[Congressional Record (Bound Edition), Volume 146 (2000), Part 10]
[Extensions of Remarks]
[Pages 14628-14630]
[From the U.S. Government Publishing Office, www.gpo.gov]



       FEDERAL LAND EXCHANGE PROGRAMS NEED TO BE HALTED AND FIXED

                                 ______
                                 

                           HON. GEORGE MILLER

                             of california

                    in the house of representatives

                        Thursday, July 13, 2000

  Mr. GEORGE MILLER of California. Mr. Speaker, a General Accounting 
Office report I requested on land exchanges confirms many of the 
concerns I have expressed over the past several years: too many land 
swaps by the Bureau of Land Management and the Forest Service 
shortchange taxpayers and are not in the public interest.
  The GAO report released on July 12, entitled ``Land Exchanges Need to 
Reflect Appropriate Value and Serve the Public Interest'' (GAO/RCED-00-
73), highlights numerous failings of the exchange program. GAO found 
that the agencies have wasted hundreds of millions of dollars swapping 
valuable public land for private land of questionable value, and the 
report concludes that the BLM may even be breaking the law.
  According to GAO, the agencies ``did not ensure that the land being 
exchanged was appropriately valued or that exchanges served the public 
interest or met certain other exchange requirements.'' GAO went on to 
state that ``the exchanges presented in our report demonstrate serious, 
substantive, and continuing problems with the agencies' land exchange 
programs.'' In addition, GAO found that the BLM has--under the umbrella 
of its land exchange authority--illegally sold federal land, deposited 
the proceeds into interest-bearing accounts, and used these funds to 
acquire nonfederal land (or arranged with other to do so). These 
unauthorized transactions undermine congressional budget authority, GAO 
said.
  The GAO recommended that Congress consider eliminating the programs 
altogether.
  I believe that the appropriate step is to halt the programs and then 
fix them. In light of the GAO's report, I have asked the Forest Service 
and the Bureau of Land Management to immediately suspend their programs 
while they evaluate the best method to achieve their laudable goals.
  Mr. Speaker, I would encourage my colleagues to review the findings 
of the GAO report and to consider my call for a moratorium on land 
exchanges while the programs are being fixed. I am submitting for your 
review as well the letters I sent to the federal agencies yesterday and 
several newspaper articles on the GAO report.

     Hon. Bruce Babbitt,
     Secretary of Interior,
     Washington DC.
       Dear Secretary Babbitt: I am writing to request that you 
     direct the Bureau of Land Management to enact a moratorium on 
     land exchanges until the agency demonstrates that it can 
     ensure all exchanges are in the public interest and of equal 
     value, as required by law. In addition, the Bureau should 
     immediately identify and cease all activities carried out 
     under the land exchange authority umbrella that are not 
     authorized by law. The agency should also thoroughly account 
     for the funds used in these transactions.

[[Page 14629]]

