Montana drops 'bad actor' claim against Hecla mine executive

By AMY BETH HANSON

Associated Press

HELENA, Mont. — Environmental regulators have filed a motion to dismiss a legal case that sought to block the president of an Idaho-based company from being involved in proposed mines in northwestern Montana under a state law that punishes companies and their executives who don't clean up mining pollution.

The filing on Wednesday drew criticism from environmental groups that supported the “bad actor” sanctions being sought against Hecla Mining Co. President and CEO Phillips Baker Jr.

In 2018, the Department of Environmental Quality sought to have Baker removed from two silver and copper mining projects Hecla proposed near and beneath the Cabinet Mountains near Libby and Noxon.

Baker was the vice president and chief financial officer of Pegasus Gold, which went bankrupt in 1998 before cleaning up pollution from three gold mines, including the Zortman-Landusky Mine near the Fort Belknap Indian Reservation. The state and federal governments have spent more than $50 million in cleanup costs and water treatment will continue in perpetuity, officials have said.

DEQ’s dismissal of the enforcement action ignores its responsibility to enforce the bad actor law and “prioritizes mining executives over Montanans,” Andy Werk Jr., president of the Fort Belknap Indian Community, said in a statement.

“Montana’s mining laws only serve as an effective deterrent if they are enforced,” Andrew Gorder, legal director for the Clark Fork Coalition, said in a statement. “The ‘bad actor’ law was passed in the wake of Pegasus’ bankruptcy and was clearly intended to hold mining executives accountable for their previous messes. If DEQ won’t enforce the law against Pegasus’ former vice president and CFO, then the law isn’t worth the paper it’s printed on.”

Republican Gov. Greg Gianforte campaigned last year on a “Montana Comeback Plan,” which, in part, called for bringing new leadership to the DEQ and streamlining permitting processes “to eliminate needless delays.”

In the motion to dismiss the case, the DEQ said Gianforte's election and new leadership at the agency prompted a review of the case. The agency determined there were still several procedural hurdles to overcome that could potentially risk its goal of preventing bad actors from operating in the state, according to the motion, which was filed in District Court in Helena.

“In our role as a state environmental agency, we have to make tough decisions in order to make the best use of state resources while also achieving our mission,” DEQ Director Chris Dorrington said in a statement.

The DEQ would prefer to seek further legislation to protect Montana from unfunded mining cleanups, Dorrington said.

The agency said the case faced several procedural issues, including whether it could be heard in Montana. Earlier this year, District Court Judge Mike Menahan ruled that it could. The merits of the complaint have not yet been addressed.

Hecla has argued that its company was never involved with the Pegasus mines and that Baker left Pegasus before it forfeited its cleanup bond, which did not fully cover the costs. Hecla spokesperson, Jeanne DuPont, did not return a phone message seeking comment.

One of the DEQ's goals with the case was to seek reimbursement for reclamation costs, the agency said.

“At this time, it seems highly unlikely the case would result in reimbursement,” Dorrington said. “In choosing to dismiss this case, I want Montanans to know that DEQ is not stepping away from continuing to seek reimbursement of these costs and we are not backing down from our commitment to holding bad actors accountable for their actions.”

The agency notes the mining projects at issue in the case — the Troy Mine Project, the Montanore Mine Project and the Rock Creek Mine Project — are all in compliance with the Metal Mine Reclamation Act.

The Troy mine is undergoing final reclamation and the two proposed mines face environmental review, technical evaluation and public comment before they would be issued permits, the agency said.