[House Hearing, 106 Congress] [From the U.S. Government Publishing Office] FUNDING OF ENVIRONMENTAL INITIATIVES AND THEIR IMPACT ON LOCAL COMMUNITIES ======================================================================= OVERSIGHT HEARING before the SUBCOMMITTEE ON FORESTS AND FOREST HEALTH of the COMMITTEE ON RESOURCES HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTH CONGRESS SECOND SESSION __________ FEBRUARY 15, 2000, WASHINGTON, DC. __________ Serial No. 106-87 __________ Printed for the use of the Committee on Resources Available via the World Wide Web: http://www.access.gpo.gov/congress/ house or Committee address: http://www.house.gov/resources ______ U.S. GOVERNMENT PRINTING OFFICE 67-408WASHINGTON : 2000 COMMITTEE ON RESOURCES DON YOUNG, Alaska, Chairman W.J. (BILLY) TAUZIN, Louisiana GEORGE MILLER, California JAMES V. HANSEN, Utah NICK J. RAHALL II, West Virginia JIM SAXTON, New Jersey BRUCE F. VENTO, Minnesota ELTON GALLEGLY, California DALE E. KILDEE, Michigan JOHN J. DUNCAN, Jr., Tennessee PETER A. DeFAZIO, Oregon JOEL HEFLEY, Colorado ENI F.H. FALEOMAVAEGA, American JOHN T. DOOLITTLE, California Samoa WAYNE T. GILCHREST, Maryland NEIL ABERCROMBIE, Hawaii KEN CALVERT, California SOLOMON P. ORTIZ, Texas RICHARD W. POMBO, California OWEN B. PICKETT, Virginia BARBARA CUBIN, Wyoming FRANK PALLONE, Jr., New Jersey HELEN CHENOWETH-HAGE, Idaho CALVIN M. DOOLEY, California GEORGE P. RADANOVICH, California CARLOS A. ROMERO-BARCELO, Puerto WALTER B. JONES, Jr., North Rico Carolina ROBERT A. UNDERWOOD, Guam WILLIAM M. (MAC) THORNBERRY, Texas PATRICK J. KENNEDY, Rhode Island CHRIS CANNON, Utah ADAM SMITH, Washington KEVIN BRADY, Texas CHRIS JOHN, Louisiana JOHN PETERSON, Pennsylvania DONNA MC CHRISTENSEN, Virgin RICK HILL, Montana Islands BOB SCHAFFER, Colorado RON KIND, Wisconsin JIM GIBBONS, Nevada JAY INSLEE, Washington MARK E. SOUDER, Indiana GRACE F. NAPOLITANO, California GREG WALDEN, Oregon TOM UDALL, New Mexico DON SHERWOOD, Pennsylvania MARK UDALL, Colorado ROBIN HAYES, North Carolina JOSEPH CROWLEY, New York MIKE SIMPSON, Idaho RUSH D. HOLT, New Jersey THOMAS G. TANCREDO, Colorado Lloyd A. Jones, Chief of Staff Elizabeth Megginson, Chief Counsel Christine Kennedy, Chief Clerk/Administrator John Lawrence, Democratic Staff Director ------ Subcommittee on Forests and Forest Health HELEN CHENOWETH-HAGE, Idaho, Chairman JOHN J. DUNCAN, Jr., Tennessee ADAM SMITH, Washington JOHN T. DOOLITTLE, California DALE E. KILDEE, Michigan WAYNE T. GILCHREST, Maryland OWEN B. PICKETT, Virginia JOHN PETERSON, Pennsylvania RON KIND, Wisconsin RICK HILL, Montana GRACE F. NAPOLITANO, California BOB SCHAFFER, Colorado TOM UDALL, New Mexico DON SHERWOOD, Pennsylvania MARK UDALL, Colorado ROBIN HAYES, North Carolina JOSEPH CROWLEY, New York Doug Crandall, Staff Director Anne Heissenbuttel, Legislative Staff Jeff Petrich, Minority Chief Counsel C O N T E N T S ---------- Page Hearing held February 15, 2000................................... 1 Statements of Members: Chenoweth-Hage, Hon. Helen, a Representative in Congress from the State of Idaho......................................... 01 Prepared State of........................................ 04 Smith, Hon. Adam, a Representative in Congress from the State of Washington.............................................. 06 Statements of witnesses: Arnold, Mr. Ron, Executive Vice President, Center for the Defense of Free Enterprise, Bellevue, Washington........... 08 Prepared State of........................................ 11 DeVargas, Mr. Antonio, Officer, Rio Arriba County Land Planning Department, La Madera, New Mexico................. 62 Prepared State of........................................ 64 Lyall, Mr. Jeff A., Disabled Outdoorsman, Catawba, Virginia.. 58 Prepared State of........................................ 60 White Horse Capp, Ms. Diana, Chairman, Upper Columbia Resource Council, Curlew, Washington....................... 44 Prepared State of........................................ 46 Additional Material Supplied: Correspondence............................................... 99 OVERSIGHT HEARING ON FUNDING OF ENVIRONMENTAL INITIATIVES AND THEIR IMPACT ON LOCAL COMMUNITIES ---------- TUESDAY, FEBRUARY 15, 2000 House of Representatives, Subcommittee on Forest and Forest Health, Committee on Resources, Washington, DC. The Subcommittee met, pursuant to notice, at 2 p.m., in room 1334, Longworth House Office Building, Hon. Helen Chenoweth-Hage (Chairperson of the Subcommittee) presiding. STATEMENT OF THE HON. HELEN CHENOWETH-HAGE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF IDAHO Mrs. Chenoweth-Hage. The Subcommittee is meeting today to hear testimony on the funding of environmental initiatives and their impact on local communities. In last week's Economist magazine, one of the lead stories was about non-governmental organizations, or NGO's. The article said that ``the general public tends to see them as uniformly altruistic, idealistic, and independent. But they are often far from being `non-governmental', as they claim. And they are not always a good force''. The Economist goes on to say that NGO's ``deserve much sharper scrutiny''. That is what we are doing here today: examining the funding of NGO's environmental initiatives on the national forests and their impact on local communities. A full Committee hearing on the Impact on Federal Land Use Policies on Rural Communities'' was held on June 9, 1998. At that hearing, it was pointed out that in States with a high percentage of Federal land, there is a significant urban-rural prosperity gap. Urban areas are booming while rural areas are reeling. Many witnesses attributed this to Federal land management policies and outlined specific examples of how current Federal land management policies have had devastating impacts on the economies of their communities. Several witnesses pointed out that many of the destructive Federal policies were implemented as a result of NGO environmental advocacy, financed by tax exempt grants from private charitable foundations. Environmental groups are relying more and more on wealthy non-profit foundations to fund their operations. According to a recent article in the Boston Globe, foundations invest at least $400 million a year in environmental advocacy and research. The largest environmental grant-maker, the $4.9 billion Pew Charitable Trusts, gives more than $35 million annually to environmental groups. Advocacy for national forests policy initiatives appears to be largely financed by charitable foundations through tax-free grants. For example, the Clinton-Gore Administration's Roadless Initiative may withdraw up to 60 million acres of National Forest Lands for multiple use. This initiative appears to have been organized and funded by charitable foundations, primarily the Philadelphia-based Pew Charitable Trusts. Since September 1998, Pew has given the National Audubon Society more than $3.5 million in tax-free grants to organize the Heritage Forests Campaign, a coalition of about a dozen environmental groups. The sole objective of the Campaign appears to be the creation of widespread public support for the Clinton-Gore Administration's initiative to restrict access on 60 million acres of national forest lands. The Heritage Forests Campaign illustrates several potential problems with foundation-financed environmental political advocacy, namely, the lack of fair, broadbased representation and the absence of accountability. Particularly disturbing is this Administration's acquiescence to the Campaign in the setting of policy. At a recent hearing on the Roadless Initiative, I asked George Frampton, Director of the Council on Environmental Quality, for the names of all those attending any meetings he held regarding the development of this initiative. The list he sent in response is a who's-who in the environmental community. Even more telling is that not one individual representing recreation, industry, academia, county commissioners, or local schools were in attendance. Only representatives of the national environmental groups participated. Now only was the public excluded during these meetings, but so was Congress. The Administration's Roadless Initiative appears to be an attempt to bypass the role of Congress. Under Article IV, Section 3 of the United States Constitution, Congress possesses the ultimate power over management and use of lands belonging to the United States. If the Roadless Initiative is universally popular, why can't the Heritage Forests Campaign get it enacted by Congress through the normal legislative process? Administrative directives such as the Roadless Initiative bypass Congress and centralize policymaking authority within the hands of unelected bureaucrats in the executive branch. Foundation-funded advocacy groups make back room deals thus denying the average citizen a voice and input into the policy through their elected representatives in Congress. As a result, our Government becomes more remote and unresponsive to the needs of the average citizen. To whom is the Heritage Forests Campaign accountable? This Campaign is put together by foundations, not the participants. The grantees are accountable to the foundations that fund them, not even their own members. Foundations have no voters, no customers, no investors. The people who run big foundations are part of an elite and insulated group. They are typically located hundreds or even thousands of miles from the communities affected by policies that they advocate. They receive little or no feedback from those affected by their decisions, nor are they accountable to anyone for promoting policies which adversely affect the well being of rural people and local economies. Today's witnesses will tell us how their communities are being crushed by an inaccessible and faceless movement wielding great power and influence. The Economist is right to say that NGO's deserve much sharper scrutiny. I agree, but even more important is the issue of the undue influence being granted these groups by the Administration. As we progress through this and future hearings, I believe it will become clear that this isn't an issue concerning the environment--not at all--but rather one concerning power and its use for political ends, with rural communities being trampled in the process. [The prepared statement of Mrs. Chenoweth-Hage follows:] [GRAPHIC] [TIFF OMITTED] T7408.001 [GRAPHIC] [TIFF OMITTED] T7408.002 Mrs. Chenoweth-Hage. And now the Chairman recognizes Mr. Smith, the Ranking Minority Member, for any statement he may have. STATEMENT OF THE HON. ADAM SMITH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON Mr. Smith of Washington. Thank you, Madam Chair. I think there are some good things that we are going to discuss today, and some issues that are very legitimate to raise and to talk about. There are also some things that I am troubled about about this approach. What is good, and what I think is very fair to raise, are issues of policy. There are a variety of different environmental policies, the Roadless Initiative being one of them; what is the proper use for our public lands--I think all of those things should be discussed as broadly as possible in as many open hearings as is humanly possible--and I think all of that is very good. What I am puzzled about is why we seem to think, whether you agree with them or not--and we live in a democracy, and part of being in a democracy means that people you disagree with have a right to express those opinions and have a right to advocate for those opinions in just about any way they see fit within the law--the Pew Trusts and a variety of others are doing just that. You may disagree with what they are doing. You may disagree with their policies and, if you do, I would strongly urge you--as, in fact, you have done--to form groups with opposite opinions, and lobby your Members of Congress, and lobby the Administration, and go about the democratic process the way it should be done. But for us to have a hearing and say that a group of people who happen to advocate a particular set of policies that some folks don't like, somehow need to be held up to higher scrutiny than any other group that is advocating a policy, is a little bit ridiculous to me. When you look at environmental policy, I hear all the time from the other side, ``Oh, corporations have undue influence''. You know, back in the early part of the Republican Congress in 1995 and 1996, there were endless accusations that corporations were actually drafting the amendments or drafting the legislation that was going to affect environmental policy, and at the time I was not as troubled by that as most people. I was troubled by some of the policies, I will grant you, but the fact that citizens of our country were out advocating for a position, trying to exercise influence, is what this process is all about. I mean, to hold these people up and say, ``No, you are not supposed to do that'', as I said, is just ridiculous. And it seems to me that the focus of this hearing is saying that these trusts, charitable trusts--individuals, really--who come together to advocate for a position don't have a right to do so is ridiculous. They absolutely have a right to do so. And if you disagree with them, organize on the other side, lobby your Members of Congress, lobby the Administration, and try to get that position changed. Now, it was mentioned the Roadless policy is not universally popular. Absolutely, it is not. I can tell you in my area it is not. I have people on both sides of that issue, many who strongly advocate for it for a variety of different reasons, many others who think that it is an absolutely horrible idea. And I have heard from both of them, and that is great. I hope I continue to hear from both of them, and all sides in between and beyond, and I hope the Administration does, too. Now, it is quite possible the Administration will adopt a policy that some folks don't like. It is quite possible that Members of Congress sitting up here will adopt policies that these folks don't like, and they will scream bloody murder about it, and that, too, is fine. But it is not fine to stand up here and say ``How dare these folks advocate for a position''. That is what we do in this country. That is what makes this country so great. People have a right to advocate for whatever positions they believe in. They have a right to marshall their resources toward doing that within the bounds of campaign finance laws, but they have the absolute right to do that. So, I hope that the bulk of this hearing will focus on some of these policies. I think we are going to have some excellent testimony from folks who are affected by these policies and who will challenge some of them, and then we, as lawmakers, as we are, will make a decision on what is right, what is wrong, what we think is in the best interest of people. But these folks have a right to say their piece, the Pew Trust and all the people who are affiliated have a right to say their piece. And I will make one closing comment. I think we, as legislators, have this tendency whenever we are losing an argument, to attack the process, and I submit to you that that is to our own detriment. Just as in the 1995 and 1996 years when people on the other side were attacking not just the policies but the process, who were saying, ``Gosh, it is just horrible that these corporations are talking about environmental