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THE GREAT GOLD HEIST

by Karen Bixman

On October 8, 1994 the biggest gold heist in history occurred, but this theft lacked the melodrama of a Jesse James holdup or the excitement of a Brink's truck robbery. Nary a word was reported by the media even though this thievery was committed in the light of day. The citizens that were being robbed tried to cry out for help but the lawmen wouldn't listen because unbeknownst to them they were helping the bandits gain their booty.

The 103rd Congress managed to accomplish more than a gang of train robbers could achieve in a lifetime when they approved the Desert Wilderness Protection Act. "Instead of voting on the Desert Wilderness Protection Act, Congress should be convening a criminal investigation," said Donald Fife, spokesman for the National Association of Mining Districts. Fife was commenting on recent information that indicates tens of billions of dollars in gold deposits and huge real estate swindles may be the motivating factors behind the act.

Sponsored by Senator Diane Feinstein, the Desert Wilderness Protection Act and it's companion bill known as the California Desert Protection Act create three new national parks and seventy-four new wilderness areas in the desert of California that would total 8 million acres (an area the size of Maryland). This will close this acreage to development, force out private owners within the protected area and close down mines and ranches. It would also expand the Death Valley and Joshua Tree national monuments and upgrade them to national parks. This is the largest wilderness land lockup since the 1980 Alaska Lands Act; largest ever in the lower 48 states. Senator Feinstein contends that the fragile ecosystem of the desert must be protected from development, but in reality the areas being placed into park and wilderness closures are not threatened.

In 1980, the California Desert Conservation Area Plan was enacted to protect the desert and it has been rigorously enforced by the U.S. Bureau of Land Management. Furthermore, the designated acreage mentioned in this bill have largely been for sale at bargain prices for over 100 years with no takers because there is absolutely no water or any prospect of water for development. It seems that the real motivation for passage of this bill lies with the special interest groups that would benefit monetarily.

Through a complex series of land exchanges, Catellus Corp., a subsidiary of Santa Fe Pacific, would receive land that contains some of the richest gold deposits in the world. In exchange the public gets seventy-four widely scattered tracts of desert which have found no economic use in more than a century. These will have to be maintained at public expense, but Secretary of Interior Bruce Babbit says the National Park Service has the resources to accomplish this.

Catellus owns over 400,000 acres of worthless land in the California Mojave Desert. This land was obtained by Santa Fe Pacific and its predecessor railroad companies as part of the "checkerboard" railroad lands awarded for the building of the transcontinental railroad. Santa Fe transferred these lands which have been for sale for over 100 years, over to its subsidiary, Catellus Corp. In the land swap, Catellus Corp. will receive land from decommissioned military bases. One of the bases will be the Chocolate Mountain gunnery range. Unbeknownst to the public, inside the range is the world's richest gold rift zone. Geologists estimate that the gold contained in this zone is worth between $40 to $100 billion. These are surface gold deposits which are more profitable to mine than the one-mile deep gold deposits in South Africa.

In addition to controlling Catellus, Santa Fe owns and operates the Mesquite gold mine located on the Chocolate Mountain rift zone. The Mesquite gold mine is one of the top ten mines in the United States and has some of the most profitable gold deposits of any mine in the world. To the north is the Chocolate Mountain gunnery range. The Mesquite open pit gold mine literally stops at the fence that borders the gunnery range.

According to mining engineers who work at the Mesquite mine, the main gold ore body is north of the fence inside the gunnery range. Engineers allege that in 1981 and 1982, Consolidated Goldfields, which owned the mine at the time, illegally drilled into the gunnery range area to determine the composition of the ore body. The samples proved to be of high quality. According to these same engineers, beginning in the mid-1980s, military helicopters brought high ranking military officers, Congressmen and Senators to the area to examine these large gold deposits. Congressman Bruce Vento (D-Minn.) was one of those who toured the area. Engineers allege that the purpose of these tours was to come up with a way to hand these gold deposits to Consolidated Goldfields. No legal mechanism was then available to transfer this land without alerting the public to the existence of the gold. But around the same time the California Desert bill was introduced into Congress by former Senator Alan Cranston.

