Commons or Commodity?

The Dilemma of Federal Land Exchanges

by George Draffan & Janine Blaeloch

January 2000
Western Land Exchange Project • Seattle, Washington
There is no hunger like land hunger, and no object
for which men are more ready to use unfair and
desperate means than the acquisition of land.
— Gifford Pinchot, Chief of the U.S. Forest Service, 1898-19101

You chaps who are in favor of this conservation

program are all wrong. In my opinion, the proper
course to take with regard to [the public domain] is
to divide it up among the big corporations and the
people who know how to make money out of it...
— Richard A. Ballinger, Secretary of the Interior, 1909-19112

The most frightening part of my job is land exchanges.

— Pat Shea, Director of the U.S. BLM, 1997-19983
 Acknowledgments
We wish to pay tribute to William Andrew Jackson Sparks, Commissioner of the U.S.
General Land Office (1885-1888), whose integrity and determination saved millions of
acres of the public domain—and cost him his job. His story will someday be told. And
thanks to all those in public service who have had the courage to work for better gov-
ernment and who have thereby put their careers and sometimes their safety on the line.
Thanks to Vernon Bates, professional biologist and chairman of the Ouachita Watch
League, whose work has revealed the extent and depth of corruption and opportunism
in public service. David Orr supplied a steady stream of news on land swaps around the
nation. Phil Knight of the Native Forest Network in Montana provided photos and
reviewed the case study on the Gallatin. Dave Atcheson of the Pacific Crest Biodiversity
Project provided photos of the places and events of the I-90 Land Exchange and pre-
pared them for publication. For photos and graphics we also thank Peter Kuper, Jeff
Johnson, Del Sonneson, Sanford Lewis, Colby Chester, and Chuck Carter.

And thanks to all the grassroots activists working to ensure that land exchanges are in
the public interest. Future generations will enjoy a larger and healthier public domain
because of their dedication.

We wish to extend our profound thanks to the following foundations, who provided
critical support for the Western Land Exchange Project and made this report possible:
Henry P. Kendall, True North, Wilburforce, Deer Creek, New-Land, Muckleshoot Indian
Tribe Charity Fund, Bullitt, and Kongsgaard-Goldman.

Cover illustration: Map of Huckleberry Ridge and the Green River in south-central
Washington State, scene of the Huckleberry and I-90 land exchanges between the U.S.
Forest Service (green) and Weyerhaeuser (yellow) and Plum Creek Timber (purple). The
checkerboard pattern of ownership is the result of 19th century railroad land grants
from the public domain.

The Western Land Exchange Project

• Disseminates information about ongoing and planned exchanges;
• Provides legal and environmental analysis of land swap proposals;
• Works with environmental organizations and communities affected
by these proposals;
• Assists with or submits administrative appeals, where appropriate;
• Consults with agencies planning exchanges; and
• Advocates for reform of land exchange policies and regulations.

© 2000 by the Western Land Exchange Project

All Rights Reserved
PO Box 95545, Seattle WA 98145-2545
http://www.westlx.org

Draffan, George, 1954 -

Commons or commodity ?: the dilemma of federal land exchanges / by George Draffan and Janine
Blaeloch.
1. Public lands—United States. 2. Land use—Government policy—United States. 3. Land
tenure—United States. 4. Right of property—United States. I. Blaeloch, Janine. II. Western Land
Exchange Project. III. Title.
 Table of Contents
Forward ............................................................................................................................................6
Introduction ...................................................................................................................................... 7
Chapter 1. Overview of Land Exchange History And Recent Trends ..............................................................8
Disposing of the Public Domain ............................................................................................... 8
The Purposes of Land Exchanges ........................................................................................... 10
The Law ................................................................................................................................ 12
Recent Trends ........................................................................................................................ 13
More and Bigger Land Deals .................................................................................................. 13

Chapter 2.Rationale, Rhetoric, and Reality............................................................................................17

The Rationale for Land Exchanges .......................................................................................... 17
Rhetoric versus Reality ........................................................................................................... 17
Conflicts of Interest: Buying Trades ........................................................................................ 20
Leveraged Exchanges ............................................................................................................. 22
Legislated Exchanges ............................................................................................................. 24
Paying Politicians ................................................................................................................... 26
Conflicted Environmentalists .................................................................................................. 27
Third-Party Facilitators ............................................................................................................ 29
“Equal Value” ......................................................................................................................... 32
Fundamental Flaws ................................................................................................................. 33

Chapter 3. Seven Case Studies ............................................................................................................. 35

Breaking All the Rules: The Arkansas-Oklahoma Land Exchange ............................................. 35
Checkerboard Empires: The Huckleberry and the Interstate 90 Land Exchanges ...................... 39
Developers’ Oasis: The Las Vegas and Humboldt-Toiyabe Land Exchanges ............................. 47
Digging in Against Reform: Southwest Mining Land Exchanges ............................................... 52
Rearranging Idaho: The Idaho Assembled Exchange ............................................................... 56
Big Sky Scam: The Gallatin Land Exchanges ............................................................................ 58
The Tortoise and the Speculators: The St. George Land Exchanges ......................................... 63

Chapter 4. Reforming the Land Exchange Programs .............................................................................. 65

Recent Legislative Proposals .................................................................................................. 65
Other Recent Developments and Opportunities for Reform .................................................... 66
Reforms at the Bureau of Land Management ......................................................................... 66
Reforms at the Forest Service ................................................................................................. 67
Recommendations of the Inspectors General ......................................................................... 68
Recommendations of the Western Land Exchange Project ..................................................... 70

Appendices
A. Acquisition and Disposal of the Public Domain .................................................................. 77
B. Applicable Laws ................................................................................................................ 78
C. Recommendations of the Public Land Law Review Commission ......................................... 81
D. U.S. Forest Service Land Exchanges Exceeding $2 Million in Value, 1994-1999 .............................. 83
E. For More Information and To Get Involved .......................................................................... 84

Notes & References Cited ................................................................................................................... 85

