State Sen. James R. Harris, who represents part of this poor coal region where moon-like craters and scarred, gray hillsides attest to decades of surface mining, recently was picked by President Reagan to be the government's chief enforcer of strip-mining laws.
If the Senate confirms Harris as director of the Interior Department's Office of Surface Mining, the companies under his jurisdiction will include two big coal producers that in recent years granted him land deals here potentially worth millions of dollars. Moreover, state and local records show that the Evansville, Ind., legislator struck these private deals while he was chairman of committees responsible for strip-mining legislation and enforcement of strip-mining laws.
Since October 1978, county records show, a partnership formed by Harris acquired at bargain prices nearly 1,500 acres of reclaimed strip-mined land from Peabody Coal Co. and Amax Inc., two of the nation's largest coal producers. The partnership last December paid an Amax unit $250 an acre for most of the land, according to the official state tax stamp on the deed. That was substantially less than one-quarter of what comparable acreage in this rugged southwest corner of Indiana was selling for at the time, based on the county recorder's records and interviews with dozens of local land owners, bankers and real estate experts.
Within two weeks of the December purchases, Harris and his partner, Evansville developer W. C. Bussing Jr., began turning a handsome profit by selling portions of their newly acquired holdings, frequently for five or six times what they paid for them. So far, the partners have subdivided and sold at least 232 acres with extensive road frontage; a number of buyers confirm they paid $1,500 an acre and higher for the undeveloped home sites.
Harris acknowledges that the transactions "could give the public the impression that something was wrong," but he maintains that he paid fair market value for land that "anybody else could have bought" for the same price. "There is no possible impropriety," he says.
In Indianapolis, a spokesman for Amax says the company realized there was "a potential conflict" when it decided to sell the land to Harris. But he adds that the company "went to great lengths," including getting an outside appraisal for the property, before it signed the deal. Amax asserts it put the property "on the open market" several months prior to the December sale but didn't receive another offer at that price.
In St. Louis, Peabody officials say they sold the property to Harris and Bussing for about $70 more per acre than the price established by an outside appraisal in July 1978. Peabody didn't have any immediate comment on the negotiations leading up to the sale or whether company officials in Indiana expressed any doubts about the transaction.
Harris last year was chairman of the state Senate Committee on Natural Resources, Environment and Agriculture, which has jurisdiction over major legislation involving Indiana's 90-odd strip mines. In 1978 and 1979, the 51-year-old legislator headed the state's Natural Resources Advisory Committee, which was created to oversee the Indiana agency that enforces strip-mining laws.
In October 1978, land records show, Peabody Coal deeded over to Harris and his partner approximately 450 acres for a total purchase price of $175,000, or slighlty under $390 an acre. About two years later, courthouse records show, the two men purchased another 1,030 acres from Amax's Meadowlark Farms Inc. unit in the same general part of the county.
The average price of $250 an acre for the second purchase "was ridiculously low," contends one real estate man who has studied the Amax property. He asserts that land, "but with nowhere near the road frontage they bought, was selling for anywhere from $1,000 to $3,000 per acre."
Another businessman, who has received $15,000 for three-acre lots not far from the land Harris is selling, says only reclaimed land that is entirely unsuitable for building sells for under $750 or $1,000 an acre anywhere in Warrick County. "I made an offer to buy some of the land at that low price, but Amax didn't want to discuss it further," he recalls.
Harris says he made a "fair" profit for selling some of the land that he purchased from Amax, considering that he and his partner didn't put in sewer, roads or other costly improvements before they sold it. He asserts that hundreds of additional acres held by Amax are still on the market in the area for the same $250 per acre.
In addition, the legislator says he "fully informed the White House" and congressional staffers about the transactions two months before his prospective selection was announced. "I have acted in good faith," he says. Harris adds that he didn't disclose his involvement in the partnership in 1979 because he understood it wasn't required.
A White House spokesman confirms that Harris "raised the subject" of his private land purchases before his name was announced. But the administration is still waiting to receive his completed federal financial disclosure forms.
Ray Rankin, the local real estate man who sold some of the property for Harris, says the partners originally "paid a fair price for it as a large parcel" because very few people in the area could come up with the hundreds of thousands of dollars necessary to buy such a large tract. Rankin says the partners are providing private financing for the families who purchase individual home sites from them, which he says is a big reason they can charge the prices they have been getting.
Both Amax and Peabody have been involved in disputes from time to time that resulted in state actions. But there isn't any evidence that the companies have received political favors from Harris.
If Harris gets the federal post, he woud run an agency with more than 750 employes and a yearly budget of $180 million. More important, he would be the federal official with the greatest influence over the way companies are permitted to strip land for coal; what they must do to restore the land for other uses, and how much it will cost such concerns as Amax and Peabody to comply with federal and state environmental constraints.
Harris's nomination capped years of efforts to build a solid political base in this area, according to both friends and foes. After a stint on the local school board, the trim, gregarious geologist served two years in the Indiana House of Representatives before winning a state Senate seat in 1975. His colleagues in 1977 named him one of the five outstanding freshman senators. Last year, Harris was reelected to the Senate as the only Republican member from the predominantly Democratic coal-mining area of southern Indiana.
Harris, who runs his own geological-consulting firm, received strong support for the federal strip-mining job from Republican U.S. Sen. Richard Lugar of Indiana and at least one coal-industry group that applauded his "wealth of coal-related experience." Harris almost certainly will keep his state Senate seat until the U.S. Senate votes on his nomination in the next few weeks.
In his home state, Harris is widely regarded as one of the most outspoken opponents of current federal strip-mining enforcement programs. Harris, among other things, played a major role in persuading state officials to spend the past few years in court attacking the constitutionality of some federal mining regulations. Two months ago, in the latest round of legal skirmishes, the state filed still another action in a federal court in Indianapolis against the Interior Department and the surface-mining office. Two Amax units and Peabody Coal filed a companion suit at the same time also attacking the validity of the federal rules.
As chairman of the natural resources committee, Harris shepherded through the Indiana legislature a 1980 strip-mining bill that denounced federal strip-mining initiatives as "an intrusion into the land-use and planning control" that should rest with the state. The legislature's "overriding consideration," the bill said, should be to "prevent further federal encroachment" in this area.