Reprinted with permission from Environment & Energy Publishing, LLC. Not for republication by Wyoming media.

A House committee will review a handful of Republican bills Thursday to accelerate energy development on public lands. Sponsors say the proposals would create jobs and lower the price of gasoline.

The proposals — which come at a time of record oil production on public lands — are an assault on Obama administration policies that Republicans claim have stifled development and crimped energy security.

But critics of the bills warned they could spoil Western landscapes, harm wildlife and spawn conflicts among land users.

A bill by Rep. Mike Coffman (R-Colo.) would block the administration’s ability to withdraw oil and gas leases after auction, set deadlines for resolving environmental protests and require the Interior Department to offer parcels for lease sooner after they are nominated by industry, among other steps.

The bill would also drive a stake through oil and gas leasing reforms that have formed a core of the Obama administration’s public lands policy.

“Although the president is taking credit for increased production, the truth is that his administration has spent nearly four years blocking and delaying domestic energy production,” Coffman said in a statement. “In Colorado, new issued leases for oil and gas production have dropped… This is costing us jobs and increasing what Americans pay for energy and families can’t afford for this trend to continue.”

A separate bill by Energy and Mineral Resources Subcommittee Chairman Doug Lamborn (R-Colo.) would require the Bureau of Land Management to reduce permitting times for new wells by about 90 percent and would charge a new $5,000 fee to protest a lease parcel.

It would also block a BLM policy requiring additional review of projects that are permitted using categorical exclusions, in addition to setting limitations on when and where lawsuits can be heard and on whether plaintiffs can be reimbursed for attorneys’ fees.

A third bill by Rep. Scott Tipton (R-Colo.) would require the Interior secretary to develop a strategic plan every four years for meeting future energy demand through increased development of oil, natural gas, coal, wind, solar, hydropower, geothermal, oil shale and minerals from federal lands.

Critics say the bills are giveaways to oil and gas companies that already own access to tens of million of acres in the West.

“Some members of the energy industry claim that inadequate opportunities exist to develop and drill public lands,” said Tom Franklin, senior director of science and policy for the Theodore Roosevelt Conservation Partnership, which includes numerous sportsmen’s groups. “The numbers, however, tell a different story. Sportsmen support the responsible development of our public lands energy resources, but we believe that before new leases are issued, particularly those that are located in areas important to fish and wildlife, industry should develop leases that already exist.”

Kathleen Sgamma, vice president of government and public affairs for the Western Energy Alliance, said the bills are a necessary safeguard against agency actions that have had a chilling effect on development.

The Coffman bill, for example, is an apparent response to Interior Secretary Ken Salazar’s decision in early 2009 to withdraw 77 leases in Utah after they were sold at auction in the waning months of the George W. Bush administration. Salazar said the leases would have spoiled viewsheds and air quality at nearby national parks and monuments. Local officials say the decision drove millions of dollars in investments out of the state.

“Once you’ve paid for something at auction, you should have some certainly that it’s not going to be withdrawn arbitrarily,” said Sgamma, who will testify at Thursday’s hearing before the Natural Resources Subcommittee on Energy and Mineral Resources.

The bill would also require the agency to issue leases within two months of their sale, as prescribed in the Mineral Leasing Act, and would prohibit BLM from adding new stipulations to leases. It is an apparent response to BLM’s decisions to delay issuance of many leases in Wyoming until the agency could resolve potential impacts to sage grouse and other resources.

Sgamma, whose group filed a lawsuit in Wyoming to force issuance of the leases, said companies need greater certainty.

“When a stipulation is added after a sale, it changes the terms of the contract,” she said. “That retroactive application of stipulations is really a breach of contract and out of line with general U.S. contract jurisprudence.”

Sgamma said energy companies wait up to five years for leases they nominate to be offered for sale. Coffman’s bill would set minimum standards for leasing in areas that have been opened for development in resource management plans.

The Bureau of Land Management will not be testifying, the agency said.

The hearing will also feature a bill by Rep. Martin Heinrich (D-N.M.) that would allow fees for renewable energy rights of way to be used to process permits.

Mining bills

Lawmakers will also be hearing testimony on one of the mining industry’s top priorities — speeding up permit reviews for projects and limiting the flurry of lawsuits from environmental groups.

Nevada GOP Rep. Mark Amodei’s H.R. 4402 aims to make the United States more competitive and self-sufficient when it comes to resource and mineral needs.

“The length, complexity and uncertainty of our permitting process are consistently cited as the primary reasons investors put their dollars elsewhere,” National Mining Association CEO Hal Quinn said about the bill.

Another mining-related bill before the panel has garnered some bipartisan support. Wyoming Republican Rep. Cynthia Lummis’ H.R. 1192 would keep the royalty rate for soda ash — a key resource used in making glass, chemicals and detergents — low at 2 percent to better compete with Chinese producers.

The Green River Basin in Sweetwater County, Wyo., has the world’s largest deposit of trona, a mineral mined for soda ash. Oregon lawmakers are also supporting the bill because of shipping facilities there.

“It has been a pretty frustrating experience,” Lummis said in a recent hearing about trying to keep the royalty rate from reverting to 6 percent. Interior Secretary Salazar responded, “There is a legal constraint that we can’t get around.”

(Banner photo by John Amos/Flickr)

There’s a major shake up in how a federal grant to help prevent suicide and the use of alcohol and tobacco will be administered in Wyoming. Some critics say it will result in significant layoffs at community-level organizations, and it could diminish some one-on-one prevention services.

Prevention officials from across the state say they were blindsided by a March 23 letter from the Wyoming Department of Health announcing that the State Prevention Enhancement Grant will be administered by a single contractor rather than administered among some 52 independent contractors as it had been for decades.

Many of the independent organizations also allege that the bidding process for the single Prevention Management Organization (PMO) contract — awarded to Community Resource Center of Johnson County in September 2011 — was mishandled, which prevented others from competing for the contract.

Wyoming healthcare facilities that offer alcohol, tobacco and suicide prevention programs are facing changes in how federal funds for those services are allocated. (click to enlarge)

“It is the most unethical thing I’ve seen. It really shakes my faith in how the system works. … It’s horrible for our staff and it’s bad for our clients we serve,” said Cori Cosner-Burton, executive director of the Mercer Family Resource Center in Casper.

Cosner-Burton and others in the prevention community told WyoFile that state officials had often discussed the possibility of moving to a single PMO, but they didn’t know a decision had been made. They said most every prevention contractor in Wyoming learned about the decision for the first time when they received the state’s March 23 letter. And they were upset to discover in March that the contract for the new PMO had been finalized in September.

A request for proposal (RFP) to bid for the PMO contract went to only five organizations, and some of those were very unlikely to qualify or even want to bid on the contract. For example, the state sent the RFP to the Wyoming Student Loan Corp.

Wendy Braund, state health officer and senior administrator of the Wyoming Department of Health’s Public Health Division, said proper protocol was followed in the RFP process. She told WyoFile that if community prevention professionals were not aware of the policy change, the bidding process and the hiring of Community Resource Center of Johnson County, it was because “they weren’t paying attention.”

“This potential change has been in discussion with prevention stakeholders in the communities for quite some time. If they chose to not take part in that discussion, that’s their choice,” Braund said.

New strategy necessitated by shrinking budgets

Like other state agencies, Wyoming Department of Health has had to plan for budget cuts — 4 percent under the current budget and 4 percent for the next budget. Finding savings in suicide, alcohol- and drug-use prevention is  not an easy proposition in a state where 700 people die from smoking each year, and where alcohol- and prescription drug-related deaths and injuries are on the rise.

“We know that we’re facing budget cuts. We know we’re not getting any more dollars to go into prevention, which is of critical importance,” said Braund. “So the way to increase prevention investment in communities without more dollars is to move administrative costs … to strategies.”

According to Braund, approximately $7.7 million for the 2011-2012 biennium goes to the prevention of suicide, alcohol- and other drug-use. Of that, about $889,000 — 11 percent — goes to non-personnel administrative costs among the 52 independent organizations. That’s just the administrative cost — not the cost of actually implementing the prevention programs. Switching grant administrative duties from 52 organizations to just one could save about $339,000, which could then be redirected to implementation of prevention programs, according to Braund.

Rural communities in Wyoming rely on federal funding to pay for a large portion of local suicide prevention programs. (click to enlarge)

“This amount ( $889,000) would be reduced by decreasing the number of entities required to have an audit and by other administrative efficiencies,” said Braund.

Restructuring

Beginning July 1, Community Resource Center of Johnson County will manage the State Prevention Enhancement Grant for the entire state. Counties will no longer receive an equal amount of funding from the grant, as they had for many years. Instead, Community Resource Center and the Wyoming Department of Health will use two epidemiological studies to help determine how much to spend in each county based on population and need.

The change will eliminate some positions at Wyoming’s 52 local, independent organizations that have managed the grant for suicide, alcohol- and drug-use prevention programs. It requires Community Resource Center hire new managers, or to re-hire some of the professionals who had handled the administrative duties under the previous structure.

“It will probably mean three staff members out of a job for us,” said Cosner-Burton. “Every county I’ve talked to is losing people as of July 1. It’s horrible.”

Both state officials and the Community Resource Center say there will be a net loss in jobs, but warn that estimates of large layoffs are over-stated.

“Everybody who is working now will re-apply, so we will hire people back again. … Some people probably won’t want to stay on and some people will,” said Toni Cervenka, executive director of Community Resource Center.

People who stand to lose their jobs this summer because of the change are afraid to speak out, said to Cosner-Burton, because if they want to be employed under the new system they’ll have to apply to Community Resource Center — the organization at the center of the controversy.

Critics also say that restructuring under a single PMO may result in duplicative work, in some instances, and it doesn’t take into account the savings from in-kind help that local independents currently achieve through housing prevention staff with existing community service organizations. Independent providers say communities will lose local control to adapt programs to community-specific needs.

“We believe that solutions to our health and prevention (efforts) comes from the community. That’s gone now. Projects will be decided by (Community Resource Center of) Johnson County. Thats a big move backward for us,” said Annmarie McMahill, prevention and wellness office manager at West Park Hospital in Cody.

“Some of those community-driven (prevention efforts), those will not be community-driven anymore. … We know what works in our community and what doesn’t,” said Jennifer Dyer, chairwoman of the Natrona County Prevention Coalition.

The state is using a separate $373,000 federal grant to restructure the state’s prevention program. Braund said the change is among several reforms at the Wyoming Department of Health. Last year, Tom Forslund accepted the Wyoming Department of Health director position after serving as Casper city manager for 22 years.

Braund said shifting to a single PMO not only saves administrative costs, but allows the department to focus more on “evidence-based,” or measurable outcomes, and “environmental” strategies, which include public media campaigns such as billboards and television ads. Those differ from programs in which a prevention specialist works directly with a small group of juveniles in diversion programs, for example, or one-on-one parenting classes.

Braund said the changes in strategy do come from concern that prevention resources were not well-managed in some communities, and results did not meet expectations in some cases.

West Park Hospital is among the Wyoming health care facilities that will soon face major changes in federal funding for prevention programs. (Ruffin Prevost - click to enlarge)

“There was a lot of variability about what was being done in various communities, much of which was not evidence-based or prevention … Sometimes money was re-purposed,” said Braund.

Braund declined to provide any specific examples.

Cosner-Burton said the Mercer Family Resource Center serves more than 1,000 individuals each year on a one-on-one basis. She said a media campaign may reach 40,000 people, but there’s always a need to balance those “environmental” strategies with strong local one-on-one programs.

“We value both, and we’ve been fortunate to do everything. And now this threatens our ability to make connections with people one-on-one and with youth and families,” said Cosner-Burton.

