WASHINGTON — As the Justice Department launches an investigation into possible collusion in the airline industry, experts say the government faces the burden of proving that carriers were deliberately signaling business decisions to each other.
Airlines routinely increase flights based on demand. A particularly cold winter in the Northeast, for instance, might merit more flights to the Caribbean. And sometimes, routes are cut because there isn’t enough demand. Nothing is illegal about that.
Any company can limit the supply of its own products, whether airline tickets, sneakers or smartphones. But it would be illegal for airlines to work together to limit flights in order to drive up fares.
The government’s investigation is just in its initial phases. Letters went out this week to American Airlines, Delta Air Lines, Southwest Airlines and United Airlines. Together, those four carriers control more than 80 percent of the domestic seats on planes.
Airlines are quick to say they can’t talk about pricing decisions. But in recent years, airline executives and Wall Street analysts have been much more open in discussing how the airlines have kept their passenger capacity — the number of seats they put into given markets — in check. With that capacity kept from growing too fast, airplanes have been fuller and carriers have been able to command higher ticket prices. That’s led to record profits.
But were airlines simply responding to Wall Street’s questions about capacity, or were they illegally agreeing not to compete too hard as part of an effort to make more money?
“Matching supply to demand is not a novel idea and running a company for profit is not a crime,” Raymond James analyst Savanthi Syth told investors in a note Thursday.
Antitrust law draws a line between the entirely lawful practice of companies’ following each other’s behavior and companies illegally conspiring. The Justice Department appears to be hunting for communications and other signals that cross that boundary, said Andrew Gavil, who teaches antitrust law at Howard University.
“The distinction involves whether or not there was really express or intentional coordination by two firms,” he said.
It’s too early to know where the investigation is going. But if the government does find evidence of improper collusion, it could attempt to negotiate a consent decree with the airlines to stop them from certain behavior, such as issuing public statements about their intentions about capacity.
Ever since the government stopped regulating routes and prices in 1978, airlines have struggled to avoid nasty and unprofitable fare wars. Historically, when the price of jet fuel fell, one airline would launch a new route or add extra flights on existing ones. Fares would be slashed to attract fliers and other airlines would be forced to match the new, lower fare.
Airlines didn’t like it, but legally they couldn’t coordinate routes or fares.
In 1982, Robert Crandall, then a senior executive who would become CEO of American Airlines, expressed his anger about these fare wars in a phone call with Howard Putnam, CEO of Braniff Airways.
Putnam, who was recording the call, asked Crandall if he had a suggestion to deal with the problem. Crandall told him to raise his fares and he’d follow suit.
Specifically, Crandall replied: “Yes. I have a suggestion for you. Raise your goddamn fares 20 percent. I’ll raise mine the next morning.” He said: “You’ll make more money and I will too.”
The Justice Department sued and the case was settled for little more than an agreement by Crandall to keep a written record of all of his contact with other airline executives for two years.
It’s unclear if there is a similar smoking-gun comment today.
Airline executives have been talking publicly about how they’ve learned not to add capacity too fast. But no statement appears to be as blatant as Crandall’s.
After a brief industry increase in seats in the spring, American Airlines CEO Doug Parker spoke about the need for capacity discipline to a Reuters reporter at the International Air Transport Association’s annual conference in Miami.
“The real question is,” Parker said, “is this a one-time catch-up for fuel prices being lower, or is this airlines behaving like airlines used to and just increasing capacity because times are good? I don’t know if we know the answer to that yet.”
A few weeks earlier, the United Airlines chief financial officer, John D. Rainey, spoke at a conference for Wall Street analysts and investors.
“We are a big believer in the right balance between supply and demand, and we’ve demonstrated that with our capacity discipline,” Rainey said. “We’ve grown our (available seat miles) at less than GDP for eight consecutive years, and so we’ll continue to believe in that.”
A government investigation could take years.
