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.
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“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.