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Only We Can Prevent You
from Using Forest

How the U.S. Forest Service Played Fast and Loose With a Tahoe Land Deal

by  Pat Hickey

t was 1968. For some it was still the summer of love. For me, it was the last chance to hike into Desolation Wilderness before going off to college.

Growing up at Lake Tahoe in the ‘50s and ‘60s, summers meant grabbing a backpack and a friend and heading up into the Sierras. For local kids, moments spent in Desolation Valley were like secret rendezvous with one of nature’s most majestic hideaways.

Unfortunately, our unfettered boyhood exploits are no longer possible. Permits and reservations are now required by the U. S. Forest Service to enter places we once considered our personal, pristine playgrounds.

The mission of the Forest Service and other agencies dealing with public lands has changed from that of benevolent caretaker to vested watchman. Smokey Bear has bureaucratically devolved—from a suppresser of fires to the chief governing agency of Americans’ contact with their public lands.

The Park Family

or over 100 years members of the Park family have owned land in and around the Stateline area joining California and Nevada. Homesteading and ranching first in Carson Valley, the Parks herded their cattle up what is now Kingsbury Grade to graze in the high summer grass of the Tahoe Basin.

Eventually Wallace Park purchased a portion of the pasture beside the south shore of Lake Tahoe. Along with the land came a Pony Express roadhouse, Fridays Station, where Mark Twain supposedly penned parts of Roughing It.

But Twain would not be the only notable to impact Park family property at the lake. Bugsy Siegel’s fledgling enterprise in the Las Vegas desert would have repercussions far beyond what even Sam Clemens could have fancied. With the success of legalized gambling and the location of their Stateline property, the Park family would have more than wily cattle to contend with in the future.

In the early 1970s Park obtained permits to construct a major hotel facility on their property. That facility opened in 1978 as the Park Tahoe. Soon after, family patriarch Brooks Park realized he was a rancher and not a resort operator. The hotel, although not the land beneath it, was let go. Today it is Caesars Tahoe.

In 1968, Edgewood Golf Course was constructed on parts of the old grazing meadow that borders the lake. In 1993, numerous improvements by Park included major wetlands restoration and the installation of state-of-the-art water quality measures. Their overall renovation project won environmental recognition in 1995 by the Tahoe Regional Planning Agency (TRPA) as the best recreation project in the Lake Tahoe Basin.

Despite the good fortune of their Tahoe land holdings, the Parks’ basic mentality remains that of 86-year-old Brooks Park who says, "I just put my head down, my butt up, and went to work."

Little did Brooks and his descendants know that actions of the U.S. Forest Service were about to demonstrate that bureaucrats from Washington also had their heads in the vicinity of their rear ends.

"I’m From the Government
and I’m Here to Help You"

hen Bill Clinton took time from his Washington, D.C. affairs to bring federal dollars and promises of ecological deliverance to the Lake Tahoe Presidential Forum last year, he told his audience, "We all have a stake, not just as Westerners, but as Americans … in preserving Lake Tahoe, [and] reversing some of the difficulties in the last few years."

Tom Tuchmann, western director for the U.S. Department of Agriculture, elaborated, saying one of the accomplishments of the just-completed environmental summit would be increased communication between Washington and local interests. He added that much of the success of future administration efforts at Lake Tahoe will depend on local participation.

"The administration wants to hand this off to the region, to see things get done on the ground," Tuchmann said. "We don’t want to get into the business of dictating from top down."

Had the Park family been invited to hear such politically correct fecundity, they might have begun to worry about a deal that had been reached with local officials of the Forest Service. Bruce Babbitt and his federal colleagues were about to show this Nevada ranching family just what "top down" and "command and control" are all about.

The Dreyfus Estate

he Dreyfus estate is nestled along the eastern shore of Lake Tahoe between Zephyr Cove and Cave Rock. The Forest Service acquired the 46-acre property, once owned by mutual fund tycoon Jack Dreyfus, as part of a $28 million Southern Nevada land swap. In it 4,700 acres of prime Bureau of Land Management land went in 1996 to the Del Webb development corporation.

In his position as Secretary of the Interior, Bruce Babbitt oversees BLM operations. According to The Wall Street Journal, one possible conflict of interest of Babbitt’s was his past role representing Del Webb in efforts to acquire land from the BLM. "Throughout the period that the land swap was being negotiated with an agency in his department," the Journal said, "Mr. Babbitt was in business as a Del Webb lobbyist, in a separate land venture." Babbitt had also once been a board member of the San Francisco-based American Land Conservancy that helped broker the Southern Nevada deal. Though Babbitt eventually removed himself from the subsequent Del Webb transaction, he still, according to a 1996 inspector general’s audit, placed the Del Webb swap high on a priority list of land exchange deals.

