Investigation finds improper gifts in Nevada land swaps

Scott Sonner

Friday, July 31, 1998 | 8:22 a.m.

RENO, Nev. - Federal agents have accused a Forest Service official of accepting free trips and other gifts from private interests who pushed through millions of dollars worth of land swaps at a national forest in Nevada.

A draft audit, excerpts of which were obtained by The Associated Press, says that government authorities have referred part of the case to the Justice Department for criminal prosecution.

In response, Forest Service Chief Mike Dombeck has suspended the local managers' authority to approve land exchanges at that forest and instructed his regional officers to more closely scrutinize land exchange proposals nationwide, his spokesman Chris Wood said Friday.

The chief also plans specific corrective action in Nevada, Wood said.

"I think the report by the inspector general is indicative of larger concerns we have with the land exchange program," Wood told the AP from agency headquarters in Washington.

The Forest Service official is not named in the draft report, according to sources who have seen the full draft. Neither are the private investors nor the third-party broker who allegedly helped provide the service official with gratuities.

Wood said he could not comment on whether the official targeted in the audit remains on the job.

Acting on a tip from a whistleblower hotline, the inspectors uncovered "a serious breakdown of controls" in the overall exchange program intended to benefit both private land owners and public interests through the trading of like-valued lands.

Excerpts of the draft audit obtained by AP cite a wide range of improper dealings involving at least $27.9 million and 7,000 acres of land swaps at the Humboldt-Toiyabe National Forest in Nevada.

"Management allowed private parties ... to exert undue influence over the direction and outcome of almost all large-value land exchanges in the forest," said an excerpt of the draft audit, written by the Agriculture Department's Office of Inspector General.

"We identified the improper conduct of one management employee who received gifts, gratuities and entertainment from private parties doing business with the Forest Service," the draft said.

The gifts ranged from free air travel and a fishing trip to Canada, to a sailing trip on San Francisco Bay and a free Christmas vacation in a condo at a ritzy resort at Squaw Valley near Lake Tahoe.

While such wining and dining of prospective business partners is commonplace in the private world, the gifts appear to violate federal ethical standards intended to guard against bribery of public officials, the inspector general's office concluded.

The AP obtained the excerpts from the Association of Forest Service Employees for Environmental Ethics, a Eugene, Ore.-based employee watchdog group.

The group has been conducting its own investigation into public land exchanges and intends to publish some of the excerpts in an upcoming, special edition of its monthly publication, Inner Voice.

Matt Rasmussen, an Inner Voice reporter, said government sources told him the Office of Inspector General plans to launch audits of the Forest Service land exchange programs in California and the Southwestern United States as well.

Such land exchanges typically involve private property owners trading a chunk of their land for a chunk of federal land of similar value in a deal that - in theory - benefits both parties.

For example, a private land owner with property surrounded by national forest or national park land might trade that land for a section of the forest along its border.

Often the exchanges involve huge timber companies, like Weyerhaeuser Co. and Boise Cascade, who want to relinquish property subject to wildlife protection controls and secure other lands they are free to log.

The deals have come under increasing attack in recent years by environmentalists who say the deals are structured to benefit private corporations.

"These land exchanges often are not in the public's best interest," said Andy Stahl, chief lawyer for the Association of Forest Service Employees for Environmental Ethics.

"The gifts create at least an appearance of a conflict of interest," he said.

The Forest Service official allegedly used a condo for three or four days at Squaw Valley near the Nevada-California border, where the 1960 winter Olympics were held. Other gratuities included wedding gifts and a pheasant hunting trip. Excerpts of the audit obtained by AP do not estimate the value the gifts.

Dombeck first was made aware of the problems in Nevada sometime in 1997, Wood said. The chief immediately withdrew three land exchanges that were in the works at that time and none has been approved since at the Humboldt-Toiyabe National Forest, he said.

"When we were first alerted early on of irregularities and mistakes by OIG, we took corrective action immediately," Wood said.

The land swaps involved various parts of the Humboldt-Toiyabe National Forest, which runs in bits and pieces across northern Nevada to near Reno, Lake Tahoe, and south near Las Vegas, including the Snow Mountain and Mount Charleston areas.

The draft audit says the government may have been shorted in one particular deal because it relied on a single, uncorroborated land valuation that appears to undervalued the Forest Service lands by nearly $6 million.

Another series of appraisals overvalued non-federal land by $8.9 million.

And in another case, the Forest Service traded for 1,065 acres valued at $10.5 million that "was of little or no discernible use to the Forest Service," the audit said.

"The Forest Service bargaining team allowed the private parties to control the bargaining process," the draft audit said.

"The team excluded the participation of federal appraisers and accepted uncorroborated valuations by an appraiser recommended by the private party," it said.

archive