Capitol Hill's Longest-Running Outrage
Bumpers, Sen. Dale
Capitol Hill's LongestRunning Outrage Congress winks while the mining companies shaft the taxpayers BY SEN. DALE BUMPERS JOINING THE SENATE IN 1975 WAS A traumatic experience for me. I had...
...But although our attitudes toward public resources have changed since the 19th century, the Mining Law has remained virtually untouched...
...This is the ninth agonizing year of my effort to reform the Mining Law of 1872, signed by Ulysses S. Grant and intended to entice people to “go West” and settie...
...As I mentioned earlier, the taxpayers are often left to pick up the tab for cleaning up the mess-acid waste, polluted streams, and unreclaimed open pits-that mining companies leave in their wake...
...The companies argue that they cannot afford to pay royalties because of the costly nature of their operations...
...There’s no limit on how many claims one may own, and the claim will remain in effect as long as the owner pays $100 a year per claim...
...In 1994 Barrick obtained patents on more than 1,800 acres of public land in Nevada...
...I’ve learned this lesson the hard way...
...However, a large number of senators, most of whom have no mining in their states, continue to vote with the Ukstern bloc...
...Code and send it to the Smithsonian Museum where it belongs...
...The EPA had to hire 55 full-time workers, and taxpayers are, at this moment, spending $33,000 per day to prevent cyanide from spilling into the headwaters of the Rio Grande...
...Similarly, in 1989, an Oregon family patented 780 acres of land containing silica in the National Dunes Recreation Area for $l,?SO...
...It is certainly understandable that legislators from states in which the mining industry is a major force would be supportive of that industry...
...It also gives them the option of hying that public land forever-at rock bottom prices...
...The problem: The mining interests have spent millions upon millions to keep this sacred law in force...
...But unless the American people are somehow awakened to this little-known abuse, I have no reason to be optimistic...
...In exchange for approximately $9,000, what did Barrick get...
...It is long past time to start treating the taxpayers with respect rather than contempt...
...The era of the grizzled prospector seeking a fortune with a pickax, a tin pan, and a burro are long past...
...DALE BUMPERS JOINING THE SENATE IN 1975 WAS A traumatic experience for me...
...I continued my efforts each year until 1994, when a House-Senate conference committee fmdy imposed the patent moratorium...
...And all that effort does not even guarantee a favorable result, or a result that hasn’t been watered down until it’s hardly recognizable...
...Here’s how the law works: Anyone, and I mean anyone, can drive four stakes into the ground on federally owned lands in the West, delineate the four corners of a 20-acre tract, and file a hardrock-mining claim on that 20 acres...
...My successes have been marginal...
...However, their efforts have also been stymied...
...DALE BUMPERS is the senior senator from Arkansas and te ranking member of the Senate Energy and Natural Resources Committee...
...So extending that royalty to public lands could produce more than $100 million per year for taxpayers...
...To paraphrase an old song, the mining companies get the gold and the taxpayers get the shaft...
...Unfortunately, many of the most valuable claims were either already patented or were excluded by a grandfather clause...
...Judd Gregg (R-NH) has been a staunch ally...
...But the Senate is an altogether different place, and for those without yards of patience, an often maddening one...
...But it should be noted that my chief co-sponsor, Sen...
...The Mining Law is as much a relic of bygone frontier days as the sod hut and the covered wagon...
...Because mining companies rnust often pay a high premium to buy land that is rich in mineral deposits, the government allows them to recover that premium by takmg a tax deduction on the value of the minerals they subsequently extract...
...As if the hard-rock miners weren’t getting a sweet enough deal, they’re also allowed to enjoy a special tax break...
...But when those interests fly in the face of the obvious national interest, it becomes the duty of the other members to tolerate it no longer...
...Yet somehow they can and do pay handsome royalties for the privilege of mining on private lands or state lands...
...This is not in itself unreasonable...
...Mining Their Own Business My eight-year battle to reform the hardrock-mining laws of this country has been a lonely one...
