CONFLICTS OF INTEREST
AND INDUSTRY INFLUENCE

As Interior Secretary, Bernhardt oversees all Interior employees. This raises serious ethical questions as any former client of Bernhardt’s doing business with the Interior Department, even if it’s not with Bernhardt directly, will be reporting to the companies’ former lobbyist.

 

Before he became Deputy Secretary of the Interior, David Bernhardt led the natural resources group at lobbying firm Brownstein Hyatt Farber Schreck, where he worked on behalf of energy companies.

 

For his first year in office after he became Deputy Secretary of the Interior, Bernhardt promised to recuse himself from decisions affecting his other former clients. However, the recusal ended August 2, 2018. The short term of Bernhardt’s recusal is perplexing considering the Trump administration makes political appointees vow a two-year ethics pledge.

 

But even during Bernhardt’s first year in office, many former clients benefited from Interior decisions, raising questions about Bernhardt’s compliance with his ethics recusal. For example:

David Bernhardt was charged with overseeing the greater sage-grouse management plans overhaul shortly after his controversial confirmation, and has held several meetings to revisit sage grouse protections. If the sage-grouse plans get diluted as requested by extractive corporations, critical habitat would no longer be a consideration in leasing decisions, ultimately opening up vast swaths of public lands to those same corporations for industrial development. The Bureau of Land Management issued six Instructional Memorandums to state offices that among other things de-prioritize critical sage grouse habitat.

 

As a lobbyist, David Bernhardt represented special interest groups seeking to weaken protections for sage grouse. One former client, Safari Club International, publicly applauded the Trump administration for revisiting the sage grouse plans, and another, Independent Petroleum Association of America (IPAA), has weighed in on efforts to roll back protections. A recent New York Times article, based in part on Western Values Project research, exposed the extent to which Interior staff working on the sage grouse review granted IPAA’s requests.

 

Moreover, the second largest and seventh largest leaseholders of sage-grouse habitat in Colorado, SandRidge Exploration and Production LLC, and Bill Barrett Corporation, respectively, both used Bernhardt’s old lobbying firm, Brownstein Hyatt Farber Schreck, to lobby the federal government while Bernhardt worked there. Denbury Onshore LLC, the fourth largest leaseholder of sage grouse habitat in Montana, also used Bernhardt’s lobbying firm while he lobbied there.

 

After Interior rolled back protections across the West, the Independent Petroleum Association of America even joined in a thank you letter addressed to Bernhardt for his efforts that benefited the oil and gas industry.

In August 2017, David Bernhardt included Eni Petroleum, North America, on his ethics recusal, writing that, absent a waiver, he would be “recused from particular matters” in which Eni was involved.

 

Just three months later, in November 2017, the Bureau of Safety and Environmental Enforcement, an Interior agency, approved Eni’s application to drill in the Arctic, making Eni the first company to get approval for drilling in federal Arctic waters since 2015.

 

In December 2017, Interior spokesperson Heather Swift boasted to an Anchorage Daily News reporter that Bureau of Safety and Environmental Enforcement (BSEE) employees were working through Christmas to approve an application by Eni Petroleum to drill in the Arctic. Swift said that the well “could raise millions,” adding, “Wouldn’t that be a nice Christmas present!?!?”

While working as a lobbyist at Brownstein Hyatt Farber Schreck, Bernhardt was co-chair of Brownstein’s natural resources department alongside Scott Slater, the CEO of Cadiz Inc., a Southern California company that is attempting to pump billions of gallons of groundwater a year and pipe it across the Mojave Desert to sell to cities in Southern California. In order for the controversial project to succeed, Cadiz Inc. requires permits from Interior.

 

In October 2017, the Bureau of the Land Management reversed an Obama-era guidance that had been a major obstacle for the Cadiz project. The change of administrative opinion could make millions for Cadiz Inc. Additionally, Brownstein Hyatt Farber Schreck has already earned 200,000 shares of Cadiz stock for its involvement with the company and stands to earn another 200,000 if the project is completed.