policy, that proves the whole system is corrupt''. Flip it around, you have people saying, ``Look at the way these environmentalists are advocating policies, that is just horrible and an abuse of the process''. Both sides, when you do that, you damage the whole process. You damage your own ability to pass an issue because back in 1995 and 1996, if it was the environmentalists saying the process was flawed, well, now, if they start to get the upper hand and win using the same methods that their enemies used before, they have indicted a process they are now participating in. The process works fine on both sides. Advocate, push, use your influence, lobby, do what your democracy allows you to do, and I hope you will come out on top, but let us not condemn the process just because we happen to lose an argument. I think that is very damaging to democracy and very damaging to the people's belief in our democracy, which is suffering from just such a problem right now. So, I hope the hearing will focus on issues and not criticizing people for merely advocating things that they believe in. Mrs. Chenoweth-Hage. I ask for unanimous consent for Mr. Nethercutt and Mr. Cannon to sit in with this Committee at this hearing. If there is no objection, so ordered. I will now introduce our panel. I feel we have a very outstanding panel today, and I look forward to hearing from all four of you. Mr. Ron Arnold is Executive Vice President of the Center for the Defense of Free Enterprise, Bellevue, Washington, and author of a number of very enlightening books, and one that prompted this hearing. Welcome, Mr. Arnold. Mr. Jeff Lyall, Disabled Outdoorsman from Catawba, Virginia. Welcome. And Mr. Antonio DeVargas, Officer of Rio Arriba County Land Planning Department, La Madera, New Mexico, and it is really good to see you again. Welcome. And now I would like to ask Mr. Nethercutt to introduce the next witness. Mr. Nethercutt. Thank you, Chairman, and thank you for allowing the members of the Subcommittee to sit for a few minutes to take a moment to introduce Diana White Horse Capp. I must say, as a member of the Appropriations Committee on the Interior Subcommittee, it helps us, Chairman, to have this oversight assessment that goes on in an Authorizing committee and the Resources Committee to help us understand a little better appropriate appropriations for the expenditure for taxpayer dollars. So I am delighted to have a chance to sit in this hearing for a time. But it is a pleasure for me to introduce Diana White Horse Capp this afternoon to the Subcommittee. She is a resident of Ferry County, Weshington, in the northeastern corner of the 5th Congressional District, which I represent. This is some of the most beautiful country in the State of Washington, and Diana is certainly a part of the landscape. She has been very active in Federal land management and property rights issues. Her diverse heritage and culture have given her great insight into these important issues. She is an asset to our community in Eastern Washington, and I am delighted that she could be here today, and welcome her on behalf of this Subcommittee, and proudly representing the east side of the State of Washington. Thank you, Madam Chairman. Mrs. Chenoweth-Hage. Thank you, Mr. Nethercutt. As explained in our first hearing, it is the intention of the Chairman to place all outside witnesses under the oath. This is a formality of this Committee that is meant to assure open and honest discussion and should not affect the testimony given by the witnesses. I believe that all of you were informed of this and were sent a copy of the Committee rules. So, if you will stand and raise your right arm to the square.[Witnesses sworn.] Mrs. Chenoweth-Hage. The Chair recognizes Mr. Arnold for his testimony. TESTIMONY OF MR. RON ARNOLD, EXECUTIVE VICE PRESIDENT, CENTER FOR THE DEFENSE OF FREE ENTERPRISE, BELLEVUE, WASHINGTON; ACCOMPANIED BY MR. JEFF A. LYALL, DISABLED OUTDOORSMAN, CATAWBA, VIRGINIA; MS. DIANA WHITE HORSE CAPP, CHAIRMAN, UPPER COLUMBIA RESOURCE COUNCIL, CURLEW, WASHINGTON; AND MR. ANTONIO DeVARGAS, OFFICER, RIO ARRIBA COUNTY LAND PLANNING DEPARTMENT, LA MADERA, NEW MEXICO TESTIMONY OF MR. RON ARNOLD Mr. Arnold. Madam Chairman, Members of the Committee, my name is Ron Arnold. I am the Executive Vice President of the Center for Defense of Free Enterprise, a nonprofit organization based in Bellevue, Washington. The Center does not accept and has never received Government funds. Madam Chairman, I would like to thank you for holding this hearing today. It is timely, indeed. My Center recently completed a book-length study on the finding of environmental initiatives and their impacts on rural communities. The book is titled Undue Influence: Wealthy Foundations, Grant-Driven Environmental Groups, and Zealous Bureaucrats That Control Your Future. In a nutshell, the message of Undue Influence is that the environmental movement is a three-cornered structure beginning with tax-exempt foundations which devise multi-million-dollar environmental programs to eliminate resource extraction industries and private property rights. The foundations direct their funds to the second leg of the triangle, environmental groups with insider access to the third leg, executive branch agencies. This powerful ``iron triangle'' unfairly influences Federal policy to devastate local economies and private property. In the brief time since Undue Influence was released last October, so many new outrages have come from the executive branch that they demand separate attention. Therefore, my Center has documented these new developments in a special report titled Power To Hurt, which is being released at this hearing. You will find it attached to my written testimony. If you will turn to page 4 of Power To Hurt, you will see how the first leg of the triangle works. Joshua Reichert, the Pew Charitable Trusts' Environmental Director, once wrote, ``For considerable sums of money, public opinion can be molded, constituents mobilized, issues researched, and public officials buttonholed, all in a symphonic arrangement''. Madam Chairman, there is evidence that the Pew Charitable Trusts planned an end-run around Congress and arranged the Clinton Administration's new policy to eliminate access to almost 60 million acres of Federal land. They did it by an initiative they called the Heritage Forest Campaign. Pew grants of more than $3 million have gone to the second leg of this triangle, the National Audubon Society. Audubon funneled the money to 12 other environmental groups under its supervision. You will find the list on page 5. Audubon got a letter of support signed by 170 members of the House of Representatives for their access closure program. One wonders how they did that without using tax-subsidized Pew money to lobby Congress. But that was not enough. Audubon hired the Mellman Group, Inc., the President's own pollster, to produce results saying that the public favored wilderness over jobs. They had to justify destroying thousands of rural jobs for an urban movement's political victory. Audubon gave those poll results to the third leg of the triangle, the White House Chief of Staff. Shortly thereafter, President Clinton sent his October 13, 1999 memo to the Secretary of Agriculture calling for permanent roadless status for those 60 million acres of Federal land. Audubon was able to produce this controversial result because its new Director of Public Policy is Dan Beard, who came straight from the Clinton Administration, where he served as head of the Bureau of Reclamation. Pew is only one of dozens of foundations orchestrating our lives behind the scenes. The Turner Foundation last spring approached a cluster of environmental groups offering a $5 million grant to create a new group that would enhance their mailing lists by adding legislative districts, voting records, party affiliations and other political data for each name, which would be prohibitively expensive for individual groups to do by themselves. That new group, called the Partnership Project, is now compounding its members' electioneering power at the ballot box. The facts about the Partnership Project are on page 6 of Power To Hurt. If there is any doubt that the foundations are deliberately planning the elimination of resource extraction, one has only to examine an actual grant proposal to a wealthy foundation. Madam Chairman, you will find the full text of the grant application that created the Southwest Forest Alliance beginning on page 15 of Power To Hurt. The disastrous results of the Coalition are spelled out in shameful detail on page 9. Only little operations totally dependent on government timber were destroyed, not the big corporations that own their own private timberlands. Madam Chairman, in my researches I found that every segment of America's resource extraction economy--food, clothing and shelter--has been targeted by some coalition funded by wealthy foundations. This is an intolerable program of rural cleansing. Foundations are not accountable to anyone. They are totally unregulated. Madam Chairman, these are serious charges. The Center urges Congress to investigate the undue influence documented in Power To Hurt. Thank you again, Madam Chairman, for holding this hearing. 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Thank you, Mr. Arnold. The Chair now recognizes Mrs. White Horse Capp for her testimony. TESTIMONY OF MS. DIANA WHITE HORSE CAPP Ms. Capp. Madam Chairman, Committee Members, thank you for this hearing. I am Diana White Horse Capp, from Ferry County, Washington, 4.6 million acres in the Kettle Mountains, 7200 people. I am Chairman of the Upper Columbia Resource Council. Madam Chairman, history shows the elite gain power by pitting the masses against each other. Our Constitution, based on the Iroquois Great Law of Peace, is intended to prevent such abuses. Elite foundations now funnel their wealth to environmental groups who pit the masses against each other. Rural Americans are condemned as savages just as Natives once were. Rural Natives and whites work in the same occupations. Our welfare is connected. The south half of my county is Colville Reservation. On the north half, Colvilles and other Native descendants live in peace with whites. The community is intermarried. We cannot afford the division these foundations instigate. The environmental elite use Native people. They preach about Tribal Rights and promise to restore justice. Yet they do little for Native people but use them as poster children to buy the clout of Treat Rights in their lawsuits. Local activists courted favor on the Reservation and the Colville Indian Environmental Protection Alliance emerged. This is a foundation grant handled by Winona LaDuke, a Native recruiter from Minnesota, daughter of the late Sun Bear, and it is targeted to fight people like me in Ferry County. LaDuke's webpage here says that the Colville group she funds is opposed to gold mining on the Reservation. But this article from High Country News says that that same group successfully lobbied the Tribal Council to oppose Crown Jewel Mine. Madam Chairman, the Crown Jewel Mine is not on the Reservation, it is 30 miles away, minimum. This kind of deception puts a smear on the Tribe's name. These activists have come in and they have stirred up political upheaval on the Reservation. I am told that there are Tribal members who are intimidated and they would like the FBI to step in. The environmental elite use the grassroots groups to destroy our rural culture. Our county is crippled by their attacks on timber, mining and ranching. Jobs are very scarce. Our children feel hopeless. These elite have really raped our children's future. These grants target Ferry County, along with the others I have shown, with $105,000 just to silence the so- called ``incivility'' of people like me concerned with human rights. These grants go through Environmental Media Services, and that outfit is headed by Arlie Schardt, Al Gore's former Press Secretary. It looks pretty political to me. Slick media activists hound urbanites, screaming that rural cultures destroy the planet when, in fact, we feed and shelter them. The 1998 National Wilderness Conference announced its plan for Wilderness designation of the Kettle Range. Ferry County is the Kettle Range. Their millions wage a high-dollar war for Wilderness in Ferry County along with Kettle Range Conservation Group. Our county is beautiful, and they covet that beauty enough to rape our culture. We don't want to be squeezed out. This cultural genocide must be acknowledged. Cultural genocide is why the Kootenai Tribe has joined Idaho's fight against Wilderness. This petition by Bret Roberts of the Ferry County Action League has already collected 2,000 area resident signatures against Wilderness designation. What is worse is that Federal insiders reshape policy to destroy rural cultures. There is a map here that shows some of the plans coming at us that are going to squeeze us out. Colville National Forest's Public Affairs Officer took vacation time to campaign for more Wilderness. Pacific Biodiversity Institute boasts that Government agencies request their wilderness maps. And, indeed, here is the Wilderness Society map in a local Forest Service plan, and it says ``For planning purposes''. This is a grant to an environmental group that says that this group's lynx study will be used by the Forest Service for management purposes. This Nature Conservancy job ad says that their biologists write policy on Indiantown Gap Military Reservation. That really rubs salt in the wound for me. Indiantown Gap was taken away from my mother's people in 1932 by Government troops. I don't want something like that happening to my children, too. Madam Chairman, this genocidal juggernaut must be stopped. Thank you. [The prepared statement of Ms. Capp follows:] [GRAPHIC] [TIFF OMITTED] T7408.035 [GRAPHIC] [TIFF OMITTED] T7408.036 [GRAPHIC] [TIFF OMITTED] T7408.037 [GRAPHIC] [TIFF OMITTED] T7408.038 [GRAPHIC] [TIFF OMITTED] T7408.039 [GRAPHIC] [TIFF OMITTED] T7408.040 [GRAPHIC] [TIFF OMITTED] T7408.041 [GRAPHIC] [TIFF OMITTED] T7408.042 [GRAPHIC] [TIFF OMITTED] T7408.043 [GRAPHIC] [TIFF OMITTED] T7408.044 [GRAPHIC] [TIFF OMITTED] T7408.045 [GRAPHIC] [TIFF OMITTED] T7408.046 Mrs. Chenoweth-Hage. Thank you very much, Ms. Capp. The Chair now recognizes Mr. Jeff Lyall. Jeff. TESTIMONY OF MR. JEFF A. LYALL Mr. Lyall. Thank you, Madam Chairman and members of the Committee. I am honored to have the opportunity to testify before you here today. My name is Jeff Lyall. I am 32 years of age, and I live in the Blue Ridge Mountain region of Southwest Virginia. In June 1991, I received a level C5-6 spinal cord injury as the result of an auto accident. I was an avid outdoorsman. I liked to hike, backpack, camp, hunt, fish, et cetera, mostly on National Forest lands in Virginia and North Carolina. Madam Chairman, I still enjoy the outdoors, but wheelchairs are poor off-road vehicles. So, in 1995 I modified a Jeep CJ to become my new legs and feet, and this gave me access to the outdoors once again. However, not long after that, I discovered that the vast majority of off-highway vehicle roads on National Forest lands in my area have been closed down. Now I can't enjoy the outdoors by the only means available to me, and neither can anyone else with a mobility impairment. In the Blacksburg and New Castle Ranger districts