       I am extremely concerned by the General Accounting Office's 
     findings in its June, 2000 report entitled ``Land Exchanges 
     Need to Reflect Appropriate Value and Service the Public 
     Interest'' (GAO/RCED-00-73). GAO documented numerous 
     instances in which valuable federal land was traded for 
     private land worth significantly less. In addition, the 
     report described exchanges in which the public interest being 
     served was unclear.
       According to GAO, the Bureau ``did not ensure that the land 
     being exchanged was appropriately valued or that exchanges 
     served the public interest or met certain other exchange 
     requirements'' GAO went on to state that ``the exchanges 
     presented in our report demonstrate serious, substantive, and 
     continuing problems with the agencies' land exchange 
     programs.'' In addition, GAO found that the Bureau has--under 
     the umbrella of its land exchange authority--illegally sold 
     federal land, deposited the proceeds into interest-bearing 
     accounts, and used these funds to acquire nonfederal land (or 
     arranged with others to do so).
       I am also concerned by the Bureau's response to these 
     findings; it appears that the Bureau would rather deny the 
     problems than solve them. GAO reported that the Bureau is 
     attempting to make superficial changes that do not adequately 
     address these illegal land transactions. For example, 
     according to GAO, the Bureau is renaming the disputed land 
     transactions, calling them ``disposals'' rather than 
     ``sales'' and ``acquisitions'' rather than ``purchases.'' In 
     addition, the Bureau is switching from using cash in these 
     transactions, to financial instruments, like bonds. According 
     to GAO, the transactions are still not authorized by law and 
     the Bureau's arguments to the contrary are ``circular and 
     unconvincing.''
       Many of the problems highlighted by GAO are not new and 
     have been reported on by the Inspector General and in 
     numerous news accounts. While I am supportive of the Bureau's 
     ongoing efforts to address these concerns, such as creating a 
     national review team, these changes have not yet produced 
     sufficient results.
       The Bureau's moratorium should suspend all pending 
     exchanges for which a decision has not yet been signed and 
     halt the initiation of new exchanges. Before the Bureau 
     considers lifting the moratorium, the Inspector General 
     should complete a comprehensive review of procedures and 
     pending exchanges and certify that the agency has sufficient 
     control of the program and can ensure that all exchanges are 
     of equal value and in the public interest. The IG review 
     should include a close look at exchanges involving third-
     party facilitators, which may be more likely than other 
     exchanges to lead to inequitable results.
       As the Bureau works to regain control over its exchange 
     program, it may want to consider ways to improve appraisals, 
     better incorporate the public in its process, reduce the 
     influence of third parties and project proponents. Some 
     specific reforms the Bureau should evaluate include: the 
     automatic release of all appraisal information to the public 
     upon completion of review by the agency appraiser limits on 
     the ability of proponents to select appraisers; application 
     of the NEPA and NHPA requirements in Muckleshoot v. Forest 
     Service to all exchanges; incorporation of the agency's 
     priorities for acquisition in the exchange process; release 
     of a schedule of all proposed land exchanges; inclusion of 
     maps with the legal description of an exchange; reforms of 
     the appeal process; greater notification of adjacent 
     landowners; and the compilation of better system-wide 
     financial and environmental information on all exchanges.
       Thank you for your consideration. I look forward to your 
     prompt response.
           Sincerely,
                                                    George Miller,
                                               Member of Congress.

                                  ____
                                  

                                    Congress of the United States,


                                     House of Representatives,

                                    Washington, DC, July 12, 2000.
     Hon. Dan Glickman, 
     Secretary of Agriculture,
     Washington, DC.
       Dear Secretary Glickman: I am writing to request that you 
     direct the Forest Service to enact a moratorium on land 
     exchanges until the agency demonstrates that it can ensure 
     all exchanges are in the public interest and of equal value, 
     as required by law.
       I am extremely concerned by the General Accounting Office's 
     findings in its June, 2000 report entitled ``Land Exchanges 
     Need to Reflect Appropriate Value and Serve the Public 
     Interest'' (GAO/RCED-00-73). GAO documented numerous 
     instances in which valuable federal land was traded for 
     private land worth significantly less. In addition, the 
     report described exchanges in which the public interest being 
     served was unclear.
       According to the GAO, the Service ``did not ensure that the 
     land being exchanged was appropriately valued or that 
     exchanges served the public interest or met certain other 
     exchange requirements.'' GAO went on to state that ``the 
     exchanges presented in our report demonstrate serious, 
     substantive, and continuing problems with the agencies' land 
     exchange programs.''
       Many of the problems highlighted by GAO are not new and 
     have been reported on by the Inspector General and in 
     numerous news accounts. I am supportive of the Service's 
     ongoing efforts to address these concerns, such as creating a 
     national review team and the new proposal that could lead to 
     public release of appraisal documents. However these changes 
     have not yet produced sufficient results. GAO reported that, 
     ``while most regions have made progress in strengthening 
     their land exchange programs, none have clearly demonstrated 
     that they fully and consistently comply with national 
     standards reflecting applicable laws, regulations, and 
     policies in developing and processing land exchanges.''
       The Service's moratorium should suspend all pending 
     exchanges for which a decision has not yet been signed and 
     halt the initiation of new exchanges. Before the Service 
     considers lifting the moratorium, the Inspector General 
     should complete a comprehensive review of procedures and 
     pending exchanges and certify that the agency has sufficient 
     control of the program and can ensure that all exchanges are 
     of equal value and in the public interest. The IG review 
     should include a close look at exchanges involving third-
     party facilitators, which may be more likely than other 
     exchanges to lead to inequitable results.
       I am aware that the Service previously declared a 30 day 
     moratorium on third-party exchanges, and believe the action, 
     and other reforms, demonstrates the agency's commitment to 
     fixing the exchange program. In addition, I note that the 
     Service runs a less problem-ridden exchange program than does 
     the Bureau of Land Management.
       As the Service works to regain control over its exchange 
     program, it may want to consider ways to improve appraisals, 
     better incorporate the public in its process, and reduce the 
     influence of third parties and project proponents. Some 
     specific reforms the Service should evaluate include: the 
     automatic release of all appraisal information to the public 
     upon completion of review by the agency appraiser; limits on 
     the ability of proponents to select appraisers; application 
     of the NEPA and NHPA requirements in Muckleshoot v. Forest 
     Service to all exchanges; incorporation of the agency's 
     priorities for acquisition in the exchange process; greater 
     notification of adjacent landowners; and the compilation of 
     better system-wide financial and environmental information on 
     all exchanges.
       Thank you for your consideration. I look forward to your 
     prompt response.
           Sincerely,
                                                    George Miller,
                                               Member of Congress.