Jonathan Baker, an antitrust law professor at American University, said investigations like this one generally need more than just circumstantial evidence. A case with explicit discussion between executives would be easy to prove. The harder challenge is one where collusion would need to be inferred from statements by executives to analysts, and other signaling.
Aetna aims to spend about $35 billion to buy rival Humana and become the latest health insurer bulking up on government business as the industry adjusts to the federal health care overhaul.
The proposed cash-and-stock deal, announced early Friday, would make Aetna a sizeable player in the rapidly growing Medicare Advantage business, which offers privately run versions of the federally funded health care program for the elderly and some people with disabilities.
The combination also would bolster Aetna’s presence in the state- and federally funded Medicaid program and Tricare coverage for military personnel and their families.
Health insurers are eager to do more business with government payers due in part to a Medicaid expansion fostered by the health care overhaul and Medicare Advantage’s surging enrollment. The overhaul is expanding Medicaid coverage in several states as it seeks to provide health coverage for millions of uninsured people.
Meanwhile, total enrollment in Medicare Advantage plans has tripled over the past decade to about 16.8 million people and is expected to keep growing as more baby boomers become eligible for the plans. Aetna’s acquisition of Humana would make it the largest provider of Medicare Advantage coverage, with 4.4 million members, a figure that could change depending on regulatory review.
“Government markets are the most rapidly growing aspect of the system,” said Dan Mendelson, CEO of the market research firm Avalere Health.
Hartford, Conn.-based Aetna announced its deal a day after the Medicaid coverage provider Centene Corp. said it would spend $6.3 billion to buy fellow insurer Health Net. That deal would help Centene expand in the nation’s biggest Medicaid market, California, and give it a Medicare presence in several western states.
In addition to these deals, the Blue Cross-Blue Shield carrier Anthem went public late last month with an offer of more than $47 billion for another insurer, Cigna.
Health insurers see more advantages to these big combinations than a chance to build their government portfolios.
Major acquisitions can offer an infusion of new business at time when growth has slowed in the biggest part of their business, employer-sponsored health coverage. Plus more employers are opting to pay their own insurance claims and hire insurers to administer the coverage. That’s a less lucrative line of work for managed care companies.
Big deals also allow companies to quickly diversify their products and cover more territory. They also can yield savings when the companies combine back-office functions and cut overlapping jobs.
Both Aetna and Anthem also have cited the potential to improve their technology as a major reason behind their deals. Insurers are working to develop more apps and other tools that customers can use to shop for health care, since plans are exposing those customers to bigger medical bills through high deductibles and other insurance expenses.
They also are using technology more to help monitor and improve patient care. The overhaul is accelerating a push in the industry to reimburse doctors and hospitals more based on the quality of care they provide instead of just shelling out a certain amount for each procedure performed.
“Any time an industry is changing ... it requires investments to sort of successfully make that change,” said Shawn Guertin, Aetna’s chief financial officer.
The impact these big acquisitions have on consumers can be murky and likely won’t be felt for at least a year, because insurers have already finalized most of their plans for coverage that starts in January. A combination may lead to fewer choices and some price changes for consumers, depending on where they live and who already is in their market.
Aetna’s purchase price for Humana includes a combination of $125 in cash and $105.11 in Aetna shares for each Humana share. The total of about $230 per share, which is based on the closing price of Aetna’s stock Thursday, represents a premium of 29 percent to Humana’s trading price in late May, before The Wall Street Journal reported that it was an acquisition target.
The deal’s total value amounts to about $37 billion counting debt.
The combined company would be based in Hartford, Conn., led by Aetna Chairman and CEO Mark Bertolini and cover more than 33 million people. Only UnitedHealth Group Inc. and the Blue Cross-Blue Shield carrier Anthem Inc. cover more. A combined Aetna-Humana would be the second-largest insurer by revenue.
The deal is expected to close in the second half of next year.
