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Mining Company Lobbied Hard in U.P., Lansing

Opponents say it influences permitting process, lawmakers say ‘Not so’

September 19, 2007 | By Glenn Puit
Great Lakes Bulletin News Service

  The Salmon Trout River winds through miles of untouched Upper Peninsula forests.

As a large, Utah-based mining company’s push for permission to dig a sulfide mine directly beneath an unspoiled Upper Peninsula trout stream heads for hearings in Lansing today, many opponents of the project wonder whether the state agency considering the company’s application is actually listening to their concerns.

The firm, Kennecott Minerals Company, claims that its proposal to extract nickel and copper embedded in sulfur 1,000 feet directly beneath the Upper Peninsula’s Salmon Trout River will provide badly needed jobs for the region without harming the environment. But many green organizations that either helped write (sees sidebar) or subsequently praised the state’s new regulatory regime say that if officials are even considering the idea of mining sulfide beneath a river—where any accidental mixing water, oxygen, and sulfur would produce what the company calls "dilute" sulfuric acid—something is awry.

An investigation by the Great Lakes Bulletin News Service indicates that Kennecott has staged a well-crafted, pervasive, and entirely legal campaign to sell its project to the communities near the mine, and lobbied members of Michigan Governor Jennifer M. Granholm’s administration and lawmakers whose districts are in the Upper Peninsula.

But the investigation also revealed another activity that, while legal, is shrouded in secrecy. Kennecott donated cash to non-profit organizations controlled by the state Democratic and Republican parties, but refuses to reveal the amount.

Unlike traditional campaign contributions, donations to these organizations—known as 501 (c) 3’s, 501 (c) 4’s, or 527’s—are unregulated in Michigan; individuals and companies can give to them, even when operated by political parties or elected officials, without disclosing them.

Richard Robinson, director of Michigan’s Campaign Finance Network, said secrecy around donations to political non-profits—a practice recently investigated by the Detroit Free Press—is common in Michigan, and he takes a dim view of it.

"If they wanted to be transparent, they wouldn’t skulk around to a non- profit," Mr. Robinson asserted. He described the type of donation that Kennecott and other companies and individuals now make to political non-profits as "truly an insidious development."

The information vacuum around the practice makes it difficult to discern how much influence, if any, such donations have on public policy. However, something else is easy to discern: Even in the face of widespread opposition to the project in communities near the proposed mine, only one U.P. lawmaker joined former Governor William Milliken—who called the project "a terrible idea for the Great Lakes"—in opposing it: U.S. Representative Bart Stupak.

All but one other official the Great Lakes Bulletin News Service interviewed for this article refused to take sides, saying that it’s up to the Michigan Department of Environmental Quality to administer the new regulations and decide the issue. That official, Representative Tom Casperson, of Escanaba, unreservedly supports the project.

Engaging a Community
It is now clear that Kennecott knew that there might be stiff resistance to the mine, which the firm calls the Eagle Project. So the company, owned by Rio Tinto, a large, London-based mining company, set out to win the support of local residents and local and state leaders and lawmakers.

Kennecott established its Eagle Project Community Relations plan, which targeted local residents who would have a stake in the mine’s success, including civic and political leaders. The company’s goal, according to its own documents, is "to make meaningful, long-term contributions to the surrounding communities, which would in turn provide the company benefits in business and social standing.”

Kennecott identified and engaged local political groups with legislative clout, regulatory government agencies, environmental groups, and business, labor, and charitable organizations. It placed large ads in Marquette’s daily newspaper and ran a heavy schedule of well-produced TV commercials, some featuring two professors from nearby Michigan Technological University, which Kennecott has financially supported in the past. The company has also donated to local charitable groups and to Veterans Memorial Park, in Champion, which is near the proposed mine site.

"We partner with different entities," according to Jonathan Cherry, a Kennecott spokesperson. "We do not want to be perceived as just writing checks."

But Dick Huey, co-founder of Save the Wild U.P., a citizen group leading opposition to the mine, said he believes Kennecott’s public relations is aimed at convincing local residents that there is not much that can be done to stop the proposal.

"It’s a constant drumbeat of spin," Mr. Huey said, "trying to say that sulfide mining is really no different than iron mining, and of course it is."

"I think it has had an impact," he added. "The mining company is trying to give the impression that this is a done deal: ‘They’ve got too much money—you can’t fight them.’"

Just how well that part of Kennecott’s campaign is working is uncertain. Mr. Huey said that opposition to the sulfide mine is intense throughout the Upper Peninsula. He noted that, at last week’s public hearing on the mine in Marquette, citizens spoke against the project in "overwhelming" numbers. He added that 96 percent of residents of Big Bay, where the mine would be dug, signed a petition opposing it. This week, he added, 117 physicians from the Marquette area signed a document opposing the mine.

‘Every Right to Move Forward’
Kennecott now appears on the verge of getting a permit from the DEQ under the auspices of Michigan’s new sulfide mining law. DEQ officials say they pushed for establishing that law (the state had no sulfide mining regulations) soon after Kennecott discovered the large nickel and copper deposits in the west-central Upper Peninsula. In 2004 the agency convened, with the governor’s blessing, a task force including mining representatives, environmental groups, trade unions, academics, and state legislators (see sidebar on right).