Selection process

Critics say the manner in which the state handled the PMO bidding process doesn’t pass the smell test. Funding for the PMO comes from a Federal Enhancement Grant, and is awarded as a “900 series” grant. Any contractor, or vendor, who feels they are reasonably qualified can ask the Wyoming Administration and Information division to be placed on the vendors list for 900 series grants

But that was never necessary for any of the 52 independent providers that had received State Prevention Enhancement Grant monies, according to Sarah Mikesell-Growney, an independent contractor in Cody.

There were very few names on the state’s vendors list for 900 series grants. In fact, Community Resource Center of Johnson County was not on the list at the beginning of the selection process, either. Because there were so few vendors listed, the Department of Health was asked to invite more organizations to consider the RFP.

The department invited;

• Community Resource Center of Johnson County
• University of Wyoming, WYSAC
• Wyoming Citizen Review Panel
• Wyoming Student Loan Corporation

Only one application was received. The PMO was awarded to Community Resource Center, the contracts were signed in September, and then the rest of the prevention community seemed to be completely unaware of the events until the Department of Health issued its March 23 letter.

In the meantime, Community Resource Center had already made some key hires, which further raised concerns that the whole process was either mishandled or, worse, purposefully kept low-key.

Sarah Mikesell-Growney

“If the state really wants to have the best services possible, that would be another argument for opening up the RFP process,” Mikesell-Growney told WyoFile. Moreover, the positions that Community Resource Center filled are good-paying jobs, said Mikesell-Growney, yet it doesn’t appear that many prevention professionals around Wyoming were aware of the job openings.

If all of these changes are meant to save money and improve the quality of administration and services, “It would seem they would want to open up the applicant pool as well,” Mikesell-Growney said.

Several conference calls have already taken place between Department of Health officials and community providers who are upset over the process. Braund maintains that the RFP process was legal and open. Department officials admit they only invited four organizations to apply and did not make a general notification or announcement statewide. Part of the reason was because department officials didn’t believe any organizations outside the four they recommended could meet the criteria required. A qualifying bidder must have an existing statewide presence with properly accredited experts and have demonstrated a capacity to manage prevention services statewide.

“We could have sent it to everyone, and probably should have,” Wyoming Department of Health prevention unit manager Marilyn Patton told WyoFile.  ”People who are disgruntled with the communications, I can understand that.”

“There’s always opportunities to improve our communication with our stakeholders,” said Braund. “I understand this is the end-all-be-all for these folks, but we are spending an inordinate amount of time addressing this issue. … This is all in efforts to make sure we provide good prevention (services) to the citizens of Wyoming.”

— Contact Dustin Bleizeffer at 307-577-6069 or dustin@wyofile.com.

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After nearly two years of study and building a wide coalition of stakeholders, Wyoming’s Health Insurance Exchange Steering Committee is temporarily on hold. Wyoming’s Legislative leaders in February directed the steering committee to “stand down” in anticipation that portions, or the entirety of the Affordable Care Act (ACA), might be overturned this summer.

Several states, including Wyoming, challenged the constitutionality of the ACA, and the U.S. Supreme Court heard arguments in the case last week. The court is expected to rule sometime in June. Under the ACA, each state is required to have an operating exchange by January 1, 2014. It’s up to each state to decide whether to design and run their own exchange or let the federal government run it. The purpose of an exchange is to improve the accessibility, quality and cost of health insurance for individuals and small businesses by creating a regulated, transparent marketplace and pooling thousands of individuals and small businesses together to give them buying power.

In response to the legislative directive, Wyoming’s steering committee met in Casper March 28 and voted unanimously not to recommend filing for an extension of federal funds set aside for states to study health insurance exchange programs. Wyoming had already missed a deadline to file a grant extension application. However, if the ACA is upheld, Wyoming can re-apply for the federal funds later this year.

71 Construction president Steve Loftin, right, visits with his employee Dave Miller at a job site in Casper. Loftin said he's frustrated with the failure of legislators and Congress to address the rising cost of health care so he got involved with the Wyoming Business Coalition on Health to try to find solutions in Wyoming. (Dustin Bleizeffer/WyoFile - click to enlarge)

Approximately $220,000 in federal funds remain available to Wyoming from the original $1 million set aside.

Steering committee co-chairwoman Rep. Elaine Harvey (R-Powell) said the suspension is appropriate. The group’s work during 2011 yielded some good initial information about the viability of a state-managed exchange program, but it didn’t make sense to continue drafting a set of exchange options if that mandate in the ACA is struck down.

“I’m not going to start hiring consultants and paying people to do things we don’t have to do,” said Harvey.

Others say the Legislature’s order to suspend the committee’s work feels like a political affront to what had grown into a fairly large and diverse group of stakeholders during the past two years. Many individuals, businesses, insurance companies, municipalities and consumer advocates had engaged in the process of researching health insurance exchanges, including variations outside the realm of an ACA mandate that may benefit Wyoming.

Dave Schulte of 71 Construction operates a backhoe in Casper. Employers competing for skilled workers are trying to find more affordable ways to provide health benefits. (Dustin Bleizeffer/WyoFile - click to enlarge)

“The health care law is the law of the land and it seems to me this committee should do whatever it could to be in compliance with the law of the land,” Alan Harris, who represents private businesses on the committee, said via teleconference during the committee hearing on Wednesday.

Harris voted against filing for an extension, he said, because that was the order given by the Legislature. “To me, the message was clear from the Legislature; put the brakes on this bus,” he said.

Anne Ladd, CEO of the Wyoming Business Coalition on Health, said even if all or part of the ACA is struck down, it is still in Wyoming’s best interest to continue researching all options available.

“I’m going to lobby for pursuing the extension; $220,000 is good chunk of change,” Ladd said. “Even if the law is (ruled to be) unconstitutional, if we do some good work about what (makes) a good plan, not only would the state find that very valuable, but the purchasing community would find that very valuable, too.”

In a follow up interview, Ladd told WyoFile, “The Legislature said they really want to send a message back to Washington D.C. that this is not what we want to be doing. I understand there are pieces of ACA that people don’t like, but I think with insurance exchanges, that there is a gem.”

Pressure for the steering committee to “stand down” didn’t come from just the Legislature alone.

Sen. Bill Landen (R-Casper)

“Our fellow legislators, and many of my constituents, by the way, are saying, ‘What are you doing?’ you know. ‘This is a bad law, it’s going to be struck down.’ I, by the way, signed a letter encouraging the governor to join that lawsuit primarily because of the individual mandate,” steering committee co-chairman Sen. Bill Landen (R-Casper) told WyoFile.

If the health insurance exchange mandate survives the Supreme Court review, Wyoming’s steering committee will have to rush to re-apply for federal funds to continue the work, and rush to meet a deadline of October 1 to report to the Joint Labor, Health and Social Services Interim Committee. Harvey, who also co-chairs that committee, said she will instruct that body in May to come up with a contingency plan. In addition, Harvey wants to have a grant application filled out and ready to go should the exchange mandate remain intact when the Supreme Court rules on the ACA this summer.

Outlook for a Wyoming exchange program

For now, Wyoming’s Health Insurance Exchange Steering Committee is still charged, under Senate File 58, with exploring three options:

— An exchange based on Wyoming data without any influence from the ACA and the federal government.

— An exchange driven by Wyoming-specific data, which still meets terms under the ACA, as a partnership between Wyoming and the federal government.

— And a federally-managed exchange, requiring very little data or management from Wyoming.

Employer-based insurance in Wyoming. (click to enlarge)

The idea of an exchange is to pool enough enrollees to compel health insurance providers to compete for their business. To compete under the current ACA mandate, providers’ plans would have to meet minimum “essential benefits” and adhere to a cap on deductibles. Individuals and employers could then compare plans side-by-side. A Congressional Budget Office report indicated that the transparency and competition fostered through an exchange could reduce costs for doctors and insurance buyers, cutting premiums 7 percent to 10 percent.

But a major challenge to creating an exchange in Wyoming is its low population of 568,000. A study commissioned by the Health Insurance Exchange Steering Committee suggested that 38,000 to 41,000 Wyomingites might enroll in an exchange, either individually or through their employer. About 61 percent of those enrollees would have previously been uninsured. At 38,000 to 41,000 enrollees, the administrative cost to run the health insurance exchange would be an estimated $132 per enrollee per year — in addition to actual insurance premiums.

Some believe that’s too costly, while others say it may still yield considerable savings by bringing pressure to bear on quality of health care service and transparency throughout the health care system.

“Some people feel that’s very high, some say it’s reasonable, and some say it’s low,” said Anne Ladd. “I think it’s a good starting point to start the discussion on this.”

Terry Gardnier is vice president of policy and strategy for the advocacy group Small Business Majority. He spoke about insurance exchanges at a forum in Casper last week organized by the Wyoming Business Coalition on Health. Gardnier said to keep administrative costs of a state-run health care exchange program to about 3 percent would require a minimum 100,000 enrolled individuals. Few disagree that that level of enrollment might be impossible in Wyoming, which is why many people are interested in looking into multi-state exchanges.

Rep. Elaine Harvey (R-Lovell)

Low enrollment numbers were one major factor in the Legislature’s decision this year to pull the plug on Wyoming’s pilot health care program, Healthy Frontiers, aimed to serve the state’s lowest income families. Harvey said she believes that enrollment criteria for Healthy Frontiers were too restrictive. But she does worry about how much market influence Wyoming can have at about 40,000 enrollees.

“We’re awfully discouraged in our investigation because of the cost to the consumer in the individual market and for the cost to small businesses and their employees,” said Harvey.

Another difficulty is that the federal government hasn’t yet spelled out what it will require as “essential care” minimum standards in packages offered in insurance exchanges.

Ladd noted that Wyoming’s preliminary estimates of enrollees were conservative, and the estimated cost was a “worst case scenario.” Ladd said she expects the costs of an exchange could be more than justified in not only savings from competition, but also in greater accessibility to Wyoming purchasers.

“I think there are a lot of false barriers out there, and with a lot pressure we can knock down those false barriers,” said Ladd. “And I think health care is the most important thing we buy.”

Wyoming businesses get onboard

Steve Loftin, president of Casper-based 71 Construction, says the cost of employee health care for his company has grown to 2.9 percent of the company’s costs, taking a serious bite out of the 3.5 percent to 5 percent profit margin. Last year, 71 Construction — which employs 58 to 95 workers depending on the season — spent about $450,000 on health coverage. Loftin said he’s had to shift the growing cost of health coverage to his employees just to hold the company’s portion to $450,000.

“What I suspected was some of my competitors were dropping health care altogether to get a competitive advantage,” Loftin told WyoFile. Loftin said he wanted to gain a competitive edge in the construction market by finding more affordable, quality health care coverage. As he researched the market he discovered the Wyoming Business Coalition on Health. Unable to say ‘no’ he now serves as the group’s chairman, he joked.

Workers use a scissor lift in the construction of a new Baker Hughes shop east of Casper. (Dustin Bleizeffer/WyoFile - click to enlarge)

The Wyoming Business Coalition on Health includes about 12,000 workers and about 27 employers from a wide range of businesses, such as Arch Coal, Peabody Energy, Natrona County School District and the City of Casper.

Loftin said the group’s goals are pretty simple; find ways to make health care and insurance more affordable with or without the help of federal and state lawmakers.

“The Wyoming Legislature has been at it (health care) four or five times,” said Loftin. “I’m disappointed in their (Wyoming Legislature’s) efforts over the years, and so I’m ready to be disappointed again.”

The coalition organized a forum in Casper last week titled, “Health Reform Is Your Business.” Speakers addressed health insurance exchanges and how to create more transparency in health care services.

Leah Binder is CEO of the Leapfrog Group business advocacy organization backed by General Electric, General Motors, Boeing, Ford and other big employers. She said many people underestimate the cost savings that can be had by demanding more transparency.