Shares of Aetna and Humana closed at $125.51 and $187.50, respectively on Thursday. Markets were closed Friday for the July 4th holiday.
The shares of both companies, like several other insurers, have soared to all-time-high prices this year.
This is your life, America: hour by hour, minute by minute. The latest American Time Use Survey from the Bureau of Labor Statistics tracks where the sands in your hourglass go.
This writer plotted the average American weekday and weekend day according to these numbers. “Average” is the crucial word here. Nobody actually works 4.5 hours every weekday and 1.3 hours every weekend day, for instance. But when you ask 11,000 citizens age 15 and up what they did in a given day, as the BLS did, and average their responses, this is what you end up with.
Let’s start with sleep. You may be shocked to find that the average American gets 8 hours and 32 minutes of sleep on a typical workday. Wait, what? If you’re like a lot of people, the eight-hour sleep schedule sounds like a far-off dreamy ideal.
Bear in mind that these numbers include responses from seniors and teens, people who typically get a lot more sleep than the rest of us. And as a BLS economist explained to me last year, these figures also include naps, as well as a number of “non-sleep activities” — reading, tossing and turning, and some, ahem, other things — that typically happen in bed. And on weekends, we sleep nearly an hour longer on average.
We spend a little more than three hours on household chores and activities on weekdays and weekends. These numbers include making food, cleaning up, caring for others and performing basic personal grooming.
The biggest difference between weekdays and weekends shows up in work time — 4 hours and 32 minutes of it during the week, 1 hour and 23 minutes on the weekend. Keep in mind: The numbers include people who are employed part-time, as well as retirees and those not working. Among just the people who do work on weekdays, 8.6 hours was the norm once commuting time was factored in.
We watch a lot more TV on the weekends — 3 hours and 21 minutes on average, compared with 2 hours and 36 minutes during the week.
Not surprisingly we also spend more time socializing and doing other leisure activities, like playing sports and games, on the weekends. And we also spend a little bit more time buying things — at the grocery store, for instance.
Overall, this year’s Time Use Survey shows that, paradoxically, both hours worked and time spent watching TV have increased in the past year. As the Wall Street Journal notes, the rise in work hours is partly explained by the recovering economy — if more people are working, that average number is going to increase. With that extra work, perhaps, comes a greater need to relax and veg out at the end of the day.
SALT LAKE CITY — A trademark battle between organizers of the biggest comic-book convention in the nation and a Salt Lake City counterpart may end up going to trial soon.
The Deseret News reports settlement talks in the lawsuit between established San Diego Comic-Con and Utah’s 3-year-old Salt Lake Comic Con have stalled.
A federal judge has given them until the end of July to reach a settlement or schedule pretrial hearings in the dispute.
The San Diego event contends that Salt Lake Comic Con’s use of “comic con” in the name constitutes federal trademark infringement and confuses the public into thinking the two conventions are affiliated.
Salt Lake City organizers say dozens of conventions across the country brand their events as comic cons.
The events feature costumed attendees and the best in movies, television shows, comic books and more.
Happy Fourth of July! Contrary to Justice Scalia’s dissent in the same-sex marriage case, American democracy is not threatened, but rather, still thriving after 239 years. (And my inner sixth-grade civics teacher wants to remind Justice Scalia that America isn’t really a democracy, but a representative republic — the republic for which the flag stands, and to which we all swear allegiance on this national holiday — but I digress a little.)
The Supreme Court’s decision in Obergefell v. Hodges came out after I’d submitted last week’s column and I’ve watched with interest as it seems every other writer for the Standard has weighed in on the ruling, including on the Sports page, along with seemingly everyone on Facebook, Twitter, television and print. I wanted to come up with something fresh, something different to say, particularly since I expressed my thoughts (along with another correct prediction on how the court would rule, by the way) back in May after oral arguments were made in this case. I explained the exact legal reasoning the majority decision actually used and why the decision was likely. If you missed it, go to Standard.net or Google and in the search bar type “Charles Manson Winward.” Sorry about that search query, Mom, but it works for finding the article.
