National Mining Association

American Mining and Political Transition: The Pitfalls, Promises and Contingencies
Spokane, Washington December 8, 2000

Luncheon Remarks by Jack N. Gerard President & Chief Executive Officer
National Mining Association
To The 106th Annual Meeting Of the Northwest Mining Association

Thank you ladies and gentlemen of the Northwest Mining Association.

I appreciate the invitation to speak with you today and in many ways I feel like I have come home. I’m obviously familiar with NWMA, with this part of the country, and with many of you.

Although this is my first speaking appearance as the new president and CEO of the National Mining Association, I’ve already come to think of these remarks as the Plan C speech.

The C stands for contingencies, which abound these days.

Plan A was sketched out on election night. It called for discussing a Bush administration, a marginally favorable Congress, and what might happen as a result.

Plan B was outlined as the noise level and the contingencies mounted in the days after the election. It called for adding thoughts about a possible Gore administration and a divided Congress.

Then, in escalating succession, we got the following:

A certified presidential election that is, nevertheless, the subject of ongoing contests and other court challenges to overturn it;
An evenly divided Senate, made so by the defeat of a friend and supporter, Senator Slade Gorton;
A difference of just nine votes in control of a House of Representatives where the rules require a change of committee chairmen this year, even if control has not changed;
Plus a rising tide of 11th hour regulations as lame-duck administrators of the Clinton-Gore era strive to embed their will and even their wishes in future applications of policy;
And finally, to cap the onslaught for mining, the rush at Interior to put into force new and ultra-restrictive 3809 Regulations on a timetable that precludes their review or easy reconsideration by an incoming administration – one that makes them effective on Secretary Babbitt’s last day in office.

The new rules presume BLM can prevent and close down mining almost at their sole discretion.

It is almost as if Secretary Babbitt and Solicitor Leshy have decided, in their last days of power, that they want their BLM to be remembered in history as the Bureau of Lock-ups and Mine-rejections.

Be assured that the National Mining Association, in cooperation with each of you, will fight to correct these excesses – these abuses that were designed to punish the one industry that is, perhaps, the most essential to our economy.

And so, for today I decided to shift to Plan C.

Plan C calls for me to deal with yet another administration – the Gerard administration of the National Mining Association. There are a number of reasons for this approach.

One is that right now I may be the only new president of a Washington-based institution involved with federal policy whose scheduled taking of office is not open to challenge in fact or in public opinion by re-interpretation or re-trial or re-count or re-vote: Not in the press; not in the courts; not in the electoral college; and not in the House of Representatives of either Florida or the United States.

But, the best reason is that I will be asking for your help, co-operation and active participation as we move forward, especially the regional and state associations. You are entitled to know what I will be about and how I intend to go about it.

Some here know me, but more do not; some here have worked with me, but most have not; and the same is true throughout the industry.

My election may have come as a surprise to many of you, for my candidacy surprised me – perhaps, more than anyone.

I didn’t seek the job and, frankly, I thought I didn’t want it. I had settled into a more-comfortable, less-demanding professional life as a founding partner and the CEO of McClure, Gerard and Neuenschwander, a government-affairs consulting firm. Many of you knew my partner, former Senator James McClure.

However, when the search committee approached me a second time, I had to do a little soul-searching, which I’ll touch on a little later.

So today I propose to share my thoughts:

First, to introduce you to me and to the ways I shall think and act in behalf of mining by touching on some of the experiences that have influenced my approach to life;
Then to annotate these experiences and connect them to the job at hand;
And, finally, to think about the implications of current events – the narrowness of the presidential vote, the narrowing differences between majority and minority in the House and Senate.

While the federal transition has yet to begin, we’ll be out of the transition mode in just a few more days. General Lawson’s last day in the office before retirement will be next Friday.

Right now I’m finishing up a total-immersion course designed to facilitate this transition. It has taken me into sectors of the mining industry with which I am less familiar.