                                  ____
                                  

               [From the Washington Post, July 13, 2000]

              Land Exchange Program Hurts Public, GAO Says

                   (By Deborah Nelson and Rick Weiss)

       A federal program designed to improve national wilderness 
     and recreation areas by trading expendable public land for 
     desirable private property has shortchanged taxpayers by 
     millions of dollars, government auditors reported yesterday.
       Too often, the report concludes, developers, timber 
     companies and other business interests benefit at the 
     public's expense from the complex real estate deals that are 
     supposed to help the government acquire important natural 
     resources and clean up messy ownership boundaries.
       The program is so riddled with problems and abuses that 
     Congress should consider banning trades altogether, the 
     report from the General Accounting Office concludes.
       In one instance, for example, a private buyer obtained 70 
     acres of federal land for $763,000, and then sold the parcel 
     the same day for $4.6 million. In another case, the same 
     buyer acquired another 40 acres with a supposed value of 
     $504,000 and sold it the same day for $1 million.
       The report also highlighted a deal in which the Forest 
     Service gave Weyerhaeuser Co., a valuable, mature Douglas fir 
     forest in exchange for vast amounts of mostly clear-cut land 
     near Seattle. A couple of the private parcels had been traded 
     to Weyerhaeuser in an earlier deal, shaved clean of trees and 
     then traded back to the Forest Service. The deal was only 
     stopped after a local Indian tribe and an environmental group 
     challenged it in federal court.
       The stinging new assessment is the latest in a series of 
     highly critical reviews of the program by government 
     investigators, but it goes further than any other by 
     suggesting a congressional ban.
       Rep. George Miller (D-Calif.), who released the report, 
     called on the Clinton administration to impose an immediate 
     moratorium on land exchanges.
       However, officials from the Forest Service and the Bureau 
     of Land Management (BLM), the two most active land-trading 
     agencies, say the program is too important to abandon, 
     particularly because they do not have the money to buy land 
     outright at a time of rising real estate prices.
       Over the past decade, the Forest Service and BLM have 
     traded 2 million acres of public land for 3 million acres of 
     mostly private land in increasingly complex deals that 
     sometimes have moved entire mountains from federal to private 
     ownership.
       Despite the net gain in land, the GAO found that the public 
     was shorted in many of