...It’s estimated that billions of dollars worth of minerals are extracted from federal lands each year...
...They argue that tougher standards would increase their costs of doing business...
...What’s more, whereas oil, gas, and coal companies must pay substantial royalties to taxpayers for the right to extract those resources from public land, the hardrock-mining companies pay nothing for extraction rights on their claims-not a dime...
...But, the measure stalled in a House-Senate conference as senators from the West threatened to filibuster any bill that would establish a royalty similar to the kind mining companies pay private landowners...
...The new owners offered to sell the land back-for $11 million...
...It seems incomprehensible that Congress would allow this abuse of taxpayers to continue...
...It is virtually impossible to accomplish anything significant without spending years shepherding, pleading, cajoling, begging, explaining, and compromising with your colleagues...
...How much is this quirk of the law costing taxpayers...
...When I first heard about the 1872 Mining Law, I was incredulous...
...According to the Mineral Policy Center, more than 3.2 million acres of public lands packing $243 billion worth of hardrock minerals have been patented since 1872...
...How could this be...
...When I first heard about the 1872 Mining Law, I was incredulous...
...If the claimholder can prove to the Department of Interior that his claim contains commercially producible hardrock minerals, then the government must grant the applicant a deed or “patent” to the lands for the princely sum of between $2.50 to $5 per acre...
...Summitville’s parent company subsequently declared bankruptcy, leaving only a $4.7 million bond for reclamation...
...How could this be...
...Talk about double-dipping...
...In 1993, the House actually passed a comprehensive reform bill by a nearly 3-to-1 margin...
...hd the unpleasant.truth is that it is much more important to the mining industry and members of Congress from mining states to maintain the status quo than it is for the public, largely unaware that it i:s being used and abused, to demand and achieve change...
...it’s also estimated that the average royalty paid by mining companies to private landowners is about 5 percent...
...For just $10,000 Stillwater will gain title to land containing platinum and palladium reserves worth more than $35 billion...
...The Mineral Policy Center estimates it will cost upwards of $71.5 billion to reclaim the more than SS7,OOO abandoned hardrock-mining sites in the United States...
...However, companies that mine public land not only do not pay a premium for the minerals in that land, they are able to purchase the land at the below-market, laughable rate of $2.50 per acre...
...Archaic Senate rules allow a small minority to block legislation and Western-state senators have used them to thwart efforts to reform the 1872 Mining Law time and again...
...Unfortunately, such has not been the case with this unseemly law...
...It’s called a “freebie,” a bad vote that has no political repercussions and which the lawmaker can cash in when he’s gathering support for his own interests...
...But these excesses are just the tip of the iceberg...
...Even more galling, the same mining industry that benefits so handsomely from Congress’ generosity has successfully used its money and lobbying influence to preserve this sweetheart deal...
...In June of that year, a pad and protective liner at the site failed, allowing cyanide to seep into the ground...
...Yet once a claimant has been granted a patent, he is not required to mine the land he’s bought...
...For instance, just four days after the Senate voted .TO to 48 to defeat my patent moratorium amendment in 1990, the Stillwater Mining Company filed applications for patents on 2,000 acres of national forest land in Montana...
...Mining Our Pockets Beginning in 1990, I attempted to include a provision in the Department of Interior appropriations bill to prohibit the processing of new patent applications...
...Fat chance...
...The mining industry narrowly defeated this proposal...
...When the Interior Department recently announced its intention to update the regulations regarding mining on public land, the industry attacked, tapping its allies in the Senate to include a provision in the Department of Interior appropriations bill that would prevent the department from even worlung on new regulations unless all the governors of the Western states signed off on them...
...Yet, incredibly, these companies are still allowed to take the tax deduction on the value of the minerals they extract...
...The cost to taxpayers: almost $100 million a year...
...This archaic, 12s-year-old law permits mining companies to gouge billions of dollars worth of gold, silver, platinum, palladium, and other hardrock minerals from public lands, without paying one red cent to the real owners, the American people...