where I live in Virginia, there are some 66 gated National Forest off- highway vehicle roads, which represent 110 miles of potential forest access, but there is a problem. Of these 66 roads, only nine are open during certain times and zero are open year round. Hikers and mountain bikers can use them anytime they like, but because my feet and those of some of my friends consist of four wheels and a motor, we are denied access. If that is not discrimination on the basis of a disability by an agency of the Federal Government, nothing is. Carla Boucher is the attorney for United Four Wheel Drive Association, which is an international organization that represents four wheel drive enthusiasts. She is bringing a lawsuit against the forest Service on road closure issues. She has documented that less than 2 percent of all forest visitors use Wilderness areas, but those areas take up about 18 percent of all National Forest lands. On the other hand, off highway users, who represent 35 percent of all forest visitors, traditionally use roads on less than 2 percent of Forest Service lands. So, it seems that the Forest Service caters to 2 percent of the visitors to Wilderness areas, while closing roads that take up less than 2 percent of the total National Forest System. In the Fall of 1998, I began talks with local National Forest officials. I discovered that the Forest Service has adopted a policy they refer to as ``Obliterate Roads'', meaning they intend to gate and destroy as many off-highway vehicle roads as possible. Since these roads are the only viable access to these public lands by a mobility-challenged person, this is, in effect, a Federal Policy of Discrimination against the estimated 54 million disabled people in the United States, not to mention the millions in the senior community who enjoy the outdoors but are not able to travel as they once did. Mrs. Boucher found that 76,300 miles of Forest Service roads are now closed, which represents one in every five miles. Just last year the Forest Service closed 683 miles out of 800 miles of off-highway vehicle roads in the Daniel Boone National Forest, effectively eliminating motorized access to this area as well. Within the past year, three off-highway vehicle roads in my own backyard, which have been open since the 1950's and 1960's, were bulldozed and gated, cutting off my access to these areas also. In essence, the Forest Service is saying, ``if you can't walk, we don't want you in our forests''. This has got to stop. And the people behind it have to be stopped. Mrs. Boucher has found that these road closures have been pushed by environmental groups funded by large foundations and working with Clinton Administration insider. Mrs. Boucher found that the National Audubon Society pushed the President to permanently preserve 450 million acres of roadless areas. The Pew Trusts funded the Audubon Society, which will funnel more than $3 million to 12 environmental organizations to pressure the Forest Service to shut down more roads. So, I now understand that it isn't simply a line officer with the Forest Service who is shutting me out of our National Forests. It isn't even simply a matter of some local or national environmental organization trying to shut down the forests. It is large, rich foundations such as the Pew Charitable Trusts that are discriminating against me and the entire disabled community by funding environmental groups to push policies such as ``gate and obliterate''. I cannot fight them alone. I am respectfully requesting congressional investigation into the involvement of large foundations in making land management policy for the Forest Service. Thank you for the opportunity to testify before you today. [The prepared statement of Mr. Lyall follows:] [GRAPHIC] [TIFF OMITTED] T7408.047 [GRAPHIC] [TIFF OMITTED] T7408.048 Mrs. Chenoweth-Hage. Thank you very much, Mr. Lyall. The Chair now recognizes Mr. Antonio DeVargas. Ike. TESTIMONY OF MR. ANTONIO DeVARGAS Mr. DeVargas. Madam Chairman, members of the Committee, my name is Antonio DeVargas. I am the President of La Compania Ocho, a for-profit, minority-owned business in the logging and processing of timber, located in the small mountain village of Vallecitos, New Mexico. Unemployment in Vallecitos and the surrounding communities is more than 20 percent. Madam Chairman, I thank you for holding this hearing today and am honored at the privilege of being invited to testify. La Compania Ocho operates with the Carson National Forest. As a direct result of frivolous litigation brought by Forest Guardians, a Santa Fe-based, self-proclaimed guardian of the forests, La Compania has been severely crippled in its ability to work. Although the Federal courts have consistently ruled in our favor, the delays created by Forest Guardians have had a devastating impact on La Compania Ocho and on the villages which surround Vallecitos. Forest Guardians has been able to pursue its vindictive and punishing litigation campaign because of the grants it and its allies have received from certain large foundations. This campaign against our way of life and our efforts to create a local, sustainable economy has been based on half- truths, distortion, and outright lies and has been propped up by the seemingly endless supply of money for litigation. Numerous foundations have been involved in supporting the campaign to destroy the Hispanic village lifestyle. For example, the Pew Charitable Trusts has funneled money to the New Mexico Audubon Society under the auspices that the money would be used to benefit the villages of northern New Mexico, including those in the Vallecitos area. In fact, those moneys were used to try and destroy our villages. Foundation money has also been used to create coalitions, the member groups of which are often like Potemkin villages, organizations consisting of only or two people. The people involved have been able to successfully create the impression for their funding sources that they are mass organizations with large bases of support in the coalitions. One example is a group called Carson Watch, based in Penasco, New Mexico. When I refer to the false information and distortion of the truth that are disseminated by these environmentalists, I am referring to their ``mantra'' that the forest is being clear cut and that harvesting of timber exceeds the growth of the forest. As an example, I would like to present figures that are documented on a 73,000 acre tract of land in the Carson National Forest in the El Rito Ranger District. In 1986, our organization requested a site specific inventory in the Vallecitos area. This inventory revealed that this tract of land had 380 million board feet of timber, that the forest was growing at the rate of 12 million board feet per year, that 9 million board feet could be harvested sustainably, and the forest plan allowed for the harvest of 7.2 million board feet per year. Since 1994, less than 4 million has been harvested and, due to appeals and litigation brought by various environmental groups funded by organizations mentioned above, that figure has dropped to less than 1 million per year for the past 3 years. There has been no clear cutting of timber in this area in my memory or the memory of my parents or grandparents. Another area in which the lies and misinformation are utilized is when the funding proposals assert that these groups work with local and indigenous communities. Nothing could be further from the truth. In fact, on the few occasions that they have engaged local villages from affected communities, what they say that they plan to do is the exact opposite of their intentions, and the only reason these engagements even occur is so that they can document that they did meet with the community. The fact that there was no consensus and that strong opposition to their plan was expressed is never documented in their proposals and so they present a very rosy picture that gives the appearance of cooperation and collaboration with local villages but, in fact, was a manipulative ploy to misinform the funding sources and the general public. We, the people of New Mexico, would like to see the U.S. Congress take swift and decisive action to put an end to this abuse of privilege, and restore our ability to create an economy based on access to the natural resources that are an integral part of our custom, culture, tradition, and right to the pursuit of happiness. Our commitment in response is to be good and responsible stewards who will make sure that our activities are sustainable environmentally, economically, culturally and in concert with the tenet of protecting our heritage for future generations. Thank you again, Madam Chairman, for holding this hearing and affording me the privilege and honor of presenting my testimony on behalf of my company, my village, my county, and the countless other rural people whose lives have been devastated by the abuse of the Endangered Species Act and other environmental laws that are well meaning but are being abused. [The prepared statement of Mr. DeVargas follows:] [GRAPHIC] [TIFF OMITTED] T7408.049 [GRAPHIC] [TIFF OMITTED] T7408.050 [GRAPHIC] [TIFF OMITTED] T7408.051 [GRAPHIC] [TIFF OMITTED] T7408.052 [GRAPHIC] [TIFF OMITTED] T7408.053 [GRAPHIC] [TIFF OMITTED] T7408.054 [GRAPHIC] [TIFF OMITTED] T7408.055 [GRAPHIC] [TIFF OMITTED] T7408.056 [GRAPHIC] [TIFF OMITTED] T7408.057 Mrs. Chenoweth-Hage. Thank you very much. I am going to step out of the order of things, the manner in which I usually conduct this hearing, simply to make a comment. Usually, the Chair recognizes other members for questions at this time, but I just want to say that I have been a Committee Chair for going on my fourth year now, and of all the oversight hearings that we had held--and we have held a lot of them--this may be the most remarkable of all of the hearings. The testimony that I have heard today is very startling, and I agree with the Ranking Member's assessment about this country, America, being a land where people can still lobby and have access to their elected officials, but I guess I just depart a little bit in expressing my concern that it is known to all of us who work in this world of politics, that money is the ``mother's milk'' of successful politics, and therein lies the touchstone and the reason why we are having this hearing. When you see a charitable trust that amounts to $4.9 billion, who can fund one program and one organization to the tune of millions and millions of dollars. I am sure that Mr. Arnold, Mr. Lyall, Ms. Capp and I have never had the benefit of being so well funded. Usually, these organizations have to scramble and pass the hat. I see some union people in the audience today. Even they had to take leave from their jobs to come back. People pass the hat and send people back to Washington, but it is sad to recognize--and this didn't happen just in this Clinton Administration, believe me. I want you to know I would be holding this hearing if Ronald Reagan were still President, if George Bush were still President, because some of this started in those Administrations. But without regard to who is sitting in the White House, this is a malignant mess and the metastasis is growing very quickly, and it is destroying rural America. It is destroying lives. And I guess some day we in the Congress have to come face-to-face with the fact that those who have a lot of money either have a lust for power or care very little about this being the ``land of opportunity'' for others, too, who may not be as well off as they are. And because this Congress funds grants that eventually make their way into the organizations that prevent those who live in rural districts from achieving the success that many of these who are heads of these foundations have been able to enjoy, we have jurisdiction, and we have a responsibility. This still is the ``land of opportunity'' for everyone, no matter whether you were born of privilege and parents who head foundations or whether you were born a carpenter's son or dairyman's daughter, like I was. So, I thank you very much for your testimony. I think you are very courageous and brave for bringing this issue to us. And now the Chair recognizes Mr. Peterson for his questions. Mr. Peterson. I thank the Chairwoman. I come from the eastern part of this country, but I come from what I call the ``eastern West''. My district is northern tier Pennsylvania. It is rural. It is the most rural district east of the Mississippi. We timber, oil was discovered, we mine for coal, we manufacture, we process oils and chemicals, and we farm, and my view is they are all under attack--at least they are where I come from. But I guess I would like to ask a quick question, and make a few more comments. Those who you speak of, foundations and Federal agencies who work together to common goals, I hear often their No. 1 issue is urban sprawl. Would you agree with that, that one of their top issues is urban sprawl? Is that what you hear also? Mr. Arnold. Yes. Mr. Peterson. But I claim and tell them often they are causing it because, as they force the people who timber, the people who produce oil, people who mine for coal, people who manufacture/process, and our farmers who are being devastated today as we speak, as they leave the rural lifestyle, they go to the urban/suburban areas to try to make a living, and they cause the urban sprawl. And so while they destroy us, they are also destroying their own backyards, which in my view makes little sense. I guess a question I would like to ask is, the use of lawsuits is a very popular ploy, whether it is to stop timbering or stop any kind of rural economics, and I often find those who propose the lawsuits never seem to have a job or at least a visible employer. In your research and work, any of you, have you found how these people--are they indirectly funded by somebody? It always seems like it is somebody hanging out that gets a university professor to pro bono the lawsuit, and the process starts with no investment and often shut down many operations. Mr. Arnold. Congressman Peterson, let me try and answer that as quickly as I can. The short answer is, yes, they are getting money from somewhere. I would have to refresh my memory to get the numbers, but I think in your area, in the Allegheny, you have a thing called the Allegheny Defense Fund, if I am not mistaken. Mr. Peterson. That is correct. Mr. Arnold. It has no visible means of support, but it does have a means of support. If you look carefully into the grant giving of a well known environmental group called Heartwood in Indiana, you will find that grants go from there, funneled through Heartwood to that little group, to do the interesting things they do in your area, and the money comes from a group of foundations we call the ``Usual Suspects'' at my Center because their names show up everywhere that the kind of thing you are talking about happens, somebody with no visible means of support suddenly has a ton of money to sue people for things that you wonder why they are suing them. Mr. Peterson. Well, they also have expertise because they are better at PR than most of us who get elected. They get quoted continually in the papers as if they are experts, and as if they are local folks, yet nobody knows them, nobody sees them, they don't belong to anybody's church, they are not a part of any community that I am aware of, but yet they constantly speak as experts