I’ve compared this process to drinking from a fire hydrant: I’ve been soaked, but I’m not sure how much I’ve absorbed.

At one point I was put in the custody of a coal CEO who works only three-quarters of the day, and who isn’t particular about which 18 hours he works. It was a great sleepless experience.

In the last three weeks I’ve been to Baltimore, Cleveland, Denver, Phoenix, Reno, Salt Lake, Spokane, St. Louis, Toronto, and a few points in between.

I’ve met with almost two-dozen senior and chief executives and spoken with each about their range of concerns and expectations. I’ve even lined up a few new members along the way.

All of this has given me even more respect for the depth, breadth and diversity of our industry.

In addition, the transition has introduced me in detail to the National Mining Association – to the duties, responsibilities and capabilities of the organization.

For the record: I believe that with your help, and the help of others, this organization can go everywhere and do most everything. And that it is often asked to do a little of both – sometimes simultaneously.

In the Gerard administration there’ll be no effort to reinvent the National Mining Association or to fix what does not need fixing.

My challenge is to build on the tradition and extend the achievement – to adjust and synchronize this resource with the other strong resources of the industry in anticipation of all that is evolving: In politics, in policy, in public opinion.

And so, let’s move on to the considerations I mentioned a minute ago – to share insights and experiences that shaped my approach to the job at hand.

This first official trip back to the Inland Empire is a homecoming of sorts. Like many homecomings it has called to mind and reaffirmed both a point of view and the reasons for it.

I grew up in Mud Lake, Idaho, population 190, on 40 acres; and my first job was with Gerard Brothers Dairy. I did not work for my father and his brothers. The Gerard dairy was me and my brothers.

My father acquired the dairy cows by forfeit in a business deal that didn’t work out; and he thought the day-to-day responsibility of a dairy operation would be good for us.

In winter the temperature often went well below the age of even the youngest brother, only one of us in our teens. Dad was always the first up. He had the heater going in the barn by 5 a.m.

If every brother wasn’t on the job by 5:30 the heater went off; and we were left to finish the daily tasks on our own.

Dad called it incentive to pull together – no double meaning intended. It led us to keep track of one another, to check with one another frequently, and to trade information.

In a few more years the Gerard brothers expanded. Our father owned a John Deere dealership, and he allowed us to use a grain combine during the harvest months. The neighbors began to hire us for their harvests. I think that, at first, some did it just to give the Gerard boys a hand.

It took us a while to decide who was going to do what and when it would be done – how to plan a job and how to stick to the plan. Once we decided to work together we got very good at it.

The income, the hours and the nature and season of the work all were more to our liking than the dairy. We were happy to exchange the shovels and the other duties of the barn for the tools of the harvest.

In my first corporate move, we quickly sold the dairy operation and stuck with our core business – the combine.

Some years later, following my first year at the University of Idaho, I accepted a two-year missionary assignment, which took me to Australia.

Working there as an assistant to the Mission President, I found myself in another full-immersion course: The management, motivation and coordination of 200 young men and women volunteers; and the details of their activities, logistics and budget.

Following my return to the states – after short stints in both the Governor’s office of Idaho and as a lobbyist for higher education – I went to Washington, D.C., with a curiosity about the workings of federal government.

My first look came at the outset of the Reagan administration. I signed on as an intern in the office of Congressman George Hansen, of Idaho.

In our get-acquainted interview, the Congressman asked me to find ways to save money by cutting the federal budget. The implied suggestion was that I shouldn’t come back until I had something to report.

I was too dumb to be intimidated by the magnitude of the budget and too determined to deliver not to try to make something happen. Time passed and I scrambled. More time passed and I scrambled harder.

I think Congressman Hansen might even have forgotten what he had asked me to do when I visited him for what I thought was to be my exit interview. I produced my thick notebook of findings and extended it to him.

What’s this? he said.

Over $40 billion that you can save the federal government, I answered.

Where did you find it? he asked.

