Hundreds of Western landowners profit from federal grazing permits by subleasing the rights to ranchers at higher fees than the government charges for them, government auditors say.
The Interior Department's inspector general, who conducted the audit, estimates 1,800 landowners could be making as much as $5.1 million a year on the permits.Environmentalists say the audit proves their point that the Bureau of Land Management charges too little for the grazing fees in the first place.
"It indicates that something is very, very wrong with the current fee system on federal lands," said Dave Alberswerth of the National Wildlife Federation.
The monthly grazing fee currently is $1.92 per cow or horse. The market value ranges from $4.68 in the desert Southwest to as much as $10.26 in the Dakotas, according to a BLM study earlier this year.
Ranchers argue that the public leases are less valuable because they don't have fencing, water and other services that private land has.
Sublet leases are the exception, which makes them as valuable as private land, said Pamela Neal, director of the Public Lands Council, an organization of permit holders. The landowners are justified in charging more than $1.92, she said.
The inspector general's report estimated that the government lost $145,000 on one case alone: a family-owned set of corporations that leased Nevada land to eight different ranchers. The companies were not named.
The report said BLM should require landowners to give the government any money they make on the sublet leases in excess of the grazing fees.
Critics have said that large corporations were taking advantage of the permit program.
The largest permit holders include the Union and Hunt oil companies, Pacific Power and Light, the LDS Church and the Metropolitan, Aetna and John Hancock life insurance companies. But the report didn't say whether those entities engaged in subleasing.