on these issues as if they had credentials. I guess I would just like to quickly mention the other issue, the ``Roadless'' issue, which is sort of the current issue, and you so carefully explained how this was promulgated. But I have tried to be fair about this issue. I have tried to be thoughtful. But spending a lot of time in the woods myself--I grew up spending a lot of time in the forest, and I still do--and I know in the rural area I live, the people that spend time there, when an area is roadless, very few people enter it. Is that true? Very few people use--most people my age don't even want to be on a roadless area very far for fear of a health problem. I have always had good direction. My father would go a mile from the road and he would always get lost, so he never traveled--though he was not fearful, he didn't travel very far from a road because he would get lost. He had no sense of direction. I have always had a good sense of direction, could figure out how to get home, but I know in hunting you go a mile from the road, you are alone. There is nobody there. I mean, if there is not a road, you have closed the forest to human consumption, except a very few hikers--percentage of population, it wouldn't be even a fraction of a percent that would go in. Do you figure that is an accurate observation? Mr. Arnold. I do, and you are out in the woods a lot more than I am. Mr. Lyall. Yes, sir. On this whole issue, that is my point of view. Like a person who can walk, they have the option, they can go wherever they want to go, just as I used to, sir. Now, to a disabled person, a mobility challenged person, the only access that we have to the outdoors is through free existing roads. I mean, that is just it. And what access is there is just a very, very small part--like where I live it, talking about these roads here, if every one of these 66 roads opened up to give disabled access to the forest, that would open up approximately 120 acres. And in the two ranger districts where I live, there are 400,000 acres. And I have been dealing with the Forest Service trying to open up these roads to 120. I have asked for 120 out of 400,000 acres, and I have been getting a very hard time with that. I mean, I have not just been dealing on a local level, but I have also been dealing on a national level. One gentleman I was talking with in the Forest Service up here in DC., we were talking about this issue, and he was telling me about, well, our policy might be different than what it is now, but we get a lot of pressure from these groups like Mr. Arnold has been talking about, that I don't know nothing about. And as far as from the disabled community's point of view--you know, I have done research--and right now there are approximately 54 million disabled people in the United States, but we are spread out. The disabled community is interwoven throughout the fabric of America--big city, small town, rural, rich, poor--and it is not an organized group, and therefore it is not given any consideration to, which is an abomination, in my point of view. Mr. Peterson. Thank you. Well, I think anybody who has had any health problems, anybody who is aging and are not quite as strong as they might have been at one time, you are really limiting our forests to a very few people. I guess the frustrating thing that I find is that rural people--and I don't know that much of America is aware of what is happening to rural America. I intend to be outspoken about it, but rural people have little ability to fight major foundations and Government agencies combined. I was at a hearing this morning where one of these Government agencies--and I will leave it nameless--was asked by the Chairman of a Committee, an important Committee, Appropriations Committee, if they were willing to give that Committee 60 days' notice on purchases of land they were going to make--and I would have thought not approval, just notice-- and the head of that organization paused and stuttered and stammered and tried not to answer the question. I mean, where are we when we have Government funded agencies who think their decisions should not be reviewed by Congress, let alone the public? And I think that shows the elitism that we have that the common goal they have and the good they think they know is so great that the people be damned, and that is not what democracy is about. That is not what this country is about. But it is what is happening in this Administration and departments of Government and with the help of foundations, and I applaud all of you for being willing to investigate and document as you have. Mrs. Chenoweth-Hage. Thank you, Mr. Peterson. The Chair recognizes Mr. Smith, and I want to say that since we have one panel today, I have been rather lenient on the lights, and we will have a second round. Mr. Smith. Mr. Smith of Washington. Thank you, Madam Chair. First of all, I want to say--I don't want to ask a lot of questions about the policy except to say that I think the statements that are made about the policy battles going on in this country are very well made. There is a definite disagreement about how we should handle our public lands, and I think it has been laid out fairly well what the concerns are about the current policy, and that is the impact that it has on rural America. And I will even say that I agree with a significant chunk of that assessment. We have a significant problem in this country where rural America is suffering economically while the rest of the country does very well and, as public policymakers, we need to figure out some way to change that. There are a variety of different avenues to get there, but we are not there now. And I think it is perfectly appropriate to raise challenges to the policies that would exacerbate that problem and figure out how to solve them. What I am curious about is the approach that says people who disagree with me on a policy do not have a right to advocate that policy, because I hear this all the time. In my 10 years in politics, it seems like undue influence is basically that influence that is exercised by the person who disagrees with me, and I hear this from both sides. I mean, everything that has been testified here, we could take all four of you away, put four environmentalists up there, and have them talk to us about corporate trusts and, believe me, I don't think corporations are underrepresented in terms of how much money they put into trusts. Many of them, timber industry, various industries who are interested in resource extraction fund a trust to do precisely the same thing that the environmentalists are trying to do on the opposite side. This is not peculiar to one group. So I think it is a little unfair to hold a hearing that focuses on one group as if they have invented something brand new in public policy advocation that is horribly upsetting the balance of the process. As far as having access, that is always an issue. And Democrats can sit up there and squawk about all the Republican access on a variety of different issues. So, what I am curious about is, with all this stated, what should be the policy? I mean, are we saying that the Pew Trusts does not have a right to exist? Are we saying that basically trusts such as that--and keep in mind that when you are doing this, you are going to paint a pretty broad brush. I don't know who funds, I don't even know if you are a nonprofit trust, or who it is that funds that, or whether or not it is public--and there are a lot of different trusts advocating a lot of different positions out there. What structurally and fundamentally is wrong with that funding process, and if you could put aside for a moment the environmental aspect of it, how should the law be changed, and how should these people not have the right, in essence, to spend their money and use their time to advocate what they want to advocate for? And, yes, I direct this primarily to Mr. Arnold. Mr. Arnold. ``Undue influence'' is the name of a crime. That is why it is the title of the book that I wrote. It is also the name of a civil tort. Those can be handled in a court. I am petitioning for redress of grievance not before a court, but before Congress, which is a fundamental right that I have. Mr. Smith of Washington. Absolutely. Mr. Arnold. And as a citizen and as an executive of a nonprofit 501(c)(3) with my 990's right here for your investigation. Our total income, none of which was from foundations, for 1999 was $26,812. I take no compensation and never have since I have been there in 1984. Mr. Smith of Washington. I doubt seriously your trust is a large part of the problem. There are others, however. Mr. Arnold. But to answer your question about what do you do, how do you change the law, one thing, I think, is that the matter of fairness can be addressed by the IRS. It has done a considerable job of making these trusts transparent because there are recent regulations that require divulging of where the grants went that are actually taken seriously for the first time, and one of the reasons I was able to produce this book is because the documents were finally available without spending many, many thousands of dollars going through the foundation centers' records to find where those grants were. They did not have to give me their 990's, now they do, but they don't have to tell me where their investment portfolio is, so that if I want to find out the W. Alton Jones Foundation--which I do have their 990's for 1993 but not since because they won't give them to me--that if they have investments in Georgia Pacific to the tune of about $1.4 million, in Louisiana Pacific to the tune of about $1.2 million, and in Western Mining to the tune of something like 600,000 shares--and I would have to look to see what those numbers really were--I would like to know that. I think that is simply a matter of public transparency, and I do believe that the law should be changed so that it doesn't matter who--it is me, them, anybody--where the money comes from should be visible to the public. Mr. Smith of Washington. I think that is a very good answer. I guess I would just close by saying I think making it more transparent and apparent to folks where advocates are coming from, where they are getting their money, and where they are sending their money, is something that I can certainly, 100 percent, support. Again, I think it is a little unfair of this hearing to point out people who advocate for an environmental position and say that they are somehow doing something different than what a lot of different advocates are for a variety of different positions. I can assure you, they are not. They are living by the rules as they currently exist. Corporations, people on both sides of this issue are doing that, and I would hope in the interest of balance in terms of how we approach this issue, that folks in the audience and on this panel understand that if we want increased transparency so we know where the money is coming from that influences issues, we shouldn't single out any one group. There are quite a few different ones who deserve in depth analysis to figure out where that money is coming from, and I applaud, frankly, efforts like Mr. Arnold's to expose that, at least let people know what is going on, but I don't want to stop the process of democracy and folks being able to advocate for positions that they believe in, even if we may disagree with them. Thank you, Madam Chairman. Mrs. Chenoweth-Hage. Mr. Cannon, you are recognized for your questions. Mr. Cannon. Thank you very much, Madam Chair. First of all, I would like to thank the panel for being here today. Mr. Lyall, in my district we have the new Grand Staircase-Escalante National Monument that was done just 3 years ago, and just in the last couple of months the Administration has come out with its plan for that area and-- surprise, surprise--90 percent of the roads in that area have been--by the way, that is a 2 million acre area--and 90 percent of the roads have been illegally shut down, and that area now has as its only recourse the courts to sue the Administration, which they are doing over that issue. Ms. Capp, in my district I have the largest number of Native Americans. I have the Ute Tribe and the Navajo Tribe in the southeast of the state--in the northeast is my Ute Tribe. And, Mr. DeVargas, you mentioned the unemployment in the Vallecitos area. The unemployment in our Native American area is about the same, between 20 and 40 percent unemployment. And just last year--this year, this cycle--the budgeting by the oil and gas drilling companies in that area plummeted from about a proposed $96 million to virtually nothing. I think two wells will be drilled in that area where 20 or 30 had been planned before. So, when we talk about the pain that is being inflicted on rural areas, it is not that we as public administrators have to do something about that, this Administration is causing the pain. I mean, the pain wouldn't exist unless there was an affirmative and aggressive action to do so. About a year ago, Patrick Kennedy, who is the Chairman of the Democratic Congressional Campaign Committee, now says that we who are friends of the Democratic Party have written off rural America. The next day, the Minority Leader, Dick Gephardt, pointed out that he--that is, Patrick Kennedy--didn't mean to say that. Now, Mr. Gephardt didn't say that Patrick Kennedy didn't mean what he said, he just pointed out that he didn't mean to actually say it because, in fact, that is, I think, the difference between parties at this point in time. I might just point out one thing for the record. There is a difference between tax-exempt foundations that pump money into public activity and private corporations that pay taxes. Normally, I ask questions, I don't get off on my soapbox in these circumstances, but let just add one other fact. We are now going through a remarkable renaissance of individual responsibility and opportunity in America largely caused by the Internet and the access that individuals have to information, and I personally want to thank you, Mr. Arnold, for the answer to your question, which Mr. Smith also agreed with, when you talked about transparency. I have this great faith in the American public. If they have access to information, they will make the right decisions. I don't care how anybody attempts to influence anybody about anything, I care about the hiding of those attempts. And perhaps now I can just shift into a question. Can you give us a little background, Mr. Arnold, on the Heritage Forest Campaign--that is, who initiated it, how was it set up, how successful has it been, and why? Mr. Arnold. Let me try to do that, Congressman Cannon. The understanding that I have, according to the documents from Pew Charitable Trusts and according to their Website, is that it is titled a Pew Initiative, which tells me that it was the brainchild of Joshua Reichert, a single individual who is the Environmental Director of the Pew Charitable Trusts. He is typically the model of the ``coalition''. His whole way of thinking is that you can't just do things with one organization, you must have a coalition. And in order to make a coalition work, as the Environmental Grantmakers Cluster of Foundations discovered to their dismay in 1992 when they tried a different model and it didn't work, you have to have a single money funneler, a fiscal agent that can actually get on top of a bunch of other