What I would like to do is talk about three fundamental legal concepts that are illustrated by the court’s ruling. They are addressed in the court’s decision, but have been lost in everyone’s discussion about the end result of the decision.
Federalism. A large portion of Obergefell dealt with couples whose marriage was recognized in one state, but not in another. The court’s ruling was the federal trump card that required all the states to play by the same rules. This wasn’t an attack on the individual states’ rights to define marriage, but rather a ruling that the U.S. Constitution requires uniformity on the issue of marriage throughout the entire country.
Two of the three cases, whose facts were cited in Justice Kennedy’s decision, involved marriages that were performed and accepted by one state and then rejected by another state. The 14th Amendment passed after the Civil War increased federal authority over the states, which often happens after one side is victorious in battle. The law favors the victors and in this case, the Civil War victory created a strong federal government governing over united states and consequently, 147 years later, marriage equality throughout all of the states.
Judicial review. The role of the Supreme Court in deciding the issue of same-sex marriage was hotly argued by the justices. The dissents in particular question whether the Supreme Court had the authority to equalize marriage laws across all the states. This tension is as old as the Supreme Court.
While none of the nine justices are elected, they appear fully cognizant that their authority is still based, at least in part, by the public perception of their authority. Historically, the Supreme Court has walked the tightrope between politics and judicial independence with varying degrees of success. History will be the ultimate judge ruling on how well they performed that task in the Obergefell decision.
The law is all about the money. When I hear people worrying about this decision in regard to religious belief, the thought that immediately springs to mind is Mark 12:17: “Render to Caesar the things that are Caesar's, and to God the things that are God's.”
This ruling was about a form of marriage that doesn’t fall within any religious tenet. The marriage that requires equality is the government-sanctioned marriage, not the religious ritual. The image on the marriage coin that was delivered to the Supreme Court was the image of Caesar, not God. The marriage discussed by the court was the marriage of inheritance rights, retirement benefits, tax benefits, interstate succession, health insurance, worker’s compensation benefits, disability benefits, and financial responsibility for children — and that was just for state-sanctioned marriage. Do you really want to give a same-sex adoptive parent an out on child support by letting them simply move to a state that doesn’t recognize same-sex adoption? Not to mention the federal government bestows thousands of benefits for couples that any state recognizes as married.
The problem of marriage equality was created when legislators gave financial benefits for what should have been a religious commitment. Once you go into Caesar’s realm, you are stuck with Caesar. The majority decision also made that clear — purely religious marriages can remain in whatever form you believe.
So relax. Enjoy the Fourth of July. The American Republic is doing just fine.
E. Kent Winward is an Ogden attorney. He can be reached at 801-392-8200 or email@example.com.
WASHINGTON — Don Fox considers himself a good employer. The chief executive of a 896-location sandwich chain called Firehouse Subs gave his employees health-care coverage a year before it was required. But the Obama administration’s new overtime rules — which will make millions more salaried managers eligible for overtime pay — might be too much, even for him.
Right now, Fox’s salaried bookkeepers and store managers don’t have to be paid time and a half above 40 hours a week if they make more than $455 per week. The White House said late Monday that it wants to double that threshold by next year. That might force Fox to convert salaried employees to hourly, or tell his salaried workers — from bookkeepers to store managers — not to work more than 40 hours a week.
“What’s a real shame is that I’m in a position of having to penalize someone because they’re doing something they judge is best for their career,” Fox said. “Everything in this proposed rule is anti-American work ethic and culture.”
In a speech set for Wednesday in Wisconsin, President Barack Obama plans to explain that he’s trying to solve a problem. In 1975, the overtime rule covered 62 percent of the salaried workforce. Since then, inflation has eroded coverage to the point where only 8 percent of salaried workers qualify and the $23,660 a year cutoff is below the poverty line for a family of four.
