Court Documents Reveal:
Feds, Nature Conservancy
Join in Covert Pact to Gain
Lahontan Farmers' Water

  By Tim Findley

A seven-year campaign by a rich national conservation organization to acquire Fallon farmers' water rights turns out to have been covertly subsidized by the U.S. government.
Court documents reveal The Nature Conservancy (TNC) and the U.S. Fish and Wildlife Service quietly signed an agreement in 1989 effectively making the non-profit group an agent of the federal government in its drive to obtain irrigation rights from farmers in the Lahontan Valley's Newlands Project.
Because the Nature Conservancy organization presented itself to Nevada and Churchill County authorities as an independent party acting in good faith, it was granted that role during critical negotiations with the federal government. Now, local officials are charging that TNC operatives and federal agencies essentially conspired to subvert local authority.
"It amounts to a betrayal," said Nevada State Assembly Representative Marcia DeBraga said last week.
"It's really a tragedy that farmers and others went into those talks in good faith and with high hopes, never knowing that the deck was stacked against them," she said.
DeBraga said she will seek a state or federal investigation of the agreement between the Conservancy and the U.S. Department of Interior's Fish and Wildlife Service.
The contractual arrangement hiring the Conservancy and its Nevada representative, Graham Chisholm, as virtual secret federal agents remained in effect as least through June of this year and cost U.S. taxpayers over $300,000, the documents revealed.
Steve Hobbs, Nature Conservancy's Nevada director, denied last week that there was anything secret or suspicious about the group's deal with the U.S. Fish & Wildlife Service and portrayed it as merely an agreement to share environmental data on the region.
But DeBraga and others in the Lahontan Valley were unimpressed by Hobb's denials and said they were never informed of the Conservancy agreement with the feds until it was revealed by court documents last week.
The agreement, which Hobbs contended was never "a contract," was established even before passage of U.S. Senator Harry Reid's so-called "Negotiated Settlement Act," and was repeatedly renewed through June of 1996, each time giving the Conservancy organization more responsibility in the acquisition of water rights.
The 1993 version of the agreement specifically called on TNC to explore "the operational de-coupling of the lower Truckee and Carson river basins, and the off-project use of Newlands Project water rights."
DeBraga said an investigation should focus on not only the secret nature of the agreement, but its potential conflict of interest between a government agency and the non-profit group.
While there was little doubt among farmers in the Lahontan Valley, she said, that Nature Conservancy operative Graham Chisholm was at the time trying to acquire more water for an expanded wetlands region, Chisholm never revealed he was working under an agreement with federal authorities that paid part of his salary.
Chisholm, who this summer left or was removed from his position with the Nature Conservancy, entered the Lahontan Valley in 1990 and portrayed himself to local groups -- as well as elected county and irrigation officials -- as the sympathetic representative of a non-profit foundation seeking "partnership" with the valley in developing an environmental plan.
Part of Chisholm's duties, supposedly on behalf of the Conservancy, was to identify "willing sellers" of irrigation rights and offer to buy them out, either as a representative of the Conservancy, or as a broker for the Del Webb Corporation of Arizona which was involved in other federal agreements to swap farm land purchased by the corporation for more valuable BLM property near Las Vegas.
The Conservancy arrangement with Del Webb thus also potentially brought the huge real estate developer, with its immense financial resources, on board as a Department of Interior ally in the pursuit of the Fallon water rights.
U.S. Fish & Wildlife authorities admitted in 1994 that they lacked sufficient federal appropriations to carry out the full purchase of water necessary to expand the Fallon wetlands areas as mandated by Senator Reid's Public Law 101-618. Apparently the wildlife agency's agreement with Nature Conservancy was in large part based on the organization's independence of federal budget appropriations or Congressional will.
"We were not trying to hide what we were doing," Hobbs of the Conservancy argued. "Clearly the agreements do not commit The Nature Conservancy to any U.S. Fish and Wildlife positions."
But the federal agreement called on TNC to "cut through the controversies on Newlands project efficiencies, active water rights and transfer rates.." and "apply the integrated Below Lahontan Reservoir and Negotiated Settlement Models."
The "Below Lahontan Reservoir" model is later identified in the document as having been developed by the Environmental Defense Fund (EDF) under another federal contract. The model is designed primarily to take away water for irrigation from farming in the Lahontan Valley and its Newlands Reclamation Project and direct it into a vast new wetlands area.
According to elected farmer representatives in the Truckee-Carson Irrigation District (TCID), the EDF "model" would virtually dry up farming in the Lahontan Valley.
"If the farmers had created their own model as a basis of settlement it would have been seen as an obvious conflict of interest," DeBraga said.
Hobbs claimed The Conservancy "publicly acknowledged" the "cooperative agreement with Fish and Wildlife on at least four separate occasions when The Conservancy and Environmental Defense Fund released various studies.
The 1993 extension of the Conservancy pact with U.S. Fish and Wildlife cites the need of Fish and Wildlife to complete reports called for by Senator Reid's Public Law 101-618, which established environmental priorities on the twin river system.
Reid (D-NV) called it the "Negotiated Settlement" based on talks arranged and conducted by his staff in 1988 in which Lahontan Valley farmers were heavily outnumbered by representatives of Reno power company interests and environmentalists, including participants from the Sierra Club and the Environmental Defense Fund, which was apparently already working on its federal contract to "model" the intended redirection of irrigation rights.