Tables
Table 1. Land Acquired for Public Ownership, 1964-1994 ..................................................... 11
Table 2. Largest Public-Private Land Exchanges ..................................................................... 14
Table 3. U.S. Forest Service Land Exchanges, 1987-1998 ...................................................... 14
Table 4. BLM Land Exchanges, 1990-1997 ........................................................................... 15
Table 5. Land Exchanges Exceeding $10 Million in Value ........................................................ 15
Table 6. Major Public Lands Acquisitions ............................................................................... 77
Table 7. Public Lands Disposals, 1781-1996 ......................................................................... 77
Table 8. U.S. Forest Service Land Exchanges Exceeding $2 Million in Value, 1994-1999 ........... 83
 Foreword
by Janine Blaeloch, Western Land Exchange Project
Every year, the two biggest public land agencies in the United States, the U.S. Bureau of Land
Management (BLM) and the U.S. Forest Service (FS), complete some 300 land exchanges with
private entities that include timber companies, developers, and mining conglomerates. While
the agencies are authorized to make land trades only where they serve the public interest, most
projects are initiated by private parties, not the agencies. The largest land trades occur in the
West, where a single project can involve the transfer of tens of thousands of acres.
Perhaps the most vexing aspect of the federal land exchange program is that few citizens have
any idea it exists. But most Americans understand that anything that involves land—especially in
the West—is fertile ground for manipulation and malfeasance. The land exchange program is no
exception.
In fact, the obscurity and complexity of land exchanges have made it possible for the agencies
to keep the public at a distance and enact these deals with little fanfare or controversy. Until
recently, environmental activists showed but tepid interest in challenging land swaps; some
environmental groups have endorsed or even engineered exchanges, contributing to the
perception that these projects are always benign or beneficial.
Ostensibly created to serve the public and protect public lands, land exchanges have become a
corporate welfare program, doling out prime lands and resources to powerful interests and
yielding dubious benefits to the public. A whole new industry of land swap facilitators has
emerged to take advantage of this phenomenon. In too many cases, to paraphrase a country-
western song, the corporations get the gold mine and the public gets the shaft.
Across the West, the Forest Service is trading away irreplaceable native forest to timber compa-
nies, often getting clearcuts, “rocks and ice” and low-quality habitat in return. In the Southwest,
the BLM is using land trades to help companies like ASARCO and Phelps Dodge expand their
already mammoth open-pit mining operations. Rampant urban expansion throughout the arid
West is being facilitated through huge land exchanges with developers. Land swaps are partially
responsible for the transformation of native deserts into golf courses and retirement
communities.
Far from being the benevolent, “win-win” deals the proponents would have us believe they are,
land exchanges are divesting us of some of the most ecologically valuable lands we have left. To
heap insult on injury, taxpayers are losing millions of dollars each year through the under-
appraisal of public lands and the overvaluing of private land.
Fortunately, things are changing for the better as more citizens become aware of the implica-
tions of land trades and their own rightful place in the decision making process.
As historian George Draffan shows us in this report, the dilemma of federal land exchanges is
deeply rooted in Euro-American history. From that history has evolved a shockingly cavalier
attitude toward the very thing that has provided our economic, cultural, and spiritual suste-
nance—the land.
Underlying the issues associated with land exchanges are fundamental questions regarding the
very purpose of public lands and how we want to or should relate to them. Are they our com-
monwealth, or are they a mere commodity, a “resource”? Is it right to use public lands and the
remaining fragments of our native ecosystems as currency? Are they a permanent legacy to
protect and expand upon, or an asset to be liquidated, bartered, disposed of? These are
questions that belong at the very center of our political dialogue.
We hope that this report will expand public knowledge of the federal land exchange program
and encourage citizens to become involved in this important issue. Moreover, we hope that
more Americans will begin to speak out about the importance of protecting our commons, the
public lands.
6
 Introduction
The federal government is annually trading away an average of 150,00 acres of
public land valued at $130 million. In recent years, public-private land exchanges
have become gigantic, with some deals exceeding 50,000 acres and $100 million.4

The federal and state governments conduct land swaps which add open space,
greenbelts, or rare old-growth forest to the public domain. Other land exchanges
take ancient forest out of the public domain and give it to timber corporations, in
exchange for lands those corporations have already clearcut.

Sometimes small inholdings (pockets of private land) within the national forests
are eliminated by trading them for less valuable parcels of public lands else-
where. The biggest inholdings in the national forests are the checkerboards still
held by the corporate heirs of nineteenth-century land grant railroads. One
legacy of the land grant policy is today’s largest land exchanges—and huge
losses to the public treasury and the public domain. Other land exchanges
involve developers trading parcels of real estate in order to acquire public lands
on the edge of a town, where prime development potential will bring the devel-
opers huge profits at public expense.

What is at stake in these land trades is no less than the public treasury, the
irreplaceable public domain, increasingly rare wild habitats and their dependent
species, water in arid places, the scope and pace and kind of development of
rural areas, and the integrity of the political system.

The law governing land trades states that public-private land exchanges must
be of equal value, but all too often the appraisal process is manipulated and
hidden from public scrutiny. The law states that it is the policy of the federal
government to retain the public lands unless the disposal of specific lands is
consistent with the agency’s land use plans. Yet as a nation, we (and conse-
quently our public lands agencies) have no comprehensive program for the
exchange, acquisition, and disposal of public lands. The result is that private
proponents and third-party facilitators with much to gain are running the show.

This report will discuss the history and law of land exchanges. It will present an
overview of recent trends and detail several case studies which illustrate the
problems created by land exchanges. The report will conclude with recommen-
dations for the reform of public lands policies, and point toward some practical
tools that can be used by public lands activists and concerned citizens.

It is hoped that readers of this report will gain a greater understanding of some
critical elements of public lands history and policy, come to appreciate some of
the complex issues at stake, and gain the desire and confidence to participate
in land use actions that are affecting communities across the nation.

7
Chapter 1 Overview of Land Exchange History And Recent Trends
Disposing of the Public Domain
The public domain is a generic term for the vast areas of land in the United
States that still belong to the public as a whole. Public land policies were domi-
nated by acquisition through the mid-nineteenth century, by disposal through
the early twentieth century, and have reflected conflicting mandates to both
exploit and protect the land and its resources. In the modern era, this conflict
continues in the simultaneous acquisition and disposal of public lands.

Most of the public domain was acquired by the United States in the nineteenth
century through war, treaty, and purchase from Native Americans, various
European powers, and Mexico. Soon after the American Revolution, the federal
government began transferring much of this domain into private ownership.
The original purpose of public lands disposal was to distribute lands to indi-
viduals and to facilitate the development of the nation.

