• Records of users of federally subsidized phone service exposed

    Federally subsidized phone service for the poor provides a crucial lifeline for many low-income Americans, but providers of the service appear to have put tens of thousands of users at risk of identity theft, according to a report published Monday.

    More than 170,000 records from two companies that provide the Lifeline service -- Oklahoma City-based TerraCom Inc. and its affiliate, YourTel America Inc. -- were posted online, a Scripps News investigation found. The records, from residents of at least 26 states, include Social Security numbers, dates of birth and information about participation in other government-assistance programs. Of those records, 343 were viewed by unknown individuals, an official for both companies acknowledged.

    Click here to read the full report.

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  • Fracking boom triggers water battle in North Dakota

    Reuters

    Steve Mortenson, the owner of the Trenton Water Depot in Trenton, N.D., reviews logs inside his depot on March 26.

    WATFORD CITY, N.D. -- In towns across North Dakota, the wellhead of the North American energy boom, the locals have taken to quoting the adage: "Whiskey is for drinking, and water is for fighting."


    It's not that they lack water, like Texas and California. They are swimming in it, and it is free for the taking. Yet as the state's Bakken shale fields have grown, so has the fight over who has the right to tap into the multimillion-dollar market to supply water to the energy sector.

    North Dakota now accounts for over 10 percent of U.S. energy output, and production could double over the next decade. The state draws water from the Missouri River and aquifers for its hydraulic fracturing, the process also known as fracking and the key that has unlocked America's abundant shale deposits. The process is water-intensive and requires more than 2 million gallons of water per well, equal to baths for some 40,000 people.

    As in all booms, new players race in to meet the outsized demand. At the heart of this battle is a scrappy government-backed cooperative, conceived to ensure fresh water in an area where its drinkability is compromised.

    The co-op has decided to sell 20 percent of its water to frackers to help keep prices low and pay back state loans. That has not gone down well with the Independent Water Providers, a loose confederation of ranchers, farmers and small businesses that for years has supplied fracking water.

    Since opening in January, the co-op has tried to limit the power of the confederation with an aggressive legal and lobbying strategy. The Independent Water Providers have fought back, arguing that the co-op shouldn't be selling fracking water at all. The state Legislature stepped in with a law last month designed to quell the tension and nurture competition, but industry observers expect the acrimony to continue.

    "When all of us had nothing (before the oil boom), there was nothing to fight about," said Dan Kalil, a longtime commissioner in Williams County, home to many oil and natural gas wells. "Now, so many friendships have been destroyed because of water and oil."

    Jeanie Oudin, an analyst with energy consultancy Wood Mackenzie, predicts the competition could push down North Dakota fracking water prices at least 10 percent in the next few years, or roughly $170,000 per well. That's a sizeable savings in a state where fracking costs are the highest in the country (remoteness meant there was little infrastructure in place). The water accounts for 20 percent of the roughly $8.5 million it costs to drill a North Dakota oil well.

    NBC News

    Click on the image above for an interactive map showing where the United States produces various forms of energy.

    "Regardless of where operators get their water from, the growth in active water depots should increase the availability of raw water for hydraulic fracturing and ultimately bring down costs," Oudin said. The depots are where energy companies buy most of their fracking water.

    The North Dakota Petroleum Council, a trade group for Statoil, Hess, Exxon Mobil, Marathon Oil and other large energy companies, declined to comment on the fight or to forecast how much water prices could fall. The council acknowledged that it would prefer multiple sources for the state's 8,300 wells.

    Energy companies get most of their water in the state by trucking it from depots to oil and natural gas wells. Some wells require more than 650 truckloads to frack. Companies such as EOG Resources Inc and Halliburton Co are experimenting with ways to reduce their dependence on water.

    Fracking water depots, which cost roughly $200,000 to build and can gross more than $700,000 per year, are typically small metal buildings on concrete slabs filled with pumps and small tanks connected to the Missouri River or local aquifers. They can have two to six hookups and fill water trucks with as much as 7,800 gallons of water per visit.

    Related coverage:

    Power Shift: America's drive for energy independence

    The government-backed co-op has nine water depots to hold the fresh water that is piped from the treatment plant in Williston, about 45 miles north of Watford. It plans to build four more depots throughout the Bakken and hugely expand its pipeline system to bring fresh water to more homes. Small lines from the new pipelines will connect directly to some oil wells.

    On the other side, Independent Water Providers member JMAC Resources will build more water depots in the region and a massive pipeline just south of the Missouri River to supply oil wells. Other members of the group have also applied for depot permits.

    North Dakota water suppliers do not pay for water, and the state Legislature rejected a proposed water tax earlier this year. Each side's plans will rapidly increase the options that energy companies have to access water, further depressing prices.

    Dangerous to drink
    The co-op, officially known as the Western Area Water Supply Project, was designed to boost the quality of the water reaching western North Dakota homes. State studies for years had identified high levels of sodium, sulfates and magnesium in the aquifers.

    In Watford City, a dust-caked community of 2,000 dotted with oil-workers' run-down RVs, the sodium level of the drinking water had been 18 times higher than the level recommended by the U.S. Environmental Protection Agency. "You would drink (it) and get high blood pressure," said Mayor Brent Sanford.

    The high chemical content convinced Watford City officials in 2010 to support the co-op as it was being organized, Sanford said.

    By selling 20 percent of its water to frackers, the government-backed co-op hoped to keep water prices for homes low and generate enough revenue to pay back $110 million in state loans for the project. The co-op sells water to frackers at roughly 84 cents a barrel, compared to 21 cents a barrel for homes. (One barrel equals 31.5 gallons, or about 119 liters.)

    Denton Zubke, the co-op board's chairman and a credit union president, has defended the co-op's right to sell water to frackers as the independent ranchers and farmers decry what they see as government overreach into a private industry.

    "Free enterprise was never going to bring potable water supply to rural parts of North Dakota," said Zubke, who also operates a private water depot. "The only way we foresaw putting these water pipes in the ground was to pay for them with industrial (fracking) water sales."

    More than 230 million gallons of water flow every day past the Williston plant, and the co-op itself doesn't expect water demand from homes to exceed capacity until at least 2032, calming any shorter-term concern about fracking's taking water away from human uses.

    Closest is best
    Steve Mortenson, the Independent Water Providers' chairman, says he supports the co-op's clean-water mission but believes private industry is best equipped to provide fracking water. "We don't feel we should have state-backed competition," he said. "We never expected they would use the leverage of government to oppose private business."

    Confederation members can chose at what price to sell their water; most sell at 50 cents to 75 cents per barrel. Mortenson sells at 65 cents per barrel at his depot in Trenton, a bedroom community on the state's western edge.

    Mortenson, a soft-spoken rancher, offers washers, dryers, showers and free snacks at his depot as a gesture to the truck drivers who bring him business. Energy companies typically choose water depots closest to well sites to save on fuel costs, even if the price is higher than rival sites farther away. That has driven the building of even more water depots around the Bakken.

