Gov. Brian Sandoval’s handlers recently decided that Mitt Romney’s performance on Election Day might not be as hugely embarrassing as earlier thought here in Nevada, and so it would be safe for Sandoval to say nice things about Romney in public.
Sandoval started in the comfy confines of the Elko Daily Free Press, with a guest column warning that Barack Obama wants to establish federal mineral royalties on gold production. The royalty would be “devastating” to Nevada, Sandoval wrote.
No one in Nevada knows more about mining industry campaign contributions and lobbying relationships than Brian Sandoval. Jones Vargas, the law firm that paid Sandoval handsomely while he was running for governor and right up until a couple days before he was inaugurated, is also one of the mining industry’s most visible and powerful lobbying firms.
Not surprisingly, then, Sandoval’s claim that a federal mineral royalty would be “devastating” to Nevada merely echoes industry rhetoric (I’d be shocked if the column wasn’t drafted and edited in coordination with industry lobbyists). But while Sandoval is intimate with the mining industry’s political infrastructure, he has never demonstrated that he knows much about the mining industry itself, and his column is no exception.
Oil, natural gas and coal produced on public lands are subjected to federal mineral royalties ranging from 12.5 to 16 percent of the mineral’s value. Under federal mining law enacted during the administration of Ulysses S. Grant, the federal royalty assessed on gold and other “hard rock” minerals mined on public lands is zero.
Obama has proposed a 5 percent royalty on hard rock minerals from new projects.
Nearly $9 billion worth of gold was produced in Nevada last year. The two transnational conglomerates that produced the overwhelming majority of that gold — Newmont and Barrick — produce as much or more gold in Nevada as they produce on any other continent in the world. A 5 percent royalty on production at new (and only new) mines might, after several years, negligibly reduce the size of the billions of dollars in cash reserves that Barrick and Newmont typically rack up every year.
But it won’t influence the companies’ decisions to open new mines in Nevada. Those decisions will hinge on several factors, but first and foremost the price of gold. Australia recently levied a 30 percent tax on gold profits from all production, not just new mines. The companies, including Barrick, have no intention of leaving.
Instead of ridiculously warning that Obama’s proposed royalty would be “devastating” to Nevada, Sandoval should be advocating for a more rigorous royalty program that would be applied not merely to new projects but to all production. When oil, natural gas and coal producers pay billions of dollars every year in federal mineral royalties, a bit less than half of that money is returned to the state where the mineral was produced. A 12.5 percent royalty on Nevada production would mean hundreds of millions of dollars for Nevada’s state budget every year — and no, Barrick and Newmont would not just pick up those mines and take them someplace else.
Sandoval’s support for Romney isn’t confined to making silly and/or ill-informed comments about mining. Last weekend he also published an opinion column in the Review-Journal. Under the headline “Help for Nevada starts at the ballot box,” Sandoval gushed that the Romney-Ryan ticket will “turn the economy around, to get it roaring again and to get America’s millions of unemployed workers back into well-paying jobs.”
The “help for Nevada” that Romney envisions is the same approach that has already done so much to make Nevada all it is today: low taxes and small government. If it worked, Nevada would have the lowest unemployment rate in the nation, not the highest. Sandoval’s cognitive dissonance is breathtaking.
Romney has mostly refused to explain how he would cut government spending. But he has said he wants to save federal money for the federal government by dramatically shifting Medicaid costs to the states. That isn’t going to get Nevada or any other state “roaring again.” But Sandoval should be roaring right now, directly into his new BFF Mitt Romney’s ear, something along the lines of “WTF, chowderhead?”
Sandoval of late has also become the titular head of “Team Nevada,” that thing that Republican political consultants set up after the official Republican Party collapsed under the weight of its own imbecility. Your governor will reportedly even be making some campaign appearances, though the wisdom of this seems a bit suspect because, as Sandoval showed during his “look at me I have a Latino last name!” speech at the Republican National Convention, few public speakers can disappoint a crowd like Brian Sandoval.
Ever since his hilarious endorsement of Rick Perry for president, Sandoval has mostly tried to keep a low profile in the 2012 race, as if he didn’t want to get any more on him. So why come out into the sunlight now?
Probably because his advisers told him it would be good for his own political future if he stands with the team now, and not just Romney-Ryan but the Nevada Republicans who are running for things. And one of those Republicans, Dean Heller, was on television the other night saying that he thinks President Romney should nominate Sandoval to the U.S. Supreme Court. Perhaps Sandoval thinks a little political support now wouldn’t hurt on that front.
Well, Heller’s a bit dim. Unless and until Sandoval renounces his pro-choice position, Obama is more likely to appoint Sandoval to the bench than Romney is.
But Sandoval is probably no less qualified for the high court than, say, Clarence Thomas.
HUGH JACKSON blogs at The Las Vegas Gleaner (www.lasvegasgleaner.com) and contributes to KSNV Channel 3.