By Elaine Cimino
The showdown in the NM courts is expected this week after an Arizona Court of Appeals decision that remanded 20+ cases back to the Superior Court that will begin again at the 2016 timeline, and revert the ownership of the Brine wells. This will decide the fate of environmental impacts to the Rio Grande watershed and ecosystem from this wells and projects. The case then comes to New Mexico courts to consider ‘Fraud on Court’ committed by IMH and JP Morgan Chase and the many other offenses. [i]
In 2009, David Maniatis, Aperion RECORP, missed two mortgage payments on property in Texas during the recession mortgage finance crash. He and 147 other investors in multiple states have been fighting for the money and properties since. The properties that Aperion RECORP (RECORP NM) owned in NM, also went into receivership in 2013, which was later found to be illegal. JP Morgan Chase and IMH Financial saw an opportunity for venture capital investment as a hostile takeover of the RECORP NM assets. According to K1 and other tax filings, IMH ‘cleaned out’ the assets of these corporations and of the 147 investors in 2015 and 2016, some of those who could, fought back.[ii]
The assets in NM included the investment with Sandoval County of $6M for the drilling of the raw brine wells that were controlled by (Aperion RECORP / RECORP Investments of NM at the time of the receivership. A settlement agreement[iii]between the County and RECORP NM included 4,000 Acre-Feet- a-Year (AFY) of brine for industrial use and land. The wells were grandfathered in 2009, prior to changes in the pumping of raw brine from deep aquifers over 2,500 ft deep. At the time these decisions were made without the current modeling knowledge or geo-hydrology scientific study.[iv] 10 years later we need another study to determine impacts on the correlations of deep aquifers to the groundwater/surface water/ drinking water aquifers for the Albuquerque Basin in the Middle Rio Grande Basin. During the Condemnation Case (2009-2013)[v]there was no insertion of environmental concerns into this case nor at any time within the last 10 years.
NM OSE (Office of the State Engineer) and NMED (New Mexico Environment Department) Issued permits and temporary permissions (sometimes known to citizens’ groups as ‘Zombie Permits’) since that started in 2005, which allowed for IMH to neglect the wells while they were gathering more investors through capital calls and then cleaning out those accounts.
The brine water is highly corrosive and some of the worst brine water in the state. The water is high in VOCs, lead, arsenic, boron, turbidy, total dissolved solids (TDS) and Radium 226 & 228. All of these contaminants cause severe health impacts.[vi]It was discovered through an IPRA request that NMED allowed IMH to NOTreport radium levels in the corrective action report and to use the corrosive brine water in the construction of the new pads, berms and impoundments and use for dust control on the roads in Sandoval County.[vii]
Several leaks and spills occurred between 2013 and 2017 because IMH ignored warnings sent to them on the maintenance of those wells by Aperion RECORP NM in 2013 2014 shortly after the demand to turn over assets was made by the initial receivers, MCA and Southwest Lending, in which IMH had oversight. The wells exploded in 2016 from misaligned fittings that leaked from corrosion and the intense 150-degree temperature and pressure, when it is estimated that 11-acre-feet over a 4-year period ran down two arroyos, only to be scoured in storm events onto tribal lands and into the Rio Puerco. [viii]
During the repair of the wells in 2017 -2018, Gary Lee (engineer) and Larry Bain (CEO) of IMH won a court ordered 600-page injunction filed against the owners and investors of RECORP NM. IMH then made an application for discharge permit to NMED despite the misrepresentation the ownership of the wells, where they used home addresses and never contacted the partnerships interests in the wells.[ix]RECORP NM in the meantime had a couple of wins in the Arizona Courts and in NM won an injunction on IMH in 2018 and again in May 2019.
Despite courts orders IMH still proceeded with the NMED discharge permit #1682. During the application process, IMH exchanged application pages, and there were no summary pages, as well as, a number of file omissions and public notice issues on the permit, which we questioned. The standards on regulating contaminants were streamlined and deregulated during the period 2017-2019, during the draft permit application.