Bait and Switch

t was Douglas County officials who first approached Park Cattle about the availability of the Dreyfus Estate in June, 1997. County commissioners wanted the improvements on the property—the main residence and the caretaker’s cottage—to be kept on the tax roles to help shore up the county’s dwindling tax base. John Balliette, a Eureka County resource manager notes, "With 87 percent of Nevada land already under federal ownership, rural counties are seeing their sustainable tax base being substantially eroded."

Park Cattle was told that Olympic Group, L.L.C., an Arizona based company with reported past Babbitt ties that specializes in land exchanges, had acquired ownership of the Dreyfus land and its improvements. Olympic represented to Park Cattle that it had conveyed the land to the Forest Service as part of the land exchange in Southern Nevada, but had reserved ownership of all the improvements (main house, etc.) on the property.

Park Cattle purchased the buildings from Olympic with assurances from local Forest Service officials that the bed and breakfast use they had in mind would be allowed. Don Minor, Tahoe representative on the Douglas County Commission, said the Forest Service assured him that Park Cattle could obtain the needed permits because they were a known commodity with a clean environmental record.

Over 800 special use permits currently exist in the Tahoe Basin, including many for commercial ventures operating on public lands. Next door to the Dreyfus property, Travel Systems Limited operates the Zephyr Cove Resort and the M.S. Dixie II on land permitted by the Forest Service.

The Washoe Tribe was recently awarded a permit to operate a commercial campground at historic Meeks Bay Resort on the California side of the lake. Forest Service officials praised the tribe’s "strong business proposal." A local official, quite politically incorrect, said gaining the permit was never in doubt because the Washoes have a good ally and "Great White Father in Washington" in Bill Clinton. In fact, when the President visited during the environmental summit the summer before, he delivered in his discretionary federal goodies bag a 30-year special use permit for the tribe for 400 acres of Tahoe Basin property.

D.C. Cloud Over the Deal

uan Palma worked in the business world before he joined the Forest Service. Palma prides himself as a new kind of federal official: a consensus builder willing to facilitate dialogue and open communication between interested parties. As supervisor of the U.S. Forest Service’s Lake Tahoe Basin Management Unit, Palma must have been encouraged when President Clinton ordered the creation of a federal interagency panel and intergovernmental group to coordinate efforts at local and federal levels. Following the president’s lead, Palma announced plans to create a Lake Tahoe advisory committee, including members of the business community, environmentalists, property groups and local governments.

Park Cattle must have been pleased with the prospect of clear collaboration between locals and feds. Palma, in a meeting with Douglas County Commissioners on July 12, 1997, said that Park Cattle and the U.S. Forest Service had reached an agreement allowing limited commercial use of the Dreyfus Estate. The chief of the Forest Service’s Tahoe unit told county commissioners, "I’m very optimistic that we can move forward" with Park Cattle’s plan for a bed and breakfast facility on the property.

Unfortunately, Palma’s bosses in San Francisco didn’t share his optimism, nor did they honor his assurances.

In a letter to Park Cattle, Forest Service regional director of lands and minerals Philip Bayles asserted that the Forest Service never intended to acquire the Zephyr Cove property with the improvements in place. "It has always been our desire to acquire the property unencumbered with all improvements [buildings] removed," said Bayles.

Douglas commissioners were stunned by the Forest Service turnaround. Minor says Bayles had told him during a previous meeting that authority for issuing use permits rested with regional and local Forest Service officials. Minor and others familiar with the deal now believe local officials’ authority was usurped by someone from Washington.

Sen. Richard Bryan, invited by the Douglas County Commission in August to shed light on the situation, told commissioners and members of Park Cattle that he understood their frustration over the feds’ behavior. Saying it was obvious an "injustice has occurred," Bryan told commissioners an inspector general’s investigation "clearly has had a chilling effect on the Forest Service living up to a fairly easy deal."

Following the formal meeting, Bryan told Bruce Park and his lawyers he would continue to try and help, but "in fairness, I don’t know what can be done."

The good senator may not know. But his Washington aide, Bret Heberlee, left a clearer perception of what had transpired. At another meeting attended by county commissioners and Park representatives, Heberlee said, "Secretary Babbitt didn’t want buildings to be part of the exchange."

So much for the demise of the top-down approach in dealing with locals.

Locals Left Holding the Bag

ark Cattle is now left holding a property that it paid for, got title to, but cannot use. It should be noted, however, that not everyone from Washington took such a dim view of the potential of the Dreyfus house to accommodate visiting tourists in its luxurious bedrooms. The estate is reported to have been on a short list of residences the White House was considering for Bill Clinton and Al Gore to stay at during the Lake Tahoe Presidential Forum.

