Conflicted KAREN BUDD-FALEN needs to be investigated and brought to justice for criminal conflicts of interest. This corruption of our Government must be ended a once.
1. Conflicts of interest must be scrupulously guarded against. See, e.g., United States v. Mississippi Valley Generating Co., 364 U.S. 520, 548 (1961)("the 'Dixon-Yates' case," involving TVA rivals' conflicts of interest in a proposed Memphis, Tennessee government-owned coal-fired powerplant), citing Matthew 6:24 -- "no [person] can serve two masters," holding that laws and rules preventing conflicts of interest are aimed "not only at dishonor but at conduct that tempts dishonor."
2. All conflict of interest laws are based upon Matthew 6:24 ("A man cannot serve two masters"), which the unanimous Supreme Court decision by Chief Justice Earl Warren deemed to be both a "moral principle" and a "maxim which is especially pertinent if one of the masters happens to be economic self-interest."
From The New York Times:
The Trump Administration Approved a Big Lithium Mine. A Top Official’s Husband Profited.
Karen Budd-Falen, the No. 3 at the Interior Department, didn’t disclose a $3.5 million water-rights contract between her husband and the developers of a Nevada mine, records show.
A high-ranking official in the Interior Department is drawing scrutiny from ethics experts because she failed to disclose her family’s financial interest in the nation’s largest lithium mine that had been approved by her agency, according to state and federal records.
In 2018 Frank Falen sold water from a family ranch in northern Nevada to Lithium Nevada Corp., a subsidiary of Lithium Americas, for $3.5 million. The company was planning a $2.2 billion lithium mine nearby called Thacker Pass, and lithium mining requires significant amounts of water.
The mine needed a permit from the Interior Department, where Mr. Falen’s wife, Karen Budd-Falen, worked as the deputy solicitor responsible for wildlife from 2018 until 2021. She returned to the agency last year and is now the associate deputy secretary, the third highest-ranking position.
Mr. Falen’s sale of his water rights also depended on the mine getting a permit from the Interior Department. Without it, Lithium Nevada Corp. could have terminated its deal with him.
In November 2019, about two years before the agency approved the mine, Ms. Budd-Falen met with Lithium Americas executives over lunch in the cafeteria at the Interior Department.
Tim Crowley, a spokesman for Lithium Americas, said executives did not discuss the mine or pending environmental reviews with Ms. Budd-Falen. “We haven’t worked directly with Karen Budd-Falen related to Lithium Americas,” he said in an email, “nor have we ever met with her in a formal capacity regarding our project.”
Ms. Budd-Falen did not respond to questions for this article. Her husband, who was not at the lunch, characterized it in a telephone interview as a social occasion, not a work meeting. He said his wife knew few details about the water contract and may not have known that the company was seeking approval from the Interior Department.
“They just happened to mention to me they were going to D.C., and I was like ‘Well, my wife is back there.’” Mr. Falen said, about executives from Lithium America. “It was my fault because I just said, ‘Yeah, you should stop by and say hi to my wife.’” He said the lunch was the “only time Karen has ever talked to anybody from Nevada Lithium.”
Just before President Trump’s first term ended, the Interior Department approved Thacker Pass, using a “fast track” process to bypass typically lengthy environmental reviews.
Aubrie Spady, a spokeswoman for the Interior Department, declined to say whether Ms. Budd-Falen played a role in the approval of the mine. She did not respond to questions regarding whether Ms. Budd-Falen had recused herself from decisions related to the mine, or whether she had filed an ethics waiver that disclosed the fact that her husband would benefit from it.
“Karen Budd Falen has exemplified hard work, dedication and exceptional skill throughout her years of service across not just one, but three presidential administrations,” Ms. Spady said in a statement. “Her long record of professionalism and excellence in her work speaks louder than any baseless accusation.”
Ms. Budd-Falen is currently the associate deputy secretary, the third highest-ranking position at the Interior Department.
Ethics experts said the financial relationship between Mr. Falen and the Thacker Pass developer raises questions about whether Ms. Budd-Falen acted improperly when she met with company executives, and why a $3.5 million water deal wasn’t publicly disclosed.
“It’s not clear that Karen Budd-Falen knew she had a conflict, but it’s clear she should have known, and that the public should have known,” said Robert Weissman, co-president of Public Citizen, a government ethics watchdog group. “It’s also clear that she should not have met with Lithium Nevada,” he said.
Lithium America’s stock jumped roughly 30 percent on Oct. 3 when the Trump administration announced the government was taking a 5 percent share in both the mine and the company developing it. The stock price has since fallen to $4.70 a share.
No mention in disclosure forms
Under federal ethics laws, senior government officials must file public financial disclosure reports that detail their family’s income, assets, and liabilities to prevent conflicts of interest.
Separately agencies, including the Interior Department, require that employees sign an ethics agreement that details any companies or projects that pose potential conflicts of interest, or the appearance of them. Under certain circumstances officials can request a waiver from the agency to work on projects that might pose conflicts.
On four successive financial disclosure forms submitted to the government between 2018 and 2021, Ms. Budd-Falen listed her husband’s ranch, named Home Ranch, as an asset, noting that he had a 50 percent ownership share. The disclosures didn’t mention her husband’s sale of the water rights to Lithium Nevada Corp.
Each document filed annually also listed income from the ranch as less than $201. At the time, it was earning hundreds of thousands of dollars in initial payments from Lithium Nevada Corp., according to the contract.