    Zubke disputes the Water Providers' claim to be any better at selling fracking water. He fears expansion by the independents could jeopardize the co-op's ability to pay off its debt. Using a complex Depression-era federal law known as 1926(b), he and other co-op officials have been sending cease-and-desist letters to some confederation members throughout North Dakota. They've also lobbied state officials --so far, unsuccessfully -- to deny water permits to some independents.

    Despite the contentiousness -- call it fracktion -- the Independent Water Providers and the co-op are sticking with their plans.

    "We don't want to profit from the water," JMAC owner Jon McCreary said. "We want to profit by selling the infrastructure to deliver the water."

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  • Audit of Witness Protection Program finds gaps in tracking suspected terrorists

    A Justice Department audit report faults the federal government for gaps in tracking people with terrorism connections who were added to the Witness Protection Program.

    Originally designed to protect people who testified against organized crime figures by giving  them new names and addresses, the program was expanded to cover witnesses who testify in terrorism trials. Some were purely witnesses. Some, however, were in the federal terrorism database as suspected terrorists themselves.


    As recently as a few years ago, the report says, people in the program who had terrorism connections, but were given a new identities, could have flown on a commercial flight because only their old names were on the government’s “no-fly” list.  The report says it found "some" witness protection program participants who actually did fly.  The Inspector General says while government officials knew about their plans to travel and approved, "these individuals, on their own accord, could have flown" without approval.

    Justice Department officials say that problem has now been fixed by disclosing the new identities to government agencies that maintain terrorism databases and by banning all participants in the witnesses protection program who are on the no-fly list from traveling on commercial flights.

    The report also says that in July 2012, the U.S. Marshals Service was unable to locate two former participants in the witness protection program who'd been identified as suspected terrorists.  But government officials say two had left the program, and the United States, "years ago," after fulfilling their obligations to testify or serve prison time.

    There are currently  no participants in the witnesses protection program who are unaccounted for, the officials said.

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  • Power tool industry resists table saw technology that could save digits

    Table saws are the tool of choice for millions of construction workers and do-it-yourselfers, which explains why they maim so many people in the U.S. – more than 67,000 a year, according to government estimates.

    That number might be much lower, if saw manufacturers adopted a technology known as SawStop, which uses a weak electrical current run through the saw blade to detect when it comes in contact with a person, then almost instantaneously stops it .


    But as FairWarning.org reports, power tool manufacturers and trade groups have opposed efforts to require SawStop or similar technology on table saws, arguing that the injury numbers have been inflated and that the government’s estimate of $2.36 billion in annual costs to society from table saw accidents is exaggerated. They also say that requiring such industry-reduction systems would destroy the market for popular lightweight saws, which cost as little as $100.

    The resistance to the digit-saving technology “highlights the endless due process that makes it virtually impossible for regulators to enact safety measures over the unified objections of industry,” FairWarning’s Myron Levin writes in an eye-opening examination of the behind-the-scenes battle.

    Click here to read the full report and see a video demonstration of the SawStop in action.

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  • Lax state rules provide cover for sponsors of attack ads

    While much criticism has been lobbed at the federal system for failing to adequately identify who is spending money to influence campaigns, 35 states have independent spending disclosure laws that are less stringent than federal election law.

    In fact, in 30 states it’s impossible to total how much money outside groups are spending on campaigns, information that is mostly available when it comes to federal contests.

    That’s according to a new 50-state analysis by the National Institute on Money in State Politics, which graded the states on disclosure requirements for super PACs, nonprofits and other outside spending groups.

    Fifteen states — Alaska, California, Colorado, Connecticut, Illinois, Maryland, Massachusetts, North Carolina, Ohio, Oklahoma, Oregon, Rhode Island, Texas, Washington and Wisconsin — received an “A” grade, meaning the states’ laws were at least as robust as federal independent spending requirements.


    New Jersey and Virginia, states where residents will be casting votes for governor and state legislature this year, were among 26 states that received a failing grade in the analysis  by the nonpartisan, nonprofit organization that focuses on the influence of campaign money on state-level elections and public policy in all 50 states.

    The others were Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Dakota, Pennsylvania, South Carolina, Tennessee and Wyoming.

    States were graded on a 100-point scale, based on how much information is provided to the public about non-candidate organizations that buy ads, often negative and misleading, just before an election. Six states — Alabama, Indiana, New Mexico, New York, North Dakota and South Carolina — didn’t garner a single point in the survey.

    Independent super PACs and nonprofits intent on influencing campaigns proliferated in the wake of the 2010 U.S. Supreme Court’s Citizens United v. Federal Election Commission ruling, adding about $1 billion in spending  in federal races in the 2012 election cycle.

    At the state level, lavish spending by outside groups often faces weaker disclosure rules than federal contests and receives far less media attention.

    The result is a mishmash of rules, with some states scrambling to pass legislation in the wake of the high court decision while others show little interest in enacting any changes.

    In South Carolina, for example, outside groups paid for ads attacking several state and local politicians in 2012 but were not required to report the spending.

    Two federal court decisions have left the state without “any rules” related to outside groups’ spending, according to Cathy L. Hazelwood, deputy director of the state Ethics Commission.

    State Sen. Wes Hayes, a Republican from Rock Hill, estimates that an anonymous group called Conservative GOP PAC, which despite its name has no apparent affiliation with the state’s Republican party, spent at least $100,000 on campaign fliers in an unsuccessful effort to unseat him.

    He concedes that’s just a guess.

    “I’ll never know the amount, just like I’ll never know who spent it,” Hayes says. Efforts to contact Conservative GOP PAC were unsuccessful, as the group has no office, no phone number, no website, did not file incorporation records with the state and no individuals have claimed membership in the organization.

    Non-candidate, independent spending on elections can be broken into two general categories: “independent expenditures” and “electioneering.” With independent expenditures, potential voters are asked to back or oppose a candidate. With electioneering, a candidate is named, but there’s no explicit request for support or opposition.

    In 25 of 50 states, electioneering advertisements are not required to be reported, according to the analysis by the National Institute.

    The term “electioneering communications” came to be with the passage of the Bipartisan Campaign Reform Act of 2002. The federal law requires such expenditures be reported, but it applies only to television and radio ads that air shortly before an election.

    In a few states, however, the definition of electioneering communications is broader than at the federal level, and may include non-broadcast expenditures like direct mail and print advertising. Independent expenditures refer to all expenditures used to support or oppose a candidate, including non-advertising costs like polling and yard signs.

    Points were withheld in the survey based on the level of disclosure and whether disclosure forms differentiate between independent spending and other types of campaign expenditures.

    While North Dakota scored a zero, the state passed legislation this year that will beef up disclosure requirements for outside groups once the law goes into effect Aug. 1.

    The National Institute’s rankings focus solely on spending and not on donors to the groups that are doing the spending. Increasingly, “social welfare” nonprofits — currently at the center of a scandal involving the IRS — and trade associations are being used to hide donors’ identities in both federal and state races.