The administration wants to increase eligibility to $50,440 a year, which is where the level would be if the cutoff had kept up with the cost of living. But with business owners such as Fox on the alert, the White House’s bid to directly raise Americans’ pay is running into a brushfire of resistance.
Obama signaled his intention to raise the overtime threshold in March 2014, as part of his efforts to go around a gridlocked Congress to bolster middle-class incomes that had remained stubbornly stagnant since the recession. Many employers had been able to load their low-level salaried professionals with extra hours, because it cost them nothing, rather than hire more workers to share the burden.
“With hourly workers, you can’t change the number of hours they work without paying them overtime,” said Dana Muir, a professor at the University of Michigan’s Ross School of Business. “It’s more that middle group that’s borne the pressure of the recession and then the expansion without hiring. So this is a big deal.”
Labor unions and progressive groups pushed hard for the change, and hailed the announcement as a step in the right direction. They said it might even prompt more hiring if employers avoid overtime by bringing on more workers. The change also should increase wages for women, minorities, younger people and the less educated, they said.
“Millions of America’s workers are one step closer to earning the overtime pay they rightfully deserve but have been systematically denied,” AFL-CIO President Richard Trumka said in a statement. “Working people called on President Obama to go bold, and his response will provide a much-needed boost to our entire economy.”
But business groups campaigned fiercely against the new overtime rule, both publicly and in Congress, with House Republicans holding a hearing in mid-June to criticize the idea. They said employers are likely to cut their managers’ base pay and benefits if they have to grant overtime, to keep compensation costs level without raising prices. They also might centralize oversight responsibilities at higher levels, which would cut down on the number of pathways to upper management and lead to more inequality, not less.
“The administration seems to be under the distorted impression that they can build the middle class by government mandate,” said David French, senior vice president for government relations at the National Retail Federation. “There simply isn’t any magic pot of money that lets employers pay more just because the government says so.”
In its proposal, the White House appears to have stopped short of imposing a requirement that some employers feared more: specifying the amount of time an employee has to spend on actual managerial duties to become exempt from overtime. That means businesses won’t have to tabulate the time a manager spends wiping tables or stocking shelves. For small businesses especially, counting overtime hours can be more onerous than paying higher wages.
“I want to pay my staff for their time,” said Joel Finkelstein, the owner of Qualia Coffee in Washington’s Petworth neighborhood. Two Qualia managers would qualify for overtime under the new policy. “I think the policy makes sense for larger businesses, but for small businesses, adding more documentation requirements is a disproportionate hassle.”
The rule will not take effect until after a 60-day comment period, and both sides are gearing up to flood the Labor Department with letters.
“It’s very difficult to stop a regulatory change, short of a statutory amendment,” said Lisa A. “Lee” Schreter, co-chairman of the wage and hour group at Littler Mendelson. “If the Labor Department reaches too far, perhaps you could see a coalition develop in Congress around certain changes.”
WASHINGTON — U.S. employers added jobs at a solid pace in June, and the unemployment rate fell to 5.3 percent, a seven-year low. But wages failed to budge, and other barometers of the job market painted a mixed picture.
The economy gained 223,000 jobs last month, and the unemployment rate fell from 5.5 percent in May, the Labor Department said Thursday. But the rate fell mainly because many people out of work gave up on their job searches and were no longer counted as unemployed, which may reflect rising discouragement.
The result is that the proportion of Americans working or looking for work fell to a 38-year low. The government doesn’t count people as unemployed unless they’re actively searching for work.
The government also said employers added 60,000 fewer jobs in April and May combined than it had previously estimated.
The figures capture the persistently uneven nature of the job market’s recovery from the Great Recession. More people had begun looking for work in May, yet all those gains were reversed in June. And wages, which had shown signs of finally rising earlier this year, have now stalled. They have risen just 2 percent over the past 12 months, down from a 2.3 percent year-over-year gain in May.