[[Page 14630]]

     the deals, because the government under-valued its own land, 
     overvalued the private land or made trades that benefited the 
     private parties rather than the public.
       In addition, the BLM broke the law by selling land outright 
     and keeping the money for its own purposes rather than 
     returning it to the federal treasury as required, the report 
     concludes.
       Under federal land exchange regulations the private and 
     public land in a trade must be of equal market value and the 
     overall transaction must benefit the public and the 
     environment.
       But the GAO report found that the public often loses out, 
     because the program pits government land managers with 
     relatively little expertise in real estate against 
     professional property brokers, developers and major 
     corporations.
       Agriculture Undersecretary Jim Lyons, who oversees the 
     Forest Service, called the criticism ``overstated'' and the 
     suggested trade ban ``ludicrous.''
       The agency has improved appraisal procedures and training 
     to address past problems, he said. The Forest Service needs 
     the land exchange program as a tool to protect natural 
     resources, he said.
       Janine Blaeloch, director of the Seattle-based Western Land 
     Exchange Project environmental group, which has successfully 
     challenged the Weyerhaeuser deal and other trades across the 
     country, said the GAO report didn't go far enough. A 
     moratorium should be extended to land exchanges that are 
     legislated by Congress at the request of private landowners; 
     such trades can legally circumvent the environmental and 
     public review process that the agencies are required to 
     follow, she said.
       ``Once a land deal goes to Congress it's almost impossible 
     to stop.'' Blaeloch said. ``No public lands should be traded 
     to private parties until we figure out how to solve this 
     problem.''
       Among the land exchanges scrutinized for the GAO report was 
     a deal between the BLM and a private company that is seeking 
     to build the nation's largest garbage dump just outside the 
     borders of Joshua Tree National Park in California.
       To build the dump, which has faced repeated legal 
     challenges over the past decade because of concerns about its 
     environmental impact on the pristine desert park, the 
     developers needed 3,500 acres of adjacent public land. The 
     BLM traded that land to the developers for 10 parcels of 
     private land, which were supposed to provide crucial habitat 
     for the threatened desert tortoise, the endangered pup fish 
     and other sensitive species.
       But all 10 parcels are bisected by a rail line that will be 
     used to carry 20,000 tons of garbage a day to the dump. 
     Moreover, dump opponents have gathered evidence that at least 
     some of the land traded by the developers to the public falls 
     within a live bombing area of the federal Chocolate Mountain 
     Gunnery Range. Those and other aspects of the swap have 
     spawned two separate lawsuits seeking to undo the deal.
       In another deal, the government traded valuable federal 
     land in the booming Las Vegas valley to developers for an 
     assortment of private parcels, including the 46-acre Zephyr 
     Cove estate on Lake Tahoe, Nev.
       A combination of clever legal tactics on the part of the 
     developers and clumsy federal oversight led the Forest 
     Service to mistakenly sign away its rights to a 10,000-
     square-foot mansion and other buildings on the newly acquired 
     land, government investigators found.
       The developers that resold those buildings to another buyer 
     that quickly fenced off the area with ``private property'' 
     signs and proposed its own development plans that were to 
     expand further onto the Forest Service land.
       An investigation by the Agriculture Department found that 
     the buyer of those buildings gave the developers $300,000, 
     exclusive use of the mansion for seven weeks of the year and 
     two 20-year memberships to a Lake Tahoe golf club. The deal 
     has been mired in expensive legal proceedings.
       Other exchanges highlighted by the GAO include:
       A trade between BLM and the Del Webb development company in 
     Nevada in which the agency let the company use its own 
     appraiser to set the value of 4,776 acres of federal land at 
     $43 million and removed an agency appraiser who protested. 
     When the inspector general for the Department of Interior 
     announced plans to review the exchange, BLM contracted for a 
     new, independent appraisal that set the value $9 million 
     higher.
       A deal in which the Forest Service acquired an 
     environmentally desirable $50 million parcel on Lake Tahoe in 
     an exchange with developers who got large tracts of coveted 
     federal land outside quickly growing Las Vegas. But when the 
     developers failed to abide by two separate promises to find a 
     buyer for unwanted buildings on the land, the Forest Service 
     stood poised to get stuck with $300,000-a-year maintenance 
     costs, which it could not afford. Moreover, a USDA 
     investigation found that the developers had misinformed the 
     Forest Service about the nature of the water rights on the 
     land, which were more restrictive than officials had been led 
     to believe.
       BLM spokesman Rem Hawes said efforts to improve appraisals 
     and review of land exchanges are underway. ``We do a lot of 
     these every year,'' he said. ``And we have some every year 
     that are controversial. The vast majority don't receive a 
     single appeal or protest. We do a lot of these that are quite 
     positive.'' Hawes said.