    In New Mexico, outside political action groups spent heavily on races for the state Legislature, races that typically attract fewer than 20,000 voters. Once sleepy contests have become bruising battles fought through statewide television ads, said state Sen. Peter Wirth, a Democrat from Santa Fe.

    He’s pushed a bill requiring greater disclosure by outside groups through the Senate three times (twice with unanimous approval) only to see it die in the state House after frenetic lobbying by “very powerful special interests” from both parties, he says.

    “It’s bipartisan support in the open, and then behind the scenes it’s full-on bipartisan opposition,” Wirth says.

    But several states have enacted disclosure requirements that go beyond federal requirements.

    •In Maryland, corporations are required to alert shareholders about a company’s independent political spending;

    •A “stand by your ad” provision in a 2010 Massachusetts law requires that in corporate-funded ads, the CEO appear in the spot;

    •Alaska, California and North Carolina require independent expenditure groups to list their top donors in political ads.

    The National Institute’s rankings also factor whether states require independent spending groups to disclose which candidate they are targeting.

    Two states, Florida and Delaware, require that spending be made public but not the targets or the purpose of the spending. The result: It’s virtually impossible to track how much was spent by outside groups trying to hurt or help a particular candidate.

    Thirty-six states will elect governors in 2014. Edwin Bender, executive director of the National Institute on Money in State Politics, said he hopes states with poor grades will strengthen their reporting requirements.

    “The majority of states will elect their governors and other major statewide offices in 2014,” he said. “We think the public should know how much money is spent on these races, and by whom.” 

    John Dunbar contributed to this report.

    The Center for Public Integrity is a nonprofit, non-partisan investigative news organization in Washington, D.C. For more of its stories on this to go publicintegrity.org.

    For more information about money in state politics, visit www.followthemoney.org.

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  • Dzhokhar Tsarnaev scribbled note inside boat where he was hiding, sources say

    CBS News via AFP - Getty Images

    This image obtained April 19 courtesy CBS News shows Dzhokhar Tsarnaev, a suspect in the Boston Marathon bombing who was captured hiding in a boat in a Boston suburb.

    Bleeding and hunted by police, Dzhokhar Tsarnaev scrawled a note inside the hull of the boat where he was hiding saying that the Boston Marathon bombings were retaliation for American action against Muslims, sources told NBC News on Thursday.

    In the note, Tsarnaev, the lone surviving suspect in the marathon attack, said many of the things he told investigators from his hospital bed days later, after his capture, the sources said.

    Bombing suspect Dzhokhar Tsarnaev wrote a message inside the wall of the boat where he hid while attempting to evade police after the bombing. NBC's Pete Williams reports.

    The note was first reported by CBS News.

    Tsarnaev was discovered hiding in the boat, in suburban Watertown, Mass., on April 19 after a daylong manhunt that paralyzed Boston and its surroundings. He had been wounded in a firefight with police.

    Tsarnaev, 19, is in a federal prison hospital in Massachusetts and has been charged with using a weapon of mass destruction. He could face the death penalty. His older brother, Tamerlan, was killed in the firefight.

    Three people were killed and 264 injured when two bombs exploded near the marathon finish line April 15.

    Dzhokhar Tsarnaev told investigators in the days after his capture that the brothers acted alone and were defending Islam after the American-led wars in Iraq and Afghanistan, U.S. officials have told NBC News.

    Investigators are also focusing on a six-month trip to Russia that Tamerlan Tsarnaev made last year, looking for clues to his radicalization. He was buried last week at a Muslim cemetery in Virginia after cemeteries in Massachusetts refused the body.

    Massachusetts State Police released this video showing aerial footage of the boat where Dzhokhar Tsarnaev lay hidden during a standoff with police.

    This story was originally published on

  • Bomb plot briefing may undercut DOJ's case for AP records seizure

    Manuel Balce Ceneta / AP file

    CIA Director John Brennan, shown testifying on Capitol Hill on April 11, testified he conducted a background briefing after the Associated Press reported the Yemen bomb plot in May 2012 to avoid "dangerous questions and speculation."

    A massive Justice Department investigation into the disclosure by the Associated Press of an ongoing covert operation against an al Qaeda suicide cell in Yemen -- a probe that included a sweeping  secret subpoena of the press association’s phone records  -- has been justified by U.S. officials on the grounds that the news organization “put the American people at risk.”

    But that assertion by Attorney General Eric Holder could be undermined by the White House’s decision to publicly comment about the operation at the time and reveal details beyond those in the original AP story, according to legal experts and counterterrorism officials.


    Within hours after the AP published its May 7, 2012 story, then-White House counterterrorism adviser John Brennan, currently the director of the CIA, held a background conference call in which he assured television network commentators that the bomb plot was never a threat to the American public or aviation safety.

    The reason, he said, is because intelligence officials had “inside control” over it.

    He later told the Senate Intelligence Committee that he conducted the briefing to avoid “dangerous questions and speculation” about the operation.

    Brennan’s account came after the AP reported what it called “an intelligence victory for the United States,” saying  intelligence officials had thwarted an “ambitious plot” by an al Qaeda affiliate in Yemen “to destroy a U.S. bound airliner” using a refined underwear bomb.  

    U.S. officials say that, when they were first contacted by the AP, they were concerned publication of the story would endanger the life of a British informant who had penetrated the group. AP executives say they agreed to hold their story until they were assured by government officials that “national security concerns had passed.”

    Brennan’s use of the phrase “inside control,” a detail not initially included in the AP story, quickly led U.S. news organizations to report that the plot had been foiled by an undercover informant.

    When asked about recent news of a subpoena of AP phone records, President Barack Obama explained Thursday that information leaks can put U.S. citizens at risk and that he makes '"no apologies" over being concerned about sensitive material.

    “The U.S. government is saying it never came close because they had insider information, insider control, which implies that they had somebody on the inside who wasn’t going to let it happen,” Richard Clarke, former White House counterterrorism adviser to Presidents George H.W. Bush, Bill Clinton and George W. Bush and who participated on the conference call with Brennan, said on ABC’s “Nightline” that evening.

    NBC’s Chief Justice Correspondent, Pete Williams, did further reporting for Nightly News the next night.  “It turns out that the bomber was actually an informant cooperating with intelligence services friendly to the United States,” Williams reported.

    Bolstering his reporting was an interview with Homeland Security Janet Napolitano.

    “I want to say that the device was always under control, and that no one in the Unites States was ever at risk because we did have control,” she said.

    “The administration’s background statements helped reporters put two and two together and ultimately led to the disclosure that did reveal the existence of an intelligence source,” said Michael Leiter, the former director the National Counter-Terrorism Center under Presidents George W. Bush and Barack Obama and now an NBC News counterterrorism analyst. “That’s not to say that the original leak didn’t also do damage and undermine operations.”

    Tommy Vietor, then chief national security spokesman for the White House, disputed the idea that Brennan disclosed sensitive details in his background briefing and said  it was “ridiculous” to equate Brennan’s use of the  phrase  “inside control” with having an “informant.”  