groups that actually get a lot of the money, and tell them what to do. In other words, the marching orders come from the top--in this case, Joshua Reichert--they go down to National Audubon Society, they go from there to 12 organizations which, according to their own board minutes of their own meeting of the National Audubon Society, they say they are ``supervising'' 12 other environmental groups. Now, I am not quite sure what the IRS would think about that--one 501(c)(3) supervising other 501(c)(3)'s. Now, my board would not allow me to be supervised by anybody, not for very long. I would give notice that I didn't work there anymore. So, that is a very remarkable thing about what I found in their minutes of their own Audubon Society Board meeting which, incidentally, you will find verbatim exactly as I copied them from their own meetings, on page 10 of Power To Hurt. Let me, if I may--I don't know how much time I have here-- it says--and this is from Dan Beard, the man who was formerly in the Clinton Administration. ``There are 60 million acres of 1,000-acre-plus plots in our National forests that are still roadless''--and a comment on that, they are in no such way roadless. They have things a lot of people drive vehicles on, they just don't qualify under a very mushy definition that suits their political purposes for what does it mean, a ``road''. ``There is no hope of congressional action to preserve them as wilderness. Administrative protection is possible. We have raised the issue's visibility in the White House, but it is not enough, so we did a poll using the President's pollster. He sent results to White House Chief of Staff--poll shows that Americans strongly care about wilderness to the extent of favoring it over jobs. Even Republican men in inter-mountain states supported at the 50 percent level. The Administration has said they will take some kind of action. We hope for an announcement from the President of some kind of administrative protection. We probably won't get all 60 million acres, but if we did it would represent the biggest chunk of land protection since the Alaska Lands Act. The Pew Trusts is pleased with the campaign so far. Second year funding will take it to January 2001, $2.2 million for about 12 organizations under our supervision''--what is that about? ``Outside magazine this month has a good cover article. Our visibility and credibility among fellow forest protection organizations has been raised. Comment from John Flicker''--he is the head of Audubon, that means that he made this comment himself--``This grant came to us because of Dan Beard's reputation and good name''. Well, I didn't say that, I got that out of their board minutes. OK. So I think that gives you the most thorough answer. Just read their own documents and see what they are doing. The thing about it is, you have to know where to look. The average person who goes into Audubon's Website couldn't find that. Why not? Why don't we know about this stuff as it is going on? I want to know who is trying to put all of my members out of business before and while they are doing it, so I can do something that will counter it. That is just not fair, and that is something that those transparency laws certainly could do something about, fair notice. Mr. Cannon. Thank you, Mr. Arnold. I note, Madam Chair, that the light is not illuminated, but I suspect my 5 minutes have passed, and so I yield back. Mrs. Chenoweth-Hage. Thank you, Mr. Cannon. Mr. Udall is recognized for questions. Mr. Tom Udall. Madam Chair, thank you very much. I initially would just like to submit a statement and ask unanimous consent to submit a statement for the record. Mrs. Chenoweth-Hage. Without objection, so ordered. Mr. Tom Udall. Thank you. Mr. DeVargas, welcome and welcome to the entire panel. I would like to direct my questions primarily to Antonio DeVargas. La Compania Ocho is not the first company to lumber in the sustained yield area, is that correct? Mr. DeVargas. That is correct, Congressman Udall. Mr. Tom Udall. Could you tell me the company that was logging in that area prior to when you set up? Mr. DeVargas. Prior to us setting up, it was a corporation that was a subsidiary of Hanson Industries, Ltd., and the name of it was Duke City Lumber Company. Mr. Tom Udall. How would you differentiate your business, this lumber operation, from the lumber operations of the corporations that were your predecessors in the area? Mr. DeVargas. They were a very large corporation. Hanson Industries, Ltd. is based in London. They had pretty much a colonial mentality over the people there. They were very predatory in their practices not only in terms of their employment practices over the people there, but also in terms of how they did their lumbering. There was strong opposition from the local community to their methods and the extent of harvesting that was occurring and, in fact, the local communities were consistently fighting Duke City Lumber Company and the Forest Service. Mr. Tom Udall. And could you compare your approach--I think you have stated the earlier actions of the other corporations, the foreign corporations--how you approach this and what the reaction of the local community is? Mr. DeVargas. I believe that the local community being land-based and being rural and being from there and being vested in the land is much more--I think we are better stewards, and I think that we have a greater respect for the land because we cannot see destroying the land of our ancestors. Our village, as many of them, are 400 years old. The Native American villages are even older than that. And there's logging going on and timbering going on on the reservations in New Mexico, and nobody is arguing with the levels of harvest there, and it is because the people from there do care about the land and the water and the air. Corporations from outside the country or from outside the region don't have that same responsibility to the locals. Mr. Tom Udall. Now, Mr. DeVargas, you talk about land-based and being there 400 years, and a lot of this is intertwined with the land grants, is it not, the Spanish Land Grants and the land grant issue in northern New Mexico? Mr. DeVargas. That is correct, Congressman Udall. Mr. Tom Udall. Can you tell this Subcommittee about the important role the land grants have in the traditional lifestyle of New Mexico's Hispanic villages and local economies? Mr. DeVargas. The land grants were the basis of community survival. Without them, it was not possible for communities to survive. The sovereign of Spain, when we were under the sovereignty of Spain, that government recognized that. When we were under the sovereignty of Mexico, that government recognized that. Under the sovereignty of the United States, that has not been recognized. So, we are not in any position to develop our own economy based on a sustainability for our villages. Mr. Tom Udall. Looking at the history of land grants in New Mexico, how has your business and the community's ability to support themselves been affected by what has happened to community land grants in New Mexico? Mr. DeVargas. The community land grants in New Mexico have been swallowed up by either large corporations or the Federal Government. They no longer exist in fact. They exist in the people's consciousness, they exist in the people's hopes and dreams, but in fact they don't exist, and this is what has rendered our community so helpless. Upon losing the land grants, basically what happened is our villages were condemned to the poverty levels that we now experience. Mr. Tom Udall. How were New Mexico's community land grants impacted by the way the United States implemented the Treaty of Guadalupe Hidalgo? Mr. DeVargas. The Treaty has never been implemented, Mr. Congressman. I believe that the Treaty was violated before the ink was dry. Mr. Tom Udall. Could you tell the Committee how that happened and what injustices were perpetrated on the people of northern New Mexico? Mr. DeVargas. The acquisition of the land by the Federal Government and private individuals were done through chicanery, outright fraud, just by dispossessing people, even through violence. There was a notorious organization that was based in Santa Fe during the territorial days called the Santa Fe Ring. It consisted of politicians, judges, and lawyers that just basically circumvented the laws, and really rendered the Treaty invalid. It has never been implemented. That Treaty has never been implemented. So, for the people there it has been very difficult. It has been very difficult to understand how a people can be discriminated in that manner, considering that in fact when the United States got its independence from England, from Great Britain, it would not have been able to, without the help of Spain. And, in fact, I have documents that show that all of the Spanish holdings, all the people that were under Spanish rule, were required to pay taxes to support the war effort for the 13 Colonies of the United States. New Mexico was very active in the Civil War and protecting the Union. Just about every person that I know--in my family anyway, my great- grandfather fought in the First World War, my dad in the Second, my relatives in the Korean, myself in Vietnam, my cousins in the Persian Gulf War and other areas. The Hispanic contribution to the defense of this country is very, very well documented, and it just seems very strange that we would have to defend treaties of the U.S. Government in other countries when our Treaty has not been recognized. Mr. Tom Udall. Thank you, Mr. DeVargas. One of the things, and I know you know it very well, is that Treaty said to the people that decided to stay, the Treaty between Mexico and the United States of America, that the people that decided to stay in the United States--people were allowed to go back--but to stay in that area, that the United States would take the affirmative action of protecting their culture, protecting their property, and protecting their rights and their language. And, in fact, as you have very eloquently stated, that has not happened, and it is a great injustice that I think the people of northern New Mexico feel. I have taken a bill that was passed through the House of Representatives the last time around and introduced that identical bill on the anniversary of the Treaty of Guadalupe Hidalgo, and that bill is here in the Congress. I believe it is subcommittee, and I would just ask the Chair--I look forward to maybe working with you on that because I think these two issues are very intertwined, the issue that the panel has been asked to speak to today, and also this issue of the land grants is one that I think is a big injustice that needs to be corrected by the U.S. Government. Thank you, Madam Chair. Mrs. Chenoweth-Hage. Thank you, Mr. Udall. That was a very interesting line of questioning. And so it is clear then, in your opinion, that the Treaty of Guadalupe Hidalgo was signed, agreed upon, but has not been honored by this Government? Mr. DeVargas. That is correct, Madam Chairman, but I would like to go a little bit further and state that in my view the kind of injustice that was perpetuated against the people under that treaty, the same mentality that led to that is the same mentality that is driving the elite groups to now not only discriminate against Hispanics, but to discriminate against rural people in general, and I believe that many of the motives behind this is to disenfranchise rural people and make sure that the forests in the United States, in the western part of the United States, become playgrounds only for the rich. Mrs. Chenoweth-Hage. Thank you very much. The Chair recognizes Mr. Sherwood. Mr. Sherwood. Thank you, Madam Chairman. Mr. DeVargas, if I could continue in that line, and we will leave the Treaty of Guadalupe Hidalgo and go on to your settlement with the Forest Service in the suit of 1994. And I read that you were to be able to purchase 75 percent of the La Monga timber sale, and yet that has not happened, and I understand that that was a suit against race discrimination, retaliation and preferential treatment for Duke City Lumber Company, and you got a pretty good settlement, you thought at the time, out of that suit. But what has happened recently that has kept you from reaping the benefits of winning that suit in 1994? Mr. DeVargas. Mr. Congressman, there have been several factors in that, not the least that we had to fight the Forest Guardians in two Federal courts in Arizona, one Federal in New Mexico, and we had to go all the way to the Ninth Circuit Court of Appeals in San Francisco. For a small corporation like ours consisting of five people who had to mortgage their homes just to even found the corporation, it cost us enormous sums of money. And obtaining financing for a small corporation such as that during a climate where everything is litigated--in fact, La Monga sale has not all been put up at this point, we have purchased two portions of that. We have purchased 800,000 feet under La Monga whole timber sale, and we have purchased 450,000 in the Bonito timber sale. And we have invested in our lumber mill, which is a small lumber mill, and we are going forward with it. However, the pipeline--every sale is appealed, and it is appealed indefinitely, and it is all very, very expensive to a small corporation such as us. Mr. Sherwood. What was their basis for stopping--for suing in court to have you stop your purchase of this standing timber, that they didn't want the timber cut, or what is their brief--what are their arguments here? I realize that is a complicated--but in short detail. Mr. DeVargas. Basically, they say it is kind of like a ``mantra''--it is the last 5 percent of whole growth timber. That is what they say about every timber sale. They say it is the last 5 percent of old growth timber in that area, which is just simply not true. Mr. Sherwood. Describe the timber in that sale to us. Mr. DeVargas. That sale consists of mixed conifer, Ponderosa Pine, Douglas Fir, and white fir. It averages--the elevation is anywhere from 7200 feet to around 9800 feet. It is an area that has been logged before. It was logged very lightly in the past, more lightly than other areas. The prescriptions for logging on that sale, I feel, is a responsible prescription. It is something that the community can live with, doesn't feel it is an excessive harvesting. There has been no clear cutting, none whatsoever. Mr. Sherwood. It is a reasonably arid site, or if there is big timber it is not too arid. What are the problems that you have with logging, do you have erosion problems or siltation? Mr. DeVargas. I don't think we have any of those problems, Mr. Congressman. The arguments against logging La Monga is just that they don't want it logged, basically. It is kind of strange because we have a situation where they say they want us to do forest restoration work, such as thinning--and this is part of the deception that happens all the time--but then they initiate a zero-cut position. And our forests are overgrown. I mean, how do you justify zero-cut with thinning of the forest? It doesn't make sense to us. There is also a 150- or 250-acre environmentalist retreat located in that area, and so if the La Monga timber sale is put off-limits to grazing and logging, it would automatically increase the size of that particular retreat for environmentalists to 16,000 acres. Mr. Sherwood. What