In the past 4 months IMH Larry Bain and engineer Gary Lee have been in contact with NMED and OSE. Judge Davis specifically ordered that no individual party was to contact the OSE. IMH wanted to test for lithium, which changed the intent of use of wells, from a desalination plant for domestic water.
From an IPRA, email communications show that Gary Lee was in close contact to the County Planning Director Mike Springfield and Commissioner David Heil not to include the brine wells in the County oil and gas ordinance. During this period the EMNRD, OCD, Aztec Office, confirmed that raw brine would be considered natural occurring waters and could be used “as is” in the hydraulic multi-directional fracturing process (fracking), “All they need is a pump.” They do not need to process or polish this water to use it for fracking,” according to the State agency.
The discharge permit #1682 public comment period closed July 15, 2019. All this information was given to the Office of the Attorney General, Office of the State Auditor, the NMED and OSE, during the comment period within the past month.
According to sources, last week the OSE issued the permit for pumping the wells because of a phone call from the Office of the Governor, when Gary Lee circumvented the injunction to ask the Governor’s office to make the request. The Governor was informed of the IMH and JPMorgan potential fraud issues because she had two weeks earlier ordered two agencies to investigate the allegations. The agencies were just beginning to assess the information when the call was made. The permit was issued without public notice and a public hearing. [x]
After the public comment period NMED issued a statement that they were taking everything into consideration that came to light during the comment period and they would make a determination on the discharge permit in the next couple weeks.
Two days later the Arizona Courts of Appeals remanded the case back to the Superior Courts, where it reverted back lands to the original owners, RECORP NM. The cases in NM are “now going forward in New Mexico” according to RECORP NM Vice President Chuck Warner.
So, what happens after the ownership is decided? It’s back to drawing board for permitting, test pumping the wells for aquifer mining.
We are witnessing the creation of the first privatized water company in NM, which will be owned by Arizona investors for the most part. Currently, there is not cleanup nor a closure plan for the wells and whatever project they decide. There are no covers on the impoundment to mitigate wind-blown radioactive dust and exposures to radioactive salts, and all this being done with no public hearing.
New Mexico taxpayers most likely will experience impacts; from the lack of closure enforcement that has no fiscal assurance, water scarcity from over-pumping and health issues from impacts from these water projects. The RECORP partners and IMH have been adamantly denying the use of the water for fracking, but now they have their foot in the door. All this was done in violation of court orders, misrepresentations to state agencies in violation of the law, with no public comment on the correct facts presented to the public and with no public hearings. The OSE allowed a permit to sit for 10 years on derelict wells with no beneficial use.
Where does the buck stop? Business as usual, it looks like the bucks go out of state like other mineral resources in the state and taxpayers left without water or our health, unless these types of speculations are stopped.
[i]Appeals Court Decision https://drive.google.com/drive/folders/1NVD7B3b0cbww9w2aCuC0ops_cRQqb7yw?usp=sharing
[iii]Settlement agreement County and RECORPhttp://commongroundrising.org/wp-content/uploads/2018/07/Settlement-Agreement.pdf
[iv]Shoemaker Report JAISC Deep Brine Aquifer Wells. https://drive.google.com/file/d/1u5zFlVSrcQxQv6ld6xWUOzhdMOsMx458/view?usp=sharing
[v]Condemnation Case with County SUPREME COURT Decisionhttp://commongroundrising.org/wp-content/uploads/2018/07/NM-Supreme-Court-Case.pdf
[vii]Michelle Hunter Permit approval letter https://drive.google.com/file/d/1qbNuadNzCD7oZkCrj9CG775JCpdeEh3u/view?usp=sharing
[ix]David Maniatis Letter to NMED and Joe Campbell Letter to NMED during comment period
[x]OSE permit to test pump Folder Link https://drive.google.com/drive/folders/1NVD7B3b0cbww9w2aCuC0ops_cRQqb7yw?usp=sharing