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 government 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 prepared 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 countrywestern 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 companies, 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 underappraisal of public lands and the overvaluing of private land. Fortunately, things are changing for the better as more citizens become aware of the implications 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 sustenance—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 commonwealth, 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.

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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 elsewhere. 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 developers 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 consequently 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 recommendations 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.

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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 dominated 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 individuals 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 authorized 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 settler-squatters the right of preemption, allowing them to buy land without competitive bidding.6 • The 1841 General Preemption Act authorized settlers to claim 160 acres. • A series of railroad land grants between 1850 and 1870 allowed several dozen railroads to sell public lands in order to raise capital to build the 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.

Guthrie, Oklahoma land office in April 1889, preparing to record the claims of 100,000 white settlers rushing to acquire land in Indian Territory. Credit: University of Oklahoma Library.

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• 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 usurpation, improvident grants, and fraudulent claims and entries.”7 By the early twentieth century, the federal government had granted or sold more than a billion acres, or 70 percent of the continental U.S. (Details are in Appendix A). 52 percent had been sold in homestead or cash sales. 24 percent had been granted to the states for developing education and transportation systems. 12 percent had been conditionally granted to railroads, slated eventually to be sold at public auction. 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 beginning [of the country’s development] was the conflict between those who sought the Jeffersonian ideal of an agrarian society dominated by small, independent 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 entrepreneur [or speculator].”13

In the nineteenth century, state immigration bureaus used advertising to attract potential residents to the West. Credit: New York Historical Society.

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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 implicit 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 pattern of federal, state and privately owned lands in the West into consolidated 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.

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There are currently more than 50 million acres of privately-owned land inside U.S. national parks and forests.17 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 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 Designated Wilderness Areas are not free of inholdings. There are 400,000 acres of inholdings within designated Wilderness areas within the National Forests.20 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 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 exchanges are undertaken as a means of eliminating these conflicts.

Protecting Sensitive Lands
As discussed earlier, by the end of the nineteenth century, the federal government 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 continues, as shown in this table covering the last three decades: Table 1. Land Acquired for Public Ownership, 1964-1994 FS Purchase 1,479,300 Exchange 2,179,600 Donation 522,300 Condemed 105,100 Other Total 4,286,300 BLM 297,100 724,400 14,600 35,800 1,071,900 F&WS 1,998,200 256,600 586,400 35,000 2,876,200 NPS 1,303,300 90,700 631,700 358,800 242,500 2,627,000
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Totals 5,077,900 3,251,300 1,755,000 534,700 242,500 10,861,400

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

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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 handbooks, 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 lands policy has always alternated between protection and exploitation, acquisition and disposal.

There has never been a comprehensive examination of land exchange policy. The closest thing to such a review was the general review of public land law undertaken by the Public Land Law Review Commission (PLLRC) in the 1960s. The PLLRC was created as part of the compromise required to pass the 1964 Wilderness Act. Its mandate was to review the nation’s public lands laws and to recommend policies for future land disposition and management. 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 recommendations 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 Departments 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

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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 exchanges 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 criticized 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 are now being tice and comment procedures.”29

Recent Trends
In recent years, new purposes have been invented for land exchanges, including consolidating endangered species habitat, facilitating urban expansion, expansion of mining or grazing concerns, checkerboard consolidation, acquisition 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.

traded and exchanges of a million or more acres have been proposed.

More and Bigger Land Deals
The total number and average size of land exchanges remained relatively constant 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.

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Table 2. Largest Public-Private Land Exchanges
Proponent Weyerhaeuser Crown Pacific Plum Creek Big Sky Lumber Big Sky Lumber Plum Creek Natl Grasslands Ltd Weyerhaeuser Del Webb Name Ouachita Crown Pacific I-90 Gallatin I Gallatin II Checkerboard Medicine Bow Huckleberry Del Webb Acres to Year State Public 1997 AR, LA 156,341 1999 OR 38,745 1999 WA 31,705 1993 MT 37,752 1998 MT 54,000 1997 MT 22,672 1997 19,068 1998 WA 30,321 1999 CA, NV 5,380 Acres to Private 47,486 33,000 11,556 16,278 29,000 27,371 29,468 4,362 4,756

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Total Appraised Value Acreage of Each Side 203,827 $106,000,000 71,745 $80,000,000 43,261 $53,600,000 54,030 ? 83,000 ? 50,043 $50,800,000 48,536 $2,082,379 34,683 $45,500,000 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.