Major events in the transfer of public

lands to private hands included the
following:

• The Land Act of 1796 autho-

rized public auctions of federal
land at a minimum price of $2
per acre.

• The General Land Office was

created in 1812 to administer
the disposal of public lands.5

• By 1820, Congress had

passed 24 acts granting to set-
Guthrie, Oklahoma tler-squatters the right of preemption, allowing them to buy land without
land office in April
1889, preparing to
competitive bidding.6
record the claims of
100,000 white • The 1841 General Preemption Act authorized settlers to claim 160 acres.
settlers rushing to
acquire land in Indian • A series of railroad land grants between 1850 and 1870 allowed several
Territory. Credit:
University of Okla-
dozen railroads to sell public lands in order to raise capital to build the
homa Library. nation’s railroad and telegraph systems.

• U.S. President Pierce withdrew 31 million acres from entry in 1853.

• The 1854 Graduation Act lowered the price of unclaimed lands.

• The 1862 Homestead Act authorized settlers to claim 160 acres of any land
subject to preemption, and later to any unsurveyed land. The homestead
was free for a filing fee, but title was not transferred until the land had been
settled and cultivated for five years.

• The General Mining Law of 1872 allowed anyone to file a mineral claim on
public lands and receive a patent to the land for $5 per acre or less. Under
this law more than three million acres of federal land have been patented.
8
• The Desert Lands Act of 1877 allowed entry of 640 acres for 25
cents per acre; title was transferred upon proof of irrigation.

• The Timber Culture Act of 1872 gave settlers 40 acre tracts if

they would plant trees.

• The Timber and Stone Act of 1878 allowed claims of land

“chiefly valuable for timber or stone” for $2.50 per acre.

• The Timber Cutting Act of 1878 authorized timber cutting on

unentered mining lands.

• During President Cleveland’s administration, more than 81

million acres were (at least temporarily) restored to the
public domain. The land had been seized, as General Land
Office Commissioner William Sparks put it, by “illegal usurpa-
tion, improvident grants, and fraudulent claims and entries.”7 In the nineteenth
century, state
By the early twentieth century, the federal government had granted or sold immigration bureaus
more than a billion acres, or 70 percent of the continental U.S. (Details are in used advertising to
Appendix A). attract potential
residents to the West.
Credit: New York
9 52 percent had been sold in homestead or cash sales. Historical Society.
9 24 percent had been granted to the states for developing education and
transportation systems.
9 12 percent had been conditionally granted to railroads, slated eventually to
be sold at public auction.
9 Other lands had been transferred through private land or war bounties, or
granted or sold under natural resource and reclamation laws.

The public lands laws succeeded in rapidly giving away the bulk of public lands,
although not always to the public. Dubbed “The Great Barbecue” by historian
Vernon Parrington, much of the disposal of public lands was fraudulent, and
resulted in the transfer of large portions of the public domain to corporate
rather than private hands.8 By the end of the nineteenth century, widespread
abuse of the public lands laws, the end of the frontier, and the depletion of
timber and grazing lands led to the withdrawal of some federal lands to be
reserved for the public domain. The land laws were being revised or repealed,
notably with the General Revision Act of 1891.9

But it was not until almost a century later, with the passage of the 1976 Federal
Land Policy and Management Act (FLPMA) that Congress officially closed the
frontier, declaring that “it is the policy of the United States that the public lands
be retained in federal ownership, unless as a result of the land use planning
procedure provided for in this Act, it is determined that disposal of a particular
parcel will serve the national interest.”10

Land exchanges are but one facet of the ongoing conflict between public and
private land ownership and management.11 Alexander Hamilton first proposed
selling the public domain to generate public revenue.12 “Evident from the be-
ginning [of the country’s development] was the conflict between those who
sought the Jeffersonian ideal of an agrarian society dominated by small, inde-
pendent farmers having a ‘natural right’ to uncultivated lands in the public
domain, and those to whom land was a commodity to be developed to the
highest [most profitable] use as fast as possible for the benefit of the entrepre-
neur [or speculator].”13
9
 To these two conflicting visions may be added a third—a commonwealth of
public lands protected for the long-term usufruct of all, even if it necessitated
public regulation of the use of “private” lands as well.

Public land, whether delivered by grant or by sale, came with explicit and im-
plicit conditions. Railroads were required to sell their grant lands at public
auction. Parties filing mining claims on public lands are supposed to conduct
bona fide mining operations. Homesteaders had to reside on and farm the land
they claimed from the federal government. Even after land becomes “private,”
ownership still entails certain duties and responsibilities.

Property refers to rights and interests, “not simply to material objects but to
the relations between individuals and society that govern access to material
objects.”14 So “property” is not a thing but a socially-defined and evolving
bundle of rights, responsibilities, and values that can never be neatly defined or
made permanent. The interplay of public and private land has been a part of
our history and politics from the beginning, and will continue.15

The Purposes of Land Exchanges

Land exchanges have traditionally been undertaken to eliminate private
inholdings by returning them to the public domain, to protect watersheds or
other sensitive lands, and to serve other genuine public interest purposes. In a
speech in 1998, the director of the U.S. Bureau of Land Management provided
an explanation:

“… [L]and exchanges enable the BLM to change the checkerboard pat-

tern of federal, state and privately owned lands in the West into consoli-
dated areas that are more easily managed. This decreases the costs of
managing the lands and increases the efficiency with which they are
managed... [They] allow the BLM to acquire the kind of land that is
suited to public ownership: land with high conservation values as habitat
for wildlife including threatened or endangered species; land that offers
recreational opportunities for the public; or land containing sensitive
riparian areas that are critical to the health of streams, rivers and entire
watersheds. In turn, states, counties or private developers can obtain
land that is better suited for local management or that will serve the
development or expansion needs of growing communities…”16

Eliminating Inholdings
Inholdings affect public lands in several ways. Conflicts between inholders and
public agencies are common, particularly where the private owners manage
their inholdings in ways that are incompatible with management on adjacent
public lands. For instance, clearcutting or mining on private lands may affect
water quality or soil stability on neighboring public lands.

The exact acreage of inholdings within the public lands is unknown, but private
lands interspersed with public lands are recognized as a significant problem.

