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Interior Watchdog Opens Probe of Land Deal Linking “Dinky” Zinke, Halliburton Chairman

By as published on Politico

The investigation involves a real estate deal.

The Interior Department’s internal watchdog has launched a full investigation into a real estate deal involving a foundation established by Ryan Zinke and developers including Halliburton Chairman David Lesar, which was first reported by POLITICO last month, according to a letter the office sent to House Democrats on Wednesday.

The inspector general’s probe will focus on whether Zinke violated conflict of interest laws, the latest official inquiry of Zinke’s activities in his 16 months helming the department.

“You expressed special concern about the reported funding by a top executive at Halliburton and assuring decisions that affect the nation’s welfare are not compromised by individual self enrichment,” Deputy Inspector General Mary Kendall wrote to Rep. Raúl Grijalva (D-Ariz.), ranking member of the House Natural Resources Committee, and other Democrats. “My office opened an investigation into this matter on July 16.”

Zinke’s role at Interior places him as one of the chief regulators overseeing oil and gas drilling activities, including those performed by Halliburton, one of the world’s largest fracking and offshore drilling services companies. Zinke late last month defended his involvement with Lesar, while confirming he met him and other developers at Interior Department headquarters in August. Zinke said he had resigned from the Great Northern Veterans Peace Park Foundation, which he established a decade ago to build a park in his hometown of Whitefish, Mont., but briefed the developers on the foundation’s background and the land it controls.

In September, the secretary’s wife, Lola Zinke, signed an agreement allowing developers, including Lesar, to build a parking lot there to benefit a major redevelopment project that could raise the land value of Zinke’s nearby properties. Project developers also suggested Zinke could wind up running a microbrewery on the redevelopment site, the Whitefish city planner has told POLITICO.

House Democrats say Zinke’s meeting with Lesar and the foundation’s role in the real estate deal raises the question of whether Zinke used his office for personal gain.

“Secretary Zinke doesn’t seem to take his responsibility to the public seriously,” Grijalva told POLITICO in a statement. “He’s turned it into the Ryan Zinke show, which is more about waving his own flag above the building and doing personal business deals with his friends instead of protecting public lands and improving our environmental quality. This formal investigation is one of many he’s managed to pile up in his short and undistinguished tenure, and I join my Democratic colleagues in seeking the transparency and accountability that Republicans have so far not provided.”

The arrangement suggests that the Halliburton chairman would be building a long-sought business for the Interior secretary, ethics experts say, a relationship that is fraught with conflicts of interest.

Critics say it is inappropriate for Zinke or his family to be involved in any outside deals with the Halliburton chairman because of the sway he holds over the company’s business.

“There is no company that benefits more from Secretary Zinke’s attack on fracking standards than Halliburton, and there is no company that has been more successful over the years in getting politicians — from Vice President Dick Cheney to Secretary Zinke — to weaken government oversight of their fracking operations,” said Matt Lee-Ashley, a senior fellow at the Center for American Progress who worked as deputy chief of staff at Interior during the Obama administration.

Following POLITICO’s reporting on the agreement, House Democrats asked for an investigation into potential conflicts of interest stemming from the deal linking the secretary’s family with the chairman of one of the biggest companies he is responsible for regulating. It may take several months for investigators to complete their work and issue a report on their findings.

The foundation’s land remains little changed from when it was first donated by BNSF Railway starting in 2008, leading some locals to question Zinke’s plan for the park. Zinke in the past had promised local officials that the foundation would use the land to build a park honoring veterans and for possible summer concerts. But the land remains mostly undeveloped, and a large retaining pond dominates the site.

Government watchdogs have completed several investigations into Zinke and others are ongoing, such as an IG review of lobbying over an unorthodox tribal gaming decision.

