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Report questions offer to protect Everglades

Federal and state plans in 2002 to pay $120-million and give tax breaks to the Collier family are criticized as grossly inflated.

By WES ALLISON
Published June 9, 2005

WASHINGTON - Three years ago, President Bush and his brother Jeb gathered at the White House to announce a landmark deal:

The federal government would buy the Collier family's mineral rights in Big Cypress National Preserve and other sensitive areas for $120-million, preventing gas and oil exploration on 400,000 acres of the Florida Everglades.

But the deal languished and died. The Colliers again are planning to drill in Big Cypress. And a scathing report issued Wednesday to the Senate Finance Committee found that the Bush administration grossly inflated the value of the land, then offered the Colliers undeserved tax breaks for selling it.

The report by the Interior Department's inspector general says political pressure and public support for protecting the Everglades led the department to abandon its good sense and usual practices to make the sale work.

It blames the agency and several high-ranking officials for failing to obtain an accurate appraisal of the Colliers' mineral rights, and for shunning experts within the department who knew the price was too high by $60-million or more.

It also raps the Colliers and their family-held business, Collier Resources Co., for exaggerating the extent of drilling they planned, in hopes of increasing pressure on the government to act.

"The department is simply not well-served by senior, seasoned, career employees who dissemble an illicit process and present it to decisionmakers - in both the department and in Congress - as righteous," Earl E. Devaney, inspector general for the Interior Department, wrote in his report to the Finance Committee. "The conduct revealed in this special report cries out for accountability."

Several Finance Committee members were incensed. Chairman Charles E. Grassley, R-Iowa, said Interior Secretary Gale A. Norton could expect a letter asking that action be taken against the "bad actors" - two department attorneys - who brokered the deal.

The ranking Democrat, Montana Sen. Max Baucus, said the Interior Department seemed to be trying to deliver a public relations coup to the Bush brothers. Gov. Bush was running for re-election at the time. "I think their strong political influence biased this transaction against the public interest," he said.

Gov. Bush and the White House have denied that.

Under the terms of the deal the president and Gov. Bush announced at a White House ceremony in May 2002, the government would pay the Colliers $120-million for the drilling rights in Big Cypress and two smaller areas, the Florida Panther National Wildlife Refuge and the Ten Thousands Islands National Wildlife Refuge.

But Congress declined to approve the money after questions arose about the price. The inspector general launched his investigation soon after.

Ann Klee, a political appointee who served as Norton's counsel, and two career Interior attorneys, Barry Roth and Peter Schaumberg, brokered the agreement. According to the report, they and other officials in the Interior Department and the Minerals Management Service made a series of errors:

--Instead of finding a fair price, they attempted to justify a higher price the Colliers were likely to accept. Though the land was worth less than $70-million, according to a recent government assessment, the government offered $120-million.

--They improperly gave the Colliers credit for 100 percent of the mineral rights in Big Cypress, when it was unclear what percentage the family owned.

--They improperly offered Collier tax credits for selling the land at a loss, then offered to allow Collier to avoid paying capital gains taxes on the money it earned from the sale, citing a provision for condemned property. The two tax breaks should have been mutually exclusive.

The Collier family, for whom Collier County is named, is a major political donor, having given at least $140,000 to state and federal candidates, mostly Republicans, in the past four years. But Devaney said the investigation found no evidence the Bush administration was trying to reward them.

Instead, the Interior Department seemed intent on doing whatever it took to prevent drilling in Big Cypress. By 2001, Collier Resources had filed 27 applications for exploring for oil there, and the company was very public about its intentions to drill.

"Not unexpectedly, this caused great commotion in the environmental community, which naturally captured the attention of the new secretary," Devaney told the committee.

In reality, however, none of the Colliers' plans had been approved. And even if they had, rules limit the amount of drilling that can occur in Big Cypress at any one time.

"Due, in part, to its sheer tenacity, as well as a very well orchestrated campaign that included instilling fear into the environmental community and into the department itself with its purported intent to drill in the preserve, (Collier) successfully captured the attention, the power, and the will of the very highest political officials at the department to grant its monetary wishes," the report says.

Bob Duncan, general manager for Collier Resources Co., said that the inspector general's report is rife with inaccuracies and that Collier had been "totally open, totally honest" since the Clinton administration first asked about the mineral rights 10 years ago.

He said rights are clearly worth $120-million and more, especially with the rise in oil prices.

The Collier deal expired in late 2003, but Collier and the government continued negotiations. Collier ended them late last year, after Congress again refused to allocate money for the deal.

The company plans to seek National Park Service approval to begin seismic surveys - blasting - to look for oil and gas. "We think we can do it using new technologies that are ... more environmentally friendly than surveys of prior years," Duncan said.

The Interior Department said it was digesting the report and would make any changes it deemed necessary. Gov. Bush said he hadn't seen the report and couldn't comment.

Meanwhile, Norton has reorganized the way the agency appraises property, which Devaney said should solve the problems his investigation uncovered. But if the government should ever again want to buy the Colliers' mineral rights in Big Cypress, he suggested the Interior Department use the power Congress provided when the preserve was created in 1974: Just condemn it.

--Times staff writer Joni James contributed to this report.

[Last modified June 9, 2005, 01:18:46]