was the story behind the acquisition and sale of your wood processor? Mr. DeVargas. The Forest Guardians came up with what they considered their position to save the village of Vallecitos economically, and basically that position--it came out in the newspaper that that is what Mr. Hitt and the Forest Guardians wanted to do. And what it was really was a study that we had done ourselves. And so they were able to acquire something like $38,000 for a wood processor so that we could process firewood. They did that at the same time that they were filing a lawsuit that stopped all firewood cutting. And so we received a $38,000 wood processor that we couldn't use. And we were tied up in litigation with the Forest Guardians over the firewood and the logging for almost 3 years. That machine was rendered totally useless. Mr. Sherwood. In your northern New Mexico villages, what other means of livelihood is there? What is the other industry besides the forest-related industries? Mr. DeVargas. It is either local government, city or county, schools, the Los Alamos National Labs, and Santa Fe is about 85 miles away where there is some manufacturing, very limited. That is about it. Mr. Sherwood. Thank you very much. I very much enjoyed hearing the panel. Mrs. Chenoweth-Hage. I want to advise the members that we have just been called to a 15-minute vote on one of the suspension bills, and then after that there will be a 5-minute vote on the journal. And I also want to let you know that we will adjourn for 30 minutes when I recess the Committee, and then we will come back and we will have a second round of questions. I do want to ask Mr. Arnold before we go, you have a section in your book on Undue Influence, a chapter entitled ``Oh, God'', and it is very interesting. I think you have pretty well tied how the trusts are even moving into the churches to try to influence them. I am looking at page 101 where it indicates that the Pew Charitable Trusts donated $135,000 to Christianity Today, ``to convene a forum on population and consumption issues among leading evangelical theologians and analysts, and to produce a special issue of Christianity Today on global stewardship''. Now, Mr. Arnold, it appears that there is a strange connection here. The Congress funds grants. These grants are acquired by these trusts. Then the money is used to have an influence that is a negative influence on our First Amendment, the separation--although it isn't included, the word ``separation'' of church from state--nevertheless, the purpose was to separate the influence of Government in the churches, and it looks like the string is going right into the churches. Am I reading that right? Mr. Arnold. I believe so, Madam Chairman. I think the text there gives you enough to go on. This was a very truncated version of what I actually found, which was stacks and stacks of the ``best religion money can buy'', is what it added up to. And, of course, the foundations put piles of money in that isn't documented in here that, at your request, I could supply sheet after sheet. Mrs. Chenoweth-Hage. Would you please do so? Mr. Arnold. I will do that, Madam Chairman. Mrs. Chenoweth-Hage. We will recess the Committee right now for 30 minutes, and we will be back at that time and we will begin with questions from the Chairman and then go to the remaining members. Thank you.[Recess.] Mrs. Chenoweth-Hage. The Committee on Forest and Forest Health will reconvene. I would like to begin my line of questioning with Ms. Capp. Ms. Capp, I wonder if you could put the map up again. Mike, if you would do that. Thank you. [Map retained in Committee files] I was intrigued with this map although we didn't get much detail about the map. So, I wonder, for me and for the record, if you could go over that in a little more detail. Ms. Capp. For the sake of being able to hear me, I am not going to stand over there and point at it, Ron is going to point at it. As I said, what this map basically illustrates is the plans that are afoot that are really going to squeeze us out of Ferry County. And I want to point out that this map is in process. It doesn't even contain everything that is coming at us. In fact, we have regulations and campaigns coming at us so fast we don't really know what to address first. Basically, the left-hand side of the map is Ferry County. That white space you see there in the middle, that is not Ferry County. It is bordered by the Kettle River there on the right side. The yellow is proposed lynx range. The green is Forest Service land. The little sections that you see sectioned off there--some of them have numbers--are the Forest Service's ecosystem management plans that are being implemented which, when you look at what is being proposed in those plans, they bear an incredible similarity to the Interior Columbia Basin Ecosystem Management Project, only they seem to be implemented now on a chunk-by-chunk basis, one watershed at a time. You can't see very well there, but the Columbia and the Kettle River which flows through Ferry County--despite the fact that numerous biology experts and field biologists have told me that the Kettle River is not, nor has it ever been, bull trout habitat, we still have various people at the Federal and State level who would like the Kettle River to be bull trout habitat, so that is another thing that is threatening us. And one of the worst things about that is that--well, just for example, Dave Smith of the University of British Columbia is one of the people that I interviewed when I did a report on bull trout for the Kettle River Advisory Board, and Dave told me that in no uncertain terms the Kettle River is not bull trout habitat. Its natural characteristics are too low flow and warm temperature. In fact, a hydrological report that was done some years back for WYRA purposes states that the Kettle can exceed 16 degrees centigrade in the summertime with absolutely no human use whatsoever, and 15 degrees is the maximum for adult bull trout. So, one of the reasons that is important is because we have plans coming at us for endangered species or threatened species that aren't really even natural to our area. At any rate, the main point that I would like people to take from that map--now you can't see the lower half--is Colville Indian Reservation, and that is about--that portion of the county is about the same size as the top. The county is about 4.6 million acres. Only 15 percent of that is private property. And this is a natural resource producing community. Those are the jobs that we have there. If we are squeezed out of the National Forest, there is not going to be any employment--maybe Job Corps will still be out there, although I don't know who would want to work there, but the rest of the employment in the county is Department of Social and Health Services, the school district, the county government--which, by the way, now is only open 4 days a week. So, if there is no other employment in the area, the school is going to go. In fact, one of the ways that all this has impacted us is that up in Curlew, the Curlew School District where I live, we have under 300 students, kindergarten through 12th grade, very small school. Last year, we had to lay off four full-time teachers. Our first grade teacher now has 60 students. We have teachers who are now doing the best that they can to teach subjects that never really were their forte. The whole community is really suffering. Mrs. Chenoweth-Hage. That is quite amazing. You know, the national environmental groups often say that our forests need to be protected from development. Are forests in your area threatened by development? And my second question is, is the lynx listed on the endangered species list, or endangered? Ms. Capp. Not yet, but there is a big push to get it listed. That is one of the things that is to frustrating about the massive amounts of money that these groups have to do their PR and the way that they can really twist the facts to get urbanites really to vote and petition rural people into oblivion. Their campaigns give the impression that our National Forests are--when they use the word ``development'', what comes to most people's mind is that we have factories and industry and suburban sprawl coming right up to the edge of these so- called ``roadless'' areas which, in fact, we don't. I mean, in a county of only 7200 people, you can imagine there is not much of anything in the way of building. And the other thing is the way they carry on about development and roads. People in the urban areas get the impression that we have blacktop highways going through the National Forests and, of course, the Forest Service would be frivolous to be trying to maintain things like that but, in fact, we don't. What we have is a bunch of little one-lane dirt roads. So, no, there is no development threatening the National Forests in our area. Mrs. Chenoweth-Hage. Thank you, Ms. Capp. At this time I would like to yield to Mr. Peterson for his questions. He had some questions he was concerned about. Mr. Peterson. Thank you, Madam Chair. Mr. Arnold, and anyone else who wants to, but I want to make sure I understand what you are telling us. I haven't had time to read the book, but we have a picture here of large foundations like the Pew Foundation, who join hands and fund large national organizations like the Audubon Society, and who somehow collaborate with the Administration and the White House and the Vice President and the President's Environmental Council sort of become the War Room for these efforts. And they have ability, the Interior Department, the Department of Agriculture, EPA, smaller organizations like the BLM, the Forest Service and the Park Service all to manage information and manipulate public policy. Is that a fair assessment? Mr. Arnold. Congressman Peterson, you have that exactly right. I wouldn't change that in any way. Mr. Peterson. OK. Well, I also know something that surprised me here, I don't have a good audit of it of where all it is, but I know we spend a lot of money here in Washington funding organizations that have nothing to do with Government but who are very related to associations and organizations that represent different interest groups around the country, but they get a lot of Federal money. At the State level, where I came from and have more expertise, that didn't happen. We didn't fund our opposition or those who are promoting ideas. Are you aware of how Government tax dollars gets into this mix, too, besides the use of public offices where public policy is made? Mr. Arnold. Yes, sir, I do. As a matter of fact, one of the chapters is called Zealous Bureaucrats, and it deals extensively with that. The gist of it is that you can trace probably half a billion dollars in any given year, we suspect that there is probably four times that--that is based on a guess of a reporter from the Boston Globe, whom I respect quite well--$4 billion dollars we can't find. We can find about half a billion dollars, and it goes from groups like the Fish and Wildlife Service and the Fish and Wildlife Service Foundation, which is a quasi-Governmental group which gives grants to private environmental groups, some of which then come back and lobby. They are primarily for improvement of infrastructure on National Wildlife Refuges, such detailed things as that. On the other hand, you get grants from the EPA. Now, one of the things I will give them credit for is there is a Website that anyone can access, that lists their grants. The catch is they don't list all of them and, in fact, they don't list the most interesting ones, which you have to have special software and a computer beyond a desktop in order to access it, but the kind of money that we are seeing going from EPA goes directly to very advocacy oriented groups. It also gets back to them through the route of going to academics who see a particular issue--let us say, an air quality issue--they will go to an M.D. studying children's asthma syndromes, and then Carol Browner will, as the head of the EPA, use that in testimony saying that we have to stiffen up the air quality regulations-- which, as a matter of fact, did happen. And there are quite a few episodes of that nature documented. We have also heard, but cannot confirm and would urge this Committee do some investigation on it, that actually Mrs. Browner was, in fact, hosting on a regular basis foundation funders in her personal office, and telling them where they should be putting their money. Like I say, I can't verify that, I have that from a couple of whistleblower types who are not quite brave enough to blow the whistle, but that is something I think that should she be required to testify for other things, that certainly needs to be brought up. Mr. Peterson. But are you aware of where--you did mention several--but should we have a prohibition of tax dollars being utilized to fund any organization on any side of any issue? I mean, somehow there should be a firewall from Government funding advocacy groups? Now, I guess the question I wanted to ask and it slipped by me was, the Foundation, Fish and Wildlife Foundation, is that all tax dollars or is that a blend? Mr. Arnold. No, that is not. That is a combination of tax dollars and private funders, so as I say, it is quasi- Governmental, so that there was one person who became a board member under very unusual circumstances, who donated a million dollars to the Fish and Wildlife Foundation. So, yes, private individual grants can go into it, and a number have, as a matter of fact. So, it is a mix. And to answer your first question, should there be a firewall, I am certainly no legislator, but I have hired enough lawyers to know that is a can of worms. I think that to go in that direction probably would invite prohibitions that would probably hurt really worthy causes. I think that protecting National Wildlife Refuges is a good idea. Using them as a way to put people out of existence is not a good idea. I am not able to see how you would differentiate in a law which has to apply to everybody that wouldn't really hurt a lot of good things. So, that one needs a lot more thought than I have given to it in order to be able to say, yes, you should do something that prohibits tax-exempt organizations from using tax money to lobby with. I don't know how you would actually do that. It would be nice to have that all visible and transparent, and that, I think, the simple matter of public disclosure is probably--for one thing, it would be a very popular issue. I can't imagine any citizen of the United States that likes things going on behind their back that influences their lives as much as is documented in this book. And so public disclosure, I think, really is the way to go, rather than strict prohibitions. Again, that is up to Congress, which is why we are talking to you because we need your ideas and your help as well as you getting ours. But I see the route into clarity on this going through public disclosure. If we knew while they were planning the Heritage Forest Campaign that they were going to do it, that there was a fair notice requirement when any large coalition got together--now, stop and think of what this Pew thing was. It was 12 groups working together. If those were for-profit groups, they would all be in jail. That is a clear violation of the Sherman Antitrust Act of 1890, to do that kind of thing if you are a for-profit. And I am not