Aides to Interior Secretary James G. Watt defended their embattled coal development program yesterday as economically sound, denouncing as "unprofessional" and "deceitful" a House Appropriations Committee investigation that concluded Watt is leasing coal at "fire sale" prices.
In a contentious session before the House Appropriations subcommittee that oversees Interior's budget, Assistant Interior Secretary Garrey Carruthers acknowledged that confidential agency data was leaked to the coal industry before the largest-ever auction of government coal rights in April, 1982, but he denied that this resulted in lower bids by coal companies.
Carruthers said the agency's internal figures show the coal industry paid $11 million more than the market value for the coal leased at that auction. The investigators had concluded that Interior received $60 million less than the resources were worth, accusing the agency of mismanagement and possible breach of federal law requiring the government to obtain fair market value for its resources.
Carruthers called the 121-page investigative report "a poorly prepared and deceitful political document" that contains numerous inaccuracies and "lacks the professionalism which the Congress should expect of a product bearing its name."
But Carruthers' arguments appeared only to fuel criticism from committee members, who expressed concern over the wide discrepancy between Interior and congressional estimates of the value of coal resources in the Powder River Basin along the Montana-Wyoming border.
"Why don't you give the lands away?" exclaimed subcommittee Chairman Sidney R. Yates (D-Ill.). At another point, Yates said: "This coal program is a minefield. It's a jungle. We ought to rescind it and start over. It's like the tax law."
A key focus of controversy over the Powder River sale is the leak to industry of confidential Interior data on the value of the coal. The leak occurred more than a month before the coal was to be auctioned, and shortly afterward Interior officials in Washington cut in half the minimum required bid for the most valuable tracts.
Rep. Norman Dicks (D-Wash.) said he feared that coal companies improperly pressured Interior to lower the values. He said he has learned from a senior Interior official in Wyoming that coal company representatives called agency officials after the leak to complain that the values were too high.
Carruthers said that he knew of no such pressure and that there was "absolutely not" a connection between the leak and Interior's decision to lower the minimum bid values. This was done as part of an overall change in bidding systems, he said.
In any case, Carruthers argued, Interior was not shortchanged by the decision to halve the minimum price for the three most valuable tracts. He described one transaction, involving a tract known as Spring Draw.
A team of government economists and analysts originally recommended an asking price of $52.2 million for Spring Draw, he said. But Interior halved the asking price to $25.8 million and eventually received a bid of $25.9 million.
But later, he said, Interior officials concluded that the team's original $52.2 million recommendation was actually four times too high--because it had underestimated how much earth would have to be removed to reach the coal--and that its true value was only $13 million.
So even though the asking price was cut in half, the $25.9 million brought in twice the tract's $13 million value, he said.
Watt has announced plans to lease about 6 billion tons of coal by the end of next year, compared with 1.7 billion tons recommended by the Carter administration. The House report appears to have fueled a drive by Watt's critics to ban leasing through an amendment to his department's 1984 budget.