“There are two things we haven’t really done enough of to address (cost of health care services); transparency and competition,” Binder said. “We do not have them the way other industries have them.”

Leapfrog has conducted some voluntary surveys of Wyoming hospitals to begin offering up-to-date cost comparisons for Wyoming health care patients. Early-elected births are a major source of concern, Binder said, because they usually result in extended infant care. One Wyoming hospital reported that more than 80 percent of all births were early-elected.

Loftin said the information that the coalition gathers is available to the steering committee, and he hopes others continue bring good data and good ideas to the table, too. But he still isn’t going to wait for the state to take the lead.

“They’ve got stacks of excellent studies down there (in Cheyenne), and they never get to them. And this will be another one of those,” said Loftin.

— Contact Dustin Bleizeffer at 307-577-6069 or dustin@wyofile.com.

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LANDER — A federal appeals court on Wednesday, February 22, affirmed a 2010 U.S. district court decision that found discrimination against Native American voters in Fremont County and ordered the county to conduct single-member district elections for county commissioners.

Fremont county officials must now decide whether to appeal to the U.S. Supreme Court, attempt to use a constitutionally untested new state law permitting “hybrid” districts, or let the appeals court decision stand.

Meanwhile, Fremont County clerk Julie Freese, said the county is prepared to implement the federal court ruling and convert from an at-large election system  to single-member districts by the November elections. Two members of the Fremont County Board of Commissioners, Doug Thompson and Dennis Christensen, both opponents of the single district scheme ordered by the court, are up for reelection in that vote.

Although Wyoming law permits election of commissioners in single districts, Fremont County would be the first in the state to do so. In his 2010 decision, U.S. District Judge Alan B. Johnson ruled that the at-large system effectively diluted the votes of the county’s large Native American population, who constitute about 20 percent of the county’s population.

Already facing more than $1 million in legal fees in the voting rights case charged to the Wyoming Local Government Liability Pool, a decision by Fremont County to continue the legal fight could open up another potentially costly front.

“My guess is that this thing is over,” said state Sen. Cale Case (R-Lander), whose district includes much of the Wind River Indian Reservation. “The ball is in the county’s court. But I think they’ll go forward with the district election plan.”

J. Scott Detamore, an attorney with the Colorado-based Mountain States’ Legal Foundation that represented Fremont County in the action, told WyoFile that he had not yet discussed the latest developments in the case with county officials.

In its decision, the three judge panel of the 10^th Circuit Court of Appeals in Denver denied Fremont County’s appeal of Judge Johnson’s rejection of an alternative “hybrid plan” proposed by the county. That proposed plan would have created a single majority Indian district to elect one member of the county board of commissioners and a separate majority white, at-large district to elect the other four members.

“The Court finds that the hybrid plans proposed by the defendants [Fremont County] do not withstand scrutiny as they are not consistent with principles governing state law,” Johnson wrote. “The two districts proposed in the defendants’ plans here are crafted in such a manner that they preserve the separation, isolation, and racial polarization in the county, guaranteeing that the non-Indian majority continues to cancel out the voting strength of the minority. The plans appear to be devised solely for the purpose of segregating citizens into separate voting districts on the basis of race without sufficient justification…”

In an attempt to address the first part of Johnson’s decision regarding state law, the legislature on Feb. 18, 2011, hastily passed a bill (SF 14) allowing counties to create hybrid election districts of the type proposed by Fremont County.

This new state law, however, did not factor in the federal appeals court decision.

“Our ruling here today,” federal circuit Judge Jerome A. Holmes wrote in the 33 page appeals court decision, “does not foreclose the possibility that the County may ultimately implement its desired plan through the normal processes established by Wyoming law. We do not opine on whether such a plan would satisfy the strictures of the Constitution…”

Theoretically, therefore, Fremont County could attempt to hold elections based on the state law. However, that decision most likely would be challenged immediately on constitutional grounds by attorneys representing the Arapaho and Shoshone tribal members and take the county right back into court.

“They’d probably be biting off a whole new lawsuit,” said Mountain States’ attorney Detamore.

Attorney Berthenia Crocker of the Lander law firm Baldwin, Crocker & Rudd, which represented Indian tribal members in the case along with the American Civil Liberties Union, said the firm hoped the appeals court decision marked the end of years of litigation in the case, which was first filed in 2005.

“We are gratified that the appeals court upheld Judge Johnson’s carefully reasoned decision that the county does not have unlimited discretion to disregard state or federal law,” said Crocker.

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Foster Friess, the Jackson Hole-based mutual-fund mogul and philanthropist, has lately taken to calling himself the “underdog billionaire.”

It’s a reference to the fact that his ability to influence elections doesn’t quite measure up to those who use 11 digits to track their net worth, rather than a mere 10.

Friess has made national headlines in recent weeks thanks to his contributions to a super PAC that supports Republican presidential candidate Rick Santorum. Friess is the main benefactor of the Red White and Blue Fund, which spent $537,000 on ads to help the Pennsylvanian Republican win the Iowa caucuses. And Friess recently sent solicitations to 5,000 wealthy Republicans, promising to match any contributions they make to the Red White and Blue Fund up to $500,000.

Friess calls himself an underdog because he’s up against the likes of Sheldon Adelson, the casino magnate, whose personal wealth of $21.5 billion far exceeds Friess’s. Adelson has given $5 million to a super PAC supporting former House Speaker Newt Gingrich.

Unlike traditional political action committees, super PACs aren’t limited in the amount of money that they can raise or spend to support a candidate. They were made possible by the Supreme Court’s January 2010 ruling in Citizens United. The only catch is that the super PACs must operate independently from the politician’s own campaign.

Santorum has the best shot at taking down President Barack Obama in the general election, Friess believes. Friess, a born-again Christian, says the Obama administration has made decisions — such as funneling taxpayer funds into failing solar company Solyndra — that have hurt the economy.

In an email interview with WyoFile, Friess says he has known Santorum since the mid-1990s. Santorum is the only Republican candidate who “understands the plight of the blue-collar worker,” Friess says.

He believes Mitt Romney, the Republican frontrunner, can’t knock off Obama because his “patrician” background won’t play well with working-class voters.

Santorum, whose grandfather was a coal miner, has vowed to cut corporate taxes on manufacturing companies to allow U.S. firms to become more competitive with their Chinese counterparts.

“His positions are not only completely consistent with mine, but are consistent with the 80 to 90 percent of the America people who want to have a more fiscally responsible government,” Friess says.

He adds:  “I also like the fact that Santorum is 53 years old and he starts each day with 50 push-ups. It will be very hard for us to expect to win with the more mature candidates.”

Critics of super PACs say they give too much sway to conservative billionaires like Friess. “The goal of the top 1 percent is simple,” U.S. Senator Bernie Sanders, a Democrat from Vermont, wrote recently in a letter soliciting support for a a constitutional amendment to overturn Citizens United. “They will spend as much as it takes to elect candidates who support a right-wing corporate agenda.”

Leslie Peterson, a Democrat who ran unsuccessfully for Wyoming governor in 2010, agrees with Sanders, calling political funding in the U.S. a “disaster.”

She believes the super PACs could become just as big an issue in Wyoming as they have in national elections. “The minerals industry in Wyoming has huge resources to put into electing ‘their people,’ and they may very well do so,” says Peterson, who is also from Jackson.

Peterson notes, however, that Friess is acting within the law, and she adds that he and his wife, Lynn, have been “amazingly philanthropic” in Teton County. The Friesses have given away millions of dollars in Wyoming, to small humanitarian charities in Jackson, the National Museum of Wildlife Art, and the University of Wyoming, among others.

“They do a lot of stuff that I hate, but I also have to say they do a great deal that is good,” Peterson says. “I can’t condemn the man for doing what he believes in. I’m doing the same thing — I just don’t have the same wherewithal.”

Friess says he finds the recent concern about rich people influencing elections to be “quite humorous.”

Friess, who has long accused the mainstream media of having a liberal bias, notes that plenty of billionaires are in fact Democrats — and they’ve also been known to make huge contributions to influence elections.

The billionaires George Soros and Peter Lewis spent millions in 2004 through a 527 organization — the general category that super PACs now fall into — in an unsuccessful bid to derail former president George W. Bush’s re-election.

“It seems like these super PACs are only a problem if they’re operated by Republicans,” Friess says.

Jim King, a political science professor at the University of Wyoming, says the rise of super PACs could make it easier for the oil, gas, and coal companies that fuel the state’s economy to support Republican candidates, who are typically regarded as friendlier to the industry.

“There’s certainly the potential for the super PACs to make it more difficult for Democrats, unless they can get somebody to come in on their side,” King says.

But he notes that money is only one part of equation — and often not the deciding factor — in who gets elected. One of the biggest spenders in Wyoming election history was Democrat Bob Schuster, a Jackson lawyer, who spent $1.3 million in an unsuccessful 1994 bid for the U.S. House of Representatives, far more than Barbara Cubin, his Republican opponent. Cubin edged past Schuster with 53 percent of the vote and held the position for the next 15 years.

“It’s very, very difficult to actually buy an election,” King says.

Santorum built some early momentum with his surprising win in the Iowa caucuses, but he placed third behind Gingrich and Romney in the South Carolina primary on Saturday. He has vowed to stay in the race despite the weak showing.

Friess says he’ll switch horses if Santorum doesn’t win the nomination, and provide financial support to the GOP nominee in the general election.

He jokes that he’s ready to spend “$1 trillion” to defeat President Obama.

“We need to return our nation back to one that’s run on ethics and honesty and forthrightness,” he says.

— Also check out this Foster Friess profile originally published by WyoFile on January 25, 2011, “Wyoming Philanthropist Foster Friess; Hates taxes, opens wallet wide to those in need.”

Ben Gose is a Lander journalist who writes frequently for The Chronicle of Philanthropy and The Chronicle of Higher Education, and contributes to programs on Wyoming Public Television. He also coaches the sprinters on the Lander Valley High School track team.

If you enjoyed this article and would like to see more quality Wyoming journalism, please consider supporting WyoFile: a non-partisan, non-profit news organization dedicated to in-depth reporting on Wyoming’s people, places and policy.

REPUBLISH THIS STORY: For details on how you can republish this story or other WyoFile content for free, click here.

(Banner photo by Gage Skidmore)

Dianna and Dallas Engler of Gillette would love to offer healthcare benefits to the 18 or so employees who work at Value Villa, the retail consignment shop they own. But they can’t. No quality, affordable insurance package exists for a small business like theirs in Wyoming. “It’s very sad when people in this country cannot afford health care,” says Dianna, 63. She and her husband pay $2,400 every month for their private health insurance.

The Englers have owned Value Villa, which sells everything from clothing and books to furniture and motorcycles in Gillette, Wyo., since 1983. Over the years they’ve employed up to 34 people at a time. Their son, Scott Engler, 44, manages and runs the store. Dianna trains new employees during the summers.

Scott Engler, manager and son of the owners of Value Villa in Gillette. “It’s our civic responsibility to help people out,” says Engler. “But it just wasn’t affordable.” (Caiti Schuler/WyoFile — click to enlarge)

In the 80s and 90s, they offered good health insurance benefits to their employees. The package had a $500 deductible and Value Villa paid 85 percent of the premium while the employee paid 15 percent. In the early 2000s premiums started going up and Value Villa had to agree to higher and higher deductibles to afford the plans. Eventually, Value Villa could only pay half the premium for a plan with a deductible of $5,000. The employees, many of whom are young women, could not afford the other 50 percent of the premium, and the $5,000 deductible was too high to help them with routine healthcare needs.

That’s when, “Scott did research on every insurance known to mankind. We spent a lot of time looking into what we might be able to do,” Dianna says.

But they couldn’t find anything that would work. In 2004 Value Villa had no choice but to stop offering health insurance. A few of their workers get insurance through their spouses, but others are now uninsured. “It’s our civic responsibility to help people out,” Scott Engler says. “But it just wasn’t affordable.”