sure that perhaps something of that nature about working in combines, or illegal--you know, price fixing for the for- profits--how about policy fixing? I don't know if that even means anything under our Constitution, but there has to be some investigation of this coalition model. Nothing happens except in coalitions anymore, in the environmental movement, or any kind of what they call ``progressive'', more left-leaning type of movement, and what to do about that, I think, is let us lift the rock and ``let the sun shine in''. Mr. Peterson. Well, the frustration I have had is that they seldom want a public discussion. It is a mass manipulation of information, to then manipulate public policy, and it is a huge--it is like McDonald's selling hamburgers. I mean, that is what it is about. Earlier we talked about the sprawl issue, and somebody just handed me here--a polling company talks ``sprawl is now a bread-and-butter community issue like crime', said Jan Schaffer, Executive Director of the Pew Center for Civic Journalism, which sponsored the polling. Americans are divided about the best solution for dealing with growth, development and traffic congestion''. Well, I think part of our argument needs to be, and part of the discussion needs to be, that if we stopped squashing rural America, they wouldn't be moving to the cities to cause the sprawl. Mr. Arnold. Well, Congressman Peterson, let me also add to that, what in the name of Heaven are these foundations doing giving money to the media? Why is there such a thing as the Pew Center for Media? Are they buying newspaper reporters? If you take a look, in fact, in this book on page 99 and 100, I documented that question. Here is a Public Media Center got $300,000 from Pew Charitable Trusts, the Foundation for American Communications got $75,000 from W. Alton Jones Foundation, the Center for Investigating Reporting got $105,000 from the Schumann Foundation, on and on and on. There is so much money being poured into the media to assure proper environmental reporting, whatever that is, and you can imagine what their viewpoint is. Why are the media taking the money? I don't know that. And I do know--I worked on a newspaper---- Mr. Peterson. I think they will take anybody's money. They don't have to stand for election. Mr. Arnold. That is true. Mr. Peterson. Of course, the number of people that watch the major media today is pretty small, in comparison, and I think it is because of their spin, not because--if they reported--I think the success of Fox News is very much ``We report, you decide'' has caught on because the media doesn't report, they tell you what portion they want you to know, and I think we all know that. I want to commend you for your work, all of you, for speaking out, but I guess, in conclusion, my biggest concern as a Member of Congress--when I was in State Government for 19 years and I had a business for 26, so I come here with some experience--is the immenseness and the inability to put your arms around departments. I mean, it is like--I used to kid when I was in State Government about dealing with the Federal Government was like dealing with a foreign country, and I have been 4 years--and I am a bureaucracy fighter, I always was at the State level--but here it is like you can't get at them. I mean, they are huge. They are almost nameless, faceless agencies that have--and we here in Washington have almost no process in the regulatory process, and that is lawmaking without public discussion, and it is what people fought and died for a long time ago, but the regulatory process in Washington is totally out of control, and Congress has almost no ability to influence it, or at least doesn't, and I don't think anybody can argue with that. At the State level in Pennsylvania, we had a very effective agency that helped committee chairs and committees deal with regulations that were inappropriate, but you will find that presidents quickly find out that it is easier to regulate and write rules than it is to pass law because when you pass law you have to win a public debate. And, unfortunately, many of the problems we are fighting are because we have totally left go. Since Ronald Reagan, no one has had any influence on the regulatory progress, they have been totally free to write law and set policy without a public discussion, and we will pay down the road. Thank you very much. Mrs. Chenoweth-Hage. Thank you, Mr. Peterson, I appreciate your line of questioning. Your book is very fascinating, Mr. Arnold, and I wanted to--I have a lot of questions to ask you. I am going to ask you some now on the record, and then I will be submitting more questions to you in writing. It has always been just a strong tenet of the free-market system, freedom of enterprise, that when a company operates in their own self-interest, it is also to the self-interest and the betterment of those who work for them, those who can purchase their product, and so forth. In looking at those corporations' own self-interest, who are behind the Pew, Mellon, Alton W. Jones Foundations, all of those, why are they doing this? I mentioned in earlier comments that it was a growing metastasis, it is dark and ugly. What is their self-interest here? Have you been able to find anything? Mr. Arnold. Well, Madam Chairman, unfortunately, the answer is yes, I have. Probably the most obvious answer is if you have a large corporation in something that we have all been talking about, timber, and they are, let us say, a big landowner that has fee land that they own, clear title, and they have very little that comes off Federal lands in the way of timber supply for their mills, but surrounding them are all kinds of middle- size and smaller competitors who go into the National Forest, take timber out, and compete effectively with that--sealed bid and all kinds of things. Now, if you were one of those large corporations, what would you do if you suddenly found that somebody was shutting down all of your competition on Federal lands? If I was a CEO, I would be like Harry Merlo, who once told the New York Times about 10 years ago, ``Why should I pay money for a lawsuit to fight the spotted owl issue? All the court has done is given me a legal monopoly''. Mrs. Chenoweth-Hage. And Harry Merlo was the CEO---- Mr. Arnold. Harry Merlo said that out loud. He was the CEO of Louisiana Pacific Corporation at the time, which is a very large private landowner, and in a business sense he was absolutely right for his stockholders. Why should he spend money on something that is only going to put his competitors out of business? But, you see, that is one of those double- edged swords. Now what do you do if the free market says ``I don't care if you regulate the other guy out of business, and I will give money'', as we are seeing many large corporations giving money to the Nature Conservancy which buys private land and then sells it to the Federal Government at a markup, to the Wilderness Society even, to any kind of environmental group that advocates the shutdown of all resource extraction industry on Federal lands. What are we to make of those corporations doing that other than there is probably some competitive advantage in it for them. They are not stupid. I can't imagine that is all out of altruism. I am sure they have figured it out. Mrs. Chenoweth-Hage. So that is how the dots connect, and that is why you made the comment about the Sherman Antitrust Act, it is creating a monopoly. Mr. Arnold. It is, Madam Chairman. I think that what is sauce for the goose is sauce for the gander. Why should not there be a nonprofit equivalent of that, only how would you do it without harming churches, the Civic Opera, hospitals? You see, that is where I am really hesitant to suggest such a thing, because it would hurt good people. There may possibly be a constitutional way to deal with those abuses, but it is the dilemma of a large society. There is no way you can run one without a bureaucracy, so you can't fight bureaucracy per se, you have to fight bureaucratic abuse. And how you target a law that precisely so that it does not hurt good people but stems abuses is a question I think Congress needs to tackle seriously. Mrs. Chenoweth-Hage. I am still trying to connect the dots on some of the National Monuments. For the record, can you advise this Committee as to how the foundations may or may not have--but probably may--have benefited from the Utah National Monument designation? Mr. Arnold. They created it, essentially. The Southern Utah Wilderness Society, in the person of Ken--and I don't know how to pronounce his last name, it is in the book--took Katy McGinty, several years before the designation of Staircase Escalante National Monument, to the area and spent 2 weeks with her convincing her that it ought to become wilderness, which was not within her power as Chairman of the President's Council on Environmental Quality to do, she couldn't deliver that, but she said, ``Let us see what we can do about a National Monument''. About the same time, a memo came from the Office of the Secretary of the Interior to the Solicitor, who is the head lawyer of the agency, asking to analyze what you needed to do in order to declare a National Monument without any environmental examination, with no public debate about the environmental consequences. This was the Clinton Administration. Why would the Clinton Administration, with Al Gore sitting in the second seat, ever want to do something without going through an environmental review? The only answer is, they wanted to act in secrecy. And in this case, they wanted to do what they did without anyone knowing it. As a matter of fact, the Resources Committee subpoenaed all of the resulting e-mails back and forth between the Interior Department and Katy McGinty's shop, including of her 12 or so assistants, about how are we going to fake up a letter so that the conditions that the Solicitor was told can be met. Those conditions were these: In order to declare a National Monument without having to go through environmental review, it had to come from the President's Office. Well, the idea for this one had come from the Secretary of Interior's Office which, if it does, becomes subject to the requirements of NEPA, the National Environmental Policy Act of 1969. And so Katy McGinty and all of her people spent nearly a year passing notes back and forth, trying to fake up a letter from the President of the United States to Secretary Babbitt saying, ``Hey, I have this great idea, and would you do this for me, and tell me all about this area that should be a National Monument''. Under those circumstances, if that was really the case, the President has the authority to, in essence, deputize the Secretary of the Interior to become part of the White House so it doesn't have to go through environmental review. So, in faking up this letter, which went through, I think, three or four drafts from the e-mails that your Committee was able to recover, it is very clear that they were lying through their teeth all the time. They knew exactly what they were going to do, and this Ken Raitt--I think is how you say his name, he was the person from the Southern Utah Wilderness Foundation--was back there with Sierra Club support, with all kinds of other support, some of which I do know and some of which I don't, from foundations and other environmental groups, pushing publicly that ``there needs to be a great land legacy kind of program coming from the Clinton Administration because we are really annoyed at you because you supported the Timber Rider, President Clinton, and so we may leave you hanging in this next vote'', which was the election of 1996. Clinton and Gore were both standing for re-election. The environmentalists were disaffected, and it looked like they were simply going to walk away and let them suffer the consequences. So, what do you do to bring them back? Of course you declare National Monuments, which conveniently, not too long before the election, finally did happen, without the slightest knowledge of anyone in the State Delegation of Congress from Utah. They had no idea this was going to happen. They weren't even invited to the ceremony, which wasn't even held in Utah, it was held in Arizona at the Grand Canyon, and a whole bunch of--hundreds of environmentalists showed up, who knew when to be there, and where to be, but nobody else in the country did. So they acted in secrecy. They told flat-out lies. And I haven't seen that published anywhere except in this book and in the Resource Committee's report. So, maybe media don't think that is news, but when something that corrupt goes on in an Administration, I think it is news. Mrs. Chenoweth-Hage. So to connect the dots from the foundations, it comes from the foundations into the Southern Utah Wilderness Society and from the foundations into the Sierra Club, who were working with and had prior knowledge of-- working with Katy McGinty and had prior knowledge of the final execution by the President of a National Monument. Mr. Arnold. Yes, they did. Mrs. Chenoweth-Hage. A lot of that land is land that was used by cattlemen, some of it was school endowment lands, but there was a huge, rich coal deposit. Mr. Arnold. And oil and natural gas. Mrs. Chenoweth-Hage. Right. Can you connect the dots from those who are behind the foundations to those who are now managing to control that resource? Mr. Arnold. Well, you get back to the law of supply and demand. If you know where your deposits of those minerals and valuable products are, and they are on private land or they are in another country where you can reach them, and somebody in Government wants to reduce the supply by locking up in some kind of designation where you can't gain access to it, what do you think is going to happen to the price of those products and the value of the remaining land? So, again, you don't see many corporations crying the blues over that because now their own private holdings are worth more. Mrs. Chenoweth-Hage. Ron, I want to get back to you. I do want to take care of a little bit of business here for Jeff Lyall. Jeff, I just read a letter that you wrote, a very beautiful letter, and you have asked that it be submitted to the Committee and made a part of the permanent record. Mr. Lyall. Yes, ma'am. Mrs. Chenoweth-Hage. Without objection, that will be ordered. Mr. Lyall. Thank you. Mrs. Chenoweth-Hage. Ron, we have heard how rural communities are impacted by the large foundations. Do these effects spread beyond the rural areas, and how does it affect the country as a whole? Mr. Arnold. It is a complicated question. I could give you the typical economist answer on the one hand and on the other hand, but I think in this issue there is no other hand. The answer is simple and straightforward. If you remove and destroy all resource extraction from the United States, what does that mean for where we get our supply of everything we can't get here? It has to be gotten elsewhere. We get most of our bananas--I don't know of anyplace in the United States that grows a lot of bananas--we get them from somewhere else. We haven't fought banana wars for a while. But there is a lot of petroleum setting in the United States you can't get at and, as I recall, we had a little war over oil not too long ago, Desert Storm. If we push timber offshore, if we push mining offshore, if we push farming offshore, if we push ranching offshore, food, clothing