Democrats in Congress are demanding that the Trump administration investigate a top official at the Interior Department who is accused of violating ethics standards with a $3.5 million water deal for a Nevada lithium mine.

In a Tuesday letter to the Office of the Inspector General, Reps. Jared Huffman, D-Calif., and Maxine Dexter, D-Ore., referenced new evidence that they feel could implicate Karen Budd-Falen, the Interior Department’s third in command.

The House Committee on Natural Resources and Subcommittee on Oversight and Investigations ranking members are focused on the Budd-Falen family’s water sale to the controversial Thacker Pass lithium mine in Northern Nevada in 2018 — and a meeting Budd-Falen held one year later at Interior Department headquarters with mining executives.

Along the way, the members of Congress allege, the U.S. Fish and Wildlife Service’s concerns over groundwater and endangered species “appear to have evaporated,” and the already fast-tracked environmental review of the mine became even quicker.

“Maintaining significant cattle ranching interests while reportedly working on grazing and public lands policy is sufficient, at minimum, to warrant scrutiny for appearance and impartiality concerns,” they wrote. “Recently uncovered evidence, however, raises additional serious questions, including whether Ms. Budd-Falen’s financial interests and official activities may have implicated federal ethics and conflict-of-interest restrictions, and possibly violations of federal criminal law.”

Allegations of quid pro quo

Budd-Falen was a deputy solicitor for parks and wildlife at the Interior Department from 2018 until 2021, and came back to the agency last year as associate deputy secretary.

Both Public Domain and The New York Times revealed in the past few weeks that Budd-Falen failed to disclose that her husband sold rights to pump 2,500 acre-feet of water per year to Lithium Americas, the mining company building Thacker Pass.

According to Tuesday’s letter, though the deal was signed in 2018, the payment didn’t come through until November 2023, long after the federal government issued permits to the mine.

“Taken together, the evidence indicates that Ms. Budd-Falen’s family maintained a substantial financial interest that remained unresolved throughout the federal government’s review of the Nevada Lithium Corporation’s lithium mine,” the lawmakers wrote.

Lithium Americas told The New York Times this month that executives never met with Budd-Falen to discuss the environmental review in a formal capacity. In a Tuesday statement, company spokesman Tim Crowley said Lithium Americas works closely with surrounding communities, including the Budd-Falen ranch, “to ensure the successful development of the Thacker Pass project and long-term environmental health in the region.”

Budd-Falen’s husband told The New York Times that the in-person meeting in 2019 was purely social.

Interior dismisses ‘baseless accusation’

Interior spokesperson Aubrie Spady dismissed the lawmakers’ letter in a Tuesday statement but offered no evidence to refute the claims. The Trump administration announced last year that it would buy a stake in both Lithium Americas and the Thacker Pass mine, despite years of conflict with Native Americans and ranchers.

“Karen is an invaluable member of the Interior team, and her long record of professionalism and excellence in her work speaks louder than any baseless accusation,” Spady said.

Neither Rep. Mark Amodei, R-Nev., nor Rep. Susie Lee, D-Nev., the two Nevada lawmakers on the House Committee on Natural Resources, commented on the letter Tuesday.

In a Tuesday statement, Aaron Weiss of the nonprofit Center for Western Priorities, called for Budd-Falen’s suspension and questioned Interior Secretary Doug Burgum’s lack of a response on the issue.

“Her lack of candor to ethics officials casts a shadow on anything that crosses her desk today, and on everything that she worked on during the first Trump administration,” Weiss said. “Because Budd-Falen’s portfolio is so large, the litigation risks posed by her position alone could paralyze the Interior department for years to come.”

Contact Alan Halaly at ahalaly@reviewjournal.com. Follow @AlanHalaly on X.

Thacker Letter by Tony Garcia