DEQ sued over dropped 'bad actor' case against mining CEO

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SANDPOINT — The Montana Department of Environmental Quality is being sued by 11 plaintiffs for allegedly failing to enforce the “bad actor” law against Hecla Mining Co., and its president and CEO, Phillips S. Baker Jr.

The “bad actor” law was enacted in 2001 in the wake of the Pegasus Gold bankruptcy. Baker was the chief financial officer for Pegasus Gold from 1994 to 1998. The law was passed to prevent senior executives and mining companies from receiving new permits to mine in Montana if they’ve failed to clean-up past operations or reimburse the state for those clean-up costs.

Pegasus Gold’s 1998 bankruptcy left state and federal agencies on the hook for more than $50 million in cleanup costs at several mines, including the Zortman and Landusky mines near the Fort Belknap reservation.

Among the 11 groups suing the DEQ are the Rock Creek Alliance, and the Fort Belknap, Kootenai, and Salish Tribes.

Baker has been involved in legal action with the Montana DEQ since 2018 for heading new mining projects by Hecla Mining Co. in the Cabinet Mountains in northwestern Montana.

State District Court Judge Mike Menahan ruled May 26 the DEQ has the authority to enforce the state’s “bad actor” law against Hecla Mining Co. and its CEO for Baker’s affiliation with Pegasus Gold Corporation. Menahan ruled that Montana courts have jurisdiction due to Hecla’s mining operations in Montana.

In July, Montana DEQ filed a motion to dismiss the legal case that sought to block Baker from being involved in proposed mines in the Cabinet Mountains. The motion to dismiss the case drew criticism from environmental groups, but DEQ defended it.

“In our role as a state environmental agency, we have to make tough decisions in order to make the best use of state resources while also achieving our mission,” DEQ Director Chris Dorrington said in a statement reported by the AP.

Dorrington said past actions by Pegasus are not an indicator of Hecla’s future conduct.

In a statement made through a spokesperson on Wednesday, Dorrington said that Hecla’s subsidiaries in Montana “are in compliance with the law.”

“To be clear, we agree that the impacts from mining as a result of the Pegasus failure are harmful to Montana’s environment and communities. Hecla is not Pegasus,” Dorrington told the Associated Press.

Baker refuted the “bad actor” claims.

“No due process whatsoever,” said Baker. “No attempt to ask me, ‘OK, what role did you play?’ When you work for a big public company, you're just one of a number of people that plays a role. And my role was pretty limited,” he said.

Baker also insists that people who live in the communities where the mining operations are located welcome the industry, saying that there will be no environmental damage from the projects.

“You've got the local people that absolutely want these projects to go forward,” Baker said. “Then you've got basically, political people and people that are outside the state of Montana that are using this really as a pawn for whatever purposes they have. Because environmentally, there's not going to be an issue with these projects.”

However, environmental groups refute these claims, saying that the mine will affect the water quality of Lake Pend Oreille, as it receives approximately 92% of its water from the Clark Fork River, according to the Idaho Soil and Water Conservation Commission.

It is unclear what the next steps are. But one thing is certain, Baker’s legal woes are not behind him.

“Government organizations [need] to be very cautious about using the power they have to make a judgment about people — once they do it they can never completely take it away.”

Hecla produces nearly half of the silver in the U.S., according to their website.

The company produced 13.5 million ounces of silver, and 208,962 ounces of gold in 2020, yielding $691.9 million in sales, the highest in the company's history.