    U.S. officials acknowledge that, after they were contacted by the AP and told it was going to publish the story, they alerted British intelligence, which scrambled to extract the informant and his family from Yemen. But the leak infuriated British officials and strained relations between MI-6, the country’s intelligence service, and the CIA, officials say. Moreover, U.S. national security officials familiar with the matter said the real damage was done by the original leak to the AP because it revealed that the FBI had possession of the bomb. It also ended any chance of using the informant in the future. “They were going to keep him in there,” said the official.

    Still, the willingness of administration officials to publicly comment on the plot could undercut the Justice Department’s position if the AP decides to take any legal action challenging the secret subpoenas.

    “It complicates considerably the force of the argument that this disclosure seriously compromised national security,” said Floyd Abrams, a leading First Amendment lawyer who represented the New York Times in a historic legal  battle over its publication of the Pentagon Papers.

    In that case, Abrams noted, the Times successfully argued that much of what the Justice Department had argued was damaging in the papers had already been revealed in public statements by U.S. government officials.

    David Schulz, a lawyer for AP, said the news organization is “exploring all our  options” for  legal action to challenge the Justice Department’s secret subpoena for about two months of AP phone records on 20 separate telephone lines in an effort to identify the leaker.

    Related stories

    AP, DOJ clash over seriousness of leak that prompted phone records seizure

    AP calls government's records seizure a 'massive and unprecedented intrusion'

    Among those options, he said, were filing suit for a “declaratory judgment” that the subpoena had violated its reporters’ rights and a demand for a return of the phone records and an order that the Justice Department destroy all copies. In doing so, the AP may cite the comments by Brennan as evidence that the leak did not harm national security in the way that the Department of Justice has asserted, h said.

    “We were surprised by the attorney general’s comments yesterday about the potential security threat  from the leak under investigation,” Schulz said in an email to NBC News. “The president’s top national security advisor at the time said there was never a risk to air safety, and ‘no one in the United States was ever at risk.’ These shifting positions show the malleable nature of national security claims, and underscore the need for independent review by a judge when civil rights are infringed to protect against asserted security threats.”

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  • AP, DOJ clash over seriousness of leak that prompted phone records seizure

    Jonathan Ernst / Reuters

    U.S. Attorney General Eric Holder calls on a reporter during a news conference at the Justice Department on Tuesday.

    Justice Department and Associated Press officials clashed Tuesday over leaked classified information that led the government to seize AP phone records, with Attorney General Eric Holder saying it “put the American people at risk” and the news organization’s chief executive insisting it delayed publishing its story until it was assured “national security concerns had passed.”

    The day of back-and-forth public sallies came as new details emerged about negotiations between the AP and U.S. officials over the unauthorized release of classified information on a foiled bomb plot in Yemen, information that apparently triggered the investigation.

    “This was a very, very serious leak,” Holder said at a news conference. “I’ve been a prosecutor since 1976 – and I have to say that this is among, if not the most serious, in the top two or three most serious leaks that I’ve ever seen. It put the American people at risk – and that is not hyperbole.”


    Holder defended the secret subpoena for about two months of AP phone records on 20 separate telephone lines without prior notice as a necessary step, saying that trying to find the source of the leak “required very aggressive action.”

    Holder’s comments and a letter from Deputy Attorney General James Cole defending the seizure of the AP records – without notifying the news organization until last week --  drew a stern response from AP President and CEO Gary Pruitt. He  blasted the action as "overbroad under the law," saying  that "more than 100 journalists work in the locations served by those telephones."

    "Rather than talk to us in advance, they seized these phone records in secret, saying that notifying us would compromise their investigation," Pruitt said in a statement late Tuesday. “They offer no explanation of this, however.

    Julie Fletcher / AP file

    Associated Press President and CEO Gary Pruitt.

    "Instead they captured the telephone numbers between scores of AP journalists and the many people they talk to in the normal business of gathering news."

    Pruitt also defended the AP's decision to publish the story that apparently sparked the leak investigation.

    The May 2012 AP article disclosed what it said was a CIA operation that foiled a plot to  plant a bomb on a  plane from Yemen on the first anniversary of Osama bin Laden's death.  

    The covert operation involved an informant working for British intelligence, who passed along information about a plot to detonate a refined version of a so-called “underwear bomb” aboard a U.S.-bound aircraft, intelligence officials told NBC News.  The leak, and the CIA’s subsequent claim that it was behind the operation, infuriated the British, who said it put their operative at risk, according to the officials, who spoke on condition of anonymity.

    Prior to the publication of the story, there were extensive negotiations among AP, White House and CIA officials, said the officials. The AP initially agreed to hold the story until May 8, 2012, thereby giving intelligence officials time to minimize any risk to the informant and his family, they said.

    But as first reported by Reuters, the agreement broke down at the last minute over AP demands that the U.S. government officials not confirm the details of the news organization’s account for an hour after publication. A source familiar with the negotiations said White House officials concluded they could not make such a promise given they expected to be deluged with media inquiries about the matter.

    Erin Madigan, a spokeswoman for the AP, disputed the Reuters account.

     “As we told Reuters a year ago, at no point did AP offer or propose a deal in relation to this story. We did not publish anything until we were assured by high-ranking officials with direct knowledge of the situation, in more than one part of the government, that the national security risk was over and no one was in danger.”

    In any case, the AP ran the story on May 7. That evening, shortly before the network news broadcasts, then-White House Counter-Terrorism Adviser John Brennan held a background briefing for former counterterrorism advisers. The former advisers then appeared on television networks to talk about the foiled plot and maintain that intelligence officials had “inside control” over it.

    Brennan, now CIA director, later told the Senate Intelligence Committee that he conducted the briefing to avoid “dangerous questions and speculation” about the operation.

    Pruitt on Tuesday denied the article posed a threat to national security.

    "We held that story until the government assured us that the national security concerns had passed," he said. "Indeed, the White House was preparing to publicly announce that the bomb plot had been foiled.

    "The White House had said there was no credible threat to the American people in May of 2012. The AP story suggested otherwise, and we felt that was important information and the public deserved to know it."

    Pruitt's statement  came after he received a letter from Cole, the deputy attorney general, which said  "there was a basis to believe" the phone numbers subpoenaed "were associated with AP personnel involved in the reporting of classified information." He said the subpoenas were "limited to a reasonable period of time" and were only taken after all "alternative investigative steps had been taken …  including conducting over 550 interviews and reviewing tens of thousands of documents." 

     The statement from the AP came as criticism of the Justice subpoena mounted on Capitol Hill and elsewhere.

     The House Judiciary Committee is planning to grill Holder about the matter at a previously scheduled oversight hearing on Wednesday, said Rep. Bob Goodlatte, the panel’s chairman.

    “We definitely have some pointed questions about how and why it was decided to request such a broad and lengthy” subpoena, he told NBC News.

    Holder has recused himself in the case, apparently because he had prior knowledge of the information that was leaked. If Holder says he can’t answer detailed questions about the case because of his recusal, Goodlatte said the panel will follow up with Cole, his deputy.

