The Deadbeat Cowpoke (and Other Hypocritical Chiselers)

by John Lawrence

The press can’t get enough of Nevada rancher Cliven Bundy who uses an armed posse to defy government bill collectors while tossing off racist bromides. Even conservatives like Senators Rand Paul and Dean Heller decided to back off from their reflexive support for his anti-Washington babble that concealed his long practice of chiseling the taxpayer.

Bundy’s views on minorities – few of whom are responsible for implementation of grazing fees on public lands – reveal not only his antebellum intellect, but also his wry sense of irony.   Bundy castigated African Americans as perhaps having been “better off as slaves, picking cotton and having a family life” than they are living “under government subsidy.

Bundy’s fulminations against those who live “under government subsidy” is nothing short of absurd given the billions of dollars in public subsidies lavished not only on public land grazers but on many other private interests who fatten their wallets off free and reduced price exploitation of publicly owned resources.

Two decades ago, I was the staff director for the House Natural Resources Committee when President Bill Clinton decided to bump up the ridiculously low fee for grazing livestock on public lands to help pay for land management improvements necessitated, in part, by overgrazing of cattle. (That was not long before Bundy decided he just wouldn’t pay his grazing bills at all; he is now a $1.1 million deadbeat cowpoke, according to the Bureau of Land Management, which runs the grazing program for the Interior Department.)  

The ranching community and its elected officials in Congress promptly lashed out at Clinton and his Interior Secretary, former Arizona Gov. Bruce Babbitt. Having been through resources battles in Congress over onshore and offshore oil and gas drilling, Western irrigation water, and mining, I had a pretty good idea of the reception awaiting Babbitt when he stopped by the committee offices before the hearing at which he was to be pilloried.

“I’ll tell you, John,” Babbitt confessed, describing the beating he was taking on the other wide of the Capitol. “Those senators are as bad as the Arizona State Senate!” I laughed and replied, “Mr. Secretary, believe me, they are a whole lot worse than the Arizona State Senate!”

Nothing aggravates Western free marketers more than the notion that they should pay the public a fair return for their use of taxpayer resources. Mining conglomerates, agribusinesses, oil and gas drillers and proud ranchers like Cliven Bundy conveniently forget who owns the raw materials they use to build their private fortunes, and have a tendency to convert federal leases, permits and contracts into permanent property rights for which they need pay little or nothing to the owners: the American public. Listening to them complain about the interference of the federal government in their private companies conjures up memories of the misguided picketer outside the Capitol during the health care debate in 2010 waving a sign that demanded, “Keep the government out of my Medicare.”

When Clinton proposed raising the antiquated fees in 1993 for ranchers grazing their livestock on nearly 300 million acres of federal lands, the response was seething. A renewed “War on the West.” Echoes of President Jimmy Carter’s crackdown on boondoggle water projects that also crippled a young Democratic presidency. The proposal, which of course was shot down by the ranchers’ defenders in Congress, would have made modest adjustments in the grazing fee but left the federal rate many times lower than the price for cattle grazing on private lands. The reform would have raised about $25 million a year according to the Congressional Budget Office (others say that figure is far too low), a tiny fraction of a rounding error in the federal budget, but it was $25 million too much for the 3 percent of ranchers who were lucky enough to have federal permits.

Oil and gas companies that pump from public lands similarly make off like bandits (and very profitable ones, too) by shortchanging the taxpayer. Like the ranchers and farm program beneficiaries elsewhere, they have no greater protectors than the self-professed conservative politicians who lecture us about “running government like a business.” Overseas, these same companies pay foreign governments royalties of 70-80% for the privilege of pumping public resources. Not here. Companies typically pay anywhere from 12.5% to 16.6% in royalties after having plunked down “bonus bids” – the cost of anteing up in the offshore lotteries – that may be a complete waste of money (if the land is dry) or a ridiculously low bid (if it is productive). Back in the 1970s, an ad hoc select committee of the Congress authorized the Interior Department to utilize a number of alternative royalty arrangements to yield a better return to the taxpayer; needless to say, the pro-industry Interior Department ignored those options.

Catering to the oil industry was not unique to the Reagan-Bush Administrations. In the 1990s, to entice these same companies to explore for oil and gas in the Gulf of Mexico, the Clinton Administration and the Republican Congress gave away leases royalty-free. The purported intent was to induce companies to drill in more perilous “deep” waters that were actually far less deep or dangerous than the wells they already were producing in the North Sea. Dubious of the need for such an incentive, I asked oil company executives whether the promise of royalty-free oil would entice them to bid on deep water tracts they otherwise might avoid. Every executive told me the same thing: “I would no more make a decision to invest a billion dollars in a deep water rig based on the reversible promises of the Congress than I would consult a Ouija board. If you want to give me royalty-free leases, go ahead and do it, but it won’t affect my decision to bid or not to bid.” Taxpayers have lost tens of billions of dollars for that needless giveaway, and recent efforts to recoup the losses, before handing out new leases to the same companies, have been blocked in Congress by conservatives.

Even so, the offshore fiasco looks good compared to the onshore giveaway of resources. For years, until Congress changed the law in the 1980s, the Department of the Interior gave away onshore leases for oil and gas for less than $10, regardless of the value of the land. Sure, much of it was worthless; but a lot of it wasn’t, and the companies got the profits while the taxpayers got the shaft. An uncle of mine in Texas told me about the lottery for onshore leases which he heard about on a matchbox cover – he was furious that he hadn’t won one — and I dismissed him as uninformed about leasing procedures … until a friend in the Interior Department glumly confirmed his story.

Mining corporations enjoy the public’s resources as well without adequate compensation, and have fought off reform for a century and a half. Under the Mining Act of 1872, stakeholders can mine for valuable mineral resources on public lands and pay taxpayers: nothing! A succession of reformers has tried in vain to modernize this law and secure royalties – to make government run “more like a business” – but principled conservatives in Congress, and the resource companies they shill for, have obstructed mining reform efforts for decades.

And then there is irrigation water. Giant farmers in California’s Central Valley have become enormously wealthy and politically powerful thanks to multi-billion dollar federal water projects that are massively subsidized by taxpayers. Beneficiaries repay a share of the project’s cost without interest over 40 years, or more, and receive water under contracts whose prices are locked in for decades. (Urban water beneficiaries pay interest on their project repayments, and pay much higher prices for the water they receive, but 80% or more of the project water goes to the subsidized irrigators.)

The massive farm subsidies were originally justified a century ago because the projects were built under the Reclamation laws that promised to deliver the benefits to small, family farmers. Instead, agribusinesses with good lawyers and lapdogs in the Interior Department cornered most of the water and use their profits to fight reform laws in the courts for years. They almost always lose, but in the meantime, they are pocketing billions. The mega-farmers are still reaping the subsidies – hundreds of millions of dollars a year – often on farms that run to the thousands and even tens of thousands of acres. Much of the subsidized water is used to grow crops that we pay others not to grow, or that are ill suited to desert agriculture, or that receive crop subsidies in addition to the water subsidies.

Cliven Bundy is a mean-spirited racist backed up by whack-job militia extremists who think it’s their constitutional right to point automatic weapons at federal officials defending the public’s resources. But he is also emblematic of the hypocrisy and greed of the conservative movement which talks tough about cutting government waste and protecting property, but whose loony theories and profligate policies run up record deficits while abandoning responsibility to manage the public’s resources: water, oil, gas, mineral rights, timber – as well as grazing lands. “Run government like a business? “ Please.