The flat wage growth suggested that many employers may see no need to raise pay to attract or retain qualified workers and that there are more people available for work than the unemployment rate would otherwise indicate.
The sluggish pay gains also raise doubts about when the Federal Reserve will raise rates and end a stimulus effort that dates to 2008.
Most economists have been predicting that the Fed would most likely raise rates in September. But last month’s flat pay figure suggested to some that the Fed might delay that move.
“After this report, I think it would make sense to wait until December to start that slow rate increase,” said Tara Sinclair, chief economist at the jobs site Indeed and a professor at George Washington University.
A Fed rate hike would lead to higher rates for mortgages, auto loans and other borrowing.
Some quirks of the jobs report might also explain why wages stagnated last month. The government’s survey for the report ended relatively early in the month on June 12. As a result, it might have excluded some bi-monthly paychecks and arbitrarily reduced earnings, noted John Silvia, chief economist at Wells Fargo.
One sour note in the report was that construction companies failed to add any jobs in June after hiring 15,000 in May and 30,000 in April. Manufacturing gained just 4,000 jobs in June. But health care added 53,000 positions and retailers 33,000.
Still, over the past three months, hiring has averaged 221,000, a step up from 195,000 in the first three months of the year. That shows that some employers are confident that consumer demand for their goods and services will remain strong enough in coming months to justify more staffers.
Their willingness to hire in anticipation of greater demand marks a shift from earlier in the economic recovery, when many businesses tended to hire only when essential.
A survey of purchasing executives at manufacturing firms released this week found that factories reported a scant rise in orders in June but ramped up hiring anyway.
Patrick Cimerola, senior vice president of human resources at Choice Hotels, says the company is raising pay and adding perks to hire workers in marketing, information technology, and finance jobs.
“More people are traveling, because more people have disposable income,” Cimerola said. “And we believe that will continue.”
The company, which franchises 5,500 hotels in the U.S. under the Quality Suites, Comfort Inn and other brand names, wants to add 50 employees to its technology center in Phoenix. It is seeking Java developers and other programmers to build its mobile reservation system and hotel management software.
Strong hiring has endured this year despite a miserable winter, which helped cause the economy to contract 0.2 percent at an annual rate in the January-March quarter.
Yet Americans are finally spending more after boosting their savings earlier this year, in part because they’re growing more confident about the economy. The Conference Board said Tuesday that its consumer confidence index reached 101.4, matching March’s figure for the second-highest level since the recession.
That’s good news for auto dealers and real estate agents. Auto sales jumped to nearly a 10-year high in May. The National Automobile Dealers Association forecasts that sales will top 17 million this year for the first time since 2001.
And home sales are running at an eight-year high and boosting construction. Permits to build homes jumped 11.8 percent in May to the highest level since 2007.
Most economists now expect economic growth to reach an annual rate of 2.5 percent in the April-June quarter and 3 percent in the second half of the year.
SUPERIOR, Ariz. — Outside of an aging mining town in the mountains east of Phoenix, a copper company has burrowed a shaft 1.3 miles into the high desert landscape in what is believed to be the deepest such mine in the U.S.
Resolution Copper Mining says the mine will usher in a new era of prosperity for Arizona, bringing in the equivalent of roughly a $1 billion worth of revenue annually for about 60 years in a state still trying to emerge from the housing bust.
The mine also will use approximately 18,000 acre feet of water annually, enough to supply about 40,000 homes. And it will claim nearly 5-square miles on the edge of nearby Superior to store mining waste that can be toxic.
The plan has angered conservationists, residents and Native American tribes who argue the mine will cause irreparable harm to land coveted for its beauty, biodiversity and sanctity.
Tribes say the project could destroy part of a historic ridge where dozens of Apache warriors leapt to their deaths to avoid surrendering to U.S. Calvary during western expansion.