                                  ____
                                  

             [From the Wall Street Journal, July 13, 2000]

           Congressman Seeks U.S. Moratorium on Land Exchange

                            (By Jim Carlton)

       A California congressman has called for a moratorium on 
     government land exchanges, following the release of a General 
     Accounting Office report criticizing the program for trading 
     valuable public properties for marginal private ones.
       Democratic Rep. George Miller sent letters to Interior 
     Secretary Bruce Babbitt and Agriculture Secretary Dan 
     Glickman asking them to halt all exchanges by the Bureau of 
     Land Management and the U.S. Forest Service pending further 
     review.
       BLM officials under Interior's authority acknowledged they 
     had room for improvement, and agreed to put their exchange 
     process under closer review. ``If we have a squeaky wheel, we 
     want to make sure to get it fixed,'' said BLM spokesman Rem 
     Hawes. Agriculture officials overseeing the Forest Service 
     said that, while appraisal methods could be improved, most of 
     their exchanges are conducted fairly. ``What the GAO report 
     is pointing out are exceptions to the rule,'' said Jim Lyons, 
     an Agriculture undersecretary.
       Rep. Miller, the senior Democrat on the House Resources 
     Committee, had requested the report by the GAO, an 
     investigative arm of Congress, following numerous reports in 
     the media and elsewhere in recent years of problems with the 
     land exchanges. Most of the exchanges have involved the 
     government's vast land holdings in the West, where resources 
     advocates have complained of pristine wildlands being traded 
     away for less valuable private or locally owned tracts.
       In Washington state, for instance, a federal appeals court 
     last year blocked a proposed swap of private land that had 
     been logged for untouched public forest, following an outcry 
     by environmentalists. In Utah, a proposed land swap between 
     the Bureau of Land Management and a state school trust is 
     drawing fire from critics who say the transaction would open 
     the entrance of Zion National Park to commercial and 
     residential development.
       The exchanges are supposed to enable the government to 
     acquire environmentally valuable parcels of private land by 
     disposing of federal lands deemed of marginal public value. 
     However, the GAO report documented numerous exchanges in 
     which federal land was traded for private land worth 
     significantly less.
       As a result, private parties in one Nevada exchange managed 
     to sell for $4.6 million land they had acquired from the BLM 
     that same day for $763,000, according to the report, the 
     Forest Service acquired land in three Nevada exchanges that 
     was overvalued by $8.8 million, ``because the appraised 
     values were not supported by credible evidence.''
       ``Land deals are being cut behind closed doors with 
     tremendous special-interest pressure and limited public 
     input,'' said Rep. Miller, who asked Mr. Babbitt and Mr. 
     Glickman to put a hold on all exchanges until the problems 
     are corrected.
       The GAO report also found that the BLM has been illegally 
     holding onto proceeds from land sales, rather than returning 
     the money to the U.S. Treasury, as a pool to purchase 
     additional lands without congressional approval. Rep. Miller 
     called on Mr. Babbitt, who oversees the BLM, to cease those 
     activities as well.
       BLM officials said they knew of one such instance in which 
     the agency had neglected to return to the Treasury interest 
     from an escrow account. The BLM's Mr. Hawes said that money 
     would be returned, and added that the agency is seeking to 
     retain an auditor to determine whether escrow monies from 
     other exchanges also need to be returned.