I told him: In GAO reports – the audits and public reports of the Government Accounting Office; in committee reports of the House and Senate; in testimony at oversight hearings; in newspaper stories; from asking questions; and by following my nose.

Congressman Hansen immediately called the White House and arranged for me to meet with David Stockman, then the director of the Office of Management and Budget.

The following day I went to the old Executive Office Building – next to the west wing of the White House – and shared my dog-eared, tattered report with Mr. Stockman. He appeared impressed and thanked me for my work.

The next day the Congressman received a personal note from Ronald Reagan thanking him for his work and going on to list the items from my research that he would include in the first Reagan budget to go to Capitol Hill.

The Congressman then offered me a full-time job. I transferred to George Washington University where I completed my undergraduate degree at night.

Even today one of my brothers swears that I owe my professional start to the instincts I developed behind the shovel at Gerard’s Dairy.

As time went on my Congressional job of Legislative Assistant took me deeper and deeper into the culture, values and importance of mining.

In a few more years I was invited to join the staff of Senator James McClure, then chairman of the Committee on Energy and Natural Resources, and also chairman of the Appropriations Subcommittee on the Interior. Both of these had broad responsibilities and the chairmanships were junctions of influence at which shape policy and from which to specify its administration.

Being the Director of Legislation for Senator McClure took me in two directions:

On the one hand, it took me deeper into the details and inter-relations of legislation, policy, budgets and administration;
And on the other, it widened my understanding and appreciation of the enterprises and the resources that hold America together, especially those that flow from mining.

While working with Senator McClure during the day, I completed my law degree in a program of night study at GWU.

When Senator McClure announced his retirement in 1990, I began to think about what came next.

It seemed to me that the McClure Senate team knew better than most what it took to move legislation; that we knew what it took to guide the administration of policy; and that the proof was in the experience and the performance.

We also knew what it took to give clients successful representation – knew this from the mediocre representation we had experienced on behalf of ventures and enterprises that deserved better.

And so, in far less time than it took to find the $40 billion, I wrote and presented the business plan for what was soon to be McClure, Gerard and Neuenschwander Inc. – the other partner being Tod Neuenschwander, the Senator’s chief of staff.

Time passed: The efforts of McClure, Gerard and Neuenschwander met growing success. Business responded accordingly. Our client list grew, many of them enterprises in energy and natural resources. We began to add clients from the sectors that call themselves the new economy.

I looked forward to spending more time with my wife, Claudette, and our six children as they grow up. Needless to say, I was quite comfortable in my plans.

Little did I know.

The CEO search committee to find a successor in advance of Dick Lawson’s retirement approached me in the early rounds; and I demurred, giving them the senior practitioner’s view of the future.

I thanked them, but told them that my plans were made, my course set, my future secure; that I was flattered, but they ought to look elsewhere.

The search moved on, and in the closing rounds the committee approached me again. They asked me to just consider the job description.

I said: Send it to me, and I’ll get back to you.

Then I made my big mistake: I shared it with my wife, Claudette. She concluded that the job was tailor-made for me and that my experience was precisely what they wanted.

As I read the committee’s assessment of the responsibilities and evolving challenges, I began to think of what might be done in response to the different items, and of how the responses might be put into play.

My mind raced ahead; and soon it seemed that most of what I had done or experienced in my working life had been designed to lead me to this turning point.

As I read on, other thoughts welled up and washed over my plans and my complacency – values that reached back as far as dairy days:

Thoughts of how deep and how strong is my belief in the entrepreneurial culture and traditions that drive the mining industry;
Of the political movements and cultural trends in the country that are aimed at ripping out and casting aside this tradition and this industry;
And of how much this nation depends on mining and those who deliver the basic stuff that makes modern life possible, even if some political leaders of the moment are engaged in trying to persuade a majority to the contrary.

Before I finished reading it all came clear to me. I am a true believer!

This was not a job to me. It was a passion, a way of life.

