Grijalva, Democrats ask prosecutors to investigate Trump-era deal near threatened Arizona river

Top Democrats with oversight of the U.S. Interior Department have asked federal prosecutors to investigate a proposed Benson development for possible political interference on the project under the Trump administration.

The 37-page referral Wednesday to the U.S. Justice Department by the House Natural Resources Committee cites large, seemingly coordinated political contributions from Arizona donors to the campaign of former President Donald Trump and flags a Montana meeting that was kept off official schedules as potentially influencing the approval of a portion of the project.

The donors include prominent Arizona business and development figures, such as Jerry Colangelo, the former owner of the Phoenix Suns and a benefactor of Grand Canyon University; Arte Moreno, the owner of the Los Angeles Angels baseball team; and Jerry Moyes, the former CEO of Swift Transportation.

The referral does not allege specific crimes by anyone. But it does suggest "pay-to-play" politics helped advance a large-scale deal and seeks Justice Department scrutiny. 

The move, led by Rep. Raúl Grijalva, D-Ariz., who chairs the committee, is the latest turn for the long-sought Villages at Vigneto, a 28,000-home project on 12,000 acres near Arizona's threatened San Pedro River.

It also adds more detail to the checkered tenure of Ryan Zinke, who was the Interior secretary at the time. In February, the agency's inspector general cited him for what were cast as a series of ethical lapses. 

The new House referral says Vigneto developer Michael Ingram had breakfast on Aug. 18, 2017, in Billings, Montana, with David Bernhardt, then the No. 2 official at Interior. The meeting wasn't disclosed in Bernhardt's official calendar or travel records, the referral says. 

Two weeks later, a lawyer for the Interior Department pressed Steve Spangle, then a field supervisor with the U.S. Fish and Wildlife Service, to change his view that the Vigneto project required input from the Army Corps of Engineers, the referral claims. Bernhardt directed the legal call, the committee investigation found.

Spangle and the Army Corps had disagreed for years about whether the Army Corps needed to be heavily involved in the permitting process. Spangle wanted the Corps to provide expansive environmental reviews of the proposed project, while the Corps often sought a narrower role.

Spangle told the committee "how unusual it was for the Deputy Secretary to be involved in a field-level decision; throughout his nearly 30-year career with (Fish and Wildlife), none of Mr. Spangle’s decisions had been elevated higher than the level of FWS Regional Director."

In October 2017, Ingram and other Arizonans gave the Trump Victory Fund and the Republican National Committee $241,600 in campaign contributions. Weeks later, Vigneto received dredge-and-fill permitting from Fish and Wildlife.

The Army Corps halted the permit last year, citing concerns that groundwater pumping from aquifers could threaten the river.

Lawmaker: 'The clearest form of corruption there is'

Grijalva's committee zeroed in on Ingram, Bernhardt and others for what it viewed as political interference in agency decision-making.

“The findings of this investigation show us yet again that the previous administration cast career staff expertise aside while they handed out federal agency decisions to Trump’s buddies and big donors on a pay-to-play basis,” Grijalva said in a statement.

He called the Vigneto project “a looming threat to our fragile desert ecosystem for years.”

“Allowing the development of 28,000 homes, golf courses, resorts, and other commercial buildings to suck the San Pedro River dry during a time of unprecedented drought is nonsensical on its face and agency staff were right to be concerned.”

Rep. Katie Porter, D-Calif., who heads the committee's panel on oversight and investigations, said the apparent arrangement requires further scrutiny.

“An exchange of money for a specific government action is the clearest form of corruption there is, and Americans — Democrats, Republicans, and Independents —share an understanding that this kind of quid pro quo erodes our democracy,” she said in a statement.

What is the Vigneto project?

The Vigneto project has bounced around federal agencies since 2004, when Whetstone, a different ownership group, sought a Clean Water Act permit allowing it to fill 70 acres of desert washes.

The Environmental Protection Agency determined then that the project would have "substantial and unacceptable" consequences. Whetstone agreed to scale back the project to 51 acres and preserve another 144 acres, but Spangle asked that any environmental impact assessment consider the effect on more than just the land directly at stake.

The Army Corps didn't follow Spangle's request and instead provided Whetstone with a permit to fill 51 acres of washes. The project remained undeveloped, and in 2014 Whetstone sold the land and permit to Ingram's El Dorado group, which acquired 4,100 additional acres.

At the same time, the Fish and Wildlife agency named the Northern Mexican gartersnake and yellow-bellied cuckoo as threatened species that could occupy the permitted area.

That sparked another round of disagreement between Spangle and the Army Corps over the scope of its involvement. The dispute, along with a lawsuit, led the Army Corps to suspend the project's permit in July 2016.

Spangle's position, supported by many in his agency and by others, remained at odds with the Army Corps into August 2017.

That's when Ingram had breakfast with Bernhardt in Montana, followed weeks later by a call from the lawyer for the Interior Department. Spangle later said the lawyer said the policy change on the Vigneto permit came at the request of a "high level politico," the referral says.

There were other signs of undue influence, the committee noted in its report.

Ingram emailed Interior Secretary Ryan Zinke at his Yahoo! account to say he was meeting with Bernhardt about the "Benson, AZ development." In another email to Zinke's personal email, Ingram called for "high level action to ensure consistency and correct" application of Fish and Wildlife regulations, the referral says.

Afterward, Zinke failed to transmit the personal emails to his government email records, as federal law requires, the committee noted.

El Dorado indicated to its business partners days before the Army Corps again granted a permit to the company that it expected that would happen within 90 days.

Donations to Trump Victory Fund

On Oct. 5, 2017 — the day before the Army Corps posted notice it was reconsidering the permit for the Vigneto project — a dozen Arizonans began making sizable campaign contributions to the Trump Victory Fund, a joint fundraising committee. The contributions were largely earmarked for Trump's campaign.

The House committee said the contributions were the only time in the 2018 election cycle more than three Arizonans contributed to the Trump Victory Fund in a single day.

Most of the donors appear to have relations with Ingram or the Vigneto project, the committee report says.

Warren Florkiewicz is a co-owner of El Dorado Benson, the limited liability corporation associated with Vigneto. 

Colangelo's JDM Partners worked with El Dorado's team on the West Valley Douglas Ranch development. Colangelo's partners, Mel Shultz and David Eaton, also made contributions. 

David McIntyre, Jr., CEO of Triwest Healthcare, hosted a 2012 political fundraiser with Ingram and his wife. 

Developers Edward and Steven Robson chipped in. Moyes, the trucking magnate, was a member with Ingram on the board of the Arizona-Mexico Commission.

Moreno was another donor with ties to Ingram. Moreno was a member of the board of TGen, the Translational Genomics Research Institute Foundation. Ingram is a director there.

The Army Corps formally reinstated the permit for Vigneto in October 2018. By early 2019, the policy shift had led to the promise of a lawsuit and Spangle had recently retired. That's when the Army Corps again paused the permit.

Spangle told the Arizona Daily Star he "got rolled" in the Vigneto matter, which drew national attention.

By:  Ronald J. Hansen
Source: Arizona Republic