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For Immediate Release: Aug 19, 2002
Contact: Kirsten Stade (202) 265-7337

LAND EXCHANGE WILL COST U.S. $100 MILLION

Federal Appraisers Blow the Whistle on Utah Land Deal


Washington, DC - The U.S. Treasury stands to lose $100 million in what is supposed to be an "equivalent" value land trade with the State of Utah, according to agency documents released today by Public Employees for Environmental Responsibility (PEER). The agency documents are part of a whistleblower disclosure filed with the U.S. Office of Special Counsel on behalf of a Bureau of Land Management (BLM) land appraiser.

The land exchange was negotiated between Utah Governor Michael Leavitt and top Department of Interior officials. The Utah Legislature has already ratified the deal and congressional approval hinges on the passage of legislation (HR 4968) carried by Rep. Chris Cannon (R-UT).

By its terms, the exchange is supposed to be of approximately equal value -108,000 acres of Utah school trust land for 135,000 acres of federal land in the state - valued at approximately $35 million to each side. But according to internal BLM documents, the deal will actually cost the federal taxpayers between $96.7 million and $116 million, using conservative estimates.

One major reason the federal government stands to lose as much as three times the face value of the exchange is that BLM lands with known oil, gas, coal and tar sands deposits were counted in negotiations as having "no or nominal mineral potential." BLM Appraiser Kent Wilkinson, who made the disclosure, had protested the undervaluing of the federal interests along with other realty and mineral specialists in the agency's Utah and Washington headquarters in a flurry of e-mails, memos and internal reports.

"This is one of the most one-sided land deals since the purchase of Manhattan Island," commented PEER General Counsel Dan Meyer who filed the disclosure. "While President Bush is calling for corporate accountability, his appointees at Interior have engineered a deal that is so bad it would make Enron blush."

BLM Headquarters staff totaled up a monetary estimate of the discrepancies raised by its own specialists and found approximately $100 million in losses. Despite this internal finding, the agency has decided to push ahead with the exchange. If the Office of Special Counsel finds the whistleblower allegations have merit it will order an investigation. An investigation may preclude approval for any exchange this session.

"The negotiators of this deal not only betrayed the public but lied to Congress about its equity," stated Janine Blaeloch, Director of the Western Land Exchange Project, an organization that monitors federal land deals and has harshly criticized two previous Utah-federal land trades.

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Read the OSC disclosure.

Related documents are available upon request.