    “We will definitely be pursuing this matter,” Goodlatte said.

    His comments came as others voiced sharp criticism of the AP subpoena. Former Attorney General Michael Mukasey told Fox News on Tuesday that “it was a broader gathering of information that should never have been authorized.”

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  • IRS mishandling of Tea Party reviews still unresolved, audit charges

    Attorney General Eric Holder announced a criminal investigation into the IRS' handling of applications for tax-exempt status by conservative groups. NBC's Lisa Myers reports.

    Poor management allowed low-level IRS employees to single out Tea Party and other conservative groups seeking tax-exempt status for extra review, and the agency continues to drag its heels on fixing things, according to an inspector general's report obtained Tuesday by NBC News.

    The IRS said in its formal response that it had satisfactorily answered all of the complaints in the audit by the Treasury Department's inspector general for tax administration. But Acting Deputy Inspector General Michael McKenney made it clear in a cover letter accompanying the document that "we do not consider the concerns in this report to be resolved," noting that the IRS objected to two of his office's nine recommendations calling for clearer regulations, stricter processes and better documentation of what the IRS is doing and why.

    President Barack Obama said in a statement Tuesday evening that the report's findings were "intolerable and inexcusable." He said he had ordered Treasury Secretary Jack Lew "to make sure that each of the Inspector General's recommendations are implemented quickly."


    The audit blamed confusion by IRS administrators for the inappropriate reviews, which Attorney General Eric Holder said Tuesday would be focus of a federal criminal investigation.

    The report found that mismanagement led the IRS to ask some groups for unnecessary information — in some cases, it asked groups to list the names and address of future donors — and delayed processing of some groups' requests, some for more than three years.

    The average delay was 13 months, it said.

    Two IRS offices — the Washington headquarters of its Exempt Organizations unit, which is responsible for processing applications for tax-exempt status, and an office in Cincinnati called the Determinations Unit — come in for the brunt of the blame in the 48-page report, parts of which are redacted.

    The audit found that in June 2011, the Cincinnati office distributed an expanded "Be On the Look Out" list of criteria for identifying potential political cases. The so-called BOLO list identified four reasons for officers to give an application special attention:

    • "Tea Party," "Patriots" or "9/12 Project" is referenced in the case file
    • Issues include government spending, government debt or taxes
    • Education of the public by advocacy/lobbying to "make America a better place to live"
    • Statements in the case file criticize how the country is being run

    "The criteria developed by the Determinations Unit gives the appearance that the IRS is not impartial in conducting its mission," the audit concluded. "The criteria focused narrowly on the names and policy positions of organizations instead of tax-exempt laws and Treasury Regulations."

    In its response, the IRS acknowledged "the mistakes outlined in the report," saying they were caused by "the lack of a set process for working the increase in advocacy cases and insufficient sensitivity to the implications of some of the decisions made."

    Related: As applications swell, IRS nonprofit division overloaded, understaffed

    The agency blamed low-level "front line career employees" acting out of what it said was "a desire for efficiency and not out of any political or partisan viewpoint."


    It also claimed that some of the political groups were at fault because their applications were "vague as to the activities the applicants planned to conduct."

    Groups seeking 501(c)(4) tax-exempt status can advocate for particular general political positions, but their primary purpose must be "social welfare," and they are barred from intervening in political campaigns.

    "A number of applications indicated that the organization did not plan to conduct political campaign activity," the IRS said. But elsewhere in their applications, they "described activities that in fact appeared to be such activities," it said.

    Many of the groups "did not understand what activities would constitute political campaign intervention," it said, even as it noted in the same document that "there are no bright-line tests" for what constitutes such activity.

    "As the report discusses, these issues have been resolved," the IRS declared.

    "Meet the Press" moderator David Gregory discusses the IRS's admission that it singled out conservative groups, saying there's frustration more wasn't done to deal with the issue.

    But the audit disagreed, saying: "Although the IRS has taken some action, it will need to do more so that the public has reasonable assurance that applications are processed without unreasonable delay in a fair and impartial manner in the future."

    In a statement late Tuesday, the IRS contended that it didn't act out of any political bias, saying the cases singled out for review in the Cincinnati office since 2010 "included organizations of all political views."

    The audit didn't specifically address allegations that Acting IRS Commissioner Steven Miller misled Congress because he knew about the inappropriate procedures but kept quiet for months before they were made public.

    In a speech on the Senate floor, John Cornyn of Texas, the Republican whip, thundered that Miller "should resign today" if it is established that he "willfully misled Congress when inquiries were made earlier about this sort of scandalous political activity."

    Sen. Orrin Hatch, R-Utah, said that regardless of whether it acted out of political bias, the IRS had made a mess of things.

    "This was either one of the greatest cases of incompetence that I've ever seen or it was the IRS willfully not telling Congress the truth," he said.

    In its statement, the IRS said it never intended to hide the issue. Instead, it said, it waited to say anything until it could see the audit "and we reviewed their findings."

    In what was described as a "tough meeting" Tuesday, Senate Finance Committee Chairman Max Baucus, D-Mont., told Miller that "he is in for some serious questioning" from the committee, sources in the meeting told NBC News' Kelly O'Donnell.

    The Finance Committee is expected to convene a hearing into the controversy, although one hasn't yet been scheduled. Baucus told Miller on Tuesday that the committee would accept nothing less than his "complete cooperation and transparency," one of the sources said.

    Lisa Myers, Kelly O'Donnell and Richard Gardella of NBC News contributed to this report. Follow M. Alex Johnson on Twitter and Facebook.

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  • Cruel or necessary? The true cost of wild horse roundups

    Controversy over the Bureau of Land Management's roundups of wild horses and burros ranging over 10 Western states is coming to a head, with ranchers, horse advocates and even the government acknowledging that the program is heading toward crisis. NBC News' Lisa Myers has the story.

    DELTA, Utah -- The mustangs run with a spirit that makes them legendary here in the West. On a bitter cold morning, they descend from the Swasey mountains of central Utah and gallop for miles across the plains. Stallions and mares, beautiful and strong, guiding their young. 

    It’s an enthralling scene, but also one that infuriates many Americans. Thundering choppers overhead are driving the wild horses, many that appear terrified, toward a trap. For most, these are their final moments living wild and free. 

    A steel gate slams behind them.  There is panic.  Minutes later, families are split up, with males, females and their young eventually sent to separate holding facilities.

    “I know how much they love their families and their freedom.  And in an instant they lose both,” said Ginger Kathrens, a filmmaker who has documented wild horse herds.

    This recent roundup ended a season of wild horse “gathers” in which the government captured and removed thousands of mustangs from nearly 32 million acres of public land in 10 Western states.  

    Afterward, the Bureau of Land Management reported new numbers likely to shock many Americans unfamiliar with the economics and politics surrounding the roundups: A record number of wild horses – almost 50,000 – are now living in captivity, far more than the 32,000 left on the range.  