10
9 There are currently more than 50 million acres of privately-owned land
inside U.S. national parks and forests.17

9 In 1987, the Forest Service estimated that 39 million acres within national
forests—17 percent of the total—were private inholdings. Nearly half of the
land within Eastern National Forests were within non-federal ownership.18

9 In 1989, ten percent of the public land within the national forests lacked
access due to private inholdings. The U.S. Bureau of Land Management
(BLM) had 25 million acres without public access, including 60 percent of
its land in Montana.19

9 Designated Wilderness Areas are not free of inholdings. There are 400,000
acres of inholdings within designated Wilderness areas within the National
Forests.20

9 Of the 418 units of designated Wilderness in the West, 111 have inholdings.
Ninety of those are managed by the Forest Service, 11 by the Park Service,
and 10 by the BLM.21

9 The 84 million acres in the National Park system include six million acres of
private inholdings. In the past decade, as the park system has grown,
inholdings have increased by more than a million and a half acres.22

As inevitable conflicts arise between public lands and inholdings, land ex-
changes are undertaken as a means of eliminating these conflicts.

Protecting Sensitive Lands

As discussed earlier, by the end of the nineteenth century, the federal govern-
ment was actively withdrawing or recovering land for the permanent public
domain. Withdrawals included forest reserves, which became the national
forest system, national parks, and wildlife refuges. The bulk of this land was
withdrawn by the early twentieth century, but federal land acquisition contin-
ues, as shown in this table covering the last three decades:

23
Table 1. Land Acquired for Public Ownership, 1964-1994

FS BLM F&WS NPS Totals

Purchase 1,479,300 297,100 1,998,200 1,303,300 5,077,900
Exchange 2,179,600 724,400 256,600 90,700 3,251,300
Donation 522,300 14,600 586,400 631,700 1,755,000
Condemed 105,100 35,800 35,000 358,800 534,700
Other - - - 242,500 242,500
Total 4,286,300 1,071,900 2,876,200 2,627,000 10,861,400

Increasingly, state and local governments are also acquiring private lands to
preserve them as open space and to protect public resources.

11
 The Law
Laws governing land exchanges have evolved from the interplay of public land
policies regarding acquisition and disposal. Land exchanges are arranged in
order to exploit and protect public and private land resources and values. Land
swaps are constrained by the requirements of property law, environmental law,
administrative procedure, the laws providing for public participation, and the
laws governing freedom of information and privacy. In addition, ad hoc policies
have been created to deal with specific issues arising from land trades.

The public laws affecting land exchanges range from the General Exchange Act,
which gives the Department of Agriculture the authority to make land trades, to
detailed administrative procedures and appraisal guidelines in agency hand-
books, to broader laws such as the National Environmental Policy Act and the
Endangered Species Act, with which exchanges must comply. These laws and
regulations are detailed in Appendix B.

American public There has never been a comprehensive examination of land exchange policy.
lands policy has The closest thing to such a review was the general review of public land law
always alter- undertaken by the Public Land Law Review Commission (PLLRC) in the 1960s.
nated between The PLLRC was created as part of the compromise required to pass the 1964
protection and Wilderness Act. Its mandate was to review the nation’s public lands laws and to
exploitation, recommend policies for future land disposition and management.
acquisition and
disposal. Numerous reports resulted, including Paul Gates and Robert Swenson’s History
of Public Land Law Development. In 1970, the PLLRC released its final report,
One Third of the Nation’s Land: A Report to the President and to the Congress
by the Public Land Law Review Commission. There were several recommenda-
tions that would affect land exchange policy and processes, including the
general recommendation that land acquisition and exchange procedures be
made more uniform. Eventually, this and other recommendations were codified
in the FLPMA and the land exchange regulations promulgated by the Depart-
ments of the Interior and Agriculture (see Appendix C).

American public lands policy has always alternated between protection and
exploitation, acquisition and disposal, and the Commission’s recommendations
reflected the ambivalence of these conflicting mandates.24 Some of these
recommendations were implemented through the FLPMA and the Federal Land
Exchange Facilitation Act (FLEFA), but not all of the PLLRC’s recommendations
could be implemented.25

The Federal Land Exchange Facilitation Act (FLEFA)

In keeping with America’s ideal that the land and its resources can be all things to all
people, FLEFA declared that land exchanges were an important tool for consolidating
federal, state and private holdings of land and of mineral and timber holdings for more
logical and efficient management, for protecting fish and wildlife habitat and aesthetic
values, for enhancing recreation opportunities, for expanding communities, and for
promoting multiple-use values.

The purpose of the Act was to facilitate and expedite land exchanges by providing
more uniform rules and regulations, and by establishing procedures and guidelines
for the resolution of appraisal disputes through arbitration and bargaining. The Act
also appropriated up to $4,000,000 per year for the ten years 1989-1998 for the
consideration, processing, and consummation of land exchanges.26
12
Despite widespread support for land exchange reform, FLEFA sparked debate.27
Some feared it would result in the overuse of land trades as a tool for land
acquisition. The Chairman of the U.S. House Public Lands Subcommittee, John
Seiberling (D-OH), noted that “the bill is not premised on any idea that ex-
changes can be considered an adequate substitute for federal land purchases
for conservation.”

Representative Ron Marlenee (R-MT) argued that the bill intended to bypass
Congressional budget and appropriations processes by using federal land to
pay for the administrative costs of exchanges, in effect, “giving away or selling
off federal lands to a vested few, those who are involved in the exchange,
rather than identifying land and opening it up to sale to the general public.”28

Representative Manuel Luhan (R-NM) (who would soon be appointed Secretary

of the Interior by George Bush) supported the FLEFA legislation and saw land
exchanges as a way to resolve problems with federal ownership. Lujan criti-
cized Congress, which he claimed “has complicated the [land exchange] pro- Whole watersheds
cess by requiring the agencies to follow several environmental and public no- and landscapes
tice and comment procedures.”29 are now being
traded and
exchanges of a
million or more
Recent Trends acres have been
In recent years, new purposes have been invented for land exchanges, includ- proposed.
ing consolidating endangered species habitat, facilitating urban expansion,
expansion of mining or grazing concerns, checkerboard consolidation, acquisi-
tion of environmentally sensitive areas, and prevention of development. Many
exchanges are being initiated by private parties rather than by agencies. They
often involve numerous private and public parties trading dozens of parcels
over many years. Such complexity has inspired the use of outside facilitators in
the form of real estate companies and non-profit land trusts.