and shelter--you know, even environmentalists get grumpy when they miss dinner. So, I think are we going to be forced into facing something like timber wars with some other country to get their trees because we won't cut ours? It is not inconceivable. I don't say that that is what is going to happen, but if it happened with oil, why couldn't it happen with all the other things they are shutting out. So, is it affecting the Nation as a whole? Possibly, we don't know. I mean, my crystal is no better than yours, but as far as immediate impacts that you can see now, if you take people out of the country--you know that old saying, ``you can take the boy out of the country, but you can't take the country out of the boy''--well, when you take the boys and girls out of the country, you put them in the cities. Now, what does that do to concentration of population? We have seen in the State where I live, even an attempt to address some of the urban problems by sending welfare families into rural areas because the State Government seemed to be able to think, well, how do you help rural areas? You send them urban things. Well, that is not the answer at all. You stop preventing them from doing rural things, like cutting trees and growing cows and food and other incidental things like that. I think that a lot of people in urban areas simply haven't ever lived on the land. They have lost their roots not just to nature like the environmentalists claim, but to agriculture which grows all their food, to mining from which if it doesn't come from the ground it comes out of the water, so you have to have minerals to make fishhooks even when you get stuff out of the water. So, it is a matter of, like one engineer once told me, ``You know the problem with people in cities is they don't understand that everything--that things are made of stuff, and stuff comes out of the ground''. Now, I don't know any simpler way to say it, but that struck me because it is so on-target, and it is so much like the problem that you see in urban areas--and this is not a joke. There was a farm poster contest in San Francisco, and one little boy submitted a poster that said ``We don't need farmers where I live because there is a Safeway right across the street''. That is the kind of mentality you are up against, and yet when they see people coming in from the country--oh, that is a bunch of rubes and hicks, and we don't like them, and they make crowding and urban sprawl has become a big deal''--well, who is doing it? It is the people who thoughtlessly support the depopulation and the rural cleansing that environmentalists are promoting and advocating and actually producing with the help of the Administration. Long-winded answer to a short question, Madam Chairman. Mrs. Chenoweth-Hage. Thank you, Mr. Arnold. I wanted to ask Mr. DeVargas, what level of funding do the environmental groups have in your area, and how does it compare to the funding for the concerns that you represent? Mr. DeVargas. I know that they have about a million and a half dollars as of the last funding cycle that I had a chance to see, and we don't get anything. So, the comparison is really striking. As a former serviceman, one of the concerns that I have, that Mr. Arnold kind of alluded to, is that some of this stuff could really lead to some kind of danger to the country's security. If you kill the mining outfit, even just sinking a new shaft could take 5 years. If international shipping were to be disrupted by a serious war and we were totally dependent on all our raw products from somewhere else in order to fight a war, I think our national security is also at stake in a lot of these activities, and that is how I feel about it in terms of a threat to all of us. But in terms of the funding that we get for our activities, it is almost nonexistent. Mrs. Chenoweth-Hage. I wish my colleagues could have heard that answer. Can you tell us the story behind the acquisition and what you did, the sale of your wood processor, and now you have a new piece of equipment? I think you have already put that in the record, haven't you? Mr. DeVargas. Yes, I have. Mrs. Chenoweth-Hage. Tell me the history of the Mexican spotted owl in your area. Mr. DeVargas. There is none. There hasn't been any spotted owl. I believe in Santa Fe in the early 1800's, they were able to find one. In Taos, New Mexico, they said that they thought they had heard one. In the Hicorea area of northwestern New Mexico, they found two. They killed one of them to study it. That is the history there. Now, I understand there are spotted owls in southern New Mexico. I don't know what the populations are, but in the northern part of the State where I live, there are none. There are no spotted owls. Mrs. Chenoweth-Hage. What kind of impacts have the listing of the spotted owl had on your people? Mr. DeVargas. Well, there have been a lot of mill closures. The cattlemen are very severely impacted. The access to the natural resources--it is not just the listing of the spotted owl--I mean, the assault on the community is really broad. It is not just like the spotted owl. When the spotted owl loses its credibility because the biology doesn't sustain it, then they will go to the willow flycatcher, and when that doesn't work, when science reveals that the real threat to the willow flycatcher is not the cattle, but the cowbirds, then they go on to something else. And, really, what I see happening over there is just taking the people off the land. That is the real priority. Right now, the Bureau of Land Management and the Forest Service have enormous amounts of money to purchase land in the riparian areas. For us, what that does in terms of the impact on our county, it is manyfold. For one thing, it continues to take away our tax base, the people's tax base. I mean, we have numerous wilderness areas in New Mexico, quite a few, and they are underutilized because, as mentioned earlier, people just-- there is not that many people who are going to walk up there. Just in my area, there is probably over a million acres just in our area. There is the Pecos Wilderness, there is the San Padre Park, there is Wheeler Peak, there is Bisty Badlands, Bandolier, and it just goes on and on. Between the National Parks, the Monuments, pretty soon there is not going to be any land to support a tax base, and that affects our schools in the payment-in-lieu-of-taxes program because our county receives--most western counties that are surrounded by Federal land receive 25 percent of the revenues that they get in payment in lieu of taxes. Well, recreation doesn't bring us anything in lieu of taxes. The revenue from hunting and fishing licenses, they don't go to the counties, those go to the State Game Commission. So, whenever you don't have grazing and you don't have logging or any kind of extractive industries, you have no payment in lieu of taxes. When 70 percent of the land is in Federal hands and you don't get payment in lieu of taxes, your county's budget is just really bad. Mrs. Chenoweth-Hage. Well, Mr. DeVargas, I want to thank you for coming all the way out here to deliver your testimony. I want to thank all of the witnesses for their fine testimony and coming so far. Ms. Capp, you came clear across the country. Mr. Lyall, you came in, too, thank you very much. And, Mr. Arnold, I want to thank you. Before I close the hearing, I want to begin with Mr. Lyall, and ask you to respond briefly to one final question for me. What is the most important thought that you want left with this Committee and on the permanent record? Mr. Lyall. I think, ma'am, we just, like all the witnesses here--people--how can I say this, how would I like to--people are on the bottom of the totem pole when the environmental organizations, the Forest Service policy, when you look at all the policies, people are on the bottom of the totem pole. And why I say that, I deal with a gentlemen back home, they offer me a lot of excuses and they will tell me things like resource preservation. And what that means is that dirt, in their eyes, is more important than the quality of lives of millions of people. I am here trying to represent and trying to improve the quality of life for millions of people who are already behind the 8-ball to start with, and dirt is given more consideration than that. And that is why I have a problem with that. And back home where I am from, I know a family--who wishes to remain anonymous--but they have a 17-year-old daughter with cerebral palsy, and they just got down--I think it took them over 2 years--a big fight with the Forest Service and some Virginia State Land as well. They gave these people an awful time just so they could get access for their daughter to use a motorized golf cart so that she could get into the outdoors around their house. She lived in the middle of some Forest Service land and there were some roads on it that they wanted to be able to take their daughter on. What is the big hurt? The road is there. Let them use it. And they gave these people, I mean, an awful time. It is really a shame what they did to them. And that just comes down to when resources, things like--well, they are important, I will give them their place--but when those things take precedent over the quality of people's lives, I don't think there is any excuse for that. Mrs. Chenoweth-Hage. Thank you, Mr. Lyall. Mr. Arnold, what final thought would you like to leave with the Committee? Mr. Arnold. Madam Chairman, I would like our country to wake up and realize what is being done to them by this ``iron triangle'' of wealthy foundations, grant-driven environmental groups, and zealous bureaucrats. Simply understanding that will do more to dry up that influence and to put it in a proper perspective and to reduce it to a manageable level, I think, than just about anything else. Mrs. Chenoweth-Hage. Thank you, Mr. Arnold. Ms. Capp? Ms. Capp. Well, there are basically two things that I would like to say. The first is something that I would like minority people and Native Americans in particular to understand, and that is just as these groups use certainly animal species as what they call ``flagship'' species, they use Native Americans as ``flagships'' species. And this sounds outrageous, but I am going to say it because I believe it--after seeing the billions and billions of dollars that these people have access to, I believe that they could have ended the problem with the Hopi removal a long time ago, had they wanted to, but I believe that the Hopi served as a great ``flagship'' species for them to rally other Native Americans around, to get them to fight, in particular, mining, which if we abandon environmentally responsible mining here, we are going to be getting our mined products from other countries where mining may not be done responsibly. So that is one thing that I really want to be looked at, how minority people are being used against one another and against their neighbors. The other thing is that what I see happening now is it is currently manifesting what I clearly see as genocide against rural people in general. That is what is manifesting now. But I believe that down the road, if this trend continues, it is going to result in the economic devastation of this country, which of course will mean the devastation of our security. It is very important to me that this huge group of environmental grantmakers make their investment portfolios visible. It is hard to imagine that they are not somehow profiting from this. Mrs. Chenoweth-Hage. Thank you. Thank you very much, Ms. Capp. Mr. DeVargas. Mr. DeVargas. I guess the most important thing that I would like to come out of here is that it doesn't matter if you are a rural dweller with a limited education and walk around in dirty blue jeans because you work in the woods or with cattle, or if you are a Native American and dress a little bit different. What I would like to see is the end of the demonization of people. Whenever people are demonized, to me, that is a prelude to a war, to being able to allow mass society to have no empathy. So, I just think that the leastest of us should be treated the same as the ones with the mostest of us. Mrs. Chenoweth-Hage. Very, very well said. In closing, I again want to thank you and express my deep gratitude to you for the investment that you have made in at least exposing this issue, this problem, and we have made great strides forward just in your willingness to expose the issue. I am still baffled, and I will continue to search for the reason that the grantmakers who get together and make plans for the policies of ultimately negatively impact rural communities and human lives. I keep thinking that they do operate in their own self-interest, we know that, whether it is for good or whether it is for not so good, but I have to ask what is their self-interest because the forests are being destroyed. It is like wanting to take the car and they shut the car down and take the keys away and run the car out of gas, they are not going to be able to start that car again. It is like killing the goose that laid the golden egg while the golden egg is still being laid, and the golden egg is the American economic engine that has thrived so well because of mutual respect for human beings, people who could live together in peace and respect. The dehumanization of the people is a very appropriate term because that is exactly what is happening. What is frightening is if people can get together and plan policies that impact humans without a care in the world for that human being. So, like John Adams said, this form of government was put together to be run by people who are lawful and moral people, and when we lose that kind of integrity, this is what has happened. I still think that because people collude at the grantmakers' meetings and various other meetings, because they use the kind of power that they do, because they involve Government, that there is a huge civil rights case there, or a huge RICO case there. And even if the case were put together, this legal system, judicial system, has got to develop the judicial will to right this wrong. And I just pray to God that this judicial system has the kind of will that it had when it passed the Sherman Antitrust Act. So, this will not be the end of my hearings on this issue. The Committee will continue to investigate, ask for more congressional investigations, asking for transparency reporting in actions by these grantmakers is a proper course. I will do my best to influence leadership along this line. I would ask that you work in your communities, to impress your Congressmen individually along this line. Openness in Government is so vitally important. So, with that, I want to remind you that the record will remain open for ten working days, should you wish to add anything to your testimony or add any amendments to your written testimony, please work with my Committee staff, feel free to do so. I will be submitting questions in writing to you. With that, again I want to thank you, and this hearing is adjourned. [Whereupon, at 5 p.m., the Subcommittee was adjourned.] [Additional correspondence follows:] [GRAPHIC] [TIFF OMITTED] T7408.058 [GRAPHIC] [TIFF OMITTED] T7408.059 [GRAPHIC] [TIFF OMITTED] T7408.060 [GRAPHIC] [TIFF OMITTED] T7408.061 [GRAPHIC] [TIFF OMITTED] T7408.062 [GRAPHIC] [TIFF OMITTED] T7408.063 [GRAPHIC] [TIFF OMITTED] T7408.064 [GRAPHIC] [TIFF OMITTED] T7408.065