Farmers representing the irrigation district tried to make a case for preserving their legal rights to the water, but were overwhelmed by the combination of tribal, power company and environmentalist representatives allied against them.
Senator Reid, apparently infuriated by their
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unwillingness to accept his terms, later falsely accused the farmers of walking out on negotiations, and proclaimed himself to be "the Devil in Churchill County."
While the farmers sought judicial protection for their rights under previous federal and state laws and agreements, Reid's new law directed Fish and Wildlife to begin acquiring their water rights.
"...the Service needs assistance in planning, water acquisition, and negotiations," says the contract extension prepared in the spring of 1993. "...The Conservancy and the Service can combine resources and become more effective and efficient, with less total outlay."
By then, Chisholm had ingratiated himself into the political and social structure of the Lahontan Valley and Churchill County.
He was familiarly known as "Graham" from his frequent and polite attendance at community forums designed to develop some strategy for protecting irrigation rights and related ground water aquifer supplies.
Chisholm offered helpful assistance to the local leaders in dealing with environmental concerns and repeatedly suggested that the Nature Conservancy organization's purpose was to work "with the community" in developing a reasonable plan.
In 1993, Chisholm was among the participants in founding the Lahontan Valley Environmental Alliance, a broad-based group of concerned Churchill County citizens that helped inspire and appeal to Senator Reid to reopen talks on implementation details of his "Settlement Act."
The Senator agreed to the mediated discussions after citing the "progress" made by the Environmental Alliance. Whether he knew that Chisholm, as a paid federal agent, had worked his way close to the leadership of the Alliance is not known.
But by the time the new talks opened in the late summer of 1994, Chisholm and the Conservancy were already more that a year into meeting their contract obligations, which, in part, included making sure that any later talks met government aims.
The documents reveal that farmers and their irrigation district stood virtually no chance in the new talks already heavily stacked against them. Reid's office and federal Interior Department bureaucrats announced that they would only take a sideline position in the discussion meant to be carried on directly between parties with specific interests on the river systems.
But at the table, in addition to representatives of the Sierra Pacific Power Company, the cities of Reno and Sparks and the Pyramid Lake Paiute Tribe, was David Yardas of the Environmental Defense Fund.
Alongside Yardas sat Graham Chisholm of the Nature Conservancy organization. Neither of them revealed they were being paid by federal government contracts.
Senator Reid had insisted repeatedly that it was not his intention to cut off the Truckee from the irrigation project or to put farmers out of business. Chisholm had repeatedly insisted he had no role in the many lawsuits. The farmers had no evidence to suggest anybody was lying.
Chisholm and Yardas each expressed their "disappointment" when the talks failed to reach any new agreements.
Robert Pelcyger, the attorney for the Pyramid Lake Paiute Tribe, never made any secret of his goal to end irrigation diversions from the Truckee and secure total control of the river by the tribe. He indicated satisfaction that the talks produced nothing that could stand in his way.
Conveniently, the contract extensions following 1994 were signed with Robert Wigington in the Nature Conservancy organization's Western Regional Office on Broadway in Boulder, Colorado, just a short walk from Pelcyger's own law office in the same city.
That seemed to put just about everybody in the loop -- Senator Reid, the Nature Conservancy organization, and EDF, U.S. Fish and Wildlife, and the Tribe -- everybody, that is, except the farmers and rural residents of the Lahontan Valley whose water the others wanted.
After the negotiations collapsed, Churchill County went to federal court seeking an injunction to halt federal acquisition of farm land until Fish and Wildlife complied with the National Environmental Policy Act (NEPA) and produced a comprehensive environmental assessment of the social and economic effect on the county. The Department of Interior resisted the suit, claiming the NEPA report was unnecessary.
Chisholm, still portraying himself as a good guy concerned about the individual problems of the farmers, went right on buying out water rights and property, for the first time using Del Webb money as a multimillion-dollar inducement for farmers to sell.
When the County Commission summoned him in for some explanation, Chisholm professed himself and the Nature Conservancy organization to be acting merely as friendly brokers for independent interests.
The contract with the Fish and Wildlife Service, however, was more explicit, saying that "The Conservancy will:
"1. Continue the development of pooled purchase, drought leasing, storage banking, and reciprocating water use strategies, emphasizing the revenue bases and institutions needed for such strategies..."
In fact, the contract left little for Fish and Wildlife itself to do except offer "free" appraisals of water right and property values to any interested farmers. The appraisals were then apparently passed on to the government's partners in the Nature Conservancy.
One Nature Conservancy acquisition announced by Chisholm earlier this year was described as "an old farm" that will become a TNC-operated "visitor's center."
The "old farm" includes a sprawling two-level home built in 1990 that was part of the million-dollar-plus purchase of the property by Del Webb in a deal negotiated and brokered by Chisholm.
Del Webb is expected to turn the rest of it over to Fish and Wildlife after an exchange agreement is completed granting the private development company property owned by the Bureau of Land Management near Las Vegas.
Graham Chisholm, no longer seen in the Lahontan Valley, turns out to have a Doctorate in Political Science from the University of California at Berkeley.
His thesis was on the effort of the "Green Party" to take control of the government of Germany.

Tim Findley is Associate Editor of
the Hatch New Mexico Courier.
where an initial versions of this story first ran.
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