The company, business leaders and Republican members of Congress believe they have addressed environmental and tribal concerns while protecting the environment and holy Native American locations.
Copper is one of Arizona’s most abundant resources and remains a vital part of the state’s economy. The Arizona Mining Association estimated that if Arizona was a country, it would be the ninth-biggest copper producer in the world.
But mining that mineral wealth creates the risk of pollution and a vicious boom-and-bust cycle that the Sierra Club says has resulted in more than 100,000 abandoned mine shafts around the state.
A study by Arizona-based Elliot D. Pollack and Company found that Resolution Copper Mine could produce as much as $64.1 billion in economic value over the estimated 60-year mine life, about a third of which will go to local, state and federal tax revenues.
Project director Andrew Taplin said the mine will create as many as 1,400 mining jobs and 2,300 contracting positions.
“The economic epicenter will be right here in the town of Superior and spread its way out through the state,” Taplin said.
The 1.7 billion-ton copper ore deposit sits deep underneath an area called Oak Flats, which the San Carlos Apache tribe believes is the origin of all life on earth.
In 1955, President Dwight D. Eisenhower protected the Oak Flats campground from future mining activity and reserved the location for recreation including camping, hiking, birding and rock climbing. Conservationists covet Oak Flats and the nearby Devil’s Canyon as a unique habitat home to an endangered type of cactus and the headwaters of a creek.
The company plans to tap into the ore using block-cave mining, a technique that involves digging underneath the ore body and setting off explosions to break apart the ore. As miners remove the ore, the land on top is expected to fracture and collapse, creating a two-mile wide, 1,000-foot-deep crater that could swallow the Oak Flats campground and destroy part of the Apache Leap Ridge.
To obtain the land, Resolution Copper enlisted the help of Congress, namely Sen. John McCain. McCain attached a provision into a defense bill in December that transferred 2,400 acres of federal land to Resolution Copper in exchange for 5,300 acres of land owned by the company.
McCain heralded the bill as a compromise that protects 800 acres of sacred land along Apache Leap, allows access to Oak Flats campgrounds and requires the mine to undergo an Environmental Impact Statement before it receives the land. Access to the campground is contingent on the sinking ground being able to safely hold campers.
Critics say the mine’s economic projections are overstated.
The San Carlos Apache Tribe enlisted its own economics consultant, Dr. Thomas Power from the University of Montana, who concluded that Pollack’s study ignored volatility in copper’s price and other key numbers. Power’s study said the mine would bring in fewer than 900 jobs and $300,000 in tax revenues.
Opponents also point to the foreign owners of Resolution Copper Mining, a subsidiary of British-Australian Rio Tinto and Australian BHP Billiton, saying it’s unclear how much of the profits and the copper will stay in the U.S. They also point out the political influence of the corporation — McCain received $10,000 from Rio Tinto this election cycle.
Roy Chavez, a retired miner and former mayor of Superior, has watched the boom-and-bust cycle of the mining town for decades. He watched the old Magma Mine lay off 1,200 workers in one day in 1982, open again in 1989 with less than 400 workers, then close again in 1996. The town was never the same after 1982, he said.
Today, the town’s main street remains a row of boarded up, abandoned buildings.
“When you talk to some of the people here they will say they need the mine because of the future it promises,” Chavez said. “But the reason these towns suffer is because of the mining industry.”
Apaches marched to the Oak Flats campground and have been occupying the location since February. They are planning to head to Washington in July to protest the land transfer coinciding with a bill by Rep. Raul Grijalva, D-Ariz, recently introduced to repeal the land transfer.
Wendsler Nosie Sr., councilman and former chairman of the San Carlos Apache tribe, said the land transfer is yet another chapter in the history of Manifest Destiny.
“To me, this is the spiritual war. Because we are fighting something that is old. Because they want to continue to take from the earth and leave nothing behind,” Nosie said.