The Englers are typical of many small business owners whom a Wyoming Health Benefits Exchange, a requirement of federal health care reform, is targeted to help. The purpose of an exchange, supporters say, is to improve the accessibility, quality and cost of health insurance for individuals and small businesses by creating a regulated, transparent marketplace and pooling thousands of individuals and small businesses together to give them buying power. Under the federal Affordable Care Act, each state will have an operating exchange by January 1, 2014. States decide whether to design and run their own exchanges or let the federal government run it.

Wyoming has cautiously studied and is beginning to draft a bill to create a state-run exchange. Some say the state is foot-dragging, reluctant to engage because of political opposition to the federal healthcare reform law. Supporters believe that even if the Affordable Care Act crumbles under scrutiny of the Supreme Court this spring or if a Republican is elected to the White House next fall and repeals the law, uninsured individuals and small business owners in Wyoming would benefit from a robust exchange. Others say that controlling costs should be the first priority of fixing the healthcare system, and the state should look to solutions other than an exchange.

Glimpse of a Wyoming Health Benefits Exchange

Under the federal Affordable Care Act, every state will have an insurance exchange, a device meant to address the three pillars of healthcare reform – accessibility, quality and cost – for small businesses and individuals. Members of the U.S. Congress and their staff will also be required to get their health insurance through the exchanges.

To address the first of the three pillars, access, the exchange makes shopping for insurance easy. It also matches low-income buyers with federal insurance subsidies and directs those who qualify into Medicaid. It lets buyers clearly compare plans side-by-side, making insurance packages more transparent and competitive. Like Expedia or Travelocity (travel websites which compare airfare from several airline companies side-by-side to help shoppers make an educated purchase), the exchange will have a website that clarifies the differences between insurance plans so consumers know exactly what they are buying.

Employee Carol Foster shares a hug from a furry friend of a regular customer.. Value Villa is typical of many small businesses that a Wyoming Health Benefits Exchange, a requirement of federal health care reform, is targeted to help. (Caiti Schuler — click to enlarge)

To address quality of health insurance, the exchange defines minimum essential benefits that must be offered by each insurance plan and puts a cap on deductibles. States have some flexibility in deciding how rigorous the requirements will be. Side-by-side comparisons of plans are also expected to improve quality, in contrast to the current system where it’s very hard to tell what plans cover and how they differ.

To address cost, the exchange combines individuals and small businesses into a large pool of buyers who share risk and have buying power, much like a large corporation with thousands of employees. The Congressional Budget Office estimates that transparency in insurance plans, a competitive marketplace and reduced administrative costs for doctors and employers will drive premium costs down 7 to 10 percent.

In October of 2010, Governor Dave Freudenthal created the Wyoming Health Benefits Exchange Steering Committee, which continues under Governor Matt Mead, to study the feasibility of a Wyoming-run exchange. Wyoming received an $800,000 planning grant from the federal government to fund the study. The 17-member committee includes representatives from the state legislature, several state agencies, insurance providers and the business community.

Over its first year of operation, the committee hired Public Consulting Group, a Boston-based company working with several states on health care reform, to help them understand what a Wyoming-based health exchange would look like. Their market study determined that 83,000 Wyoming citizens – 15 percent – are uninsured.

Of the 208,000 people with individual insurance in Wyoming, half face a deductible of $3,000 or more. Insurance plans for individuals in Wyoming have an average actuarial value of 43 percent. The actuarial value is a measure of how good the insurance is, determined by the average percentage of medical costs the plan ends up paying as opposed to what the insured person pays. The national average is between 55 percent and 60 percent, and the minimum value allowed under the Affordable Care Act is 60 percent.

The small group market in Wyoming is better off than the individual market: almost two thirds of these plans have a deductible of less than $1,000 and the average actuarial value is 63 percent.

The study estimated that between 38,000 and 41,000 Wyomingites would enroll in an exchange, some individually and some through their small employer. About 61 percent of them would be people who are currently uninsured while 19 percent would be those who currently have employer insurance and 20 percent would be those who currently buy their own individual insurance.

The consulting group determined that a Wyoming-run exchange would cost about $4.2 million per year to maintain. To make the exchange self-supporting each enrollee must pay a monthly fee. For example, if 30,500 enroll, the fee would be $11.46 per month.. If more enroll, those monthly fees would go down. States also have the option to partner with neighboring states on some aspects of the exchange, which can cut costs a bit.

The steering committee took their findings to the state legislature’s Labor, Health and Social Services Committee in October 2011. In December, the committee voted to sponsor a bill with three parts. First, it would extend the deadline to create the exchange until after next year’s legislative session in April 2013. That doesn’t meet the federal government’s January 2013 deadline for states to show their plans for an exchange, but it’s the next chance for the legislature to consider a bill. Second, the committee’s bill excludes the governor or anyone else from creating an exchange without the legislature’s approval. And third, it provides $20,000 to pay expenses for the four legislators working with the Exchange Steering Committee on the exchange bill for 2013. The state will use federal funds to design the exchange.

“Our next step is to take the show on the road,” says state Rep. Elaine Harvey (R-Lovell), co-chair of both the Exchange Steering Committee and the legislative Labor, Health and Social Services Committee. Over the coming months, the Exchange Steering Committee will hold seven town hall meetings around Wyoming to learn about the concerns and needs of individuals and small business owners. The committee will use information gathered at the meetings as it writes a bill for Wyoming’s exchange.

The first meeting took place January 10 in Cody. The next town hall meeting is scheduled for Tuesday, January 17, 2012 from 6:00 p.m. to 8:00 p.m. at Central Wyoming College’s Wind River Room in Riverton. The meetings in Gillette, Casper and Cheyenne will occur in January, information to be released soon. There will also be town hall meetings in Rock Springs and Jackson later this winter. Check the “Latest News” tab on Governor Mead’s website for the schedule.

Existing exchanges

Two states – Massachusetts and Utah – were already operating exchanges before passage of federal healthcare reform. The Massachusetts exchange, called the Connector, provided the model for the federal law. The Connector is an “active purchaser” exchange, which means the state approves insurance providers, ensuring that the exchange sells only the best possible insurance packages. The Connector launched in 2007, where to date over 39,000 people buy their health insurance. More than 33,000 of them are individuals. As of August 2011, three different plans for small businesses within the Connector covered only 6,500 people through about 2,250 small businesses. In Massachusetts, 98.1 percent of residents have health insurance.

By contrast, the Utah model is an “open marketplace” exchange, where any insurer can sell. The state has less oversight than in Massachusetts. The Utah Exchange launched in 2009. About 160 small businesses were enrolled as of August 2011 covering 4,200 people. About 86 percent of Utah’s population is insured.

Scott Engler and Dakota Christiansen load up a large filing cabinet into the bed of a customer's truck. (Caiti Schuler/WyoFile — click to enlarge)

On the Utah Health Exchange, small business owners determine a set amount to pay toward each employee’s health benefits. Then the employee, who can add additional money if desired, goes to the exchange’s website and selects his or her insurance. If the employee changes jobs, he or she can keep the same insurance plan as long as the next employer is part of the exchange.

“The Utah exchange I find extremely interesting and intriguing,” says Al Harris, owner of a Green River-based radio broadcasting company and a business representative on the Wyoming Health Benefits Exchange Steering Committee, “but the Utah exchange does not meet the federal guidelines.”

“Nobody knows what ‘compliant with the Affordable Care Act’ means because the federal government hasn’t established those criteria yet,” says Norman Thurston, Utah’s Health Reform Implementation Coordinator. “We’re definitely still in development. We think we are on a trajectory to be certified when the time comes, but we’re not finished yet.” So far, small businesses, but not individuals, can purchase insurance through the Utah exchange, which creates a transparent marketplace, but doesn’t include some of the federally required mechanisms for improving access, ensuring quality or controlling costs.

“The lesson is that Utah’s health exchange as a model of health reform has not done anything for those three pillars,” says Judi Hilman, executive director of the Utah Health Policy Project, a nonprofit trying to improve healthcare access for Utah residents. She says for an exchange to work everyone available must participate, which will only happen with a mandate. “Those are the kinds of changes, the very levers that Utah – for political reasons, and I’m guessing Wyoming, which is more conservative than Utah – was not able to pull. So we are grateful for federal reform for pulling those levers for us.”

Several other states are designing their own exchanges, too. Among Wyoming’s neighbors, Colorado has passed legislation to create an exchange governed by a governor-appointed public board. Colorado’s exchange is scheduled to launch in October 2013, fifteen months before the federal deadline. Montana’s legislature created a committee similar to Wyoming’s to study an exchange. South Dakota’s governor created a large taskforce working on many aspects of the exchange. Idaho and Nebraska failed to pass legislation to create study commissions or start developing exchanges. Florida and Oklahoma have returned the federal planning grants they received and decided they will not actively participate in exchange design in their states.

The federal Health and Human Services Department will set up and operate exchanges in states that don’t create their own. If a state wants to run its own exchange, but isn’t ready by January 2014, HHS will operate the exchange until that state is ready.

Is a state-run exchange right for Wyoming?

Promoters of a Wyoming exchange hope it will make insurance accessible, quality and cost effective for the 15 percent of the population,  83,000 people, who are uninsured in the state – plus the tens of thousands more who have poor-quality, high-deductible, expensive insurance that doesn’t cover their healthcare needs.

“So what is concrete so far?” says Chairman Harvey. “We want a Wyoming market. We do not want to partner with the federal government. And we want as much flexibility in our plans as we can have so people can be insured appropriately.”

Essential health benefits, defined by states based on a benchmark plan, must at least cover everything listed above. (Click to enlarge)

She predicts the greatest challenge will be designing the “essential benefits” to balance meaningful coverage with affordability. The federal Health and Human Services Department requires that states set essential benefit standards based on the benefits and services provided by a benchmark plan. The benchmark plan is one of the three largest – as determined by enrollment – small group plans, state employee health plans, or federal employee health plans in the state. Every insurance plan must, at a minimum, offer the essential benefits and cover ten categories defined by HHS such as maternity and newborn care, mental health and substance use disorder services and prescription drugs.

Governor Mead has endorsed the Health Benefits Exchange Steering Committee’s work on a Wyoming-based exchange, writing last October that the state should, “establish some components of a state-run benefits exchange and that these efforts [should] be transparent and accountable. I advocate for an approach that gives Wyoming as much flexibility for as long as possible.”

Harvey believes that a state-level, quasi-governmental department made up of experts from around the state, comparable to the Wyoming Business Council, should govern a Wyoming exchange. She wants the Exchange Steering Committee to have a bill or series of bills designing a Wyoming exchange ready to present to the appropriate legislative committee(s) this year.

Harvey, who opposes the federal Affordable Care Act, says while the law triggered the state to work on its exchange, she believes individuals and small business owners could benefit from an exchange regardless of whether the law stands up in court this spring.

“I hope at the end of the day – this is just me speaking – that we have done our work well enough so we can hold our heads high and say we can do it,” she says. She emphasizes that covering the uninsured also benefits those who already have insurance, because hospitals and doctors don’t have to transfer the costs of caring for the uninsured to paying patients.

But state Sen. Charlie Scott (R-Casper), also co-chair of the Labor Health and Social Services Committee (though not a member of the Exchange Steering Committee), is not so sure. He questions the numbers presented by the exchange study and doubts the feasibility of an exchange in a state with such a small population. He believes, “the traditional marketplace has worked moderately well for Wyoming,” insisting that because Wyoming places few regulations on insurance companies, there is adequate competition. His primary concern for improving Wyoming’s healthcare system is controlling costs, and he doesn’t believe a Wyoming exchange would be large enough to do that.

