Tuesday, March 20, 2012

Ethics Probe into Monty Pearce: Leases, Fracking and Disclosure

Posted By on Tue, Mar 20, 2012 at 11:57 AM

More than two hours of testimony and debate played out before the special Senate Ethics Committee this morning, looking into New Plymouth Republican Sen. Monty Pearce's alleged conflicts of interest—voting on oil and gas legislation while holding a personal lease with an oil and gas exploration company which helped write the bill.

Before the morning was out, it was clear that lines had been drawn on where many of the committee members were leaning—and to no big surprise, it was primarily along party lines.

"I don't see why we should pursue this further," said Coeur d'Alene Republican Sen. Jim Hammond. "I'm not seeing any evidence that [Pearce] enjoyed any greater benefit of anyone else in that class."

The so-called "class" that Hammond was referring to were the hundreds of similar leases signed with oil and gas exploration companies. But members of the committee falsely presumed that the leases represented individuals. In fact, as Boise Weekly readers know from our investigation during the summer of 2011 where we poured through hundreds of the agreements, scores of leases are with the same individuals or families and even more are with the State of Idaho which holds primary rights to the minerals below individuals' properties. Our investigation also found that the majority of the leases were signed with Bridge Resources, which were secured through the Royal Bank of Scotland, and all of those leases are currently being shopped. As soon as Friday, March 30, Bridge shareholders will vote on whether to sell the majority of the company's assets to a Houston-based firm, in the wake of Bridge's significant financial troubles. A newer oil and gas player to Idaho,Snake River Oil and Gas [a subsidiary of Weiser-Brown Oil] has been privately stepping in where Bridge was failing. Snake River has continued to negotiate new leases with scores of landowners in Payette and Washington counties, including the agreement with Pearce.

This morning, some members of the committee asked to see a sample of the leases to distinguish Pearce's advantage versus the rest of the so-called "class."

"I'm not satisfied that we've heard all of the evidence regarding these leases," said Pocatello Democratic Sen. Diane Bilyeu.

But Rogerson Republican Sen. Bert Brackett, who had been silent during most of the proceedings, indicated that he agreed with his GOP colleague, in favor of Pearce.

"I tend to agree with [Hammond]," said Brackett. "I'm willing to come back tomorrow, but I also believe we should wrap this up."

Ultimately Deputy Attorney General Brian Kane told the committee that the big question to be decided might be: "Should Sen. Pearce have disclosed his conflict of interest in the Senate Resources and Environment Committee [of which Pearce is the chair]?"

"That's the critical question to this committee," said Kane.

Moscow Democratic Sen. Dan Schmidt said he wanted one more issue to be addressed: fracking.

"I've looked at [Pearce's] lease," said Schmidt. "And it appears to me that with fracking, there would definitely be increased production. Therefore the passage of House Bill 464 [which Pearce shepherded through his committee] impacts that lease. 464 would increase gas production in Payette County."

But Hammond pushed back again.

"That's speculative," said Hammond. "It might increase it."

Idaho Falls Republican Sen. Dean Mortimer, the committee chair, decided to adjourn the session until the morning of Wednesday, March 21.

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