In August 2018, Zinke put Bernhardt in charge of overseeing a new Bureau of Reclamation project to explore “methods of moving more water south.” Bernhardt’s former lobbying client, Westlands Water District, has welcomed the proposed project.

Another former Bernhardt client, the Garrison Diversion Conservancy District (GDCD) is “spearheading” a project to “diver[t] Missouri River water to supplement water supplies in the Red River Valley,” a project that environmentalists have long bemoaned.

 

In October 2017, two months after Bernhardt became Deputy Secretary, GDCD had a meeting with Secretary Zinke, in which Zinke promised to take “‘a fresh look at this project,'” and he “told officials attending the meeting to expect a response from the Department of the Interior in the near future.” One GDCD board member described the meeting with Secretary Zinke as “‘a very good meeting;'” after this meeting, the GDCD expects that the diversion project will receive approval from the federal government. North Dakota Congressional Representative Kevin Cramer has also met with Secretary Zinke to discuss the project.

 

The District was so impressed by Bernhardt’s former lobbying firm’s newfound access to top Interior officials that they nearly tripled the retainer paid to Brownstein Hyatt Farber Schreck to $10,000 per month.

 

Most recently, in September 2018, Interior released a Finding of No Significant Impact for the Central North Dakota Water Supply Project, allowing the controversial water project to move forward.

Bernhardt is also leading the Interior Department’s effort to reform the Endangered Species Act (ESA). This is problematic because as a lobbyist, Bernhardt represented Westlands Water District, a California water user that has sought to weaken to weaken the ESA.

Bernhardt has promised the oil and gas industry swift action on drilling opportunities in the Alaskan National Wildlife Refuge, promising he would “move very, very quickly on that project” to expedite the permitting process. Bernhardt previously represented the state of Alaska in their suit to open the refuge to drilling.

In September 2017, the Interior Department refused make a decision on the Mohegan and Mashantucket Pequot tribes’ plans to open a new casino in Connecticut. While “federal law gives Interior just 45 days to issue a yes-or-no verdict after a tribe submits proposed changes to its gaming compact with a state… the department declined to make any decision in this case” after intense lobbying from MGM, Senator Dean Heller (R-NV), and Representative Mark Amodei (R-NV).

 

Interior’s non-decision that has benefitted MGM Resorts International, a competing casino company, as the tribes proposed casino would be just across the border “from a billion-dollar casino that MGM is planning in Springfield, Mass.”

 

Meanwhile, Bernhardt’s old lobbying firm has been lobbying on behalf of MGM Public Policy LLC “on issues including gaming.” MGM Public Policy LLC is “an affiliated company” of MGM Resorts International.

 

The state of Connecticut and the Mashantucket Pequot tribe filed a lawsuit against Zinke seeking to force Interior to issue a decision on the tribe’s casino plan. After the lawsuit was dismissed by the U.S. District Court for the District of Columbia in September on technical grounds, the state and the Mashantucket Pequot tribe is asking the court to revive its lawsuit, alleging that Zinke acted as a result of undue political pressure in blocking the casino. The new filing says that Interior’s decision not to act on the casino application “was the product of improper political influence and was therefore ‘arbitrary and capricious’” and in violation of the Administrative Procedure Act. The decision is also under investigation by the Interior’s Office of Inspector General.

Recently, Bernhardt had to cancel a speech at the last minute due to ethics concerns. He was scheduled to deliver the keynote speech at the Colorado River Water Conservation District’s annual water seminar program on September 14, 2018. Interior officials did not elaborate on the reasons behind the cancellation beyond “recommend[ing] that he not participate.”

Bernhardt’s last-minute cancellation could be related to his previous work on behalf of other water districts, including Central Arizona Water Conservation District and Westlands Water District. However, the fact he couldn’t keep the entities he was and wasn’t allowed to speak to straight raises questions as to how much he can be trusted to follow his ethics recusal.