A land exchange program set up to obtain pristine wilderness areas and other valuable lands that the government wants is shortchanging taxpayers by millions of dollars, according to a new report.

The report by the U.S. General Accounting Office (GAO) charges that the U.S. Forest Service and the Bureau of Land Management (BLM) have undervalued federal land and overvalued land the government has obtained in trade from private interests.

In one case study, the DeMar land exchange in Utah, the government decided to buy 239 acres for $7,440 per acre – $6,440 more than the estimate of the government's appraiser, who said the land had no developable value.

The report also found that BLM violated the law by selling federal land outright and keeping the money for the agency budget instead of returning it to the treasury.

Private interests often benefit from these real estate deals by receiving too much money for their land. These interests also end up paying too little for untouched government property that they can turn a profit on or use for its underdeveloped resources.

Some recipients of federal land resold the property they received from the federal government the same day for exorbitant profits. In one instance, a private buyer bought land for $763,000 and sold it for $4.6 million shortly thereafter.

In another example, the BLM hired an in-staff appraiser to value non-federal land at $1.2 million more than the initial appraised value of the land because the exchange partner was “unhappy” with the proposed value.

The federal agencies may also have violated federal rules by frequently failing to use independent appraisals.

Without full disclosure of land exchanges to the public, the value of the land cannot be judged before it's too late to make corrective changes. Yet the U.S. Forest Service does not regularly release appraisal information to the public until well past the completion of a land swap.

The government has made land exchanges its preferred method of acquiring land for years, ever since limits were set on funds to buy land outright.

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Taxpayers shouldn't be victimized by shady land deals that subsidize private interests. For fair land exchanges to occur, the government must provide full disclosure for all land exchanges and use independent appraisals to determine that taxpayers are getting a fair return on their investment.

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