Coal coercion 

Schweitzer blackmails officials to back Otter Creek

In a perplexing turn of events, Gov. Brian Schweitzer told local governments this week that if they want federal stimulus funds already appropriated by the Legislature, they must sign a statement supporting development of the Otter Creek coal tracts. The move, which has no precedent in recent memory and is likely to spawn numerous lawsuits over its legality, has left lawmakers, local elected officials and citizens wondering what Schweitzer is thinking.

The complex tale requires some understanding of the background of both the bill that appropriated the federal stimulus funds and the constitutional requirements for disposition of revenues from school trust lands such as the Otter Creek tracts.

As most Montanans know, last year Congress appropriated hundreds of millions of dollars to be spent by state and local governments to create jobs. The goal was simple—to try to address the highest levels of unemployment and biggest economic crash since the Depression by putting people back to work on local infrastructure projects. The term "shovel-ready" was widely used to describe projects that could be started almost immediately to put people to work.

Schweitzer accepted the federal funds and, as required by Montana's constitution, the Legislature passed a bill, HB 645, to appropriate the funds across the state. Moreover, since the goal was to immediately create jobs, the funds were to be spent by September 30 this year or they would revert back to the state's general fund.

Once the Legislature sends a bill to the governor, he or she can veto the measure, sign it into law, send it back to the Legislature with amendments, or allow it to become law without signing it. Schweitzer chose to issue a line-item veto of several of the bill's provisions prior to signing it into law. In his May 2009 letter, Schweitzer closed with this sentence: "Now it is time for me to continue with the business of running the executive branch of government within the policy and budget framework the Legislature established for the State of Montana for the next two years."

As most Montanans also know, the somewhat rosy revenue projections for the state did not meet expectations and created a budgetary shortfall triggering the governor's authority to reduce state spending by up to 10 percent without legislative approval. To this end, the governor's budget office prepared recommendations for agency spending cuts but, significantly, did not include the stimulus projects contained in HB 645.

Nonetheless, and contrary to his statement that he would run the executive branch "within the policy and budgetary framework the Legislature established," Schweitzer unilaterally decided to direct the Department of Commerce to withhold stimulus funding for a number of projects already approved by the Legislature. Besides raising hackles across the state, this action prompted Sen. Dan McGee, R-Billings, to request a legal opinion from Greg Petesch, the Legislature's director of legal services.

In his opinion Petesch outlines the stimulus bill's provisions in detail and concludes: "Because there is no statutory basis for withholding funds if the local governments have submitted correct and complete applications, then withholding the funds appears to be an arbitrary and capricious action and an abuse of discretion by the Department that is unconstitutionally violative of substantive due process under Article II, section 17, of the Montana Constitution." In simpler terms, Schweitzer's actions may be both illegal and unconstitutional.

This week, the tale took a bizarre turn when Schweitzer told Missoula County Commissioners that if they want their stimulus funds, they'll have to sign a letter supporting development of Otter Creek, a pristine river valley in southeastern Montana that will be strip-mined for coal to be shipped by a yet-to-be-built railroad to prospective customers in Asia, where it is likely to be burned in conventional thermal power plants.

But here's the rub: There's absolutely no connection between the federal stimulus funds and Otter Creek. None. Yet Schweitzer is holding stimulus funds hostage to gain support for coal development and blurring the lines between those funds and the $85 million in "bonus bid" money the state expects to receive from Otter Creek.

Once again, it appears Schweitzer's actions are potentially illegal and unconstitutional, since the bonus money is "interest and income" from school trust lands. As Greg Petesch wrote: "Article X, Sec. 5 of the Montana Constitution requires that 5 percent of the Otter Creek bonus money must be deposited in the public school fund and the remaining 95 percent of the money must be deposited in the guarantee account for state equalization aid pursuant to section 20-9-342, MCA. The Otter Creek bonus money may not be spent on the county, city, and town projects funded through HB 645."

Schweitzer's actions have left local officials hopping mad and wondering what he's trying to do. Schweitzer, dubbed the "Coal Cowboy" by east-coast media, hangs his hat on coal development, and proved committed to leasing Otter Creek coal no matter how controversial it became. The state Land Board, made up of the state's five top elected officials and chaired by Schweitzer, split 3-2 in their approval to lease the coal for a bonus bid of 15-cents a ton, a figure some say is far below its true value. Public sentiment, if last week's unscientific poll in the Helena Independent Record is any measure, runs 75 percent against the decision. And, of course, the impacts of global warming are eminently visible in western Montana, with an estimated 2 million acres of dead, beetle-killed trees.

Governor Schweitzer likes to call himself "Montana's CEO." But Montana is not a corporation. Schweitzer is the elected head of only one of three branches of government intentionally meant to provide checks and balances against the abuse of power by any one branch. It would be prudent for the governor to remember that.

Helena's George Ochenski rattles the cage of the political establishment as a political analyst for the Independent. Contact Ochenski at

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