Land exchanges are also getting larger. Traditionally used to eliminate isolated
inholdings of a few acres, whole watersheds and landscapes are now being
traded, and regional exchanges of a million or more acres have been proposed.
Larger exchanges are redefining the land trade programs by drawing increasing
public interest and controversy and by transforming what were once arcane real
estate transactions into huge land deals of regional impact and significance.

More and Bigger Land Deals

The total number and average size of land exchanges remained relatively con-
stant between 1987 and 1996. In those years, the largest transfer of national
forest lands in a single exchange was 17,000 acres traded to the City of Seattle
in its Cedar River watershed.30 Since then, however, exchanges of much greater
size—and greater environmental and financial concern—have taken place. Some of
these are listed in the following table.

13
 31
Table 2. Largest Public-Private Land Exchanges
Acres to Acres to Total Appraised Value
Proponent Name Year State Public Private Acreage of Each Side
Weyerhaeuser Ouachita 1997 AR, LA 156,341 47,486 203,827 $106,000,000
Crown Pacific Crown Pacific 1999 OR 38,745 33,000 71,745 $80,000,000
Plum Creek I-90 1999 WA 31,705 11,556 43,261 $53,600,000
Big Sky Lumber Gallatin I 1993 MT 37,752 16,278 54,030 ?
Big Sky Lumber Gallatin II 1998 MT 54,000 29,000 83,000 ?
Plum Creek Checkerboard 1997 MT 22,672 27,371 50,043 $50,800,000
Natl Grasslands Ltd Medicine Bow 1997 19,068 29,468 48,536 $2,082,379
Weyerhaeuser Huckleberry 1998 WA 30,321 4,362 34,683 $45,500,000
Del Webb Del Webb 1999 CA, NV 5,380 4,756 10,136 $52,000,000

Since 1996, the value and size of land exchanges has increased dramatically
due to several large trades. In 1997, one exchange with Weyerhaeuser, the
Arkansas-Oklahoma exchange, represented more than half of the acreage and
almost half of the total value of all Forest Service land exchanges that year. In
1998, another Forest Service-Weyerhaeuser trade, the Huckleberry Exchange,
comprised a third of the total acreage, and, again, almost half of the total value
of all Forest Service trades for the year.

From 1986 to 1998, 918,822 acres of federal land were traded for 1,366,686
acres of private land.32 The vast majority of these trades were enacted by the
Forest Service and the Bureau of Land Management.

33
Table 3. U.S. Forest Service Land Exchanges, 1987-1998

Acreage Acreage Total Average Average

Year Number Gained Lost Value Value Size
1987 141 112,680 70,818 $179,573,370 $1,273,570 1,301
1988 142 78,767 56,330 $68,264,375 $480,735 951
1989 117 90,333 72,480 $39,793,419 $340,115 1,392
1990 122 80,484 43,292 $47,612,070 $390,263 1,015
1991 126 55,565 36,130 $60,976,021 $483,937 728
1992 99 69,329 49,235 $53,385,769 $539,250 1,198
1993 100 67,662 44,744 $29,635,985 $296,360 1,124
1994 97 39,674 37,728 $50,104,876 $516,545 798
1995 71 42,381 36,211 $36,076,423 $508,119 1,107
1996 86 68,067 59,987 $80,913,168 $940,851 1,489
1997 96 242,126 133,875 $219,801,282 $2,289,597 3,917
1998 91 69,390 32,233 $97,620,702 $1,072,755 1,117
Totals 1,288 1,016,458 673,063 $963,757,460 $748,259 1,312

14
The BLM annually completes 60 to 70 land exchanges involving about 150,000
acres of land valued at $50 million.34
35
Table 4. BLM Land Exchanges, 1990-1997

State exchanges Private exchanges

Year Acres Acres Acres Acres
Acquired Conveyed Acquired Conveyed
1990 1,282 343 94,540 77,224
1991 114,811 62,827 106,159 45,177
1992 - 14,186 61,570 120,434
1993 7,635 6,909 110,544 117,809
1994 2,748 4,349 97,847 21,253
1995 41 40 97,447 100,561
1996 49,614 52,314 42,947 99,992
1997 102 40 84,127 99,453
Totals 176,233 141,008 695,181 681,903
Annual averages 22,029 17,626 86,898 85,238

The annual average value of Forest Service land exchanges in the years 1987-
1995 was $537,000. In 1996 a series of giant land swaps began, raising the
average value of a land trade in 1996 to $941,000, then to more than $2
million in 1997, and more than $1 million in 1998. Public-private land ex-
changes valued at more than $10 million for each side include the following.

36
Table 5. Land Exchanges Exceeding $10 Million in Value

Acres to Acres to Total Appraised

Proponent Name Year State Public Private Acreage Value of Each Side
Weyerhaeuser Arkansas- 1997 AR, 156,341 47,486 203,827 $106,000,000
Oklahoma OK
Plum Creek Checkerboard 1997 MT 22,672 27,371 50,043 $50,800,000
Weyerhaeuser Huckleberry 1998 WA 30,321 4,362 34,683 $45,500,000
Plum Creek I-90 1999 WA 50,000 15,800 65,800 $79,000,000
Crown Pacific Crown Pacific 1999 OR 38,745 33,000 71,745 $80,000,000
Big Sky Lumber Gallatin I 1993 MT 37,752 16,278 54,030 ?
Big Sky Lumber Gallatin II 1998 MT 54,000 29,000 83,000 ?
Galena R Toiyabe 1996 NV 3,864 - 3,864 $18,439,000
Goldbelt Inc. Tongass 1994 AK 1,166 2,592 3,758 $15,255,000
Sierra Pacific Industries Tahoe 1997 CA 10,861 3,210 14,071 $12,740,000
Plum Creek St Joe 1997 ID 6,943 4,496 11,439 $11,172,000

A list of all Forest Service land exchanges valued at more than $2 million is
given in Appendix D.

15
 Increasing Complexity
As recent data show, what was once the simple trading of one discrete parcel
of land for another has evolved into a variety of more complex transactions.