Barb Rea, a consumer advocate for Wyoming Project Healthcare and the Equality State Policy Center, has worked for years to bring a better health care system to Wyoming. She also buys her own insurance. Her plan has a $5,000 deductible and rising premiums. And in 2009 she was diagnosed with kidney cancer.

“It was just a nightmare getting all of my expenses paid,” she told the audience at a public forum to explain pieces of the Affordable Care Act last September. “Now no one will write me a policy because I have a preexisting condition. I’m not satisfied with my product. I did everything right, paid all my bills, and there’s no place for me to go. That’s an example of something we are trying to fix.”

She wants to see an insurance exchange in Wyoming, but is not sure whether it’s better for Wyoming to run its own exchange or have the federal government run it. And while she’s glad to see Wyoming working on reforms, she’s not sure the Health Benefits Exchange Steering Committee is the best approach.

“It’s a politically appointed board,” she says. “It’s too hard for them to get the work done. It’s really a big task. It will take a lot of expertise to get this accomplished.” She adds that it’s important to have consumer input into design and governance of an exchange, but it needs to be run by people with lots of experience and technical expertise. “The states that are really moving forward and making changes to their systems and getting everyone covered have healthcare planning bodies at the state level. We could do that.”

She emphasizes that the first priority of any healthcare reform should be to get coverage for all citizens and turn them into paying customers, something the exchange is designed to help do. “Then, how do we make best use of money that is in the system to take care of what’s medically necessary in people’s lives? The exchange will be part of the answer, but we have more work to do and we need more data.”

The work continues

A customer peruses a clothing rack at Value Villa. Although rising costs forced Value Villa to cut health benefits, co-owner Dianna Engler says driving down costs won't help if the coverage is inadequate. (Caiti Schuler — click to enlarge)

Rising costs prohibited the Englers from providing insurance to their employees, but driving down costs won’t fix the problem if it results in a cheap product that doesn’t adequately cover healthcare needs, Dianna says. “The main crux for anybody would be the quality of the insurance plan itself,” she says. “It has to be affordable and worth having. If you pay a dollar for nothing, that’s too much.”

She was unaware of the Wyoming Health Benefits Exchange Steering Committee and their work, but suggests that it would be nice if employers could contribute to their employees’ health benefits, but leave selection of the plan up to each individual employee, much as the Utah exchange allows.

Meanwhile, “We have 83,000 people uninsured in Wyoming,” Harvey emphasizes. “We are still seeing them and we are taking care of them, but we’re doing it as uncompensated care. We’re seeing them in emergency rooms instead of doctors’ offices. Medical bankruptcy is happening all over the state. We have to do something.”

Emilene Ostlind was a High Country News editorial fellow in the winter of 2011 and now works as a freelance journalist in Lander, Wyo. 

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Cynthia Lummis first won election to the Wyoming House of Representatives in 1979. She was just 24 years old at the time, making her the youngest woman in Equality State history to serve in the legislature.

Since then, the Republican from Cheyenne has spent 24 years in elected office, climbing the political rungs through both chambers of the Wyoming Legislature to the state treasurer’s office, and then to the halls of U.S. Congress.

Cynthia Lummis' rise in Congress is preceded by her success as a businesswoman and investor. Her 2007-2008 financial disclosure forms reported an estimated net worth between $20 million and $75 million. (Photo from Lummis' Facebook — click to enlarge)

Though it is not widely known, Lummis’ rise in politics has been matched by her ascent as a businesswoman. While working as a lawyer and elected official in Cheyenne, she quietly built her personal wealth through a number of real estate ventures she pursued with her husband and law partner Alvin Wiederspahn, who has been a board member of several banks.

Even before Lummis began her political career, her family was known in Cheyenne for owning the Arp and Hammond Hardware Company, along with several large ranch properties southeast of town.

But election to the U.S. House in 2008 shed more light on Lummis’ personal finances, showing that the self-described rancher and small business owner may be one of the richest lawmakers in the Capitol.

In 2007-2008, Rep. Lummis’ financial disclosure forms reported a net worth between $20 million and $75 million, landing her spot No. 15 on RollCall.com’s list of the 50 wealthiest members in both houses of Congress.

Those numbers may make her net worth appear to be larger than it actually is, because the form used by Congress allows lawmakers to report their wealth within broad ranges; if an asset is over $1 million, there are only four boxes to check: $1-5 million, $5-25 million, $25-50 million, and over $50 million. (Click here to learn more.)

Lummis’ more recent disclosure forms have reported lower values, putting her total net worth for 2010 between $5.5 million and $24 million. Still, that ranks her as the 29^th richest member of the U.S. House.

On paper, Lummis’ reported wealth dwarfs that of her fellow Wyoming members of Congress: Senators Mike Enzi and John Barrasso, both Republicans. According to financial disclosure statements filed with the Clerks of the House and Senate in 2010, Barrasso’s net worth is between $2,713,015 and $8,747,000, and Enzi’s is between $440,067 to $1,878,000.  The Center for Responsive Politics ranked them as the 34^th and 66^th wealthiest senators, respectively.

Sen. Enzi’s biggest asset may be the three-story Washington D.C. home he bought in 1997 for $360,000, and which D.C. tax authorities valued at $874,000 in 2008.

The bulk of Sen. Barrasso’s money is his portfolio of Vanguard investment funds, valued between $2 million to $7.25 million in 2010. He earned a salary of $306,000 for his last year of work at Casper Orthopedic Associates in 2007.

If Lummis’ median estimated wealth of $14.75 million is accurate, she could be easily counted among the wealthiest 1 percent of all Americans who have more than $9 million in assets.

Lummis wrote about moving cows in Platte County during a weekend home from Washington in a recent press release. But it would be a mistake to cast her as an ordinary ranch woman. Her career trajectory and her financial balance sheet reveal an ambitious, intelligent woman from a wealthy family who gained political clout through her work on key state issues like tax revenue and the management of billions in state money.

Wealth in Property

Most of Lummis’ wealth is locked up in her shares of Arp and Hammond Company, Lummis Livestock Company, and Old Horse Pasture Inc. In 2007, she reported these three large family land companies to be worth between $5 million to $25 million each, which attracted the attention of Rollcall.com and other news outlets.

Lummis revised the values of the companies in her 2009 disclosure form,putting them between $1 million and $5 million, which dropped her out of the top 20 rankings of the wealthiest members of Congress.

Rep. Cynthia Lummis' financial disclosure form shows that a large portion of her income comes from businesses jointly owned by her and her husband Al Wiederspahn. (Form courtesy of Opensecrets.org — click to enlarge)

While the exact value of these companies is unknown, the real estate footprint is part of the public record. Records from the Laramie County Assessor’s office show that Lummis is part or full owner of over 14,000 acres in Laramie County assessed at $2,735,244 in 2011.

Lummis Livestock paid a distribution ranging from $48,000 to $50,000 to Cynthia Lummis from 2007-2009, but paid nothing in 2010. One parcel owned by Lummis Livestock contains a gravel pit that could be generating income.

With her husband Wiederspahn, a Cheyenne Lawyer and former board member of Rocky Mountain Bank and First National Bank of Wyoming, Rep. Lummis owns the Colony Building and the Carey Block in downtown Cheyenne, along with a warehouse at 1112 Dunn Street. Those three properties were assessed at $1,114,100 in 2011.

Wiederspahn also owns Equipoise Corporation, a real estate and historic preservation development firm valued between $1 million to $5 million. Through Equipoise Corporation, Wiederspahn owns a three-story apartment building with 11 bathrooms at 912 Country Club Avenue in Cheyenne, plus a lot at 410 Randall Avenue. The latter property was to be the site of The Irwin, a luxury condo building that has not yet been built. Those properties are valued at $618,253 in 2011.

A map of the property near Cheyenne owned by the Lummis Family. (Graphic by Guy Padgett with data from Laramie County Assessor — click to enlarge)

Equipoise also owns an 80-acre parcel at the foot of the Wyoming Range in Lincoln County, near the Star Valley community of Etna.

County tax assessment records show Wiederspahn and Lummis own 1,600 acres of ranchland in Platte County, located on Cooney Hills Road west of Wheatland near the Laramie Range. They own another 1,200 acres in Albany County.

Wiederspahn and Lummis’ primary residence is on Bent Avenue in Cheyenne, valued at $314,277 in 2010. Lummis also owns a condo on New York Avenue in Washington, D.C. valued at about $501,440 according to tax assessment records.

Lummis’ assets and those of her husband have not grown extravagantly since her election to Congress, though she did manage to pay off two ranch mortgages between 2008 and 2009 valued between $1.1 million and $5.25 million.

In 2010, Lummis reported between $115,000 and $250,000 in real estate income from the Colony Building, the Carey Block, and the warehouse at 1112 Dunn. Though not reported in the disclosure statement, she also earned a yearly salary of $174,000 as a member of Congress.

State Treasurer 1999-2007

Lummis’ power may have reached a peak during her years as state treasurer, when she was responsible for the investment and diversification of the massive windfall Wyoming saw during the natural gas boom.

During her two terms as state treasurer from 1999 to 2007, the state had received over $6 billion in revenue. Lummis oversaw the growth of the state’s investments from $3.5 billion to $8.6 billion, and led the conversion from mostly fixed income funds to a diversified portfolio.

As one of the five members of the State Land and Investment Board, she championed a strategy to put 50 percent of state investment funds into equities. Up to that point, the fiscally conservative state had kept most of its investments in fixed-income bonds.

During the course of Lummis’ term she helped choose fund managers like Cheyenne Capital Fund, which invested $257 million in state money, and State Street Global Advisors, which invested $952 million by December 2006.

Lummis’ treasurer’s report for 2006 shows other large investments were made through Fisher Investments and Capital Guardian Trust, which managed $350 million each. Western Asset Management and Lehman each managed over $330 million in fixed income funds. Friess Associates and GAMCO (Gabelli) each managed over $180 million in equities. Subsequently, donors connected to Lehman, Friess, and GAMCO all gave money to Lummis’ congressional campaign.

The array of new investments created a modernized growth portfolio that many hoped would help equalize the boom and bust cycles of mineral revenue that wreak havoc on the state’s budget.  As Lummis said in her closing treasurer’s report for 2006, “Perhaps no State Treasurer will have as unique an opportunity as I to effect such significant change on Wyoming’s investment portfolios using modern institutional portfolio theory.”

She later wrote a chapter called “Combating the mineral curse: the case of Wyoming” in the book Sovereign Wealth Management for the World Bank. The publisher, Central Banking Publications, flew Lummis on a one-night all-expenses paid trip to London, according to her 2010 financial disclosure form.

In Lummis’ 2008 run for Congress against Democrat Gary Trauner, her campaign materials touted her role in the state’s $4 billion investment growth that occurred during her two terms as treasurer. Gov. Dave Freudenthal told the Casper Star Tribune that the energy boom, not Lummis, should be credited for the growth.

Whether or not the credit can be given to Lummis, it’s clear that the state’s portfolio has been growing in the right direction overall. As of June 30, 2011, Wyoming’s investments had a market value of $14.4 billion.

The increased exposure to growth also brought increased risk, and there have been some setbacks. In 2009 the state portfolio declined in value from $11.5 billion to $10.9 billion, an unrealized loss of $600 million on paper.

Even so, the portfolio is up nearly $6 billion since Lummis left the state treasurer’s office. That growth has been good for Wyoming, but it has also been good for the fund managers. For example, Cheyenne Capital Fund initially collected a yearly management fee of $1.9 million when it was chosen to manage state funds in 2003. Cheyenne Capital Fund founder John Fitzgerald said the company’s formula for calculating management fees is complicated, but usually comes out to about 1.55 percent annually, which is in line with the industry average. His fund charged the state a $2.9 million fee in 2010.

