UPDATE: On April 28, President Trump nominated David Bernhardt to be the next Deputy Secretary of the Interior.
David Bernhardt, one of President Trump’s leading candidates for a top job at the Interior Department, has a long history of making money off of sketchy clients, ranging from a Ukranian-Russian-American oligarch’s oil conglomerate to a company looking to drain an aquifer underneath the California desert. Now Bernhardt is poised to cash in on a long list of conflicts of interest if he returns to the public sector.
Bernhardt is reported to be on the short list of candidates for Deputy Interior Secretary, the department that oversees America’s national parks and public lands. Bernhardt was the head of President Trump’s transition team at Interior, and now he’s angling for a position that would put him in charge of some of the most high-profile decisions made by the agency over the coming years.
But Bernhardt’s conflicts of interests raise serious questions about who he will be representing in the Interior Department — American taxpayers or the special interests he served in the private sector.
Bernhardt runs the Natural Resources Department at a high-powered lobbying and law firm, Brownstein Hyatt Farber Schreck. His department co-chair is Scott Slater, who is also the CEO of Cadiz, Inc., a company that’s planning to tap into an aquifer “the size of Rhode Island” underneath the Mohave Desert to pipe drinking water to Southern California.
Scientists warn that allowing the Cadiz project to move forward would cause severe damage to the Mojave National Preserve, potentially drying up springs across the desert that provide water to the bighorn sheep, mountain lions, and bobcats that make the preserve their home. The project’s prospects looked bleak until President Trump took office, but last month, the Interior Department started issuing orders that will clear the way for Cadiz to tap into the aquifer despite the risks.
Those orders are already a windfall for Bernhardt. His lobbying firm owns 200,000 shares of Cadiz stock, which has more than doubled in price since President Trump won the election.
If Interior gives the green light and Cadiz completes the project, Bernhardt’s firm will earn another 200,000 shares of stock in the company, worth nearly $3 million today. If Cadiz stock returns to its all-time high of $375, the lobbying firm’s total stake would be worth around $150 million.
David Bernhardt has not said if he’ll profit from those additional shares, or whether he’ll recuse himself from this and potentially dozens of other conflicts of interest should he return to Interior.
Drain the desert, fill the swamp
Far from “draining the swamp,” as President Trump promised during his campaign, David Bernhardt is a veritable poster boy for the revolving door in and out of the Washington swamp.
Here’s Bernhardt’s resume:
- 1992–1998: Congressional staff, Rep. Scott McInnis (R-Colorado)
- 1998–2001: Lobbyist and lawyer for lead paint and oil companies, Brownstein, Hyatt and Farber
- 2001–2009: Counselor and solicitor, U.S. Department of the Interior
- 2009–2017: Oil industry lobbyist and lawyer, Brownstein Hyatt Farber Schreck
During those middle years in the Bush administration, Bernhardt performed favor after favor for the oil and gas industry. He was the point person for the administration’s effort to open up the Arctic National Wildlife Refuge to drilling. At one point, Bernhardt prepared congressional testimony that ignored government scientists while relying instead on reports funded by BP.
Later, as Interior Solicitor, Bernhardt concluded that the department could not use the Endangered Species Act to protect polar bears from the effects of climate change.
David Bernhardt’s time at Interior was tainted by ethical challenges as well. As Solicitor, he sided with a political appointee, Julie MacDonald, who doctored reports from government scientists and passed sensitive internal documents on to industry lawyers.
MacDonald was the subject of a scathing internal report that revealed how she bullied scientists with the U.S. Fish and Wildlife Service. Bernhardt, instead of stopping MacDonald’s abuse, was part of a committee that gave her a cash bonus of nearly $10,000, but without any documentation justifying the award.
Bernhardt also forced out an Interior whistleblower, Robert McCarthy. McCarthy exposed mismanagement of Indian Trust funds, which helped secure a court victory for tribal members. Bernhardt was the lead attorney for the government, which lost the case.
McCarthy was forced to resign despite a government audit that confirmed the mismanagement he warned about.
After the Bush administration, Bernhardt returned to his old lobbying firm, Brownstein Hyatt Farber Schreck, this time heading up a new department out of Washington dedicated to the issues he worked on as Interior Solicitor.
Among his new clients was EP Energy, an American subsidiary of Access Industries, a multinational conglomerate owned by a Ukranian-born oligarch, Len Blavatnik, who made his fortune in Russian oil after the fall of the Soviet Union.
While working for Blavatnik’s EP Energy, Bernhardt lobbied on a bill that would have delayed new air pollution limits on coal-fired power plants. On behalf of another client, Cobalt International Energy, Bernhardt pushed multiple bills that would have expanded offshore oil and gas drilling in the aftermath of the Deepwater Horizon disaster.
Conservation groups dubbed one of those bills, HR 1231, the “Law of Eventually Drilling Everything.”
Bernhardt also picked up the State of Alaska as a client, suing the federal government for the right to start up a $50 million state-run oil scouting project inside the Arctic National Wildlife Refuge.
It was around this time that Bernhardt’s fellow lobbyist, Scott Slater, became president and later CEO of Cadiz, the company that wants to build a 43-mile water pipeline out of the Mojave desert.
The pipeline had been blocked by a 2015 decision from Interior that found Cadiz needed federal permits to build the pipeline. With Trump taking over the White House, Slater told McClatchy “the dynamics have changed,” and Cadiz’s stock price rose along with the pipeline’s chances.
According to SEC filings, Bernhardt and Slater’s lobbying firm will get an extra 200,000 shares of Cadiz stock if the pipeline starts selling water. Cadiz’s stock price, which had languished at $5 a share one year ago, once traded at $375 when the pipeline project appeared to be on track more than a decade ago.
If it reaches those heights again, David Bernhardt’s lobbying firm would hold $150 million worth of Cadiz stock.
With friends like these
As David Bernhardt’s name continues to surface as a likely appointee at Interior, he has remained silent on the myriad conflicts of interest his lobbying career would create at the department. Without full disclosures of those conflicts, Bernhardt is poised to profit from decisions he would make at Interior, including the Cadiz pipeline and the Arctic National Wildlife Refuge.
If nominated, Bernhardt would require Senate confirmation to become Deputy Secretary. He’s no stranger to the members of congress who would vote on his nomination — he has personally donated more than $80,000 to Republican candidates and committees in recent years, including $1,000 each to Senate Majority Leader Mitch McConnell and Energy and Natural Resources Committee Chairwoman Lisa Murkowski.
Bernhardt also gave generously to his potential future bosses, donating $2,700 to President Trump’s campaign and $500 to Ryan Zinke’s congressional campaign.
Despite these connections, or perhaps because of them, David Bernhardt’s confirmation hearing is likely to be must-see TV — a remarkable spectacle for a non-cabinet level appointment. If he takes the job, he will surely face harsh questions about ethical lapses during his time at Interior, his clients as a lobbyist, along with demands to recuse himself from the decision-making process on any projects he worked on in the private sector.
We will soon find out if Bernhardt, or the Trump administration, is willing to take that risk.