    Both critics and supporters of the roundups agree on one thing: the BLM’s Wild Horse and Burro Program is “out of control” and heading for crisis. With adoption rates falling, its cost has doubled in a decade to $78 million this year.  Even the government acknowledges “the current path is not sustainable for the animals, the environment or the taxpayer.” 


    “The roundups are devastating for the wild horses, being terrorized by helicopters and stampeded for miles,” said Suzanne Roy, director of the American Wild Horse Preservation Campaign, one of several groups fighting the roundup program.  “It doesn’t make sense.  It doesn’t work.  It costs taxpayers money.  It costs horses their freedom, sometimes their lives.  It’s insanity.” 

    A tug-of-war 
    The BLM, which is responsible for protecting wild horses under federal law rejects that charge, insisting the roundups are “necessary and justified.”  


    Joan Guilfoyle, head of the Wild Horse and Burro Program, says the wild horse population doubles every four years and needs to be thinned to preserve ecological balance on the public land. 

    “If we stopped gathering animals, the population would continue to grow and grow and grow and the rangelands would continue to be overgrazed,” she said.

    The BLM says there are currently 7,831 "excess" mustangs and that the "appropriate management level," the number of wild horses which can be supported in official herd areas, should be only 23,622.

    Courtesy of The Cloud Foundation

    Controversy over roundups of wild horses roaming the ranges in 10 Western states is reaching a boil, with ranchers, horse advocates and even the government itself in agreement that the Bureau of Land Management's Wild Horse and Bureau Program is "out of control." Click to view photos of the horses in the wild, and during and after the BLM roundups.

    Roy and other advocates insist wild horse overpopulation is a “myth propagated by the BLM and the livestock industry.”

    “The reality is that there are a small number of wild horses out there, fewer than 32,000, and there are millions of cattle and sheep,” she said. “We don’t have an overpopulation of wild horses. We have an overpopulation of livestock on our public lands.”

    Roy’s group recently analyzed how the government allocated forage in 50 herd management areas where there have been roundups in the past three years. It found 82.5 percent was allocated to livestock; 17.5 percent to wild horses. 

    Bob Edwards, who retired in 2005 after 30 years with the BLM managing wild horses and working as a natural resources specialist, agrees that the deck is stacked.

    “The wild horses are not getting a fair shake,” he told NBC News, speaking out against the roundups for the first time. “I don’t think they have been given their proper place on the landscape in the American West.” 

    Guilfoyle argues that she must manage the land for “multiple uses,” including grazing for cattle, sheep and wildlife. 

    And Utah rancher Fred Tolbert, who pays the BLM for permits to graze his cattle with wild horses, says the horses are overgrazing.  

    “I’m on the range and I see what the damage is,”  said Tolbert, adding that he’d go out of business if roundups stopped.  “… If my cows don’t calve, I don’t make any money. There’s no feed, they’re not gonna have calves.” 

    The National Cattlemen’s Beef Association also supports the BLM roundups and calls for more “aggressive and increased use of long-term fertility control” to stabilize the population. 

    The BLM currently devotes only 1.5 percent of its wild horse budget to “population suppression,” such as treating female horses with the contraceptive PZP. But the agency says PZP works for only about one year after it’s injected and “has not been as effective as we had hoped.” So most of the program’s budget goes to rounding up and permanently housing horses and burros, which are kept in separate facilities.

    Witnessing the roundups 
    The Wild Free-Roaming Horses and Burros Act of 1971 states that wild horses and burros “shall be protected from capture, branding, harassment, or death,” but activists say the BLM program subjects them to that very treatment. 

    “It’s my observation that the government continually violates the provision of the act that requires humane handling of these animals,” said Laura Leigh of the advocacy group Wild Horse Education. Leigh has taken BLM to court four times and has won two temporary restraining orders in lawsuits she has filed against the roundups. “I feel that removing wild horses by helicopter stampede is inherently inhumane.” 

    Leigh says she has spent about 500 days observing roundups, living out of her truck, documenting injuries and even deaths with her cameras.  One of Leigh’s videos has been seen more than 2 million times on YouTube.  

    Criticism of roundups is not limited to wild horses. The BLM also annually removes "excess" wild burros from public lands, mainly in Arizona, Nevada and California. In this video, wild burro advocates document "aggressive" roundup practices. As with horse roundups, the BLM defends the operations as humane and says such incidents are isolated and contrary to guidelines.

    “I’ve seen broken legs,” Leigh said, standing outside a BLM holding facility in northern Nevada. “I’ve seen legs ripped up by barbed wire. I’ve seen horses kicked in the head.  I’ve seen animals dragged by the neck with a rope.  I’ve seen a helicopter hit horses.” 

    NBC News showed Guilfoyle, the BLM division chief, some videos taken by activists, including Leigh.  Among other things, the videos showed a stallion trying to escape from a roundup nearly ripping off his leg, horses in a trap pen with gouged and bloody faces and BLM’s contractor wranglers repeatedly applying electric shocks to horses that wouldn’t move into a trailer.  

    “There are some very heartbreaking pieces in there, absolutely,” Guilfoyle said. But she characterized the injuries as accidents and “isolated incidents.” “They are still wild animals and accidents will happen,” she said.

    BLM wild horse specialist Gus Warr questioned the editing of some of the activist videos.  

    “I would challenge … the stuff you see on YouTube because you’re not seeing the whole picture, that is the worst of the worst,” he said.

    Leigh responds, “My pictures and video do show the whole story.  What I’m showing is what BLM will not show the public.” 

    Despite such incidents, BLM reports “the mortality rate during wild horse and burro gathers is typically about 1 percent or less.”  Among the common causes of deaths listed in BLM mortality reports: broken necks, head trauma and complications from the agency’s gelding of animals.

    Critics say that many other wild horses die later of complications from the roundups, but the BLM attributes many of those deaths to pre-existing conditions. 

    BLM reviews roundup 
    The BLM conducted its own review of the 2011 Triple B roundup in Nevada, assessing video shot by advocates and its own staff.  The review found “aggressive loading procedures and excessive pressure by multiple handlers,” including:

    • Helicopters pursuing horses too closely and for too long; 
    • Excessive and inappropriate use of electric prod, based on animal welfare experts’ review of the videos;
    • Kicking, pinning horses in gates and twisting of tails during loading.

    The review team generally found operations “were done in accordance with current BLM policy,” but added: “External animal welfare experts, as well as BLM employees, split on whether or not horses had been treated inhumanely.”  

    In January 2013, a federal judge issued a temporary restraining order halting another roundup after Leigh produced photos of a BLM helicopter driving wild horses through a barbed wire fence at the Owyhee Complex roundup one month earlier. 

    Courtesy WildHorseEducation.org

    A wild horse somersaults over a barbed-wire fence during a Bureau of Land Management-run roundup at the in the Owyhee Complex in Nevada in December 2012.

    Judge Miranda Du later lifted the order, but barred the BLM from using “hot shot/electric prod treatment” on weanlings and “rushed and aggressive loading tactics.” She also instructed the bureau “to conduct the gather in a humane fashion,” not “in a manner where the horses are driven through barbed-wire fences.” 

