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Union Calendar No. 322 105Th Congress, 2Nd Session – – – – – – – – – – House Report 105–569

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Union Calendar No. 322 105Th Congress, 2Nd Session – – – – – – – – – – House Report 105–569 1 Union Calendar No. 322 105th Congress, 2nd Session ± ± ± ± ± ± ± ± ± ± House Report 105±569 ABUSE OF POWER: THE HARDROCK BONDING RULE R E P O R T BY THE COMMITTEE ON RESOURCES together with DISSENTING VIEWS JUNE 5, 1998.ÐCommitted to the Committee of the Whole House on the State of the Union and ordered to be printed U.S. GOVERNMENT PRINTING OFFICE 59±006 WASHINGTON : 1998 59±006 COMMITTEE ON RESOURCES DON YOUNG, Alaska, Chairman W.J. (BILLY) TAUZIN, Louisiana GEORGE MILLER, California JAMES V. HANSEN, Utah EDWARD J. MARKEY, Massachusetts JIM SAXTON, New Jersey NICK J. RAHALL II, West Virginia ELTON GALLEGLY, California BRUCE F. VENTO, Minnesota JOHN J. DUNCAN, JR., Tennessee DALE E. KILDEE, Michigan JOEL HEFLEY, Colorado PETER A. DEFAZIO, Oregon JOHN T. DOOLITTLE, California ENI F. H. FALEOMAVAEGA, American WAYNE T. GILCHREST, Maryland Samoa KEN CALVERT, California NEIL ABERCROMBIE, Hawaii RICHARD W. POMBO, California SOLOMON P. ORTIZ, Texas BARBARA CUBIN, Wyoming OWEN B. PICKETT, Virginia HELEN CHENOWETH, Idaho FRANK PALLONE, JR., New Jersey LINDA SMITH, Washington CALVIN M. DOOLEY, California GEORGE P. RADANOVICH, California CARLOS ROMERO-BARCELO, Puerto Rico WALTER B. JONES, JR., North Carolina MAURICE D. HINCHEY, New York WILLIAM M. (MAC) THORNBERRY, Texas ROBERT A. UNDERWOOD, Guam JOHN B. SHADEGG, Arizona SAM FARR, California JOHN E. ENSIGN, Nevada PATRICK J. KENNEDY, Rhode Island ROBERT F. SMITH, Oregon ADAM SMITH, Washington CHRIS CANNON, Utah WILLIAM D. DELAHUNT, Massachusetts KEVIN BRADY, Texas CHRIS JOHN, Louisiana JOHN E. PETERSON, Pennsylvania DONNA CHRISTIAN-GREEN, Virgin Islands RICK HILL, Montana RON KIND, Wisconsin BOB SCHAFFER, Colorado LLOYD DOGGETT, Texas JIM GIBBONS, Nevada MICHAEL D. CRAPO, Idaho SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES BARBARA CUBIN, Chairman W.J. (BILLY) TAUZIN CARLOS A. ROMERO-BARCELO* JOHN J. DUNCAN, JR. NICK JOE RAHALL, II KEN CALVERT SOLOMON P. ORTIZ WILLIAM M. (MAC) THORNBERRY CALVIN M. DOOLEY CHRIS CANNON CHRIS JOHN KEVIN BRADY DONNA CHRISTIAN-GREEN JIM GIBBONS [VACANCY] (II) LETTER OF TRANSMITTAL HOUSE OF REPRESENTATIVES, COMMITTEE ON RESOURCES, Washington, DC, June 5, 1998. Hon. NEWT GINGRICH, Speaker of the House of Representatives, Washington, DC. DEAR MR. SPEAKER: By direction of the Committee on Resources, I submit the Committee's report to the 105th Congress on ``Abuse of Power: The Hardrock Bonding Rule.'' The report is based on a study conducted by the Subcommittee on Energy and Mineral Re- sources. The report was adopted and ordered reported to the House of Representatives by voice vote on May 20, 1998. Sincerely, DON YOUNG, Chairman. (III) C O N T E N T S Page Executive Summary ................................................................................................. 1 Introduction: Committee Review of Bonding Rule for Hardrock Mining ............ 4 Part I: How the rule was made .............................................................................. 5 A. Introduction .................................................................................................. 5 B. First period (January 1990±September 1992) ........................................... 6 C. Second period (August 1993±November 1994) .......................................... 7 D. Third period (late November 1994±February 1997) ................................. 8 Part II: Problems with DOI's rulemaking process ................................................ 8 A. Fair and meaningful public input denied .................................................. 8 Administrative Procedures Act problems ................................................ 8 Staleness issue ........................................................................................... 9 Substantial modification issue ................................................................. 9 B. Forcing undue hardship on small businesses ............................................ 10 Regulatory Flexibility Act violated .......................................................... 10 Efforts to comply with Regulatory Flexibility Act (RFA) nullified ........ 11 Major defects in determination of effects result in erroneous conclu- sions ........................................................................................................ 11 Determination of effects not considered in rulemaking ......................... 12 RFA requirements ignored ....................................................................... 13 C. Appearance of impropriety .......................................................................... 14 D. A significant regulatory action is concealed .............................................. 