Table 3. U.S. Forest Service Land Exchanges, 1987-1998
Acreage Gained 112,680 78,767 90,333 80,484 55,565 69,329 67,662 39,674 42,381 68,067 242,126 69,390 1,016,458 Acreage Lost 70,818 56,330 72,480 43,292 36,130 49,235 44,744 37,728 36,211 59,987 133,875 32,233 673,063 Total Value $179,573,370 $68,264,375 $39,793,419 $47,612,070 $60,976,021 $53,385,769 $29,635,985 $50,104,876 $36,076,423 $80,913,168 $219,801,282 $97,620,702 $963,757,460

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Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Totals

Number 141 142 117 122 126 99 100 97 71 86 96 91 1,288

Average Average Value Size $1,273,570 1,301 $480,735 951 $340,115 1,392 $390,263 1,015 $483,937 728 $539,250 1,198 $296,360 1,124 $516,545 798 $508,119 1,107 $940,851 1,489 $2,289,597 3,917 $1,072,755 1,117 $748,259 1,312

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The BLM annually completes 60 to 70 land exchanges involving about 150,000 acres of land valued at $50 million.34 Table 4. BLM Land Exchanges, 1990-1997
State exchanges Acres Acres Acquired Conveyed 1,282 343 114,811 62,827 14,186 7,635 6,909 2,748 4,349 41 40 49,614 52,314 102 40 176,233 141,008 22,029 17,626
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Year 1990 1991 1992 1993 1994 1995 1996 1997 Totals Annual averages

Private exchanges Acres Acres Acquired Conveyed 94,540 77,224 106,159 45,177 61,570 120,434 110,544 117,809 97,847 21,253 97,447 100,561 42,947 99,992 84,127 99,453 695,181 681,903 86,898 85,238

The annual average value of Forest Service land exchanges in the years 19871995 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 exchanges valued at more than $10 million for each side include the following.

Table 5. Land Exchanges Exceeding $10 Million in Value
Acres to Year State Public 1997 AR, 156,341 OK 1997 MT 22,672 1998 WA 30,321 1999 WA 50,000 1999 OR 38,745 1993 MT 37,752 1998 MT 54,000 1996 NV 3,864 1994 AK 1,166 1997 CA 10,861 1997 ID 6,943 Acres to Private 47,486 27,371 4,362 15,800 33,000 16,278 29,000 2,592 3,210 4,496

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Proponent Weyerhaeuser

Name ArkansasOklahoma Plum Creek Checkerboard Weyerhaeuser Huckleberry Plum Creek I-90 Crown Pacific Crown Pacific Big Sky Lumber Gallatin I Big Sky Lumber Gallatin II Galena R Toiyabe Goldbelt Inc. Tongass Sierra Pacific Industries Tahoe Plum Creek St Joe

Total Appraised Acreage Value of Each Side 203,827 $106,000,000 50,043 34,683 65,800 71,745 54,030 83,000 3,864 3,758 14,071 11,439 $50,800,000 $45,500,000 $79,000,000 $80,000,000 ? ? $18,439,000 $15,255,000 $12,740,000 $11,172,000

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

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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 exchange may take years to complete, during which time the values of the various 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 endangered 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 address 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 anything and everything, but the reliance on these transactions to delay and relocate our land management problems has reached a crisis.

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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 interest 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 volunteer 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 involvement 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 facilitator 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 analysis, 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 administrative process and brought to Congress for passage only after that process is complete.

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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 substantial 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 includes, but is not limited to, preservation of water quality and water supply; the health and abundance of fish and wildlife; biological integrity of ecosystems; 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 corporations, 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 estate—i.e., both surface and subsurface rights—in any exchange. The agencies often violate this policy, creating a dangerous situation 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.

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• 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.

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• 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 considered 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 multiple 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 corporations—Maxxam’s Pacific Lumber Company, to save the redwoods of the Headwaters forest, and Crown Butte Mines, to stop the company from using cyanide 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 attitude 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).

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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 acquisitions. 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. This summer the House and Senate approved about half of the $295 million the Interior Department had sought for its “land legacy” purchases, including funds earmarked to buy private land in and adjacent to federal parks.”289 Purchase of public lands is opposed by ostensible “fiscal conservatives” who are unwilling to spend money for land protection but apparently more than willing to tolerate multi-million dollar taxpayer losses through faulty land exchange 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 incentives 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 provisions. 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 acquisitions 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

Land and Water Conservation Fund money could easily replace the land exchange programs.

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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 holdings. 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 authorizes 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 pursue acquisition of non-federal land by purchase, exchange, donation, or eminent 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 intended 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 compensated 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 standards are meant to ensure that citizens whose land is acquired by the government 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.

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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 lessthan fee-title acquisition is along the Mississippi River, where Wisconsin property 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 properties 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 review 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 procedures 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 involvement; 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 logging 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.

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Appendix E

For More Information & To Get Involved
Western Land Exchange Project PO Box 95545, Seattle WA 98145-2545 http://www.westlx.org 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. The WLXP Citizens’ Guide to Federal Land Exchanges has extensive information 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 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/ Get on the mailing list for your nearest National Forest or BLM district to receive notice of upcoming land exchanges. Get involved in the NEPA process, from scoping of issues to comments on environmental impact statements to appeals of decisions. For information on existing and proposed laws, the Congressional Record, Senate and House Committees, and other information on federal legislation, 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/

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