Bidder 70

A former wilderness guide, University of Utah economics student, and now environmental activist infiltrates a federal oil-and-gas drilling auction in Utah and buys $1.7 million of drilling leases that he has no intention of paying for. His bidding raises the price by a total of about $300,00 on 20 other contracts that were won by "legitimate" oil men. For this he is charged with "interfering with and making false representations at a government auction" and faces up to ten years in prison and fines of up to $750,000. He is said to be the first person ever to be charged with failing to make good on bids at a lease auction of public lands in Utah.

Is it appropriate to press criminal charges against Tim DeChristopher for his actions? It seems to me that the appropriate penalty is to force Mr. DeChristopher to come up with the $1.7 million that he promised to pay. He reportedly has offered to try to do this by soliciting funds from environmental organizations (some of which are organizing protests at his trial that began this week). From that amount perhaps the government should discount the $300,000 that Mr. DeChristopher earned the Bureau of Land Management by bidding up prices on the 20 contracts that he didn't win. Surely the top bidders for those contracts have no legitimate complaint against Mr. DeChristopher. They paid no more for the contracts than they thought those contracts were worth; Mr. DeChristopher merely denied them the windfall that they otherwise would have gotten, to the benefit of the BLM. Arguably Mr. DeChristopher's actions regarding those 20 leases provided a social benefit - he assured that the resulting price of contracts reflected their true social value, a criterion for economic efficiency.

The environmentalists protesting outside the courthouse in Salt Lake City charge that the government's true motive in prosecuting Mr. DeChristopher is to prevent outsiders from interfering in the process by which leases to drill on federal land are distributed below fair value to the oil and gas industry. Question: what would the reaction of the government have been had Mr. DeChristopher intended to pay for the leases he bid on? Would the government still view his actions as somehow illegitimate because he did not intend to drill on the land he leased? Clearly it would be wrong to view those actions as illegitimate: if Mr. DeChristopher and the environmental organizations that support him value the right to prevent oil and gas companies from drilling on Utah public lands at $1.7 million they should be able to buy that right. Recognizing Mr. DeChristopher's right to do this is not only fair, it serves the cause of economic efficiency by ensuring that the price of public lands reflects its true worth to the companies that want to drill on it as well as the opportunity cost of drilling on that land.