When their handiwork was done, task force members said the law could help grow Michigan’s economy and protect its ecology. But even with the environmental groups who helped write the new rules up in arms over the Eagle Project, and opposition booming among local residents, local elected leaders are reluctant to favor or oppose it.

For example, state Senator Mike Lahti (D-Hancock) said he generally views the mine as a positive development if Kennecott can follow the state’s new law, while state Senator Mike Prusi, (D-Ishpeming) said that the new law was a positive development for the state and noted that environmental groups fully supported the task force’s endeavor.

Governor Granholm’s spokesperson, Liz Boyd, said that her boss "has directed the DEQ to insure that Kennecott’s application meets or exceeds all requirements" of the new law.

Similar refrains can be found throughout the Democratic Party. Freshman state Representative Steve Lindberg, (D-Marquette), who is clearly pained by the proposal and acknowledges feeling pressure at home to oppose it, said that he has to "depend on the process, which seems like it works."

Joe Agostinelli, a spokesman for state Senator Jason Allen (R-Traverse City), who represents part of the U.P., said his boss is deferring to the DEQ, adding that if Kennecott follows the rules "they have every right to move forward."

Lobbying in Lansing
Whether such caution is out of respect to the approval process embedded in the new sulfide mining law or is due to something else is unclear. Legislators quite often critique state agencies; for example, some state Republican lawmakers have frequently and sometimes bitterly attacked some state agencies’ decisions since Democratic Governor Granholm took office and appointed new department directors.

What is certain is that Kennecott has complimented its U.P. campaign with extensive lobbying in Lansing. This is not unusual; environmental groups also engage in extensive lobbying there.

Kennecott is active in Michigan’s federal and state politics. For example, at the federal level, the company donated approximately $10,000 to Michigan U.S. Representative John Dingell over the past six years. Mr. Cherry said any campaign donations to Dingell were not related to the mine.

Virtually all of the Upper Peninsula’s legislators, with the exception of Congressman Stupak and state Senator Lahti, have accepted free food and beverage from Kennecott’s high-profile lobbyist, Governmental Consultant Services Inc., also known as GCSI. According to Secretary of State records, Kennecott spent $53,997 on statewide lobbying expenses on behalf of Kennecott in recent years. The lobbying firm did not return a phone call seeking comment for this story.

State records filed by GCSI show it had steady access to Michigan’s political leaders and executive office staff over the last four years. And, the News Service confirmed, when GCSI officials lobbied U.P. legislators, Kennecott’s sulfide mine was a topic of conversation.

According to state records, Representative Casperson, and Senators Allen and Prusi accepted free food and beverage from GCSI while being lobbied. The value of those items ranged from $731 to $1,170 per legislator from 2003 to 2006. The legislators deny the lobbying had any influence on their public positions on the mine.

State Representative Lindberg, who apparently has not been in office long enough for lobbying recordings about him to show up in state records, portrayed Lansing as overrun with lobbyists, and said he has reservations about accepting freebies. But he is also adamant that a free dinner is not going to influence his position on an issue.

"I’ve talked to GCSI about the mine," the representative said. "I’ve talked to the Sierra Club about the mine as well. Have I gone out to dinner with lobbyists? Unfortunately, it is a way of life down here."

Many members of the Governor Granholm’s staff have also met with GCSI on the issue. GCSI has spent about $1,064 on food and beverages on that top circle of state government since 2003.

Save the Wild U.P.’s Mr. Huey said he’s convinced lobbying and behind the scenes politicking caused Michigan’s political leaders to abandon their responsibility to protect the pristine area in Marquette County where the mine would be located from industrial encroachment.

"I do have the feeling it has influenced public policy," he said. "I think the governor has also somehow been influenced to go off in a different direction than what were her prior campaign positions."

Insuring the Process
Spokesperson Cherry said his company has been evenhanded and bipartisan in donating to political non-profits, in what he said was "the interest of insuring good legislative process, so the process is understood and explained to everyone fairly."

But Kennecott refuses to say how much it gave to either party through that unregulated route. Meanwhile, a spokesman for the Michigan Democratic Party confirmed that Kennecott gave the party $1,000 for administration expenses, but was unable to answer whether or not the money arrived via the party’s non-profit fund.

A spokesman for the Michigan Republican Party did not return two phone calls for this story.

A spokesman for Ms. Granholm said the governor has not accepted any money from Kennecott, while Senator Lindberg said he didn’t even know Kennecott had given to his party until he was asked about it for this article.

Mr. Cherry said Kennecott lobbies because it wants its voice heard in the political process.

"We’re very conscientious of making sure that it is done on an equal basis," Mr. Cherry said. "We are not interested in influencing one side or the other."

(Veteran investigative journalist Glenn Puit is the Michigan Land Use Institute’s Emmet County policy specialist. Reach him at glenn@mlui.org

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