Senators' letter to Governor Schweitzer on North Fork protection

June 30, 2010

Dear Governor Schweitzer:

We are pleased to have the opportunity to continue our work with you following the Memorandum of Understanding between the State of Montana and British Columbia. The MOU is a critical starting point for our long-standing efforts to establish permanent protections of the North Fork of the Flathead River, and we appreciate your work on it. 

As we discussed, because more than 90 percent of the U.S. side of the Flathead is owned by the U.S. government, we took swift action to prevent future mining and oil and gas development in the North Fork by introducing our bill, the North Fork Watershed Protection Act of 2010.  The Energy and Natural Resources Committee held a hearing on April 28, 2010, and we expect passage in the coming weeks.  Simultaneously, we have been working with existing leaseholders in the region, and we are pleased to report that on April 28 ConocoPhillips, the largest single leaseholder in the North Fork, decided to voluntarily relinquish its interest in 169,000 acres without compensation—close to 71% of the leased area.  On June 2, we announced that Chevron also decided to voluntarily relinquish its holdings of close to 11,000 acres in the area, also without compensation.  With these two actions, we have succeeded in eliminating almost ¾ of the leased acreage in the area at no cost to the American taxpayer.

Because funding is not explicitly mentioned in the MOU between Montana and British Columbia, we need to clarify for what purposes the funds would be used.  On June 7, we received your letter explaining that such funds would be used to “reimburse mining companies for past investments.”  The exact scope of which entities are involved remains unclear.  The press has reported Cline Mining Corporation and Max Resources as potential recipients and the June 7 letter refers to lost revenue by British Columbia.  In either case, U.S. taxpayers are being asked to send money to private, foreign corporations.  And in these tight economic times, we must justify every expense.

The Federal government was not involved in the negotiation of the MOU, nor is the Federal government a party to the agreement.  Therefore such spending would be highly unusual without a complementary bilateral agreement between the United States and Canada, as well as the establishment of permanent, legally binding protections in the North Fork.  This bilateral agreement will build on the foundation of the Memorandum of Understanding.

Legislating and appropriating U.S. tax dollars requires a carefully vetted, transparent process.  With that in mind, we have the following questions to help us achieve our shared goal of permanently protecting the North Fork:

1. Did the State of Montana explicitly commit to providing $17 million or another amount of money to British Columbia as part of the MOU?   Must it be money from the U.S. government?  Or can it be money from the State of Montana?  The Canadian federal government?  Or the Province of British Columbia?
2. How was the figure of $17 million determined to satisfy the terms of the MOU?  Are there any invoices or other documentation to justify these expenses?
3. Under the Honest Leadership and Open Government Act of 2007, Public Law 110-81, and Senate Rule XLIV, any request for a Congressionally directed spending item by a member of Congress shall be accompanied by a certification of the name and location of intended end recipient for federal funding as well as the purpose of such funding and whether the requestor has a pecuniary interest in the companies that may receive funding under this proposal.  As you are aware, the deadline for submission of appropriations requests to our offices for the fiscal year 2011 appropriations cycle was March 1, 2010.  Our funding requests were submitted to the relevant Appropriations Subcommittees and disclosed on our websites by April 1, 2010.  Will the State of Montana submit to our offices a request detailing the end recipient of these funds, the exact purpose of such funds, the justification for the total dollar amount requested, and the response to the pecuniary interest question above?
4. With regard to the proposal to reimburse foreign mining companies for past investments using U.S. taxpayer dollars, do the mining companies in question have a legal claim to reimbursement under British Columbian or Canadian law?  Can you please provide independent validation from a qualified Canadian legal authority that such a valid claim may exist?  
5. Are contracts or agreements in place to guide the disposition of such funds and what are the terms identified in those documents?  Is the State of Montana a party to those contracts?  If not, what accountability measures will be in place to ensure that any funds provided would be used for their intended purpose?    
6. What additional provisions are in place to ensure the permanence of protecting the North Fork from oil, gas and mining development? 
7. What enforcement measures will Montana or British Columbia invoke under the terms of the MOU if either party fails to comply with its terms, either before or after a transfer of such funds?
8. Why is the July 2010 date important and how was it selected?  As you know, Congress provides funding on an annual appropriations cycle for one fiscal year at a time.  Funding for fiscal year 2010 in which we are currently operating was approved in calendar year 2009.  Funding for fiscal year 2011, which begins on October 1, 2010, is likely to be approved over the next 6 months.  The appropriations bills relevant to the topic at hand have not passed before July 1 of any given year for at least the last 35 years. 

We look forward to your reply, and we look forward to working with the State of Montana, British Columbia, and the U.S. and Canadian Federal governments to achieve our shared goal of permanent, lasting protection for the North Fork.  In fact, on June 28, at our request, the White House announced that President Obama and Canadian Prime Minister Harper met to discuss ways to cooperate to establish sustained protection for the Flathead.  We’ve asked Secretary Salazar and Secretary Clinton to begin four-party talks as quickly as possible with the United States, Canada, British Columbia, and Montana.

Because we share the same goal, we look forward to your cooperation and participation in any future four-party talks.

Sincerely,

Max Baucus
Jon Tester