    Thirteen days later, the BLM issued an internal memorandum “to ensure that the responsible and humane care treatment of WH&B (wild horses and burros) remains a priority for the BLM and its contractors at all times.” The document lists 24 “expectations” intended to reduce abuses at roundups.  

    But under the new guidelines: helicopters will still be able to hover over animals “when it is necessary,” electric prods can still be used on animals as a “last resort,” and wild horses will be treated “in a manner that is consistent with domestic livestock handling procedures.” 

    Deniz Bolbol, a spokeswoman for American Wild Horse Preservation Campaign, called the memo a “charade” and said it is “the latest attempt by the BLM to weaken humane standards.” She also called the use of domestic livestock techniques a “significant step backward,” saying wild horses should be treated like wild animals, not livestock. 

    As a result of its aggressive capture program, the BLM is running out of places to put mustangs. Long-term holding pastures in the Midwest are close to capacity. The BLM adoption program tries to find homes for the younger horses and burros it removes from the wild, but the adoption rate is on the decline -- only 2,598 animals were placed last year.

    The BLM’s contracts for use of privately owned holding facilities for captured horses also have triggered disputes  among neighboring property owners, who fear that, among other things, the wild horses could overgraze the land, leaving them to either escape or starve. (A Montana ranch owned by NBCUniversal CEO Stephen Burke is among several parties appealing BLM efforts to locate about 700 wild horses on a nearby ranch.)

    The slaughter ‘solution’
    Federal law actually provides a “solution” -- it allows the sale of wild horses by the government to citizens “without limitation,” including sale for slaughter.

    So far the BLM has taken a public stance against slaughtering the animals, but ranchers like Tolbert support the idea and say it would save taxpayers millions of dollars. 

    “Let ‘em go to slaughterhouse,” he said. “What value are they now? ... They’re a drain.  They’re a negative.”

    Guilfoyle said the BLM would not consider allowing wild horses to be sold for slaughter: “We never have and never will.”

    But BLM records show the agency has considered slaughter as a way to solve the problem. In October 2012, the idea was floated again by BLM advisory board member Jim Stephenson at meeting in Salt Lake City: “The only real solution to this is to have a slaughter market,” he said.

    In March, however, legislation known as the Safeguard American Food Exports (SAFE) Act was introduced in both the U.S. Senate and House. If approved and signed into law, it would prohibit the knowing sale or transport of all horses (wild or domestic) "for purposes of human consumption."

    Edwards, the former BLM rangeland expert, said he thinks the days are numbered for wild horses in America.  “I think what’s going to happen in the long run is that the wild horses will eventually be removed from public lands, which I think is a tragedy,” he said. 

    Filmmaker Ginger Kathrens, who has produced documentaries about wild horses, said, “The BLM would like to see wild horses gone, because with no wild horses, end of problem. ... Wild horses will be managed to extinction.” 

    Related stories

    One man purchased 1,700 mustangs; where are they now?

    In their own words: opposing views of wild horse roundups

    Family nurses wild horse back to health

    It's not all about horses; the battle over burros

    Complete coverage of wild horse roundups

    But BLM program chief Guilfoyle insists that, despite the criticism and controversy, “We will always have wild horses and burros out there.  That’s our job.  We care about them and we’re going to do our best to have them out there forever.” 

    Back in Utah, meanwhile, 160 mustangs chased out of the Swasey mountains by choppers this year will likely spend the rest of their lives in holding pens, eating hay at taxpayer expense, wild -- but not free.

    Lisa Myers is NBC News' Senior Investigative Correspondent; Michael Austin is a producer in NBC's bureau in Burbank, Calif.

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  • In their own words: opposing views of wild horse roundups

    Singer-songwriter Carole King, left, and Joan Guilfoyle, head of the Bureau of Land Management's Wild Horse and Burro Program, have opposing views of the wild horse roundups.

    The Bureau of Land Management's roundups of wild horses and burros fire strong emotions on both sides of the issue. Here, in their own words, BLM Program Chief Joan Guilfoyle and singer-songwriter Carole King, a wild horse advocate, present their views: 

    The head of the Bureau of Land Management's Wild Horse and Burro Program defends the "gathers" of wild horses and burros: "We will always have wild horses," she says.

    Guilfoyle: 'We have too many of them out there'

    As the head of the Bureau of Land Management's Wild Horse and Burro Program since August 2011, Guilfoyle is responsible for overseeing the government's helicopter roundups and the holding facilities for wild horses and burros.

    Guilfoyle is an avid outdoorswoman who came to her job after holding other prominent positions with the BLM, National  Park Service and USDA Forest Service. She holds a bachelor's degree in zoology/ecology and a master's degree in environmental learning and leadership.

    More information from roundup supporters:

    Bureau of Land Management Wild Horse and Burro Program

    National Cattlemen's Beef Association

    The Wildlife Society

     

    Singer-songwriter says she has three primary objections to the roundups: "They're cruel and inhumane ... they break up families ... they cost taxpayers millions and millions of dollars."

    King: 'Leave them where they are'

    King is not only famous for being one of America's great pop singers and songwriters, she's also an environmentalist who advocates for greater protection of wild horses.  

    King supports the American Wild Horse Preservation Campaign, has worked with the Alliance for the Wild Rockies and has testified before Congress on environmental issues.  She lives on a ranch in Idaho near one of the government's wild horse herd management areas.

    More information from roundup critics:

    American Wild Horse Preservation Campaign

    Wild Horse Education

    The Cloud Foundation

    Related stories

    Cruel or necessary? The true cost of wild horse roundups

    One man purchased 1,700 mustangs; where are they now?

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    Complete coverage of wild horse roundups

  • The case of the missing mustangs; what happened to 1,700 wild horses?

    Dave Philipps

    Tom Davis at his corrals in La Jara, Colo.

     

    The semis would rumble down country roads packed full of wild horses. Truckload after truckload, sometimes 36 horses at a time, all with the same destination: a ranch in the small town of La Jara, Colo.  

    Records show that for years, the Bureau of Land Management sold and shipped more than 1,700 wild horses from its animal holding facilities to just one rancher. Now federal investigators are trying to figure out:  What did he do with all those mustangs? And did any of them ultimately end up being butchered in the slaughter plants of Mexico? 

    Wild horse advocates fear the worst. They want to know the truth about the fate of the horses and whether the U.S. government looked the other way as the federally protected animals seemingly disappeared. 

    “I want to know where the horses went,” said Laura Leigh of the group Wild Horse Education, which advocates on behalf of the wild mustangs. “It’s disgusting, it’s abhorrent.  Whoever signed that slip to approve those sales, I want to look them in the eye and say, ‘What were you thinking?’” 

    Federal investigation
    The BLM is charged with protecting wild horses under federal law and has confirmed that the Interior Department Office of Inspector General is investigating the agency’s sale of mustangs to rancher and livestock hauler Tom Davis. 

