Government thrift officials have decided to scrap an agreement with the U.S. Fish and Wildlife Service to identify and preserve environmentally fragile lands in their vast portfolio of properties.
The Resolution Trust Corp., the agency overseeing the thrift cleanup, "must be guided by its statutory obligation to maximize proceeds from its disposition of properties," according to a Jan. 17 letter sent by the RTC Oversight Board to agency director David Cooke.
Instead of working with Fish and Wildlife Service experts, the oversight board has told the RTC to strengthen its own process for identifying sensitive property, hiring government or private experts when necessary. The RTC was also told to notify conservation groups when such properties are offered for sale, and to alert government regulators to the existence of properties that should be protected.
"That's pretty weak," said an aide to Sen. Timothy Wirth (D-Colo.), author of the language on the environment in the thrift rescue bill. "You have to have some expertise to do this; you can't just send any old appraiser out there."
The decision by the Cabinet-level oversight board not to go forward with the long-awaited agreement also dismayed conservation groups that have lobbied for it over the past 18 months.
Representatives of the Sierra Club and other organizations argued that the agreement would have given taxpayers at least some benefit in return for the hundreds of billions of their dollars being pumped into the S&L cleanup.
RTC Oversight Board President Peter Monroe defended the decision. "It's not an anti-environmental thing," he said.
Monroe said the board concluded that the agreement would entail cumbersome requirements that would slow the sale of RTC properties. And any such agreement with the Fish and Wildlife Service could open the door to similar requests from other agencies such as the Bureau of Mines, the Army Corps of Engineers and the Environmental Protection Agency.
Rep. Bruce Vento (D-Minn.), who held a hearing last fall on the issue, attacked the decision in a letter to Treasury Secretary Nicholas F. Brady, oversight board chairman, saying he believes that the RTC can protect both the environment and its return on property sales. This "is just the kind of action that led me to introduce legislation last year to abolish the oversight board," wrote Vento.
Under the savings and loan cleanup legislation enacted in 1989, the RTC is required to identify its properties that have significant natural, scientific, historic or recreational value. Of the agency's 38,000 properties, 1,800 have been listed in those categories. Environmentalists have said many other such properties likely have not been identified in the RTC's real estate holdings, more than 15 percent of which is raw land.
Not included in the 1,800 tracts identified by the RTC are the properties that have some sort of environmental contamination, which now number several hundred.
"They are working with an overabundance of caution. Nobody wants to see any more burden on the taxpayer," said S. Scott Sewell, principal deputy assistant secretary of the interior, whose agency has been negotiating with the RTC.
Under the terms of the agreement, the Fish and Wildlife Service would have identified features of biological significance on RTC properties and recommended actions for the RTC to take to preserve them, including the sale of properties to conservation groups or government agencies. Or it might have recommended that the RTC impose conservation easements on a property.
The RTC would have had the authority to accept or reject the recommendations from the Fish and Wildlife Service.
RTC officials feared that the agreement would lower the market value of properties it is trying to sell, and an easement that prohibits construction on a piece of property might make it unsalable altogether.
"Obviously RTC viewed the document a little differently than we did," said Sewell.
The Fish and Wildlife Service "has the best available biologists" to evaluate properties, said Sewell, and "the kind of contacts to help assist them in marketing those kind of properties" in the conservation community.
The Fish and Wildlife workers have been combing through RTC's portfolio on their own, said Sewell, "to find the gems." Among the environmentally significant properties they have identified are coastal land in Texas and North Carolina. The service will continue to help "any way we can," he said.
"We're at the point where we'll just do it ourselves," said Karen Berkey of the Nature Conservancy, which buys land for preservation. "We have purchased the RTC database, we are in process of sending lists to our offices in all 50 states saying, 'please look at all these properties.' "
"We want to give this the attention it deserves, especially since they're adding to the inventory, and now that there is the problem with the banks."
Richard Lowerre, project director for a group that advocated the agreement, the Texas Center for Policy Studies, said the RTC is woefully unequipped to handle even the job of identifying sensitive properties. Among the items on its current list, said Lowerre, are time-share condominiums and shopping malls.
"Ninety to 95 percent of the things listed are jokes," said Lowerre. "There's no way in hell they're going to do this without the help of Fish and Wildlife," he said. "I guess they're just saying to Congress, 'We're not going to do this.' "