Friday, March 7, 1997 | 11:59 a.m.
CARSON CITY -- A report by an Elko County grand jury accusing federal and state officials of criminally coercing a mining company into paying a $500,000 mitigation fee is a "witch hunt," state officials say.
Silent until now, state officials say the grand jury was stacked and this is nothing but a ploy by county officials to control the public lands in the continuing "Sagebrush Rebellion."
Peter Morros, director of the state Department of Conservation and Natural Resources, said his employees in the state Division of Wildlife are above reproach. His only criticism is that they let the Independence Mining Corp. "off the hook" and should have sought $1.5 million in mitigation fees.
Morros and other state officials involved were to meet today with the state Natural Resources and Conservation Advisory Board to outline their position. Until now, Morros said, "I have kept my powder dry." But he's angry that the grand jury said state and federal officials were guilty of the crime of oppression under the color of office, a gross misdemeanor.
In 1991, Independence Mining Corp. sought permission from the U.S. Forest Service to expand its operation to 5,500 acres of prime winter habitat for mule deer.
The wildlife division objected, saying the land would be disturbed. It also sought fees to restore other lands disturbed by the company. Negotiations started and a contract was signed for Independence to pay a $500,000 mitigation fee to the division.
Independence then got its permit from the U.S. Forest Service to begin mining on the land in question. The grand jury said Willie Molini, director of the wildlife division, and employees Duane Erikson, Larry Barngrover and Kenneth Grey and Forest Service workers John Inman and Ben Siminoe, took advantage of their position to force the mining company to pay the mitigation fee.
The jury found no other mining company had been required to pay the fee, that there was no authority for the state division to collect this fee and that damage to the land is not major. It accused the Forest Service of using "pseudo-scientific data" in assessing the potential damage to the land.
In addition, the jury said the state knew that under the federal law it would get matching funds for the $500,000, but it never disclosed that to Independence. That could have lowered the Independence payment.
It said the wildlife division and the forest service "proceeded in bad faith" during the bargaining and that Independence Mining, which was reaching the end of its mining reserve at its present site then, "was virtually without any negotiating strength." It said the state and federal agencies "had essentially absolute control of IMC's financial well-being."
The jury recommended the return of the $500,000 to Independence, but that's not going to happen.
Since the grand jury's report Feb. 13, Independence Mining has not said anything. But Morros complained that two mining company employees, Joseph Burden and Alan Mariluch, were on that grand jury.
Erikson, a 29-year employee with the wildlife division who was involved in the negotiations, said the charge of coercion is "unfounded." There was disagreement on the amount of money and the formula for setting the fee, he said, adding that happens in any negotiation.
After the contract was signed, Erikson said, the company hosted a dinner for the state and federal employees in Elko and even summoned a newspaper photographer to take a picture of them handing over a check.
Morros is unhappy Independence Mining has not said anything in the defense of the state and federal officials involved in the negotiations. "This was a good faith agreement," he said.
Erikson said the money received is being used to rehabilitate land south of the mining operation, which was scarred by range fires.
Morros is now talking about taking a hard-line against any mining company that wants to expand into wildlife habitat. "The mining companies need to be put on notice that mitigation may no longer be an option in new projects or expansion," he said.
This means mining companies would not be able to put up any money to remove state objections to potential environmental damage.
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