Right then I knew that no matter how comfortable the other life might have been, I could not turn my back on my beliefs, my experience or my passion.

And so I got back to them. I was recommended by the committee in September, elected unanimously by the directors in October, and officially took the reins just this past Tuesday at our board meeting.

The principles on which I propose to conduct my watch at the National Mining Association come from the sum of my experience – from dairy days through the present. They include the following:

The day’s not over until the work’s done.
We will strive to coordinate and harmonize for mutual support and reinforcement our strengths and capabilities across the range of concerns;
We will identify and emphasize the concerns and the goals that we have in common and not allow small differences to divide;
In planning and making policy, everyone will have a say;
Once the membership sets policy, there will be no special exceptions or exemptions in the execution of policy – not for the largest member, not for the smallest;
We will introduce our friends in office to one another and to our common concerns to maximize their effectiveness and our effectiveness;
We will strive to make new friends for mining – new friends in elective office, in appointive office and among the public at large.

On the personal level:

I will shoot straight – will give forthright assessments of what I believe can or cannot be done in a given situation on a given issue without trying to decorate or disguise the facts;
My door will be open, figuratively and literally, to all;
I will not play favorites among members or individuals;
And, you can count on this: When I say that I’ll get back to you with an answer, I will get back to you.

We may not always agree, but I will diligently strive to make sure everyone has had a fair and open process in which to express their views.

Now that we’ve touched on the association, let’s turn to the political landscape over which it will have to function and to the attitudes it will face – to some considerations of federal policy, national politics, and public opinion.

Opinion influences politics. Politics determine policy. And so, opinion might be the best place to start.

One of McClure Gerard’s clients is the big communications company Verizon. When I took this job a surprised Verizon senior executive asked me why I was giving up the new economy for the old economy.

His tone suggested that the real question was: Why are you jumping off the lifeboat to get back on the Titanic?

With what I remember as commendable patience and restraint, I went on to point out the following:

There would be no new economy without the steady flow of material resources – no e-commerce, no miracle-machines of diagnostic medicine or modern manufacturing;
The so-called old economy of automobiles and other durable goods requires the same flow of resources – without it, no high-mileage automobiles with catalytic converters, no jet planes to cut travel times and lower transportation costs;
And, finally, that these resources come from the base economy –the foundation of entrepreneurs and enterprises that deliver the nation’s food, fiber and material resources

The prosperity and compartmentalizations of modern life have separated the concept of having milk from the requirement to shovel, the idea of having cell phones or of being "wired" from the requirement to mine.

My friend at Verizon represents the origin of mining’s political dilemma. We deliver more at lower costs with fewer workers and no disruption than ever before. As a result, the contribution is generally unnoticed and there is a vacuum in opinion.

In the politics of influencing federal policy, the arts of persuasion often involve creating vacuums and filling them with a point of view.

For at least the last 30 years a dedicated political movement has turned the arts of persuasion full-force against mining. They have run campaigns to condition and position opinion in furtherance of constrictive policies that are based on fear, resentment and misrepresentation.

During the reign of Secretary Babbitt and Solicitor Leshy these campaigns were brought to a crescendo, and they were augmented by a pattern of official pronouncements that talked of train robberies, gold heists, robber barons and money changers in the temple.

This crest of specialized and regional persuasion rose and spilled over to cause trouble for Senator Gorton, who understood the importance of mining.

His defeat may have been due in part to his leadership in thwarting Solicitor Leshy’s attempt to personally repeal the nation’s mining policy and to restrict mining with a simple memo of reinterpretation – the millsite opinion.

When it became clear that this issue was being misrepresented in Senator Gorton’s campaign, I expressed regret to his staff and got a response in line with the Senator’s character and service.

The response was short and direct: It was the right thing to do and he would have done it even if he could have seen what was coming.

We will strive to help more see the right thing, and to see it clearly – more in office and more among those who depend on you without realizing it.