In pooled exchanges, an agreement is made to trade multiple parcels of public

and private land in several transactions over time. Multiple-level exchanges
make values more difficult to track. For example, the phases in a pooled ex-
change may take years to complete, during which time the values of the vari-
ous parcels may change significantly. In some cases, the private party may
receive a net gain in value in one phase, to be reconciled in future transactions.
Pooling agreements are not allowed under Forest Service regulations.

Third party exchanges are those in which an organization, either for-profit or

non-profit, represents one or more private landowners in a trade with a public
lands agency. Third parties usually acquire an option to buy a private parcel
with the intent to trade the property into public ownership; occasionally the
organization purchases the land and therefore becomes the proponent in the
exchange.

New Purposes Drive Exchanges

Increasingly, land exchanges are used to achieve a wide variety of public and
private goals. They are seen as a way to expand urban areas and save endan-
gered species at the same time. Land swaps have been used to prevent mining
in sensitive areas.

They have been pursued to create a buffer around the areas where bombs are
stored at an Air Force base, and conversely to create an area for Air Force target
practice using uranium bullets. One federal-state land exchange occurred in
order to provide the state, at no cost, a suitable site for a new veterans home
within the deadline imposed for receiving matching federal funds.

Land trades are also pursued for private purposes. Exchanges have been used
to enable mine owners to expand their operations. Timber corporations have
swapped cut-over land for standing timber. Exchanges have been used to
establish ski resorts within or adjacent to national forest land, or to privatize
land and expand housing and facilities at existing resorts inside public lands.

Former BLM Director Pat Shea summarized the dilemma inherent in land trades
when he stated that “land exchanges are one of the tools with which we ad-
dress that obvious paradox: how to preserve the values that people find so
appealing and yet accommodate the need for growth and development of
Western Communities.”37

In spite (or perhaps because) of such high expectations, land exchanges often
do not achieve their goals. Failure often results from flaws in the exchange
process, but the fundamental problem lies in conflicting public-private goals.

Ultimately, land is finite and we cannot create more. It is tempting to see land
exchanges as a way to rearrange our land uses in order to be able to do any-
thing and everything, but the reliance on these transactions to delay and relo-
cate our land management problems has reached a crisis.
16
 Recommendations of the Western Land Exchange Project
The Western Land Exchange Project has reviewed scores of land transactions
throughout the United States, and works closely with citizens and public inter-
est groups concerned with public land policies. Until such time as the public
support and political will exist to replace land exchange programs with outright
purchase, the Project recommends the following reforms.

Open land value information to public scrutiny.

The ubiquitous problems with the appraisals associated with land exchanges
and the enormous public skepticism around their secrecy make it essential that
land appraisal data be open to the public as early in the process as practicable.

Because the main justification for withholding these data is to protect the
privacy of the public land trader, private parties to land exchanges must volun-
teer to the release of this information. This agreement should be part of the
Agreement to Initiate, the first document signed by both parties when the
transaction begins. The appraisal reports should be released to the public
simultaneously with the draft NEPA documents (i.e., environmental assessment
or draft environmental impact statement).

Eliminate third-party facilitators.

Private parties or their “non-profit” representatives should not be the initiators

of land exchanges. If there are public values to be obtained, they should be
pursued in a systematic and open manner and initiated by the public lands
agencies, not private parties.

Government audits and media investigations have shown that third-party in-
volvement tends to skew the land exchange process in favor of private parties
and facilitators. Facilitated exchanges have become a profitable business for
real estate agents and political deal-makers such as Clearwater Land Exchange
and American Land Conservancy. There is some concern that, where a facilita-
tor such as CLE is set to convey lands to outside parties, legal protection of the
public interest would be more difficult. In cases where facilitated land trades
are challenged in court, the courts may not have jurisdiction over these outside
parties, but only over government and the facilitators themselves.

Eliminate intrastate legislated land exchanges.

Explicitly or implicitly, legislation can exempt land exchanges from NEPA analy-
sis, reduce agency discretion to proceed with an exchange, and suspend or
moot the rights of citizens to file administrative appeals and obtain judicial
review. Legislation is often used to implement politically-motivated exchanges
that are not in the public’s interest.

There is no reason to implement an intrastate land exchange through Congress;

interstate land exchanges should be analyzed and proposed through the ad-
ministrative process and brought to Congress for passage only after that pro-
cess is complete.

70
Enact true policy reform to protect public lands.

Even as the Forest Service and BLM work to deal with procedural problems and
malfeasance in land trades, meaningful reform will not occur without substan-
tial changes in policy. Procedural improvements alone will not address such
things as the loss of old-growth forest, acquisition of corporate roads, or the
conversion of desert habitat to retirement communities and golf courses.

In 1997, the Western Land Exchange Project and several other environmental
organizations formulated a set of Land Exchange Principles intended to provide
a framework for more protective land trade policies.287 The Principles are
reiterated below, with commentary:

• Land exchanges shall not violate the public interest. The public interest in-
cludes, but is not limited to, preservation of water quality and water supply;
the health and abundance of fish and wildlife; biological integrity of ecosys-
tems; preservation of late-successional and old-growth forests; preservation
of roadless areas and critical habitat, and public safety.

• No late-successional or old-growth forest shall be transferred from the public

domain.

The government has at least ostensibly recognized that mature

and old-growth forests are imperiled, but has no policy forbidding
the exchange of these lands to private interests. In fact, in the
Northwest, lands that could not be logged under the Forest
Service’s Northwest Forest Plan can be traded to timber corpora-
tions, which will of course log them.
• No land comprising critical habitat shall be transferred from the public domain.

• No roadless areas shall be transferred from the public domain.

Under current law, even lands that are in Inventoried Roadless

Areas and candidates for protection can be traded out of public
ownership.
• Land exchanges shall not create or perpetuate a split estate; acquisitions by
public agencies shall include all surface and sub-surface rights.

Both long-standing government policy and the land exchange

regulations dictate that the government must obtain the full es-
tate—i.e., both surface and subsurface rights—in any exchange.
The agencies often violate this policy, creating a dangerous situa-
tion for public lands. For example, if a private party retains mineral
rights on land it trades to the government, the private owner can
exploit these rights, damaging the public lands. Alternatively, the
private owner can threaten to mine in the area and leverage a
land exchange with the government.
• Land exchanges shall not promote the conversion of natural ecosystems.

As the amount of land comprising native ecosystems dwindles, it is

critical not to trade these lands away to be developed or exploited.