    The Davis investigation comes amid a growing controversy over the BLM’s Wild Horse and Burro Program. The agency faces a dire situation: Nearly 50,000 horses captured during frequent roundups, so-called “excess animals,” are living in government holding facilities that are nearing capacity.  Horse adoptions are down, so the BLM has turned to selling the animals. 

    Controversy over the Bureau of Land Management's roundups of wild horses and burros ranging over 10 Western states is coming to a head, with ranchers, horse advocates and even the government acknowledging that the program is heading toward crisis. NBC News' Lisa Myers has the story.

    The government says Davis, who paid just $10 per head, was the biggest buyer ever of wild horses. Its sale of the animals to Davis from 2008 to 2012 was uncovered by writer Dave Philipps in a September 2012 story, “All The Missing Horses,” for the nonprofit news organization ProPublica.  The story questioned whether Davis sent the horses to so-called “kill buyers,” middle men who export livestock to meat packing plants in Mexico, but reached no firm conclusion. 

    At the time, BLM issued this response to the ProPublica story: “The BLM condemns any sale of wild horses for slaughter.  We care deeply about the well-being of wild horses, both on and off the range, and the BLM does not sell and has not knowingly sold or sent horses or burros to slaughter.” 

    Courtesy of The Cloud Foundation

    Controversy over roundups of wild horses roaming the ranges in 10 Western states is reaching a boil, with ranchers, horse advocates and even the government itself in agreement that the Bureau of Land Management's Wild Horse and Bureau Program is "out of control." Click to view photos of the horses in the wild, and during and after the BLM roundups.

    Davis did not respond to repeated attempts by NBC News to contact him for comment and his lawyer, former federal prosecutor William Taylor, declined to answer questions about the federal investigation of his client. 

    But Taylor provided NBC News with a statement criticizing the government for not following part of the Wild Free-Roaming Horses and Burros Act.  While the 1971 law was enacted to protect wild horses, Taylor said, “Congress specifically amended the Act in 2005 to remove ‘excess’ animals from the Department of Interior’s protection, and to force the government to sell those animals without condition. … How does the government have any power under the Act to bring a case based on the sale of excess animals?”

    The BLM acknowledges on its website that it is “not in compliance” with that part of the federal law which directs the agency to sell excess animals “without limitation” to any willing buyer, even to those who would slaughter the animals.

    Last year, ProPublica reported that Davis is a proponent of slaughtering wild horses in the BLM’s holding system and that he had tried unsuccessfully to obtain funding to open a slaughter plant in Colorado.

    “Hell, some of the finest meat you will ever eat is a fat yearling colt,” Davis was quoted as saying, “What is wrong with taking all those BLM horses they got all fat and shiny and setting up a kill plant?”

    But Davis denied to ProPublica that he ever knowingly resold any wild horses for slaughter, saying he found “good homes” for the mustangs he purchased from BLM.  

    Who needs 1,700 horses?
    According to BLM sales documents obtained by ProPublica under the Freedom of Information Act, Davis told government officials he wanted the animals to “put on oil fields ... to keep grass controlled” and to “use for movies.”  

    Horse advocate Leigh said neither of those explanations should have withstood the government’s scrutiny. 

    “You know, I haven’t seen any Westerns coming out of Mexico with wild horses being stampeded in front of a camera,” she said.  “It’s a joke and it’s not a funny one.” 

    So-called state brand certificates issued by the state of Colorado and obtained by NBC News indicate Davis shipped many of the animals he bought from the BLM to small towns near the Mexican border. The Colorado brand commissioner says approximately 431 horses shipped from Davis’ property “appear to be BLM horses” that were sent to unspecified addresses in towns in different parts of New Mexico and Texas, including Spofford, Texas, 36 miles from the Eagle Pass border crossing into Mexico. 

    “It doesn’t take a rocket scientist to know that there are Mexican slaughterhouses across that border,” said Ginger Kathrens of The Cloud Foundation, a wild horse advocacy group. “So it’s not a stretch to think that those horses ended up going to slaughter.” 

    Another advocacy group, the American Wild Horse Preservation Campaign, has called for the investigation of both Davis and the BLM. The organization’s director, Suzanne Roy, said, “I think the government looked the other way at what was happening to these horses. ... I think it was willful ignorance on the part of the government.” 

    Joan Guilfoyle, chief of BLM’s Wild Horse and Burro Program, told NBC News she does not know what happened to the horses that were sold to Davis, but denied the agency did anything wrong.  “We have no knowledge of him being a person who has ill intent toward the horses,” she said, “so there was no reason to question the purchase of these (animals) because he has to sign the paper that says what his intention is.” 

    Criticism of roundups is not limited to wild horses. The BLM also annually removes "excess" wild burros from public lands, mainly in Arizona, Nevada and California. In this video, wild burro advocates document "aggressive" roundup practices. As with horse roundups, the BLM defends the operations as humane and says such incidents are isolated and contrary to guidelines.

    In fact, 50 BLM bills of sale reviewed by NBC News indicate Davis agreed not to resell the wild horses for slaughter. On a BLM sales questionnaire, Davis’ name was signed on this declaration: “I agree to provide humane care and to not sell or transfer ownership of any listed wild horse or wild burro to any person or organization with the interest to resell or trade or give away animals for processing into commercial products.” 

    An official familiar with the Davis investigation told NBC News that investigators are not only trying to determine what happened to the horses, but whether Davis violated any of the conditions of his purchase. 

    Loyola Law School professor and former federal prosecutor Laurie Levenson said that, based on the bill of sale language, investigators could be trying to determine if there is evidence of a felony violation such as lying or making a false statement to a federal official. 

    New sales rules
    In January 2013, BLM responded to public criticism of its sale of wild horses to Davis by announcing new rules for the agency’s sales program.  In an effort to prevent future large sales of wild horses, the agency issued a memorandum stating: “Without prior approval from the (BLM) assistant director, no more than four wild horses and/or burros may be purchased by an individual or group within a six-month period.” 

    Horse advocacy groups immediately criticized the new rules as “window dressing.”  Laura Leigh of Wild Horse Education said, “It changes nothing, especially when they add a little fine print in there.  There is no change.  It creates a press release so BLM can look responsible, like they’re listening to the American public.” 

    Related stories

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    It's not just about mustangs: the battle over burros

    One month later, U.S. Rep. Raul Grijalva, D-Ariz., and 20 other members of Congress signed a letter to then-Secretary of Interior Ken Salazar, who oversaw BLM, citing the “substantial public outcry” over the ProPublica story on Davis.  The Feb. 13 letter said the co-signers were “troubled by your department’s lack of response to the legitimate concerns raised” by horse advocates and demanded an update about the Inspector’s General investigation.  Grijalava’s office said Salazar never responded to the letter.

    Later this year, the Office of Inspector General is expected to present its findings to a U.S. Attorney, who will decide if any charges will be filed against Davis.

    Lisa Myers is NBC News' Senior Investigative Correspondent; Michael Austin is a producer in NBC's bureau in Burbank, Calif.