Business and Politics

Over the course of her career Lummis has been involved in many major transactions and policy initiatives, and several of her efforts have resulted in criticism.

In particular, Lummis’ connections to royalty in kind have drawn media scrutiny. As reported by WyoFile, Lummis voted in 2005 to commit Wyoming’s 50 percent interest in mineral royalties from federal lands to the royalty in kind program in the Department of the Interior, an experiment that ended in controversy after a lack of oversight by the Minerals Management Service caused the government to lose hundreds of millions in royalties.

The accounting problems arose during the Clinton years, but were left uncorrected during Bush’s tenure when Wyoming’s Rejane “Johnnie” Burton was director of the federal Minerals Management Service. Burton resigned from that job in 2007, before reports of major corruption in of the service’s Lakewood, Colo. offices surfaced in September of 2008.

Rep. Lummis poses in front of a stack of government regulations. Questions surfaced after Lummis hired Johnnie Burton as a field representative in her Cheyenne office in January of 2009. Lummis had a long association with Burton, who served in the state legislature and chaired the Wyoming Department of Revenue from 1995-2002. (Photo courtesy of Cynthia Lummis' Facebook page — click to enlarge)

After the Lakewood scandal broke, Lummis hired Burton as a field representative in her Cheyenne office in January of 2009. Lummis had a long association with Burton, who served in the state legislature and chaired the Wyoming Department of Revenue from 1995-2002.

In June 2010 Lummis’ Democratic challenger David Wendt criticized her continued employment of the controversial former Minerals Management service director. Burton then defended her record in a July 2010 article in the Casper Star Tribune, saying the press had crucified her. She said that she had initiated an investigation of the Lakewood office in 2006, and that the royalty in kind program had made money for the government.

Lummis paid Burton a yearly salary of $50,000 for her work in Cheyenne in 2009 and 2010, but that was reduced to a salary of $19,000 for January to September 2011. As of this writing, Burton continues to work in Lummis’ Cheyenne office.

Lummis also attracted media scrutiny in June 2011 when the Associated Press reported that several fund managers hired by Lummis during her tenure as state treasurer had gone on to contribute to her congressional campaigns in 2008 and 2010.

As shown below, this was not illegal, and may have been a case of political fundraising as usual.

The Associated Press article noted that donors to Lummis for Congress included John Fitzgerald of Cheyenne Capital Fund and several of his associates. Contributions from the Fitzgerald family amounted to $15,800 from 2008-2010.

As treasurer and member of the State Loan and Investment Board, Lummis had made several moves that benefited Cheyenne Capital. She voted for an investment of $125 million in state money with Fitzgerald’s fund in 2003, and then voted to invest another $100 million with the company in 2004.

In both cases she argued that Cheyenne Capital was the best manager, and subsequently the fund has had an internal rate of return of over 12 percent. (See Cheyenne Capital Fund – Private Equity Commitments and Investments for more information on the fund’s performance.)

Gov. Freudenthal voted against investing with the fund both times, but the measures passed anyway.

Then in 2006, Lummis signed a confidentiality agreement with Cheyenne Capital Group, which sealed their records to the public to protect industry secrets. That agreement was overturned earlier this year by a Freedom of Information Act request made by the Associated Press.

Lummis originally met Fitzgerald in the late 1980s through her husband’s banking interests. Fitzgerald was a lawyer for Kirkland and Ellis when he represented a consortium of equity firms that was headquartered in Cheyenne. Wiederspahn was a board member of Rocky Mountain Bank at that time, and worked with the consortium as it looked for assets to purchase.

In an interview with WyoFile, Fitzgerald said he may have met Lummis once through Wiederspahn at that time, but that he didn’t do any business with her until years later when she called him as state treasurer looking for equity funds to invest in.

While she was treasurer, Fitzgerald invested state money allotted to Cheyenne Capital Fund with several other private equity managers. After Lummis left the treasurer’s office, many of those managers donated to her 2008 congressional campaign, including Paul and Paula Balser of Ironwood Partners in New York ($8,100 from 2008-2011), James Gordon of Edgewater Funds in Chicago ($2,300 in 2008), and J. Martin of Platte River Ventures in Denver ($2,300 in 2008).

Rep. Lummis speaks in Washington D.C. on the launch day of the 10th Amendment Task Force. Some of the biggest individual contributors to her campaign are managers of private equity and large-scale investment funds who she's been associated to in the past. (Photo courtesy of Cynthia Lummis' Facebook page — click to enlarge)

According to watchdog groups, managers of Wyoming’s larger investment funds also donated to Lummis, including the Jackson-based Foster Friess family of Friess Associates ($9,200 in 2008), Mario Gabelli of GAMCO ($3,300 in 2008 and 2009), and Theodore Roosevelt IV of Lehman Brothers and Barclays Capital ($3,157 in 2008 and 2009). In most cases, Lummis was only one among dozens of candidates that these fund managers contributed to at regular intervals.

Since Lummis left the state treasurer’s office in 2007, she had no authority to invest additional funds with the managers or change their compensation. Of the fund managers who made donations to her congressional campaigns after 2008, none of them donated to her campaigns for state treasurer in 1998 or 2002.

Contributions from all managers with ties to Cheyenne Capital totaled over $31,000, a small amount compared to the $1,530,454 total she raised for 2008.

Other sectors represented a much larger portion of her funding. For example, Lummis received over $177,000 from political action committees (PACs) and individuals connected with the energy and natural resources sector.

Aside from the stir caused by the fund manager donations, Lummis has had run-of-the-mill donors for a Wyoming candidate. In her fundraising efforts for her 2010 race she raised over $780,000. More than $279,000 of that came from individuals, while another $412,000 came from PACs.

Lummis held three fundraisers at the Capitol Hill Club in Washington. The events took place on March 11, June 17, and September 28, and helped net major contributions from oil industry and sugar industry PACs.

Notable donors who gave the individual limit of $2,400 included John Fitzgerald, manager of Cheyenne Capital Fund and Seneca Equity Partners; Diemer, Henry, David, and Susan True, all members of the Casper oil family; Jim and Mari Martin, Casper oil investors; Cheyenne businessman Tim Hu; Robert Model of Cody; and R. and Carol Holding of the Sinclair oil company.

Several of these individuals have a long history of supporting Lummis. In her 1992 race for Wyoming Senate, Lummis received contributions from Holding, Hu, and True.

PAC contributions for 1992 included Exxon, Arco, Texaco, Marathon, Burlington Northern, Chevron, Conoco, and many other interests.

Her list of campaign contributors for the 2002 treasurer race read like a who’s who of Wyoming Republican politics: Alan Simpson, Diemer True, Tom Stroock, Eli Bebout, Robert Peck, Judy Catchpole, Ray Hunkins, Cliff Hansen, Jim Geringer, and many others.

A Regular Wyoming Politician

Unlike Sen. Enzi, Cynthia Lummis does not appear to use her political connections or campaign funds to directly enrich her family.

As reported by WyoFile in September, Sen. Enzi’s campaign paid $70,910 to his son’s wife Danielle Enzi for her work as campaign manager from July 2010 to July 2011. Watchdog groups and some members of Congress frown on the practice of elected officials paying their relatives with campaign funds or otherwise, which can turn running for election into a way to build up family wealth. A Department of Energy stimulus grant paid Sen. Enzi’s son Brad $128,000 in consulting fees for his work on carbon storage study related to the slow-moving Two Elk power plant project.

Lummis speaks at a GOP Women's press conference on healthcare reform on July 24, 2009. Research shows that the finances of Lummis and her family are largely unconnected to her political activities. (Photo from Lummis' Facebook page — click to enlarge)

Campaign disbursement reports show that Rep. Lummis pays Wiederspahn $900 quarterly to rent an office space in the First National Bank of Wyoming Building at 2015 Central Avenue in Cheyenne, plus reimbursements like $300 for office expenses, and occasional large ticket items such as $1,000 spent on postage. Total rent and reimbursements paid to Wiederspahn were $10,592 for 2009 and 2010, according to the Center for Responsive Politics.

Lummis’ daughter Annaliese Wiederspahn served as deputy campaign manager for her 2008 House race, before taking on the role of campaign manager in 2010.

Lummis for Congress paid Ms. Wiederspahn no salary for her managerial work, though she received $14,603 in reimbursements for mileage and expenses in 2009-2010. Lummis’ campaign expenditure reports can be found here.

Lummis for Congress also spent $161,876 on a loan repayment to Cynthia Lummis for money she loaned to her own campaign in 2010, plus $15,000 to Lummis for an unspecified expense in 2009.

Alvin Wiederspahn’s wealth seems to be largely independent of his wife’s political activities. In 2003, he partnered with Mick McMurry of Casper and Robert Jensen of Cheyenne in restoring the historic Plains Hotel in downtown Cheyenne.

McMurry was a major early player in the discovery of the Jonah natural gas field near Pinedale, and Jensen was Chief Operating Officer of the Wyoming Business Council at the time.

Wiederspahn also served on the board of directors of the First National Bank of Wyoming. The company is based in Laramie, but has branches in Cheyenne and Fort Collins.

In 2004, Lummis and Wiederspahn purchased shares of First Capital West Bankshares, the holding company of First National Bank of Wyoming. The president of the corporation is Timothy Borden, a banker and small-engine foundry owner from Steamboat Springs, Colorado.

Rep. Lummis’ financial disclosure statements indicate that the debt to Timothy Borden is held by Lummis’ spouse, Alvin Wiederspahn. From 2009 to 2010 the amount owed to Borden dropped from a range between $500,000 and $1 million to between $250,000 and $500,000. So even amid the global economic downturn, Lummis and Wiederspahn have maintained their ability to pay down debts.

Despite WyoFile’s repeated attempts to reach Rep. Lummis’ offices for comment on this article, neither she nor her staff offered a response.

However, Tammy Hooper, Chairman of the Wyoming Republican Party, provided a statement on Lummis’ investment record as state treasurer: “We’re appreciative of her efforts and always have been. (Cynthia Lummis had) an intuitive ability to invest Wyoming’s money well when she was treasurer, to the benefit of the state and the citizens of Wyoming.”

Hooper noted that Lummis’ fiscal experience of balancing the state budget on a yearly basis has informed her current work in Washington: “She’s carrying that forward to how the government is spending the money, and where it’s spending its money, and she’s trying to tackle the deficit spending.”

While Lummis has a much higher net worth than the average Wyoming voter, Hooper said that distinction is irrelevant to how the representative does her job.

“I don’t think that her personal wealth determines or impacts her decision making to do what’s best for the country and for the people she represents in Wyoming. You’re elected to do the job, which is to represent the people,” Hooper said.

This story is part of an occasional WyoFile series about the finances, records and political work of Wyoming’s congressional delegation. Read the previous installment: Rising From the Right: Barrasso’s climb in senate follows increasingly conservative course

Gregory Nickerson is a University of Wyoming-trained historian and writer from Big Horn.  He has worked on documentary films in Nicaragua, Yellowstone, and Philadelphia, and held jobs as a museum curator and hunting guide.

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A Wyoming congressional representative is trying to resurrect a federal land sale act to reduce the budget deficit and help the National Park Service end a long quest to capture a Grand Teton inholding.

The Federal Land Transaction Facilitation Act (pronounced “flit-fah”) was enacted in July 2000 to allow federal agencies to sell off disposable lands identified prior to the bill and stash most of the profits for land purchases to preserve important cultural, wildlife or protected sites. (High Country News writer Zachary Smith wrote about the Bureau of Land Management’s interest in upping land transactions under the Act in 2004.)

Kimberly Hirai

The Act expired in 2010, but Congress resurrected it last July for an additional year through an emergency appropriations bill. It died a second time this summer. Flit-fah is now flitting its way back into Congress. Rep. Cynthia Lummis, R-Wyo., introduced a bill Nov. 4 to bring the act back. Lummis wants it to help close a lagging land sale from the State of Wyoming to the Department of Interior. The sale includes some 1,400 acres worth $107 million in Grand Teton National Park.  Money from land sales could be used toward the cost of that inholding.

