"Shocking level of corruption": Watchdogs question if firm was rewarded for supporting Trump's wall

A company that offered its "services" for the border wall got "quick approval" to mine outside of normal protocol

By Igor Derysh

Senior News Editor

Published June 28, 2020 5:00AM (EDT)

The United States-Mexico border wall is seen in Organ Pipe National Park south of Ajo, Arizona (SANDY HUFFAKER/AFP via Getty Images)
The United States-Mexico border wall is seen in Organ Pipe National Park south of Ajo, Arizona (SANDY HUFFAKER/AFP via Getty Images)

Multiple government watchdog groups have called for an investigation after a Mexican company received rapid approval on a multi-million-dollar mining contract in Colorado shortly after it expressed support for President Donald Trump's border wall.

Days after Trump's election in 2016, Enrique Escalante, the chief executive of Grupo Cementos de Chihuahua (GCC), told Reuters that the company was "ready to lend its services" to build the border wall that the president promised during his campaign.

"For the business we're in, Trump is a candidate that does favor the industry quite a bit," he told the outlet.

The announcement drew headlines around the world as outlets seized on the idea of a Mexican firm helping to build the wall.

The company has seen business boom since Trump's inauguration with some help from the administration.

About a year after the announcement, the company's subsidiary, GCC Energy, received "quick approval" to expand operations in the King II coal mine near Hesperus, Colo., The Durango Herald reported. The company has operated the mine since 2007 and had asked the Bureau of Land Management for a 950-acre expansion.

But the request did not go through the normal process. The expansion was granted by the Interior Department in Washington rather than the Bureau of Land Management (BLM) state office in Denver.

Normally, a mining company which operates on BLM land in Colorado has to go through the Denver office and can then appeal to the Interior Board of Land Appeals, which is part of the Interior Department. But the GCC expansion was instead approved by Katharine MacGregor, then the department's deputy assistant secretary for land and minerals management, which meant the decision could not be appealed.

Watchdog groups cried foul over the move.

"Even by the Trump administration's standards, trading a coal mine for the border wall is a shocking level of corruption," Kyle Herrig, the president of the progressive watchdog group Accountable.US, told Salon. "Our public lands belong to all Americans — not to foreign corporations that pander to the president by pledging allegiance to his divisive and dangerous political agenda."

GCC Energy did not immediately respond to a request for comment. The company told The Herald that it would have been forced to shut down if it did not receive approval to expand. Steven Hall, a spokesman for the BLM office in Denver, told the outlet that the decision "reflects the Trump administration's orders to expedite energy development" and "streamline decision-making processes."

The mine had long drawn complaints from residents, who cited "impacts on health, noise, traffic and water safety," according to The Herald. The complaints prompted numerous public comments calling for the BLM to conduct an environmental impact analysis before approving the expansion. BLM later said the analysis was unnecessary, The Herald reported.

A BLM spokesman told Salon that the agency did complete an environmental assessment and found no significant impact.

"The premise of this story is completely ridiculous. The Bureau of Land Management's review of the King II Mine in Colorado followed the BLM's longstanding and lawful protocols, including multiple opportunities for public involvement," the agency said in a statement to Salon. "Further, this is only the first step before mining on this tract can occur – the operator still must obtain additional permits under [Surface Mining Control and Reclamation Act], and the [Assistant Secretary for Lands and Minerals] still must approve a mining plan."

Activists cast doubt upon the agency's argument.

"This is yet another example of the Trump administration tripping over itself to grant favors to the mining industry. It's also symptomatic of President Trump's refusal to nominate a director of the Bureau of Land Management, pushing decisions all the way to Washington rather than letting them be made on the ground in the states that are most affected by them," Aaron Weiss, deputy director of the Center for Western Priorities, a nonpartisan conservation and advocacy group, told Salon.

"Whether or not the offer to help build the border wall had any impact on the rushed mine expansion is almost beside the point," he added. "This administration will always put profits over people, risking public health and our public lands to extract every bit of coal, oil and gas available."

The Trump administration's push to expedite energy projects and bypass environmental reviews is well-reported. But critics said the decision to bypass the normal process to approve the mine expansion was "an attempt to silence opponents and deny people an opportunity to have their voices heard," The Herald reported at the time.

Last year, Casey Hammond, the current acting assistant secretary for land and minerals management, announced that the company was approved to expand the mine by another 2,462 acres, which is expected to extend the life of the mine for at least another two decades.

Along with support from within the administration, the company also paid tens of thousands to lobby officials to the law firm WilmerHale, which has extensive ties to the Trump administration and the president's family.

WilmerHale "represents at least two of President Donald Trump's family members who also are White House officials — his daughter Ivanka Trump and son-in-law, Jared Kushner — as well as former campaign chairman Paul Manafort," Politico reported in 2017.

Last year, Trump quietly appointed Gail Ennis, who previously earned $2 million per year at WilmerHale and donated thousands to Trump's campaign, to oversee the Interior Department's Office of the Inspector General. Staffers at the office reported that they were silenced during Ennis' brief tenure at the agency. Ennis currently serves as the inspector general at the Social Security Administration.

The Trump administration also appointed former WilmerHale attorney Jeffrey Kessler as the assistant secretary for enforcement and compliance at the Commerce Department.

GCC is represented by WilmerHale's Raya Treiser. Independent reporting shows extensive contact and meetings between WilmerHale and Treiser and top officials at the Interior Department.

Donald K. Sherman, the deputy director of the Washington-based watchdog group Citizens for Ethics and Responsibility in Washington, told Salon that the Interior Department's inspector general should "investigate the GCC deal immediately."

"What we see is that patronage and cronyism are core values of the Trump administration, especially when they involve the president's vanity project at the Southern border," he said. "This situation reeks of favoritism, and I think the administration's record of self-dealing doesn't afford them the benefit of the doubt. This needs to be looked into."

The questions over GCC's business boom after supporting Trump's border wall come after a small scandal-plagued North Dakota company landed a $1.28 billion border wall contract — the largest yet — after its chief executive repeatedly appeared on Fox News in an effort to win over the president.

Trump's decision reportedly "alarmed" and "concerned" career officials. Democrats slammed the move after the administration failed to disclose the contract before it was reported by a local news outlet.

The Interior Department, run by former lobbyist David Bernhardt, has also been accused of favoritism, ethics violations and blocking scientific reports.

An ethics complaint filed by the Campaign Legal Center, a government watchdog group, described a "disturbing pattern of misconduct" by numerous top officials at the department, which it said was filled with former lobbyists that are cozy with their previous employers.

"The inspector general should investigate the officials involved in the abnormal approval of the mining company's expansion and hold them accountable if their actions fit the pattern of disregard for ethical norms demonstrated across the Department of Interior since 2017," Kedric Payne, the group's general counsel and director of ethics, told Salon.

By Igor Derysh

Igor Derysh is Salon's senior news editor. His work has also appeared in the Los Angeles Times, Chicago Tribune, Boston Herald and Baltimore Sun.

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Aggregate Border Wall Corruption David Bernhardt Donald Trump Immigration Politics Reporting Republicans