71
 • Land exchanges shall recognize the special public interest that inheres in
lands derived from the railroad land grants. Where this special interest has
not been extinguished, it shall operate to limit private activity on these lands.
In addition, it shall limit the value of the land for land exchange purposes.

Many believe that the corporate retention of railroad grant lands

amounts to outright theft. The Western Land Exchange Project has
called land exchanges involving the land grant heirs the “Second
Great Land Grab,” and suggests that the government revest to
public ownership land grant lands that are wrongfully held, and
cease exchanging public lands for the railroad checkerboards.
One area in which the land grant statutes were violated is within
the Washington, Idaho, and Montana holdings derived from the
Northern Pacific Land Grant and now held by Weyerhaeuser, Plum
Creek Timber, and other resource corporations. The Project has
suggested that if land exchanges for these checkerboard lands are
to continue, the value of the private lands should be limited to
$2.50 and acre—the amount for which the railroad was ordered
to sell the land to settlers.
• Land exchanges shall respect the rights and interests of Indian tribes:

• Exchanges shall never violate treaty rights.

• Tribal interests shall be fully analyzed in environmental analyses and
planning documents.
• Where land exchanges affect tribal property or rights, the affected
tribe must be treated as an equal party to the exchange.
• No irreplaceable cultural resources shall be transferred out of the
public domain.

Tribal and treaty rights are regularly violated in land trades, and
cultural resources are often traded to private parties that will not
protect them. The Ninth Circuit Court found in its Huckleberry
land exchange decision (Muckleshoot Indian Tribe v. U.S. Forest
Service) that the Forest Service had to attach real protections to
culturally important lands it planned to trade to Weyerhaeuser.
• Land exchanges shall involve equal value. This requires that:

• Valuation methodology shall be fully disclosed in planning documents.

• Public costs of restoration from past damage on corporate lands
exchanged to the public shall be included in the valuation.
• Public costs associated with future damage on lands exchanged to
corporations shall be included in the valuation.
• Corporate subsidies in the form of tax breaks shall be included in the
valuation.

The Western Land Exchange Project has since proposed that land
values be released to the public early in the decision process to
allow for public scrutiny.

72
• Federal agencies shall impose federal management standards on public lands
exchanged to any entity.

These standards may be imposed via deed restrictions that limit

the exploitation allowed on lands traded out of public ownership.
• Non-exchange alternatives such as purchase or regulation shall be consid-
ered and included in the planning documents.

This Principle has been upheld by the Ninth Circuit Court in

Muckleshoot Indian Tribe v. U.S. Forest Service.
• Programmatic analysis shall be conducted of the cumulative effects of mul-
tiple land exchanges on all impacted ecosystems.

Replace exchanges with purchase.

In the past 35 years, more than five million acres have been purchased for the
public, compared to three million acres acquired by exchange. The problems
inherent in the exchange process are a clear indication that purchase is the
most appropriate and least risky way to bring lands into public ownership.

The purchase of lands for the public domain is authorized by FLPMA, but the
major law facilitating the purchase of lands is the Land and Water Conservation
Fund Act of 1964.

Amended in 1968 to receive additional monies from Outer Continental Shelf oil
and gas receipts, the Land and Water Conservation Fund is an underutilized
tool to acquire and protect public lands.

“Between 1987 and 1997, yearly LWCF appropriations averaged $233

million. In 1997, environmentalists and open-space advocates felt some
hope when legislators appropriated $699 million for fiscal year 1998,
the highest amount since 1978. Yet, as of [1999], Congress has refused
to spend the money on the projects for which it was earmarked.”288

In recent years, more than half of the $900 million generated each year was
used not for land acquisition but for Congressional pet projects and deficit
reduction.

A disproportionate amount of the LWCF money goes to high-profile crises—

and to the powerful corporations which help create those crises. Of $700
million in LWCF funds appropriated for 1998, almost half went to two corpora-
tions—Maxxam’s Pacific Lumber Company, to save the redwoods of the Head-
waters forest, and Crown Butte Mines, to stop the company from using cya-
nide to mine for gold next to Yellowstone National Park.

The public lands agencies often justify controversial land trades by citing the
unlikelihood of being able to get LWCF money to purchase lands, yet this atti-
tude has turned into a self-fulfilling prophecy that only makes land trades more
inevitable. It also belies the fact that more land is acquired through purchase
than through exchange (see Table 1).

73
 An MSNBC report on the issue stated the following:

“Congress has been slow to approve purchases even though it has more
than $5 billion available through a Land and Water Conservation Fund.
The 1965 fund allows some $900 million a year to go towards acquisi-
tions. Still, Congress has been reluctant to come up with money for land
purchases… [I]n 1998 only $23 million was provided for national park
land acquisition, a tenth of what the National Park Service had sought.
Land and Water This summer the House and Senate approved about half of the $295
Conservation million the Interior Department had sought for its “land legacy” pur-
Fund money chases, including funds earmarked to buy private land in and adjacent to
could easily federal parks.”289
replace the land
exchange pro- Purchase of public lands is opposed by ostensible “fiscal conservatives” who
grams. are unwilling to spend money for land protection but apparently more than
willing to tolerate multi-million dollar taxpayer losses through faulty land ex-
change appraisals and corporate manipulation of the land swap process. In
many cases these “conservatives” do not want to see any net gain in public
lands, or even protection of the existing commonwealth.

The 1998 LWCF appropriations were approved with the proviso that each
purchase had to be approved by the chairmen of the Interior Appropriations
committees, Senator Slade Gorton of Washington and Representative Ralph
Regula of Ohio.290

Gorton and others continued the political jockeying in 1999. House Resources
Committee Chairman Don Young (R-AK) tried to negotiate a bill which he
claimed would prevent “unwarranted” federal land acquisition by requiring
Congressional approval of all federal land purchases, and would offer incen-
tives for additional off-shore oil drilling.

Representative George Miller’s (D-CA) Resources 2000 bill countered with full
permanent funding for the LWCF without the environmentally damaging provi-
sions. An amendment was offered by Representative John Doolittle (R-CA)
which would require an annual inventory of federal lands “for which there is no
demonstrated compelling need” which might then be used for trade or sale to
offset new federal land acquisitions.291 As of this writing (early January 1999),
no resolution had yet been reached on LWCF appropriations for FY 2000.

