CB council to sign confidentiality agreement with U.S. Energy

“There is some risk…”

The Crested Butte Town Council has agreed to sign a confidentiality agreement with U.S. Energy in regard to the mining company’s plan to pursue a voluntary cleanup plan (VCUP) at the historic Keystone Mine on Mt. Emmons.
The agreement will allow the town to receive some proprietary information from U.S. Energy that must be kept confidential. According to the agreement, the information can be used “for the purpose of evaluating the acquisition of certain properties and related clean up activities.”

The council held a closed-door executive session to discuss the agreement before discussing the issue in public. The council expressed concern with a government body not being transparent with the public.
“Governments do things like this under certain circumstances,” explained the town attorney, John Belkin. “Developers do it with municipalities a lot. This is not out of the norm. It’s not super common but it is done.”
When some specific concerns were brought up about language in the agreement, especially holding U.S. Energy harmless if the information provided wasn’t complete or completely accurate, Belkin said such clauses in the proposed contract were “standard vernacular in these types of agreements. It’s pretty market,” he said.
“That’s why we have always said we will need to hire a third-party independent expert to look over and evaluate any information we receive,” said Mayor Aaron Huckstep.
Belkin said one long-term concern to the town might be someone challenging that the information being kept under wraps is truly proprietary. “We could get into a fight that could cost the town money to protect that information,” he said.
“But we are being very clear and as transparent as possible with what we are doing and why,” added Todd Crossett, the town manager.
Councilperson Shaun Matusewicz had concerns with the council signing such a document.
“It is not in our favor to rush this,” he said. “This [confidentiality agreement] could influence the town’s ability to effectively control the situation well beyond our time here. Twenty years from now the town staff and council could be hamstrung because of what is proposed tonight.
“We saw how U.S. Energy acted with the VCUP last year,” Matusewicz continued. “They lost their right to be trusted and it is not unreasonable to think they have ulterior motives or a back-up plan with this C.A.”
Matusewicz outlined several specific concerns with the signing of the agreement. He expressed his concern with the council’s future ability to act in a “quasi-judicial manner” if U.S. Energy applies for a watershed permit; with the ease of a lawsuit being filed against the town; and with the possibility of some information given to the town being leaked and the town being liable.
He also wanted it made clear which party would pay for legal fees if a lawsuit came out of the confidentiality agreement. Matusewicz supported the state’s open meetings laws by saying public business should be conducted in public and he did not want the current council to tie the hands of future boards.
“We are planning for the best case scenario but as public officials we should be thinking of the worst case,” Matusewicz said. “This focuses on the threat of a mine being developed when the actual threat that’s most likely in the near-term is that the water treatment plant could fail. Let’s solve the mine issue with integrity and with our heads held high.”
“The reality is that we are dealing with a publicly traded company and there is information that shouldn’t be made public,” said Mayor Huckstep. “So we either play a role in this process or turn it over to HCCA [High Country Conservation Advocates] and the Red Lady Coalition. This is the town’s number one priority and I think we should be a part of the process.”
“It’s my number one priority as well but I think there are a lot of concerns with this particular C.A.,” said Matusewicz.
“They will be giving us information to understand if a VCUP will work,” said Belkin. “They will give us access to the file room and consultants and all things Mt. Emmons.”
When asked what would happen if the town didn’t sign the agreement, Belkin said he would speculate that the mining company would be confused and that talks between them and the town would likely cease. “This is a path for us to understand them,” Belkin said. “If we are going to work out something with them then we need to understand them.”
“I don’t know why you all are trusting U.S. Energy as much as you do,” said Matusewicz.
“It’s not inconsistent to hold a public company’s information confidential,” said Councilperson Chris Ladoulis. “We are trying to evaluate a possible public transaction.”
“Some risk is certainly there,” admitted Huckstep. “But we can’t move forward without some risk.”
“We should just try to solve this right,” said Matusewicz.
“If the options are to sign this or to bow out and leave it up to HCCA and the RLC, I think we should sign it,” said Councilperson Jim Schmidt. “It is important to the town and it is what we have to do.”
The council voted 6-1 to sign the agreement, with Matusewicz voting against the move.