 1999, or 2000, and what Norton should have done days after being sworn-in, given as how the deadline was January 1, 2001.

Although the tribe is seeking an order compelling Norton to conduct a lengthy environmental review before transferring the coal, the tribe’s attorney stated the real reason for the lawsuit is to force Montana to meet the tribe’s demands for employment and contracting guarantees. If the attorney’s statement is accurate, and for a host of other reasons, the lawsuit should be dismissed. Whether federal lawyers will file a motion to dismiss is unknown.

In 1996, when Clinton stood before the media and smiling environmentalists to announce the death of hundreds of high-paying jobs, he enthused, “What a happy day.” It has not been a happy day economically in southeastern Montana for many years. Worse yet, the happy day envisioned by Congress when it mandated the coal transfer appears far away.

William Perry Pendley is president and chief legal officer of the Mountain States Legal Foundation.