In 1993, Santa Fe traded all of it's coal mines for several Consolidated Goldfield mines, including the Mesquite. According to Donald Fife (spokesman for the National Association of Mining Districts), "This transaction effectively concealed a sales price that could have drawn attention to the real value of Mesquite mine and the riches north of the pit wall in the gunnery range.

If Catellus Corp. receives land from the Chocolate Mountain gunnery range, the Santa Fe would control the exclusive rights to mine the gold trend for nearly 50 miles to the north. This would bypass any possibility of any open appraisal of the gold deposits. Senator Diane Feinstein, used language in the original bill that specifically stated that Catellus Corp. should receive preferential treatment in the disbursement of original government properties.

Since evidence of the conspiracy emerged, rumors circulating the Beltway said that the Chocolate Mountain gunnery range could not be decommissioned because there was too much live ordnance on the ground. This however, was not true. Millions of surrounding acres were in similar condition after George Patton and others trained their entire armies there between 1942 and 1945. In 1947 the entire region was made safe for civilian use. Furthermore, the decommissioning of Chocolate Mountain will be quite easy in comparison to the clearing of mine fields in Kuwait.

The original version of the bill however, raised enough red flags in Congress that a few lawmakers, notably Rep. Michael Huffington (R-Calif.) got the Catellus provisions stricken. Santa Fe however could actually obtain the bulk of the gold even before the Chocolate Mountain gunnery range is decommissioned.

A careful reading of the bill suggests that the map of the range was altered in July 1993 to exclude a rectangular parcel along the south end of the range. This land comprises the immediate area north of the Mesquite gold mine and included the bulk of the gold deposits and can only be accessed through the private holdings of the Mesquite mine. Now that the bill has become law, a new map of the gunnery range will allow Mesquite to claim public land adjoining it that could hold a billion to several billion in gold. Therefore, even with the Catellus provision stricken from the bill, the money would still be routed to the same beneficiaries.

The California Public Employees Retirement System, (CALPERS) is a nearly $80 billion pension fund whose investment clout is heavily influenced by California leadership which includes Sen. Diane Feinstein. Several years ago, CALPERS made a $400 million investment in Catellus. Shortly after CALPERS made its investment in Catellus, the value of the stock collapsed 82%.

Dehnert Queen, a San Francisco businessman, filed a criminal complaint in regards to this investment to U.S. Attorney Michael J. Yamaguchi and Ms. Sylvia Scott of the U.S. Securities and Exchange Commission. Queen states, in his complaint that Sen. Feinstein "misrepresented facts to defraud a public corporation (CALPERS), abused power and conflicts of interest to defraud State and U.S. taxpayers. In early 1993, CALPERS doubled its investment in Catellus to 41 percent...Queen contends "that both former Senator Cranston and Senator Feinstein acted to sponsor the Desert Protection Act in order to preserve and protect the formal agreement that then Mayor Feinstein signed with Catellus to build the Mission Bay Project in 1984, updated in 1986 and shepherded same through the City's (San Francisco) departments and commissions."

The land swap as purposed in The Wilderness Act "will generate the monetary value (approximately $500 million) necessary to execute Catellus' large scale development project located throughout the Bay Area." It has been alleged that Senator Feinstein as well as California Speaker of the House Willie Brown and a wide variety of San Francisco special interest groups would therefore benefit financially.

...The land swap will give Catellus Corp. thousands of contiguous acres bordering the Salton Sea which lies west of the gunnery range. Developing the arid hills and cleaning up the polluted Salton Sea would require billions of acre-feet of water. By coincidence, the Coachella Canal runs right between the Salton Sea and the range, which is about 20 miles wide and 60 miles long. Developers with such a prize could readily bid water away from owners of irrigated farms in the Brawley and El Centro areas.