Local officials like Douglas County Commission Chairman Jacque Etchegoyhen were left pondering the Forest Service’s broken promises. "This pretty much fulfills the concern people have about the feds," said the part-time commissioner and full-time rancher.

With consummate bureaucratic benevolence, Bayles went so far as to suggest to Park Cattle’s attorney that "possible solutions could include Olympic buying back the improvements and conveying them to the United States, or Park Cattle Company donating the improvements directly [back] to the United States." Perhaps the next time Nevada’s Attorney General investigates shady business scams that take people’s money for nothing in return, the Forest Service might be a candidate for scrutiny.

In fact, the whole Tahoe land exchange is part of an ongoing criminal probe by the Department of Agriculture’s inspector general’s office. Juan Palma has had a gag order placed upon him, and declined to speak to Nevada Journal about the Dreyfus matter. As of publication time, Phil Bayles had also not returned phone calls. Department of Agriculture Special Agent David Dickson has said, "The Forest Service has been told not to do anything concerning the Dreyfus property until the criminal probe is complete."

Nevada Journal has obtained part of the inspector general’s initial audit, identifying "[a] serious breakdown in controls in all phases of the Humboldt-Toiyabe Forest land adjustment program." The audit accuses Forest Service management of "allowing private parties, landowners and third party facilitators to exert undue influence over the direction and outcome of almost all large value land exchanges in the forest."

The inspector general’s audit also questions the integrity of Forest Service staff in dealing with private parties. According to the executive summary, "[We] identified the improper conduct of one Forest Service management employee who received gifts, gratuities and other entertainment from private parties doing business with the Forest Service."

The Forest Service employee in question is former Forest Supervisor Jim Nelson, who had dealings with the American Land Conservancy—the San Francisco-based conservation group of which Babbitt was a board member. Nelson had already been stripped of his authority to handle land transactions by the time the Dreyfus deal was discussed, but the cloud of his alleged discretion still hangs heavily over public land at the lake.

Government in Business for Itself

erhaps it’s the fault of conservatives who’ve urged government "to operate more like a business." Some officials, it would seem, have taken the suggestion literally—to the extent that federal agencies now behave like legendary big business monopolies. The U.S. Forest Service and the BLM have deep green pockets of taxpayer money to use for land exchanges, along with the time to wait out any private-sector adversaries who may need to engage them.

Bruce Park tells of a past encounter with Guy Pence, former Carson District Ranger of the Toiyabe National Forest, who has since been transferred to Idaho after two bombing incidents in 1995. During a discussion over cattle grazing permits, Penz told him, says Park, "Go ahead and sue us [the Forest Service]. We have deeper pockets than you anyway."

Regarding the Dreyfus property, Park says "If it weren’t for the press and the county commissioners, I don’t think anybody would even notice what the feds have done."

John Balliette points out that federal land exchanges create a "tremendous opportunity for impropriety." Balliette describes the process as a "bureaucrats’ playground" with all the rules being made in Washington. Conservationist and author Alston Chase agrees. In his 1995 work In a Dark Wood: The Fight over Forests and the Rising Tyranny of Ecology, the author decries that "environmental laws have been less successful in saving creatures, but have been a boon to bureaucratic budgets."

According to a recent National Center for Policy Analysis study of environmental governance policies, "Government has a responsibility to define and protect property rights, and government must act in accordance with certain pre-defined rules." The Center proposes what core principles should govern those rules:

  • The Federalism Rule: Regulatory decisions should be made by the smallest possible government entity.
  • The Cost-Benefit Rule: Before any policy or regulation is imposed, an objective study should weigh the benefits against the costs.
  • The Compensation Rule: Innocent property owners must be compensated for the loss of property rights.

Close to home, cost-effective and fair compensation may seem like simplistic principles hard to apply. But it’s a safe bet that local communities, taxpayers and landowners will fare much better if they are.

Rancher Wayne Hage said it well: "The best stewards of the American land are those who live on it and pass their legacy down from generation to generation, [and] not some army of faceless bureaucrats in the marble halls of Washington D.C."

Park Cattle is financially capable of surviving the bureaucratic boondoggle created over the Dreyfus property. The government (not the taxpayers) will come out a winner even if it loses in litigation because of the deep federal pockets afforded to the Forest Service.

Sadly, the losers will be the public. If we fail to act, we are at risk of allowing public lands to be henceforth defined as federal lands. Vigilance is required of each of us if we want to keep public lands "public," and to preserve the proper balance between our environment, the economy and our government.  NJ

Pat Hickey is the editor of Nevada Journal.

News to Use
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"Issues Center"

Sovereignty International
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USDA Forest Service Home Page

Bureau of Land Management

Pat Hickey


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