If fully appropriated, the LWCF could more than accommodate land acquisi-
tions that are now being accomplished through exchange. For example, $97
million from the Fund could have replaced every Forest Service exchange made
in 1998—and kept in public ownership about 27,000 acres traded to private
interests. Land values in the Las Vegas Valley have likely driven up the BLM’s
yearly total in the last several years. Nevertheless, fully appropriated LWCF
funds could also easily replace that agency’s exchange program, as well.292

74
Use eminent domain to condemn lands deliberately threatened.

Many land trades are prompted by the threat of development on inholdings

within public lands or on “checkerboard” lands interspersed with public hold-
ings. The government is agreeing to do land exchanges with private parties who
declare themselves “unwilling sellers”—in other words, unwilling to sell land to
the government but determined to make a trade.

The Right of Eminent Domain (40 U.S.C. 257) states that the government may
condemn land needed for public purposes. This act does not itself confer
condemnation authority —instead, condemnation can occur only where the
acquisition is otherwise authorized by statute, e.g., the Weeks Act, which au-
thorizes acquisition in watersheds for the “regulation of water flow” or the
production of timber. Property owners whose land is condemned for public
purposes are entitled to receive fair market value for their property.

FLPMA gives the Departments of the Interior and Agriculture authority to pur-
sue acquisition of non-federal land by purchase, exchange, donation, or emi-
nent domain, but by eminent domain “only if necessary to secure access to
public lands, and then only if the lands so acquired are confined to as narrow a
corridor as is necessary to serve such purpose.”293

The Fifth Amendment places three conditions on the use of eminent domain.
There must be due process of law, a show of public use or necessity, and just
compensation.294

But due process and other protections for property owners were never in-
tended to facilitate the fleecing of the public treasury. As U.S. Supreme Court
Justice Hugo Black wrote in 1960, the takings clause of the Fifth Amendment
“was designed to bar Government from forcing some people alone to bear
public burdens which, in all fairness and justice, should be borne by the public
as a whole.”295 An individual should not be rewarded for acquiring inholdings or
other property and threatening development under cover of his constitutional
protections. Instead, the property should be condemned and the owner com-
pensated at fair market value.

In 1992, the Department of Justice formulated the Uniform Appraisal Standards

for Federal Land Acquisition. The government created these standards partly to
deal with the possibility that citizens would sue the government for “takings” in
cases where land is condemned under the right of eminent domain. The stan-
dards are meant to ensure that citizens whose land is acquired by the govern-
ment are paid fair market value as required under the Fifth Amendment.

Table 1 shows that of the nearly eleven million acres of private lands acquired
by federal agencies between 1964 and 1994, 47 percent was purchased, 30
percent was acquired by exchange, 16 percent was acquired by donation, and
only five percent was acquired by condemnation. Of the land obtained through
condemnation, two-thirds was acquired by the Park Service.

75
 There is a history of the government acquiring partial interests in a property
without having to pay the price of the entire property. One example of a less-
than fee-title acquisition is along the Mississippi River, where Wisconsin prop-
erty owners were compensated for the value of scenic easements, rather than
the full value of their property, which they can still use for other purposes.296
Private owners adjacent to public lands could be forbidden to develop proper-
ties in ways which would adversely affect certain public lands values without
having to be bought or traded out altogether.

Issue a moratorium on land exchanges until a national programmatic re-

view of land exchange law and policy can be performed.

In September 1998, the Western Land Exchange Project (WLXP) requested that
Forest Service Chief Mike Dombeck issue a moratorium on land exchanges
within his agency. The FS rejected that request, stating “we believe a more
appropriate action would be… strengthening land exchange policies and proce-
dures to improve our use of this tool,” and noting that the FS and BLM were
forming national land exchange review teams to monitor and recommend
improvements.297

Nevertheless, WLXP and other groups have called for a moratorium on land
exchanges pending reforms that include improved public notification and in-
volvement; release of all appraisal data to the public; a ban on the trade of all
old-growth forests; and a prohibition on any net increase to the public in log-
ging road miles. The WLXP has also requested that the government conduct a
programmatic review of land exchange policy, which it has so far declined to do.

76
Appendix E For More Information & To Get Involved
Western Land Exchange Project
PO Box 95545, Seattle WA 98145-2545
http://www.westlx.org

9 The Western Land Exchange Project (WLXP) provides research, outreach, and
advocacy for federal land exchange reform. Join the WLXP for $25 and receive
the Land Exchange Update for news and opportunities for involvement.

9 The WLXP Citizens’ Guide to Federal Land Exchanges has extensive informa-
tion on the opportunities for participating in the public processes involved
in land exchanges. The Guide is posted on the WLXP website at
www.westlx.org

9 For reprints of Trading Away the West, a special report on land exchanges
published by the Seattle Times, mail a request with $2 for postage and
handling to the Seattle Times, PO Box 70, Seattle WA 98111-0070. The
series is also posted on the Seattle Times website at http://
www.seattletimes.com/special/landswap/

9 Get on the mailing list for your nearest National Forest or BLM district to
receive notice of upcoming land exchanges.

9 Get involved in the NEPA process, from scoping of issues to comments on

environmental impact statements to appeals of decisions.

9 For information on existing and proposed laws, the Congressional Record,

Senate and House Committees, and other information on federal legisla-
tion, see THOMAS: Legislative Information on the Internet http://
thomas.loc.gov/

Congressional Committees and Other Oversight Agencies

• U.S. House Committee on Resources.

Don Young (R-AK), Chairman. http://www.house.gov/resources/

• U.S. House Committee on Resources, Subcommittee on Forests & Forest

Health. Helen Chenoweth-Hage (R-ID), Chairman. http://www.house.gov/
resources/106cong/assign99.htm#forestsmem

• U.S. House Committee on Appropriations, Subcommittee on Interior.

Ralph Regula (R-OH), Chairman. Controls Land and Water Conservation
Fund. http://www.house.gov/appropriations/

• U.S. Senate Committee on Energy And Natural Resources.

Frank Murkowski (R-AK), Chairman. http://www.senate.gov/~energy/

• U.S. Dept. of Agriculture Inspector General reports http://www.usda.gov/

oig/

• U.S. Dept. of Interior Inspector General reports http://www/oig.doi.gov/

• U.S. General Accounting Office reports on land exchanges http://gao.gov/

84