We’ll work on lifting the scales from the eyes of those who don’t see mining’s contributions at all.

We’ll work to make companies like Verizon and all sectors of the so-called new economy aware of their dependence on the base economy.

We intend to be focused, smart, flexible and efficient. We’ll approach every undertaking in ways that uphold and build on the association’s strong reputation for credibility and integrity.

We’ll work on changing the way the public sees mining.

We intend to look for and to find new and more-effective ways to refute the misrepresentations the movement uses to villanize mining and to villify miners in the on-going opinion campaigns to discredit the industry. We will be quick to answer.

Our first objective always will be to do those things that will ensure the flow of coal, metal ores and other minerals from the enormous resources of America to the American economy for the use and benefit of the American public.

We’ll be vigilant about access to those resources; vigilant about your ability to produce and to deliver them to market competitively – domestic markets and global markets; and vigilant about actions that restrict the openness of those markets.

We’ll look ahead nationally and internationally to identify emerging threats and to deal with them proactively and, where possible, pre-emptively.

The next four years will be tense and grudging. We have a Senate split at 50-50, a close House, and a President with an uncertain mandate.

The situation approaches the ultimate in checks and balances.

Every action on either side of the aisle will be aimed at conditioning public opinion and positioning the political parties for the Congressional elections of 2002 and the Presidential election of 2004.

Time and circumstance may present an opportunity to modify some of the harm done by the avalanche of solicitor’s opinions and regulation in the last few years, or for a constructive reform of the Mining Law. Even if less than perfect, such a chance ought to be taken, because it’s not likely to happen twice.

What happens as a result of these years will largely determine the ultimate direction and agenda for American mining over the following 10 or 20 years.

This is the political landscape over which the American mining industry must seek to move ahead and claim its future.

Our position on this landscape is as follows:

From the states of the hard-rock West, many members of the House and Senate sit at junctions of responsibility and influence over general policy;
From coal-producing states of the East, many sit at junctions of responsibility and influence;
In other minerals- and metals-producing states, the same is true;
And from the multitude of states influenced by the presence of our manufacturers and suppliers, the same is true.

There is strength in the West and in the East; and the manufacturers bind it all together by spanning many industrial and urban centers. We are capable of winning at critical places and times the attention of most of the Congress.

We have the winning combination!

Using this combination in winning ways will require that our different sectors and cultures remobilize and reorient themselves with a renewed intensity – that all of us come to understand and accept the distinction between being slightly different and having real differences.

All mining has more in common than in isolation – more to lose in common than to gain by trying to stand alone.

Our first priority must be to successfully transit the next four years.

Plan A for this transition, all contingencies included, must rest on the following:

First, we must complete the uniting of our industry in our political activities – find and hold fast to the many concerns we have in common;
Next, we must hold fast to the friends we have – help them and also take time to make more friends;
And finally, we must blend our concerns and our activities in ways that bring into play the full weight of the Senate seats and House districts in which mining is important.

In this there can be no plan other than Plan A. We have neither the luxury of going our separate ways nor the option of plans B or C.

However, there is one more consideration.

In this atmosphere both parties will want to find ways to demonstrate to the public that they can come together in bi-partisanship to solve a problem; for showings of bi-partisanship also will be part of the conditioning and positioning.

Let us now resolve, collectively and individually, to strive to do all we can to ensure that nothing we do in the course of business can be used by those who wish us ill to successfully nominate this industry as the object-problem of such an effort.

The law dictionary and the good unabridged dictionaries all contain entries that define a special kind of business partnership – the mining partnership.

These definitions assign to the members of a mining partnership a higher-than-customary level of commitment to the enterprise – more fidelity and more flexibility. It is a definition based on precedent and traditional practice.

I propose that all sectors resolve to come together in the sprit of precedent and tradition to join as one in moving forward this enterprise we call the mining industry of the United States.

This is what I will be about as the president and chief executive of your National Mining Association.

Thank you for your invitation and your attention.