16 E. Poor record keeping undercuts legitimacy of the rule .............................. 18 Part III: DOI's uncooperative attitude ................................................................... 20 A. Example OneÐAvoid, dodge and delay ..................................................... 20 B. Example TwoÐMisleading answers to important questions ................... 22 C. Example ThreeÐThe litigation excuse ...................................................... 22 Part IV: Analysis and conclusions: DOI's actions corrupted the rulemaking process ................................................................................................................... 23 Appendix AÐExhibits ............................................................................................. 26 Appendix BÐExhibits ............................................................................................. 108 (V) Union Calendar No. 322 105TH CONGRESS REPORT 2d Session HOUSE OF REPRESENTATIVES 105±569 "! ABUSE OF POWER: THE HARDROCK BONDING RULE JUNE 5, 1998.ÐCommitted to the Committee of the Whole House on the state of the Union and ordered to be printed Mr. YOUNG of Alaska, from the Committee on Resources, submitted the following REPORT together with DISSENTING VIEWS EXECUTIVE SUMMARY In February 1997, the Bureau of Land Management (BLM) pub- lished a ``Final Rule on Hardrock Bonding,'' which amended its sur- face management regulations under the Federal Land Management Policy Act (FLPMA). The Committee on Resources has jurisdiction over FLPMA and the regulations issued pursuant to this law, juris- diction that is delegated, in this case, to the Subcommittee on En- ergy and Mineral Resources. The Subcommittee, in concert with the Full Committee, undertook its Congressional oversight respon- sibility after concluding that the process for developing the new rule was seriously flawed. The hardrock bonding rule provides an example of rulemaking at its worst. Documents obtained by the Committee clearly show that undue interference of political appointees at the Department of In- terior (DOI) in the BLM rulemaking was so great that the integrity of the rulemaking process itself was discredited. The political bosses controlling the regulatory authority at DOI used their power to implement an agenda that Congress had refused to enactÐeven when controlled by their own party. In doing this, DOI silenced the voice of those who participated in the legislative process through their elected representatives, thereby denying them participation in our democratic process. 59±006 2 The problems with the hardrock bonding rulemaking result from the refusal of a few, high-level political appointees in DOI to obey the laws that govern the rulemaking process, thereby demonstrat- ing contempt for both the spirit and the letter of the law. These bu- reaucrats refused to comply with the Administrative Procedures Act (APA) and Regulatory Flexibility Act (RFA), concealed the sig- nificance of the new rule, obstructed the impartiality of the rule- making process, excluded interested parties from participating in the rulemaking process in a meaningful way, attempted to prevent Congress from carrying out its Constitutional oversight responsibil- ities, and tried to use various inapplicable claims of ``privilege'' to hide these actions. These actions, taken together, constitute a co- ordinated effort by DOI policy-makers to affirmatively mischaracterize the hardrock bonding rule's import and impact and prevent any Congressional oversight of their actions. These politi- cally-motivated bureaucrats did not allow interested members of the public an opportunity to comment on the rule once they had dictated its contents. The hardrock bonding rulemaking process can be divided into three periods: (1) development and publication of a draft rule for public comment followed by completion of a final rules package for publication (January 1990 through September 1992); (2) DOI man- agement decision to disregard previous rulemaking efforts and issue a new, substantially different bonding rule without further public comment (August 1993 through November 1994); and (3) ex- tensive rewriting of the preamble several times by the regulation writers in an attempt to evade legal problems with the rulemaking process and meet the mandates they were given by their political bosses (late November 1994 through February 1997). One crucial problem with the hardrock bonding rulemaking is that an upper-level DOI political appointee, who played a major role in determining the contents of the new rule, appeared to have a serious conflict of interest. Mr. David Alberswerth, only recently employed by the National Wildlife Federation (NWF), laid out the terms of the hardrock bonding rule. Coincidently, Mr. Alberswerth's co-signed comments on the draft rule submitted on behalf of NWF and
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