...It's called a "freebie," a bad vote that has no political repercussions and that the lawmaker can cash in when he's gathering support for his own provincial interests...
...More than SO of these sites are already on the Superfund National Priority List...
...When speaking to their local chambers of commerce and Rotary Clubs, members of Congress often promise to guard taxpayers’ money as if it were their own...
...Rather than working to develop updated environmental standards to prevent future disasters, the mining industry continues to fight efforts to improve environmental regulations...
...But the 1872 Law doesn’t just allow companies to stake a claim and then mine public lands without paying royalties...
...Well, as my mother used to say, "Everybody's business is nobody's...
...Shortly after the patent was issued, the Department of Interior decided the land, which attracts more than 2 million visitors a year, should not be mined, and sought to buy back the land...
...Reps...
...The land is within spitting distance of a Newmont gold mine located on federal property, on which the company pays no royalties...
...The sad fact is that many members of Congress are happy to support other members’ parochial interest if they feel comfortably certain that the voters back home won’t know or care about the issue...
...It’s only natural that each member feels a duty to protect their provincial interests back home...
...Meanwhile, members of Congress who perpetuate this unbelievable scam are never held accountable, because the public knows little, if anything, about the abuse...
...But how many landowners would sell their gold- or silver-laden lands for $2.50 per acre and not even demand a royalty...
...The Newmont Mining Company, for instance, is paying a private landowner an 18 percent royalty for the right to extract gold from his land in Nevada...
...Because I will leave the Senate at the end of the year, the conclusion of my fourth term, I have redoubled my efforts...
...Well, as my mother used to say, “Everybody’s business is nobody’s business...
...He can use it for any purpose...
...While this outrage surpasses most scandals that receive massive press coverage, it continues to escape notice...
...Before the clean-up is complete, taxpayer costs are predicted to reach up to $60 million...
...Manv of the hardrock miners that managed to slip in patent applications before the moratorium are foreign-owned companies...
...Nick Joe Rahall (D-W) and George Miller (D-CA) have also fought valiantly for reform in the House...
...In 1986, Summitville, another Canadian mining company, opened a gold mine in RIO Grande County...
...It’s hard to believe that at a time when the average citizen considers himself grossly and unfairly taxed, Congress would tolerate such an unconscionable giveaway of billions of dollars in minerals to the wealthiest corporations in the world and, through the tax deduction, literally pay them to take the minerals...
...history...
...After.&, the land the mining companies purchase is an asset-and the more they extract from that land the more it depreciates in value, so it’s only fair for their tax bill to reflect that...
...I had been governor of Arkansas for four years and I was accustomed to making policy, giving my approval to legislation that I thought merit, vetoing legislation that didn't, and, in general, making things happen with the stroke of a pen...
...Here’s how it works...
...Take Barrick Resources, a Canadian corporation that touts itself as the most profitable mining company in the world...
...It is time to chisel the 1872 Mining Law out of the U.S...
...With that kind of steal it’s no wonder Barrick has become the world’s most profitable mining company...
...Today’s prospectors are multinational corporations that scar and ravage the land with giant earth-moving machines and lethal acids like cyanide...
...same companies often leave the unsuspecting taxpayers with the bill for the billions of dollars required to clean up the environmental mess left behind...
...While the desire for campaign contributions from mining interests is certainly one explanation for many legislators’ unwillingness to reform the Mining Law, it is not the only one...
...More than $10 billion worth of gold-one of the largest deposits in U.S...
...Only after the White House threatened a veto did senators from the West agree to allow the department to proceed with preparation of the regulations...
...Patented claims have become sites for vacation home developments, JU&yards, tourist traps, casinos, and golf courses...
...They should tell that to the people of Rio Grande County in Colorado...
...And these SEN...
...Industry apologists argue that reclamation and other environmental problems associated with hardrock mining are a thing of the past...
Vol. 30 • January 1998 • No. 1
