Facebook Twitter



In the harsh desert of western Utah south of the Great Salt Lake, a desolate plateau of scrub and sagebrush stretches to the horizon. It is home to gophers, jack rabbits, rattlesnakes and the occasional coyote. Groundwater is too brackish for crops. The nearest house is 40 miles away.

"Nobody has ever wanted to homestead out there, and nobody ever goes to a place like that to live or have fun," observes industrial geologist Lee Davis. "To the ordinary fella, it would seem worthless."But this desert, owned by America's taxpayers, conceals a vast fortune. Beneath 2,548 acres alone is a rare bertrandite ore which, when processed into the space-age alloy beryllium, could be worth up to $15 billion.

Brush Wellman Inc., a Cleveland-based mining company, wants to buy those acres from the Interior Department's Bureau of Land Management for a mere $26,487 - around $10.40 an acre.

That would be one of the richest lodes ever purchased from the government - potentially approaching the worth of the recent highly publicized sale of land, containing perhaps $18 billion in gold, to a Canadian mining company. "The biggest gold heist since the days of Butch Cassidy," Interior Secretary Bruce Babbitt complained as he transferred 1,950 acres in Nevada to Toronto-based American Barrick Resources Corp. for a mere $9,765. "It is a rip-off."

Rip-off or not, there's a veritable land rush going on among mining companies to buy before the rules change.

The tale of Brush Wellman's beryllium bonanza is just one part of that rush. It illustrates how government and corporations often cooperate to advance corporate interests, sometimes without fairly compensating taxpayers. Brush Wellman and others are taking an estimated $1.7 billion a year worth of minerals from federal land without much in the way of payment to the government.

Babbitt is powerless to stop the sales because, for many years, Congress has declined to curb sales of precious public property. Dirt-cheap prices intended for grizzled miners of 122 years ago are still on the books.

Babbitt vows to insist upon replacing such sales with royalties that produce a "reasonable return" to taxpayers. But the House and Senate are far from agreeing on how to do so. A group of Western senators work hard at defeating any attempts to change that law.

While Brush Wellman disputes some of these figures, arguing that its high cost of exploration and development should be considered, the company agrees with the bottom line: By paying the government just thousands, it can obtain land worth millions.

"Nobody's disputing that," says Hugh D. Hanes, Brush Wellman vice president of environmental and government affairs. "It's a relatively small amount (returned to the Treasury) in comparison to what's in the ground."

Similar stories are unfolding elsewhere. For example, in Oregon, Denver-based Newmont Mining Corp. hopes to spend $1,560 for 60 acres containing an estimated $373 million in gold - and tens of millions more in silver.

The total value of minerals on federal land is only the General Accounting Office's guess. Government officials don't really know how many millions of tons of precious minerals there are on federal lands, or what it's all worth - complicating any attempts to set a fair asking price.

"We don't have good facts," Babbitt acknowledges. He told a congressional committee he was "really astonished" when trying to learn from his own employees the volume and value of mineral production on public lands, data that companies consider confidential.

"The answer I got was, `We don't have any,' " Babbitt said.

At stake is the future of 432 million acres of publicly owned lands - and the untallied treasures they contain. These lands are managed by the U.S. Forest Service and Bureau of Land Management.

This article was assembled using corporate documents, government records, interviews with company insiders, and a computer-assisted analysis of $131,336 in campaign contributions to members of Congress.

The checks that flow each year to politicians from Brush Wellman and its employees are neither illegal nor random.

As Hanes acknowledged: "The company tends to support those people that are supportive of the company."

Two company supporters, Republican Reps. James Hansen of Utah and Paul Gillmor of Ohio, have received $41,400 from Brush since 1988.

An example of that support occurred in November, when the duo came within 45 votes of getting the company exempted from House mining rules requiring higher fees and royalties.

The congressmen argued that, without a financial break, the company might be forced to shut down the mines. America's only domestic source of beryllium would thus be jeopardized - and that, they said, elevated the exemption to a matter of national security.

But Pentagon documents show that the military is "over goal" in its stockpile of beryllium metal. Nor does it need beryl ore or a beryllium-copper alloy.

Far from being concerned about secure supplies of Brush Wellman's products, the Pentagon now wants to sell 24,221 tons of beryllium materials worth $122.9 million.

Explains Beth Offenbacker, spokeswoman for the National Defense Stockpile Center: "We feel we don't need it."

Brush Wellman, Gillmor and Hansen all say they intended only to fight for workers' jobs and the local economy.

They say they've done nothing that violates official rules or laws. By all accounts, they are correct - and for that they can thank not only campaign finance laws, but the General Mining Law of 1872, a statute dating to the administration of Ulysses S. Grant.

What President Grant had in mind - around the time of Custer's last stand - was to encourage exploration and development of the Western wilderness.

He wanted it used, opened up and settled. Thus, he offered to "patent" cheap land titles - for miners, not multinational conglomerates.

For years, aggressive lobbying by mining corporations and railing by Western politicians have thwarted attempts to revise the anachronistic law. Politicians such as Sen. Pete V. Domenici, R-N.M., often complain of a "war on the West."

But the Clinton administration's vow to seek market-based fees for use of federal lands for mining, grazing and timber-harvesting has created new pressure for reform.

"Just the first step in an assault on the West," Sen. Conrad Burns, R-Mont., complained during last year's debate on ranchers' fees.

Clinton, who made electoral gains in the usually Republican West, isn't likely to go too far in alienating his new-found Western friends. Nor is the public lands brawl strictly East vs. West.

Today's mines are more likely to be run from corporate boardrooms in Toronto or Cleveland.

In November, the House voted overwhelmingly to end the practice of selling cheap land to mining companies. Instead, companies would pay the government 8 percent of the processed minerals' value.

Amounting to some $100 million a year, such a royalty - significantly lower than the 12.5 percent that coal, natural gas and oil companies have been paying for years - would hardly make a dent in the national debt.

The industry supported a Senate-backed alternative that would impose what environmentalists regard as a "sham" royalty - 2 percent of the value of minerals before they are processed.

Since then, key members of the House and Senate who are supposed to reach a compromise have only dawdled, and now lobbying has intensified.

As Congress began seriously debating an end to cheap land sales, mining companies scrambled to start applying for purchases. There's a frenzy to buy before it's too late.

In California and Nevada, for instance, more than 100 applications are pending; a few years ago, there were never more than 40 at any time.

"Companies know that something will eventually happen (in Congress), and with a foot in the door they may be able to keep that door open," observes Walter Phelps, who heads the Bureau of Land Management's office in Utah.

Brush Wellman officers, meanwhile, hope that the company is far enough along in the process that the eventual reform of mining laws will not apply; the company will be "grandfathered" in. If not, the company threatens a lawsuit.

"Our concern," says Hanes, "is protecting the investment we've made in the patenting process."

By that, he means the money spent on lawyers - about $1 million - and on exploration about $8 million.

"Hardly a giveaway," he says. Lee Davis, the geologist, complains that environmentalists and Eastern politicians have distorted the issue.

"The idea that mining companies are getting ground cheap and not paying the government much is completely wrong," says Davis, who was Brush Wellman's chief geologist until retiring three years ago. "We pay an awful lot of state taxes and we help a lot of economies locally.

"And," he adds, "we'd be happy to give the land back to the government. After we've mined it."