“We have 33,000 federal buildings in this country that are not being used. We have tens of thousands — hundreds of thousands — of acres, federal land, BLM land that is on their disposal list,” Lummis said.

Negotiations between the Interior Department and the state over the Grand Teton property have limped on for years. The State of Wyoming is eager to sell—it only reaps $2,000-3,000 per year off the land from cattle grazing. Last year, former Gov. Dave Freudenthal gave the National Park Service an ultimatum meant to push the deal through, threatening to put the land up for sale if the federal government did not negotiate a trade that would give the state mineral rights, other land, or education money (some of the inholding lands are state school trust lands intended to generate funds for public education).  The two parties finally agreed that the Department of Interior would buy the parcels in a series of four purchases starting January 5, 2012.

Lummis says the act is a good alternative to Congress-dependent initiatives like the Land and Water Conservation Fund, the proposed method of payment for the Grand Teton transaction. The fund received a little more than $301 million for the 2011 fiscal year — a 33 percent cut from 2010 funding levels.

“In this financial environment, we have to expedite the conversion of surplus federal property to cash because we can’t appropriate it from taxpayer dollars. We’re broke,” Lummis said. The bill would reauthorize the land transaction act until 2018 and take another look at an inventory of properties eligible for sale.

The act seems to work— since 2000, the Bureau of Land Management has sold off 27,000 acres (mostly from Nevada bureau land transactions), generating a profit that paid for $94 million in land acquisitions for the BLM, National Park Service, U.S. Fish and Wildlife Service and U.S. Forest Service.

And Lummis’ plan shows promise. Energy and Natural Resources Chairman Sen. Jeff Bingaman, D-N.M., introduced a similar bill that was later put on the Senate calendar. Lummis’ bill has also garnered support from the Sierra Club, The Conservation Fund and Wyoming Outdoor Council among others. It was referred to the House Committee on Natural Resources.  Not surprisingly, although Lummis claims bipartisan support for her bill, “some in Congress, particularly Republicans, have shown a hesitance to appropriate scarce federal dollars to buy new lands,” according to Environment and Energy Daily.

Kimberly Hirai is an intern at High Country News.

(Banner photo by Frank Kovalchek/Flickr)

On July 18, Elizabeth Burns was on the first day of a backpacking trip in the Absoraka Range with Wilderness Ventures, a company based in Jackson. The two-week trip was a highly anticipated break from routine for the high-school junior from a Chicago suburb. She told friends she was looking forward to getting away from her cell phone and computer and meeting new people.

That afternoon, Ms. Burns likely experienced beautiful vistas, a good sweat, and the universal joy of dropping a heavy pack from her shoulders. But not long after arriving at the first night’s camp site, four miles east of the Turpin Meadows trail head, things went horribly wrong.

Related Story: Approaches to Safety

Few outdoor-recreation organizations have a finer reputation for safety and professionalism than the National Outdoor Leadership School (NOLS). Even so, the Lander-based nonprofit notched a sad milestone in September—its 12th death in the wilderness-education school’s 46-year history. Tom Plotkin, a 20-year-old from Minnesota, fell after twisting his ankle on a steep trail above the Ganges River in India and is presumed dead.

It’s a reminder that the inherent risks of outdoor recreation will catch up with even the best-prepared organizations.

The great outdoors is full of risks, but since they are risks that people enter into willingly, government regulators only rarely set minimum standards. No one tells NOLS, for example, how its student groups must proceed when traveling in grizzly country.

Click the image link to read more.

The Absorakas are prime grizzly country, and some members of the group went to hang food in “bear bags” in a tree. Beetles have killed many of the pine trees in Wyoming’s mountains, and the backpackers may have been limited in their options. It is unclear what guidance, if any, was offered by the trip’s two leaders. Someone made the fateful decision to hang the bags in a dead tree. (Mike Cottingham, who along with his wife, Helen, is a founder and owner of the company, declined to answer questions for this article.)

As the bear bags were hefted into the air, the 75-foot tall tree uprooted and fell, striking Ms. Burns some 66 feet away, according to a report by the Teton County Sheriff’s Office. She never regained consciousness and was pronounced dead two hours later.

Thrills, risks, and lawsuits

Wyoming’s rugged beauty makes it a big draw for outdoor-recreation enthusiasts, who come to ski, hike, raft, climb, hunt, fish, and ride horses. Tourism is Wyoming’s second biggest industry, after mineral extraction, producing more than $1-billion per year in revenue. Outdoor recreation is usually what the visitors are seeking.

But with the thrills come plenty of risks. Every year, people like Elizabeth Burns—clients of Wyoming companies—die or suffer serious injuries while recreating in the great outdoors.

And, not surprisingly, some of them sue. More often than not, an out-of-state visitor is suing a Wyoming company.

In 1989, the Wyoming Legislature addressed the litigation concerns, at the prodding of Jackson Hole Mountain Resort and other ski resorts. The Wyoming Recreation Safety Act makes clear that clients of recreation companies assume the “inherent risk” of the activity in which they’re participating.

The law has been described as the one of the strongest in the country at providing protections for outdoor-recreation companies, and lawmakers have bolstered it more than once. Courts have not only thrown out lawsuits in clear-cut cases—like the skier who died after willingly going off a 25-foot terrain-park jump at Jackson Hole—but have also rejected claims in less-obvious cases, including injuries resulting from slipping saddles and chair lifts.

Ask just about any personal-injury attorney in Wyoming, and they’ll tell you that the protections are so strong that they decline to take on many of the injured recreationalists who come to their door. The same attorneys say the Recreation Safety Act may have so successfully achieved its goal of deterring litigation that some struggling outfitters or recreation companies could be cutting corners on safety—thanks to the comfort that any resulting accidents might be whisked away by the “inherent risk” doctrine.

“It creates in providers a sense of security, and maybe some of them do not go as far as they would otherwise be inclined to go if they thought they were more exposed to the risks of litigation,” says Gary Shockey, a lawyer in Jackson.

To be sure, plaintiff’s attorneys are a biased group. But even some judges have expressed dismay at the law that they must uphold.

“Consumers in Wyoming are now faced with an entire industry whose economic and consequent legislative power enables them to conduct business with only a passing thought to the safety of those who utilize their services,” William F. Downes, a federal district-court judge, editorialized back in 1998, in his opinion that dismissed the claim brought by a man who was injured when his saddle slipped.

No one has suggested that Wilderness Ventures is that kind of company. Former employees and Jackson residents praise the company’s professionalism and safety record. The company, which has been in business for 38 years, notes on its Web site that it has helped 2,100 students climb Wyoming’s Grand Teton, and another 2,200 scale Washington’s Mount Rainier, all without injury.

Elizabeth Burns died less than four months ago, and her parents, Sally and Michael Burns, are still in mourning. Sally Burns and the family’s attorney, Thomas A. Demetrio, a prominent personal-injury lawyer in Chicago, declined to comment for this article.

If the case ends up in court, the outcome may help further illuminate how much protection the Wyoming Recreation Safety Act provides.

Falling trees are clearly a risk of hiking and camping in Wyoming—and one that will no doubt rise in the years to come. But any Wyoming company in the backpacking business would know why dead pine trees are known as “widow makers.” A 16-year-old from Lake Forest, Ill., might not share the same knowledge.

A court may ultimately have to decide if Wilderness Ventures did enough to keep Ms. Burns out of harm’s way—or if, in the case of a falling tree, the company had no obligation to do so.

“There’s a lot of ambiguity,” says Terry Mackey, a personal-injury lawyer in Cheyenne, “in the term ‘inherent risk.’”

A Chilling Effect

Steve Duerr is currently about as far away from recreation litigation as you can get—he’s the director of the Murie Center, a nonprofit in Grand Teton National Park that helps people understand the value of conserving wildlife and wild places. But in the 1980s, he was general counsel at Jackson Hole Mountain Resort—which was then, as now, among the biggest targets in Wyoming for recreation-related lawsuits.

Skiers beneath the Bridger Gondola at Jackson Hole Mountain Resort. The Wyoming Recreation Safety Act “does have a chilling effect on the types of cases that lawyers bring to court,” says Steve Deurr, who helped write the act as the resort’s general counsel in the 1980s. (click to enlarge)

Duerr wrote much of the Wyoming Recreation Safety Act. And he has retained an interest in recreation law, even as he has moved into the quieter nonprofit arena. In September, Duerr and several other lawyers participated in a panel discussion on the Recreation Safety Act at the Wyoming State Bar’s annual meeting in Cheyenne.

“The law does have a chilling effect on the types of cases that lawyers bring to court,” Duerr says. “That was the desired public policy.”

As Duerr noted in a presentation last month at the Cheyenne meeting, Wyoming’s law came into being at a time when other states were passing similar bills to grapple with the public’s increasing eagerness to sue. In 1978, a skier in Vermont tripped over some underbrush and broke his neck—and a jury ruled that Stratton Mountain Corporation owed him $1.5-million in damages.

A Time magazine piece at the time said such judgments were pushing up the cost of insurance and—hold your laughter—“raising the specter of $25 to $35 a day lift tickets.” To keep insurance rates for their ski resorts affordable, states like Vermont, Colorado, and Wyoming began passing laws that limited the liability of ski corporations.

Earlier court rulings lent historical precedent to the movement. In a 1929 case in New York, Judge Benjamin Cardozo, who later became a U.S. Supreme Court justice, ruled that when a man fell and fractured his knee cap on an amusement-park ride called “The Flopper,” he had assumed the risk of riding the moving belt.

“The timorous may stay at home,” Judge Cardozo wrote.

That sentiment plays well in Wyoming, which prizes self reliance and personal responsibility.

“If you ask people on the street what they think, they would tell you what the Recreation Safety Act has now codified: ‘You get on a horse, you strap on those skis, and you’re taking your chances,’” says Jim Lubing, a Jackson lawyer who has been defending Jackson Hole Mountain Resort from lawsuits for the past decade.

Kate Mead, another Jackson lawyer who defends outdoor-recreation providers, knows all too well about such risks. She is married to Brad Mead, the brother of Gov. Matt Mead. Their mother, Mary Mead, died in a horse accident in Grand Teton National park in 1996 while driving cattle.

Kate Mead says that in her most recent case involving the Recreation Safety Act, the plaintiff testified about how much fun he had been having until he was injured.

“That sums it up,” she says. “People really want to enjoy the adrenaline things in life—until they get hurt.”

The Legislature Strikes Back

Over the past 22 years, Wyoming courts and juries have grappled with the meaning of “inherent risk”—which may be among the fuzziest terms in Wyoming law. And when the answer has been unfavorable to recreation providers, the Legislature has been quick to take action.

Practicing horsemanship at the Teton Valley Ranch Camp. Riding a horse fast carries risks, says Tom Holland, the camp’s executive director, but “the special feeling students get will come from those risks being taken.” (Photo courtesy of Teton Valley Ranch Camp — click to enlarge)

In a 1995 case, Halpern v. Wheeldon, one of the first tests of the act’s strength, a man who severely broke his ankle after being bucked off a horse later sued the trail-ride provider. The trial court found that getting bucked off a horse was an inherent risk.

At the time, the act stated that recreation providers were “not required to eliminate, alter or control the inherent risks.” On appeal, the Wyoming Supreme Court deduced that an inherent risk is one that can’t be controlled or eliminated. The court said it was possible that the Wheeldons could have eliminated the risk of getting on the horse by helping Mr. Halpern mount in a different way. It said the trial court had erred in dismissing the case.

