Government land deals criticized by congressional auditors

H. Josef Hebert

Thursday, July 13, 2000 | 9:18 a.m.

WASHINGTON - The federal government has lost millions of dollars from land exchanges, often buying land for more than it is worth and giving up land for less than its market value, congressional auditors reported Wednesday.

The General Accounting Office, the investigative arm of Congress, recommended that lawmakers halt land exchanges by the government's two principal land agencies - the Bureau of Land Management and the U.S. Forest Service - because, according to the report, the swaps often do not serve the public interest.

Several of the deals were in Nevada.

Officials from the two agencies said the exchanges often are the way to obtain desirable property near federal land when owners are unwilling to sell unless they get other land in return.

The agencies said they had taken steps to improve the monitoring of land exchanges and address some concerns about land values raised by auditors.

Nevertheless, Rep. George Miller, D-Calif., said the GAO findings were "very disturbing" and sought a moratorium on exchanges of land between federal agencies and private parties.

"Land deals are being cut behind closed doors with tremendous special-interest pressure and limited public input," he said. The two agencies "are failing to protect the public's wallet and their environment," Miller said.

Rem Hawes, a spokesman for the Bureau of Land Management, said the report "makes some points that we think are warranted," especially on the need for closer monitoring of land exchanges. But, he said, exchanges are "very critical to effectively manage the public lands."

"They allow us to improve ownership patterns of public lands in the West" where private land often is mixed with federal land in a checkerboard pattern, Hawes said. He said the agency conducts 60 to 70 land exchanges a year and most are without controversy.

The GAO examined 25 of an estimated 2,000 or more exchanges the two land agencies have conducted since 1989. Altogether, the agencies acquired an additional 1 million acres from land exchanges during that period, valued at well over $1 billion, the GAO said.

The report cited a case in which a person obtained 70 acres of federal land in Nevada as part of an unidentified land exchange for $763,000 and on the same day, according to land records, sold the property for $4.6 million. The GAO said the case was investigated by the Interior Department's inspector general, but gave no further details.

Other cases, all in Nevada, cited by the GAO included:

-Three exchanges in 1998 in which the land acquired by the government appeared to be overvalued by a total of $8.8 million because the appraisals "did not meet federal standards" and "were not supported by credible evidence."

-A land exchange on Lake Tahoe where the BLM obtained 47 acres of private land valued at $38 million, or $10 million more than auditors later determined. The initial appraisal did not take into account that the Forest Service actually had management interests on the land, reducing its value.

At other times, the GAO questioned whether land exchanges served the public interest.

The report cited one case near Elko, Nev., in which the BLM gave up 140 acres of land that included prime winter habitat for antelope. In return the BLM received land near its field office for additional parking and storage areas. The GAO report noted that the BLM's own policy said that unimproved lands should not be exchanged for land for administrative purposes.

While both agencies have made improvements, the GAO concluded, "There is reason to question whether land exchanges remain a viable tool for acquiring nonfederal land, especially in rapidly developing real estate markets."