Prepared Testimony Of Dr. Edward L. Hudgins Director Of Regulatory Studies Cato Institute Before The House Committee On The Judiciary Subcommittee On Commercial And Administrative Law

February 3, 1995

SUBJECT: H.R.9, TITLE VIII PROTECTION AGAINST FEDERAL REGULATORY ABUSE

Edited of material not pertaining to "Sue."

I offer one case that certainly smacks of revenge by regulators. The staff of the Black Hills Institute for Geological Research, of Hill City, South Dakota, in 1990 discovered the world's largest fossilized Tyrannosaurus Rex, which they nicknamed " Sue." Sue was found on private land, the title of which is held in trust by the Federal government for a Native American. The owner asked Institute staff to explore for fossils on his land and, when Sue was discovered, the Institute paid $5,000 for the right to excavate and remove the fossil. But on May 14, 1992 the U.S. Department of Justice sent FBI agents to seize the skeleton, which Institute personnel had already spent 10,000 labor hours preparing for assembly. At first Treasury claimed the T. Rex was an artifact removed contrary to the provisions of a 1906 antiquities act. But on finding rulings showing that this Act did not cover fossils, (artifacts are manmade, which T. Rex is not), Justice changed its story. It declared that Sue was "real estate" that the landowner could sell off only with the permission of the U.S. Secretary of interior.

No charges were ever filed against the Black Hills Institute for dinosaur theft, and the Institute sued for the return of Sue. But daring to challenge arbitrary theft by government agents can be dangerous for the citizens of this country.

A team from the FBI and the U.S. Attorney's Office of South Dakota spent Sept. 26, 1993 to Oct. 8 in Japan investigating business dealings of the Black Hills Institute in what can only be considered as revenge against citizens who dare stand up for their rights. This 16 day junket included luncheons, parties, but only seven working days. A back-of-envelope estimate of the cost to taxpayers is $50,000, minimum.

From the trip came a 39 count indictment against the Institute, staff members and some of the Institute's suppliers and customers, for money laundering, theft of government property and conspiracy under RICO statutes. (Indictments against two suppliers were recently dropped.) Since no law bans Black Hill's activities, they were indicted for breaking regulations made by unelected bureaucrats. (Newly proposed U.S. Forest Service regulations 36 CFR, Parts 261-262 would essentially ban all fossil and mineral collection on Forest Service land.) Federal agents also have made trips to Canada, Argentina and Peru seeking more ways to wreck vengeance on the Institute.

So now the power and vast funds of the federal government are poised to crush a handful of underfunded entrepreneurs who refused to be victims of arbitrary bureaucrats.