That wasn’t the kind of decision that ski corporations and dude ranches had envisioned when they helped shepherd the Recreation Safety Act into law. They hired lobbyists and went back to Cheyenne. In 1996, the Legislature amended the act, taking out the language about eliminating or controlling inherent risks.

“The law was changed by the Legislature to make it even more protective of providers,” says Mel Orchard, a partner with the Spence Law Firm in Jackson. “It changed essentially to say that the provider had no duty to alter the activity to reduce risk.”

One year later, in 1997, Howard Cooperman, a novice rider, injured his shoulder when his saddle slipped on a trail ride with Wyoming Rivers and Trails outside Pinedale. After an expert witness testified that slipping saddles were an inherent risk of horseback riding, Judge Downes threw out Cooperman’s lawsuit. Whether the company made an appropriate effort to cinch the saddle was irrelevant, the federal judge noted.

Judge Downes called it a “frightening prospect” that companies had no duty try to control such risks, but nevertheless stated that he would respect his place in the system.

“A court should not decimate the purpose of a legislative act, no matter how distasteful, when that purpose is clearly incorporated in the language of the act,” Judge Downes wrote.

The net result of such rulings is that Wyoming lawyers look long and hard before accepting clients who want to sue recreation providers, especially since lawyers often work on contingency, in which case they’re only paid if they win or settle the claim.

“If you take a case and put a lot of money and time into it, and the judge says you’ve got no case, then where are you?” asks William Fix, a lawyer in Jackson.

A 2005 article in the Suffolk University Law Review named Wyoming as the state that offers the “greatest protection” to recreation providers—a sentiment with which Mr. Fix and others agree. But there’s not unanimity on this topic.

James Moss, an attorney and professor in Colorado who specializes in recreation law, argues that Colorado’s Ski Safety Act (Colorado has sport-specific laws, rather than a broad act covering all recreation providers as in Wyoming) is stronger, because it names inherent risks like bare spots and lift towers that all skiers must accept.

“Wyoming’s act allows more litigation due to the fact that there’s less specificity in how it’s written,” Moss says.

But specificity can cut both ways. For example, after listing a slew of inherent risks, Colorado’s act states: “Nothing in this section shall be construed to limit the liability of the ski area operator for injury caused by the use or operation of ski lifts.”

Wyoming’s broader law, however, can give resorts cover even with ski lifts. In 2005, Sharon Muller suffered injuries to her leg and knee when her ski boot got caught under the Bridger Gondola at Jackson Hole Mountain Resort. When she sued, a federal jury sided with the ski resort, concluding that boarding a ski lift is an inherent risk of skiing. The ruling was later upheld by the Wyoming Supreme Court.

A Constitutional Challenge

Fix, who represented Muller, challenged the constitutionality of the Recreation Safety Act on appeal. Fix says Wyoming law treats people who buy a service from a recreation provider worse than those who buy a service or product from other types of companies.

“It’s singling out a class,” Fix says. “We are all supposed to stand equal under the law.”

In upholding the decision favoring the resort, the Wyoming Supreme Court didn’t rule on the constitutionality challenge.

Grant Larson, a Jackson resident and former state senator who helped introduced the 1996 amendments, says the Recreation Safety Act remains a “good law.”

“Surprise, surprise, the trial lawyers don’t like it,” Larson says. “Their job is to go sue people. That’s what the law was designed to prevent, particularly frivolous lawsuits.”

The most controversial claim some trial lawyers make is that the Recreation Safety Act is so strong in shielding providers from litigation that they may be cutting corners on safety.

“In my own experience in dealing with outfitters and other recreation providers, I believe that’s probably true,” says Mackey, the Cheyenne lawyer. “They probably don’t take things as seriously as they might otherwise if they didn’t have the solace of that statute.”

Mackey is on a legal team representing Christine Nodine, who sued Jackson Hole Mountain Resort after her husband, David, died in an in-bounds avalanche while skiing at the resort in December 2008. The resort argues that avalanches are an inherent risk of skiing.

Ms. Nodine maintains that the resort should have been aware of “unacceptably dangerous” conditions after another avalanche in the same area buried a snowboarder earlier in the day. Her lawsuit claims that the resort’s president, Jerry Blann, pressured the head of the ski patrol to open that portion of the mountain after two days of heavy snow for economic reasons. Blann has denied those allegations.

Mackey declined to comment on the Nodine case, since it is ongoing. (The case was recently dismissed on a technicality, but that ruling will likely be appealed.)

Jim Lubing, the resort’s lawyer, says the protections of the Recreation Safety Act would never factor into the resort’s decision-making about safety.

“I understand the argument, but certainly that reality does not apply to the Jackson Hole Mountain Resort,” Lubing says. “It’s a consummate professional organization, that ski patrol out there.”

Sacrificing safety?

Gary Shockey, the Jackson lawyer, says it is the companies that are just scraping by that may be most likely to sacrifice safety.

White-water rafting in Snake River Canyon with Barker-Ewing River Trips, a 48-year-old company that has never lost a client. “People really want to enjoy the adrenaline things in life—until they get hurt,” says Kate Mead, a Jackson lawyer. (Photo courtesy of Barker-Ewing River Trips — click to enlarge)

“It doesn’t take a genius to figure out that if you’re operating on a budget, or on a time schedule, and you know that you have this state protection in the event that something you don’t want to have happen happens anyway, then you have no incentive to go the extra mile or spend the extra money on the part of safety,” he says.

Kate Mead, the Jackson lawyer who defends recreation providers, acknowledges that such thinking is possible, especially in a business like whitewater rafting where the season is short and the competition for tourist dollars is intense.

“They start with the low water in May, and then it goes to high water,” Mead says. “They’re not about to close down the river because it’s dangerous–the white-water rafting companies really count on that income. In any case where you have business involved, they’re doing some cost-benefit analysis along the way.”

Many of the deaths on the Snake River in recent years have occurred during the run-off in June and July. While whitewater companies operate in Snake River Canyon south of Jackson, the scenic tours float north of town, in front of the Tetons.

In 2006, a scenic raft operated by Grand Teton Lodge Company hit a dead cottonwood snagged in the river, throwing the guide and 12 clients into the Snake. Three passengers died, and the lodge settled for an undisclosed amount three years later with relatives of the victims. Mel Orchard, who represented the relatives, argued that the company had downplayed the risks in its marketing materials.

“It’s human nature for people to do things differently when they think they have no way of being punished,” he says. But he says he doesn’t believe that many recreation companies are sacrificing safety thanks to the protections of state law.

“I want to believe that our Wyoming companies are trying to provide reasonable recreation activities, and just want make a living for their families and provide a living for their employees,” he says.

Steve Duerr says there are plenty of “sticks” to encourage Wyoming providers to take adequate safety precautions, including requirements from insurance companies and permitting agencies like the U.S. Forest Service. He says it’s hard to believe that any company or employee, including the guide of the ill-fated scenic raft trip, would knowingly put clients in harm’s way because they believed that their legal vulnerability was low.

“I’m sure the guide on the Snake didn’t have in his mind, ‘I’m going to be protected by the inherent-risk statute,’” Duerr says.

Catherine Hansen-Stamp, an attorney and the author of two Wyoming Law Review articles about the Recreation Safety Act, says she would be surprised if any Wyoming companies were cutting corners due to protections provided by the act.

“The act doesn’t include an elimination of the ability to sue for negligence,” says Hansen-Stamp, who advises recreation providers on legal issues and risk management. “It certainly behooves recreation providers to endeavor to run a professional and quality operation and engage in responsible risk-management practices. This concept is the philosophy of my practice.  If a provider is operating otherwise, they are making a huge mistake.”

Tom Holland is executive director of Teton Valley Ranch Camp, now based outside Dubois, which provides summer camps, including backpacking, non-technical climbing, fly-fishing and riflery, for students between the ages of 11 and 17. Part of his job is to travel to the living rooms of  the camp’s alumni in cities throughout the country and pitch the benefits of his camps to teens and their parents. He tries to address the risks head-on.

“We say the experience your child will get out of this will be because of the challenges that come throughout the summer, and that come with the inherent risks of riding horses fast, climbing mountains in the Tetons, and going to riflery,” Holland says. “The special feeling they get will come from those risks being taken.”

The camp retains Hansen-Stamp for legal and risk-management advice, so Holland is well aware of the Recreation Safety Act, but he says he doesn’t think about its protections as he plans activities and staffing for the summer camps.

“I hear people say, ‘We’ve got this law on our side,’ but that’s not my approach,” Holland says. “My approach is I’m going to do to the very best I can, no matter what.”

Even so, many Wyoming recreation providers are careful to stipulate in the release forms that clients and students sign that any dispute will be governed by the laws of Wyoming. The National Outdoor Leadership School, which is based in Lander and runs wilderness skills and leadership courses all over the world, has a line in its release that states that lawsuits shall “be filed only in the State of Wyoming.”

Twelve students have died in the school’s 46-year history, including a student who fell from a steep trail in India in September, 2011. The school has never lost a case in court, although it has settled some lawsuits.

Drew Leemon, the school’s director of risk management, says the Recreation Safety Act is helpful mainly in deterring frivolous suits. “You get a little bit of protection from people who didn’t have a good time,” he says. “If somebody really gets hurt, you’re still exposed. And you care about your clients and you don’t want to see people get hurt.”

Hansen-Stamp wrote an informal paper about the evolution of the Recreation Safety Act for the Wyoming State Bar session in September. Hansen-Stamp, who lobbied for Jackson Hole Mountain Resort when the act was passed, suggests in her paper that some other states have laws that give even greater protection to recreation providers.

“The Wyoming act hasn’t really panned out to be the kind of pre-trial summary dismissal tool that I thought it might be,” she says.

A Shocking Verdict

One of the biggest blows to recreation companies in recent years came in 2009, when a federal jury awarded $1.2-million to the family of Kristina Barkhurst, who died after being thrown from a horse in January 2006. Barkhurst had been receiving training in natural horsemanship from a company near Burns called Harmony Horsemanship. The provider argued that being thrown was an inherent risk of riding. But Gary Shockey, who represented the family, maintained that the horse had a history of bolting, and that the provider had failed to provide proper equipment to control the horse.

Bud Betts, owner of the Absoraka Ranch in the Dunoir Valley outside Dubois, which operates pack trips and hunting trips, says the Barkhurst verdict “sent a mild shockwave through the horse community.” The decision had many, including Betts, wondering for a time whether the law needed to be strengthened yet again to make judges more likely to dismiss lawsuits before they get to a jury.

More than two decades after passage of the Wyoming Recreation Safety Act, the “inherent risk” doctrine remains the wild card at the heart of nearly all recreation-related litigation.

Fly fishing in the Wind River Mountains. “The timorous may stay at home,” Benjamin Cardozo, a future Supreme Court justice, wrote in 1929. (Photo courtesy of Sweetwater Fishing — click to enlarge)

And if the Wilderness Ventures tragedy makes it to court, “inherent risk” will be at the heart of that case, too.

Bud Betts is of the view that it could have happened to anyone. On a pack trip he led this summer into the Washakie Wilderness, an aluminum kitchen box on top of a horse knocked over a dead lodgepole pine. The tree, 10 inches in diameter near the base, fortunately fell away at a 45 degree angle.

“It could have killed somebody, this tree,” Betts says. “You’re going to see more and more of that.”

But others say the facts of Ms. Burns’ death, if and when they come out, might demonstrate that human decision-making made her vulnerable.

“There are all kinds of inherent risks of backpacking,” says Gary Shockey, who is not involved in the case. “If I was going out with a guided group, I would not think that that list would include that the guide did not supervise things properly.

(Banner photo by Lincoln Smith)

— Ben Gose is a Lander journalist who writes frequently for The Chronicle of Philanthropy and The Chronicle of Higher Education, and contributes to programs on Wyoming Public Television. He also coaches the sprinters on the Lander Valley High School track team.

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