A disclosure form that Ms. Budd-Falen submitted this past May, shortly after she re-entered government, said the ranch was earning more than $1 million, while not specifying the source of the income.
Public Domain, an environmental news outlet, earlier reported some of the details of Mr. Falen’s financial relationship with Thacker Pass.
Mr. Falen, who is now running a law firm that he and his wife co-founded in Cheyenne, Wyo., said in the telephone interview that Lithium Nevada Corp. dealt only with him and two brothers-in-law on his side of the family who jointly managed the ranch.
Mr. Falen also said Ms. Budd-Falen had recused herself from any work related to the Bureau of Land Management, an agency within Interior that approved the permit for the Thacker Pass mine.
Karen knew so little about what was going on,” Mr. Falen said of the water rights contract. “She was not a decision maker on any BLM stuff, and she never had anything to do, even to be aware it was going on, with Nevada Lithium,” he said.
Mr. Falen did not offer documentation of the recusal. The Interior Department did not respond to requests for copies of any recusal granted to Ms. Budd-Falen.
Environmental activists who spent years protesting Thacker Pass said it was unacceptable that the Interior Department has not said if Ms. Budd-Falen recused herself from decisions about the mine.
tal activists who spent years protesting Thacker Pass said it was unacceptable that the Interior Department has not said if Ms. Budd-Falen recused herself from decisions about the mine.
A ‘Cowboy Lawyer’ and Ranching Advocate
A self-described cowboy lawyer, Karen Budd-Falen grew up on her family’s fifth generation cattle ranch in Wyoming near Big Piney. She spent much of her career representing ranchers who have challenged grazing regulations or environmental protections and advocating for local government to have more of a say over federal land decisions.
She once tried to sue individual federal employees who had issued grazing citations against a Wyoming rancher under a law designed to crack down on organized crime. The Supreme Court ultimately rejected her challenge. In 2011 she told Congress that the Endangered Species Act has been “used as a sword to tear down the American economy.”
One prominent client was Cliven Bundy, whom she represented in 1989 along with other Nevada ranchers in a dispute over grazing an area that is home to the endangered desert tortoise. Mr. Bundy in 2014 staged an armed standoff with the federal government over cattle grazing fees. Ms. Budd-Falen condemned the incident while describing it as a symptom of the government’s hostility to ranchers in the West.
Those who have worked with Ms. Budd-Falen over the years described her as passionate about landowners’ rights and a stickler for doing things by the book.
“She looks at things from the perspective of the ranching community,” said Jim Magagna, the executive vice president of the Wyoming Stock Growers Association, which represents the state’s cattle industry. “I think she has the highest of ethics from everything I’ve observed from over 40 years of working with her.”
Critics said Ms. Budd-Falen has a history of hostility toward federal agencies responsible for environmental stewardship, including the one she currently serves. “She’s been working for decades at the margins of accepted legal theory to promote theories of property ownership,” said Paul Ruprecht, the Nevada director for the Western Watersheds Project, a conservation nonprofit.
The Search for Water at Thacker Pass
Lithium is a critical component in rechargeable batteries for cellphones, laptops, electric vehicles and electronics for the military. Global demand is expected to grow rapidly.
Thacker Pass in northern Nevada is the largest known lithium deposit in the United States. Supporters of the mine included the Biden administration.
But lithium mining is a thirsty business. Lithium Americas requires about 200 acre-feet of water per year to construct Thacker Pass, which is currently underway and expected to continue through 2027. Once in production, the mine would require about 2,600 acre-feet of water per year.
An acre-foot of water is enough to cover roughly a football field with water one foot deep, or to supply roughly two urban households for a year.
In 2018 the company found one solution to its needs: the Home Ranch, about 20 miles away from the Thacker Pass site.
It paid the ranch for rights to at least 2,500 acre-feet of water annually. A supplement to the contract said the ranch would receive annual payments for the first four years, followed by a larger final payment in the fifth year, documents filed with the Securities and Exchange Commission show.
Lithium Nevada retained “the sole right, at its discretion, to terminate” the agreement. If the Interior Department had denied the company a permit, Lithium Nevada could have terminated the water contract, making just the initial payments but not the final lump sum. The contract was signed by Mr. Falen as a manager of Home Ranch LLC.
In 2023, Lithium Nevada completed the $3.5 million payment to Mr. Falen and his two brothers in law, according to a deed of transfer filed with the state.
Federal employees are required to disclose spousal income and property, ethics experts said. They also said the agency should tell the public if Ms. Budd-Falen recused herself from Thacker Pass decisions or sought an ethics waiver in order to work on it.
In her position as deputy solicitor for wildlife, Ms. Budd-Falen was responsible for providing the agency with legal counsel over a range of issues including endangered species. Opponents of the Thacker Pass project said the mine threatened the Lahontan cutthroat trout, bighorn sheep, and pygmy rabbits as well as sage grouse habitat.
She also helped lead efforts within the Interior Department to revise the National Environmental Policy Act or NEPA, a 1970 law that requires federal agencies to analyze the environmental effects of major projects before they are built.
That process can take years, but the Trump administration in 2020 limited reviews to speed up permitting of road, pipelines and mining operations. The review for Thacker Pass was completed in under one year under the fast-tracked system.
Lisa Friedman is a Times reporter who writes about how governments are addressing climate change and the effects of those policies on communities.
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