Ed White, who owns a family mining business in the area is one of many whose business will now be destroyed. "The Sierra Club was just used, in my opinion, by Feinstein's bankers friends and the railroad or their land company Catellus, to create the public perception that these lands are fragile and threatened by development," said White. "The truth appears to be just the opposite. The scattered railroad lands that could never be developed are to be consolidated into a single block of 226,000 acres so they can be developed by Chocolate Mountain Gunnery Range Land and Mining Development."

It is alleged that JLB Realty Corp. based out of Chicago, is tied to Dick Blum, millionaire husband of Sen. Diane Feinstein and that JLB allegedly will stand to make a huge profit on this development. In the name of "re-wilding" millions of acres of desert, grave financial and environmental damage will occur once the land is closed to the public.

97% of the U.S. rare earth mineral production comes from the California desert. These minerals are used in high technology and are essential to the production of lasers, high-power magnets, super conductivity and pollution free cars. The United States will now be forced to obtain these minerals from foreign mineral cartels. 100% of the U.S. production of boron is from the California desert and this production which generates $500 million a year to the economy will now be lost.

Several pension and health insurance funds have large holdings in the area that now will be at risk. These include the AFL-CIO, United Steel Workers, and California State Teachers Pension Fund. The Wilderness Act includes 140,000 acres of National Forest found unsuitable for wilderness by then California Senators Alan Cranston (D) and Pete Wilson (R) in the 1983 California National Forest Wilderness Act, including 12,500 acres of the Bighorn Mountain Wilderness in the San Bernardino National Forest that impact the AFL-CIO trust properties. The greatest damage to union trust assets is the expansion of the Joshua Tree National Park by 234,000 acres to surround their Eagle Mountain Iron Mine on three sides with National Park Wilderness. This will prevent the mine from ever producing again. The steel workers health and pension assets are the mines and highly mineralized lands acquired when the Kaiser Steel's Fontana, California steel mill was forced into bankruptcy by overzealous environmental regulations and Japanese dumping of steel in the late 1970's...

...The 300,000 acres of Teachers Pension funds are the unsold state school sections that were given by the Federal government to the state more than 100 years ago. They have been for sale for 100 years and because there is no water they are not threatened with development.

Unlike the AFL-CIO pension and health insurance funds, the State Legislature and the State Lands Commission discouraged exploration on those lands for energy and mineral resources. Their mineral value is unknown, but it is not uncommon in that area that a single deposit of gold, silver, boron or other minerals could exceed several billion dollars in value. The closure of the lands will generate a loss of 12,000 to 20,000 jobs and billions of dollars of economic activity will be lost annually. Over two hundred homes and private businesses worth millions of dollars that will be taken and destroyed will result in claims, lawsuits and payments of 5th amendment compensation.

One of the most insidious provisions of the act is the creation of "Reserved Federal Water Rights." The Wilderness Act will reserve federal water rights for 74 desert wilderness acres and three new national parks totaling 8 million acres. This will create a precedent, usurping state supremacy and local control of the Western States precious water rights. This will be the "camel's nose under the tent" because although the Wilderness Act applies only to the California desert it gives special standing to the Federal government in the adjudication of any water rights where wilderness is involved. It could affect all neighboring states that share watershed with California: Arizona, Nevada, Oregon even including all of the states that share the Colorado River.

The California Wildlife Federation and the Society for Bighorn Sheep have headed the opposition to the act because they say that thousands of animals will die now that the bill has been enacted. In this arid, rocky region private individuals developed and maintain water holes for the Bighorn Sheep and other wildlife: now they will be prohibited from doing so.

On October 7, 1994 at 2:00 a.m., Representative George Miller (D-Calif.), representing the East San Francisco Bay area, led the charge to ram the wilderness bill through the House where it was passed by a voice vote. The next day, Senator Malcolm Wallop (R-Wyo.) valiantly filibustered the Senate in an attempt to keep the bill from passing, but his efforts failed. The Alliance of America, a coalition of property rights groups says that a criminal investigation should focus on the roles of corrupt politicians and environmental racketeers in the biggest gold heist in history.

Let the investigation begin.