US changing way it sets a price on federal land

WASHINGTON -- The Interior Department is overhauling its method for putting a price tag on federal lands as a result of repeated criticisms that its appraisers were pressured to alter their estimates to accommodate exchanges of state and federal lands.

The criticisms came to a head last year when Bureau of Land Management appraisers in Utah blew the whistle on a proposed exchange of state and federal lands that they said would cheat taxpayers out of more than $100 million in valuable mineral resources.

Under the new structure, announced yesterday, land and mineral appraisals will be done by the new Office of Appraisal Services, essentially putting a firewall between political decisions and the valuation process.

The new office will be run by trained appraisers, with Brian Holly, chief appraiser for the Justice Department, as the interim director.

"No arrangement in the world guarantees you absolute immunity from what some would call pressure, but this enhances it," said Larry Finfer, the Interior Department official who oversaw the changes. "It's a much better quality-control mechanism."

As far back as 1968, concerns have been raised that Interior Department appraisals could be influenced by supervisors who want a land deal approved. Land swaps in Utah and Nevada in the last decade were criticized by the Interior Department inspector general, Congress's General Accounting Office, appraisal organizations, and public interest groups.

Last year, BLM whistleblowers told the Associated Press that they were being pressured to approve a swap of state land for federal tracts with potentially valuable mineral resources. In August, the inspector general backed the claims, prompting Interior Secretary Gale Norton and then-Utah Governor Mike Leavitt to formally terminate the deal.

Norton also ordered the consolidation of the department's appraisal functions and appointed Finfer's team to restructure the appraisal office.

"It's a terrific step for the government to take, both in aligning their processes to make sense and, of course, giving their appraisers independence," said Don Kelly, spokesman for the Appraisal Institute, an association for professional appraisers.

The change affects appraisers for BLM, the Fish and Wildlife Service, the National Park Service, and the Bureau of Reclamation.