www.indianz.com
27 April 2004
A
federal judge has again refused to let the world's
largest coal company off the hook for its role in the
Navajo Nation's billion-dollar trust asset mismanagement
claim.
The
tribe is suing Peabody Energy and the federal government
over a coal lease approved during the Reagan
administration. The suits allege that Peabody conspired
with top Department of Interior officials to deny the
tribe a high royalty rate on the coal deposit.
The
issue was at the center of a U.S. Supreme Court case
decided in March 2003. By a 6-3 vote, the justices said
the government wasn't liable for damages under the
Indian Minerals Leasing Act (IMLA).
Peabody
used the negative decision to seek dismissal of a
separate lawsuit the tribe filed under the Racketeer
Influenced and Corrupt Organizations (RICO) Act. The
high court freed the company from liability, Peabody
lawyers argued in a motion.
But
on April 13, U.S. District Judge Emmet G. Sullivan said
the two cases involve distinct questions even though
they arise from the same situation. "In other
words, although the underlying facts are the same as
those presented before the Supreme Court, the legal
issue and ... liability are different," he wrote in
a seven-page order.
In
refusing to dismiss the RICO action, Sullivan noted that
despite the Supreme Court's ruling, the tribe's case
against the federal government is still alive. Last
October, the Federal Circuit Court of Appeals gave the
tribe another chance to prove liability under a
"network" of laws besides the IMLA.
The
dispute reaches back to the mid-1980s, when the tribe's
original lease with Peabody was up for renewal. Based on
an internal study, the Bureau of Indian Affairs
concluded the tribe was justified in seeking a 20
percent royalty rate on what was termed one of the most
valuable coal deposits in the U.S.
Peabody
appealed the decision through the administrative
process. But in an action that befuddled the tribe,
then-Interior Secretary Don Hodel in July 1985 told the
tribe to continue negotiations with Peabody.
Forced
back to the table, tribal leaders ended up settling for
a 12.5 percent rate that was much higher than payments
in the original lease. But they said they lost out on
$600 million.
Only
through litigation did the tribe discover that Hodel's
directive came days after he met secretly with a Peabody
lobbyist who happened to be a close friend. The tribe
was never informed of the meeting.
Also,
the tribe was never told that, at the time of the
meeting, the BIA had drafted a decision affirming the 20
percent rate. The decision surfaced through the
litigation.
Depending
on how the courts rule, the tribe could be entitled to
$600 million, plus damages, for its suit against the
federal government. Under the RICO suit, the tribe could
be awarded up to three times that amount, or $1.8
billion.
Bush
administration officials currently in charge of the
Indian trust have been involved in the dispute. Deputy
Secretary J. Steven Griles oversaw the now-defunct
mining division that supported the high royalty rate,
based on science, before it was rejected by the
political appointees. Special Trustee Ross Swimmer, as
former head of the BIA, approved the 1987 lease without
conducting an economic analysis of the impact.
Both
officials were deposed, under oath, for the tribe's suit
although Swimmer could not recall his participation.
Griles had no trouble remembering and attended the
Supreme Court's oral arguments in the case.
As
the second-in-command at Interior, Griles has continued
to meet with Peabody to discuss issues surrounding its
coal mining activities on the Navajo and Hopi
reservations in northeastern Arizona. According to an
investigation by Interior's inspector general, Griles
met at least a dozen times with representatives of the
company.
Before
joining the Bush administration, Griles represented the
mining industry. His firm was paid more than $140,000 in
lobbying fees from 1997 to 2000 by the National Mining
Association. Although Peabody belongs to the
organization, Griles never represented the company
directly.
Griles
continues to receive $284,000 a year for work he had
performed for the industry before joining the Bush
administration in July 2001. He agreed to recuse himself
from any dealings with former clients but the inspector
general's report documented questionable contacts with
old clients.
--- Get the
Decision: * Navajo Nation v. Peabody Holding Company
(April 13, 2004) : http://www.dcd.uscourts.gov/99-469a.pdf
Relevant
Links:
* Navajo Nation - http://www.navajo.org
* Peabody Energy - http://www.peabodyenergy.com
© 2000-2004
Indianz.Com
|