Grand Jury Report:
State and Federal Agency Officials
Extorted Money from Mining Firm

   Elko Daily Free Press

The Elko County Grand Jury charged Thursday that four state and two federal officials involved in a mining company's expansion had committed the crime of "oppression under color of office," but the statute of limitations on the offenses has expired.
Elko District Attorney Gary Woodbury informed Elko District Judge Mike Memeo about the two-year limitation on the crimes, which last occurred in July 1994.
The grand jury report, formally called a presentment, says Nevada Division of Wildlife Director Willie Molini and fellow NDOW employees Duane Erikson, Larry Barngrover and Kenneth Grey, along with U.S. Forest Service employees Ben Siminoe and John Inman committed crimes by forcing the Independence Mining Co. to pay $500,000 toward mule deer habitat as a condition of acquiring permits to expand its mining operation on forest service land.
The report said the officials, "willfully, unlawfully, and maliciously... injured the person, property or rights of another."
"NDOW and USFS had essentially absolute control over IMC's financial well- being," the grand jury report says. "The grand jury recognizes that disparate bargaining positions often exist between contracting parties, but suggests that when one of those parties is a governmental agency or has governmental powers, that disparity can be disastrously out of proportion."
Brent Chamberlain, IMC's human



resources manager, said he could not comment on the report because IMC was not a part of the grand jury process.
Molini and the other NDOW employees did not return telephone calls to their offices this morning. Local forest service spokesman Cheri Howell referred the matter to the agency's attorneys in Washington, D.C., who did not call with comment.
According to the report, IMC sought to expand its operation in 1989 when its mineral resources were approaching exhaustion and applied to the Forest Service in 1991 for expansion on lands managed by the agency.
The Forest Service solicited comments in an environmental assessment and NDOW responded with concerns, reaching an agreement with the Forest Service that the permits would not be granted without NDOW approval, the report says.
NDOW determined the expansion would have an "adverse impact" on about 5,500 acres of range used by mule deer in the Independence Mountains, the report says. NDOW said for every acre disturbed, IMC should improve three acres of habitat in other areas at a cost of $105 per acre,


 
with a total cost of mitigation of $1.5 million, the report says.
The money was to go into a fund administered by NDOW, which has no direct statutory authority for the acquisition of funds from persons alleged to be affecting habitat, the report says.
After several meetings to resolve the issue, Molini and IMC President Robert Zerga agreed Sept. 30, 1992, on a formula that brought IMC's mitigation fee to $500,000.
"Giving NDOW the power to obtain and distribute funds not under legislative control ... eliminates the check and balance system of government and that the abuse of power by NDOW against IMC was the natural result," the grand jury says.
"The grand jury has found indictable criminal activity in this investigation and would recommend prosecution but for the fact that the statute of limitations on gross misdemeanors has passed."
The grand jury said it heard testimony from other mining representatives that their companies had not been forced to participate in any off-site mitigations that required a payment before permits were issued. The mining representatives from Barrick Goldstrike, Newmont Mining




and Placer Dome U.S. also testified they had been involved with wildlife mitigation before, but only with the U.S. Bureau of Land Management, which never allowed NDOW to dictate terms.
"It is evident to the grand jury that two factors placed IMC in a different position," the report says. "It was a company without a sophisticated lobbying program and it was dealing with the USFS rather than BLM." The grand jury also found a federal law, the Pitman-Robertson Act, which would have supplemented any contribution made by IMC at a 3:1 ratio. The grand jury says IMC was unaware of the law, but NDOW had full knowledge of the act and its use.
"Had NDOW been successful in obtaining $1.5 million from IMC as it originally demanded, application of the Pitman-Robertson Act would have given NDOW approximately $6 million to pay for mitigation costs of only $500,000," the report says.
The grand jury recommended its report be forwarded to Molini's boss, Pete Morros, director of the Nevada Department of Conservation and Natural Resources, and to the Nevada Legislature for review.


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