Probe sought over land exchanges

Tuesday, June 18, 1996 | 11:59 a.m.

Rep. John Ensign, R-Nev., wants Congress to investigate a report that the federal government lost millions in exchanging Nevada land with out-of-state developers.

Ensign's call for a congressional hearing comes in the wake of an audit by the Interior Department's inspector general.

The preliminary audit reveals that taxpayers were shortchanged at least $12.2 million on four land exchanges authorized by the Bureau of Land Management between 1993 and 1995.

Two of the deals netted millions for an Arizona development company, Olympic Group Inc., and a third involved a nonprofit organization in San Francisco, the American Land Conservancy. The fourth included land in Tonopah the BLM wanted for office space.

The goal of a land exchange is for the government to obtain pristine wilderness and valuable habitat for protection in exchange for public lands that are more appropriate for development, such as in the Las Vegas Valley.

But Ensign said he requested the audit after suspecting that "incompetence" by BLM officials had cost taxpayers millions when prime land was swapped with development companies that later sold it for a big profit.

"It is unfortunate the actions of a few at the BLM office now threaten the hard-working and honest reputation BLM employees have earned throughout the state of Nevada," Ensign said Monday.

Ensign wants the House Resources Committee, of which he is a member, to begin hearings this year.

BLM spokeswomen Maxine Shane said the agency will respond to the audit by the end of the month. She said that because it was a preliminary audit, the report is subject to change based on the agency's response.

"There are always two sides to every story," Shane said. "Nevada has been a popular place for land exchanges, especially in Las Vegas."

Shane said it is more difficult to establish fair market value for federal parcels that are thousands of acres in size than it is to appraise homes or commercial property. Appraisers who establish fair market value usually try to find similar property that recently changed ownership.

Ensign declined to speculate on whether the congressional hearings would result in any firings at the BLM.

He and Sen. Richard Bryan, D-Nev., have introduced legislation that would emphasize auctions over land swaps. Auctions are expected to bring in more money because land would be sold to the highest bidder rather than swapped at undervalued prices.