Senators question MOU

Three Montana leaders agree the North Fork of the Flathead River deserves protection. But how that will come about remains to be seen and the more they talk, the messier it seems to get.

Last week Montana Sens. Max Baucus and Jon Tester had a conference call with reporters to talk about issues they had with a memorandum of understanding brokered by Montana Gov. Brian Schweitzer and British Columbia Premier Gordon Campbell that ends mining and other energy exploration in the drainage just outside Glacier National Park.

But there are a few sticking points — namely who will pay for what, where the money will come from and why it's being paid at all.

Tucked in the murky language of the MOU is apparently an agreement that the province and the mining companies will be reimbursed for investments they have in claims in the region. The Cline Mining Co. and Max Resources both had claims in the Flathead prior to the agreement. But the MOU doesn't clearly spell out who will pay for what.

Schweitzer maintains the funds should come from the U.S. federal government.

That could cost as much as $17 million.

Hold the phone, the Senators said in a letter to Schweitzer on June 30.

"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," the senators wrote to Schweitzer on July 30. "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 … 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? 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?"

The bottom line, Tester said was that, "Montanans don't want deals behind closed doors."

Schweitzer then responded in a July 1 letter that the $17 million figure was the "upper limit" to satisfy Canadian claims and that the figure "could actually be substantially lower."

He also noted that paying off a foreign nation or company to stop mining activity was not without precedent. In 1997, Schweitzer notes, the U.S. government agreed to pay $65 million to Crown Butte Mines, a subsidiary of Noranda, a Canadian mining company. He also noted the U.S. has invested $33 million in wastewater treatment plants in Mexico to stop pollution into the Rio Grande.

But the senators are clearly pushing for greater and longer-lasting protection for the North Fork than just the MOU.

"In the end we want permanent protection for the area," Baucus said. "…If we lay out money, we have to make sure the deal is solid. By definition, there's a very strong federal component to this."

And while the senators didn't say specifically they want to see a treaty, it appears that the talks are heading in that direction.

Schweitzer concedes as much in his letter.

"On a final note, members of your staffs have asserted the need for a treaty," Schweitzer writes in conclusion. "There appears to be no apparent role for the Canadian federal government given the primacy the province of British Columbia retains over all resources in question. Additionally, in our discussions with State Department officials we were told they saw no necessity for a treaty, but offered to help in any way they could as we move forward. That being said, I welcome the opportunity to continue these discussions with each of you and the Departments of Interior and State. While the complexities of a treaty may take a substantial amount of time to negotiate, and a treaty can face myriad hurdles in Congress, I will support you in any effort to consummate a treaty should it prove helpful."

Congressman Denny Rehberg views the deal with a jaded eye.

"Yet another taxpayer bailout for a private company should have no problem getting the necessary support from Democrats in Congress who seem eager to lock down the title of 'The Bailout Congress'," said Rehberg spokesman Jed Link. "Before Denny could even consider adding $17 million more to the deficit, Gov. Schweitzer needs to do a lot more homework and spell out to Congress and taxpayers all of the potential costs and benefits in detail. He simply hasn't done that yet."

Meanwhile, the senators say they will push ahead with four-party talks between the state, the province and the federal governments of both countries.

"We're going to take positive steps and get this done," Tester said.