The IG’s office reviewed Zinke’s use of chartered flights and found that while the department did not violate any laws, ethics officials were prevented from conducting a thorough review of one trip because Zinke did not disclose the role a major donor played in his plans. The Office of Special Counsel has separately concluded that Zinke’s speech to the donor’s hockey team and participation in fundraisers in the Virgin Islands and elsewhere did not violate the Hatch Act.

5 replies »

  1. Zinke is a prime example of the term “regulatory capture”. Regulatory capture is a form of political corruption that occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure; it creates an opening for firms to behave in ways injurious to the public.

    Capture arises when private interests exert an outsized influence over the very agencies that are supposed to keep them in check. A regulatory body that is overly reliant on industry representatives for information and policy direction might craft rules that prioritize private profits over public goals, such as the prevention of fraud. The agencies are called “captured agencies”. The heads of these agencies area not public servants as they are hired or appointed to be … they are nothing more than criminals.




  3. DOI’s Corruption

    Culture of Corruption at the Department of the Interior
    MAY 24, 2016

    You may wonder how widespread the ethical lapses are, and what their impact is. In my experience, the majority of Interior’s 70,000 employees take the mission of the Department and their individual responsibilities very seriously. I remain convinced that, as a whole, those who engage in wrongdoing are in the minority.
    Yet after more than 16 years with the OIG, as much as I would like to say that I have seen it all, I am continually surprised by the variations of misconduct brought to our attention. Unfortunately, misconduct by those few receives notoriety and casts a shadow over the entire Department.

    With fewer than 80 investigators, we work with constrained resources and can never detect all of the wrongdoing at Interior. We have addressed this in part by capitalizing on a culture at Interior that, for the most part, is one populated by individuals who are committed to the mission and doing the right thing. In fact, they are quick to report wrongdoing to the OIG. We were one of the first in the OIG community to create a Whistleblower Protection Program, one that is regularly referred to as a model by the Office of Special Counsel and other OIGs. Our Whistleblower Protection Program helps to advise, and thereby protect, those brave enough to shine a light on the wrongdoing they observe. In 2015 alone, the Whistleblower Protection Program has supported and protected well over 100 employees, contractors, or other individuals willing to come forward with allegations of fraud, waste, abuse, misconduct, or retaliation.

    Unfortunately, not all leadership in DOI fully supports their employees contacting the OIG to report potential wrongdoing. There is a pervasive perception by many employees in some bureaus that contacting the OIG to report wrongdoing places them in jeopardy of retaliation. We often learn that management makes more effort to identify the source of a complaint than to explore whether the complaint has merit. In some instances, efforts have been made to restrict the ability of employees to contact us. When we become aware of such incidents we have been able to successfully intervene; however, we seldom see corrective action taken against individuals who attempt to silence their employees or identify whistleblowers.



    The Teapot Dome Scandal of the 1920s shocked Americans by revealing an unprecedented level of greed and corruption within the federal government. The scandal involved ornery oil tycoons, poker-playing politicians, illegal liquor sales, a murder-suicide, a womanizing president and a bagful of bribery cash delivered on the sly. In the end, the scandal would empower the Senate to conduct rigorous investigations into government corruption. It also marked the first time a U.S. cabinet official served jail time for a felony committed while in office.

    There was much debate at the time between the merits of conserving natural resources and permitting industry to tap into the nation’s wealth.

    But once Harding appointed Senator Albert Fall from New Mexico as Secretary of the Interior in 1921, it was clear Harding would tip the scales in favor of development.

    Fall was a politically powerful senator, rancher, lawyer and miner who, like Harding, enjoyed a game of poker with a glass of whiskey – Prohibition notwithstanding. Fall soon convinced Harding to transfer oversight of the petroleum reserves from the Navy to his Interior Department.

    After the transfer of the oil-rich land holdings was complete, Fall started secret negotiations with two of his wealthy friends in the oil industry.


  5. AND the Republicans have refused to increase funding to the OIG – which Mr. Grijalva requested, plus turned down the request for 5 more investigators! This seems to be our democracy in action!


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