Episode 11 - Deal of the Century
Life Underground Episode 11
“Deal of the Century”
This is Life Underground and I’m Clark Grant. We left off the last episode with a big shutdown in the mining city of Butte, Montana. After Atlantic Richfield bought the remaining pieces of the Anaconda Company empire in Montana in 1977, they only lasted about 5 years before they closed all mining and smelting in Montana permanently. It was a bad time for the people of Butte and thousands of men were out of work. Men like Jim Killoy, recorded here in 1986.
[Jim Killoy]
But the total shutdown didn’t last long. As ARCO was looking to divest of its Anaconda holdings, they eventually found a buyer named Dennis Washington. The deal of the century was about to go down in Butte, Montana and Dennis Washington would become a billionaire because of it. Who were the dealmakers in this chapter of Butte’s mining history, and what was the negotiating like? That’s today on Life Underground.
Ask anyone in Butte how Dennis Washington and his company Montana Resources got a hold of the mine, and they’ll tell you it was Don Peoples.
[Don Peoples]
That’s Don Peoples, interviewed by Teresa Jordan in 1986, right around the time he was facilitating the sale of ARCO mining properties to Dennis Washington. Don came up in Butte politics through the Model Cities program, that Lyndon Johnson effort to revitalize cities across the nation that were down on their luck. As we covered in a previous episode, Mike Micone was the mayor of Butte when Model Cities kicked in, and a man named Jim Murphy was the director for the program. Model Cities was bringing in millions in federal dollars to help revitalize Butte in the late 1970s, which by that time was already in serious decline, even though the big ARCO shutdown hadn’t come yet. Towards the end of Model Cities, it was supposed to transition into a Community Development program, and Micone went to Don Peoples.
[Don Peoples]
Elected Mayor right before the city and county governments consolidated, Mike Micone only stayed in his new position of Chief Executive for 18 months, as Don Peoples mentioned. He was then appointed to head the city/county government by the Council of Commissioners, a position he held for the next 10 years.
When Teresa Jordan interviewed Peoples in 1986, he had been Chief Executive for about 7 years. At that time in Butte’s history, the town was definitely down on its luck. It was post-Model Cities, which depending on your metric, was not the economic success it had been advertised as. Community Development programs like Model Cities couldn’t have made up for the losses that Butte endured because of larger economic trends like deindustrialization and the closure of the mines by ARCO. Between the local government and its burgeoning Community Development Department, and entities like the Butte Local Development Corporation, there were ongoing efforts to revitalize Butte. Peoples say they didn’t always work well together.
[Don Peoples]
As things dragged on and uncertainty about the future of mining in Butte was growing, Don Peoples felt he had to find a buyer for the mine. He put together a new group: the Mining Development Committee.
[Don Peoples]
So how did that process work? How did the Mining Development Committee actually facilitate this deal and get the mine open again?
[Don Peoples]
So Don Peoples had his Butte team together, including local businessmen like Harp Cote and union leaders like Barney Rask, but they enlisted the help of the Montana State government all the way to the Governor’s office. Peoples even acknowledged that the State Department of Revenue were the ones to put forth the idea of major tax breaks for the new owner of the mine in Butte. The Montana Power Company even negotiated special rates for Montana Resources to ensure the mine would reopen at a profitable rate.
So what about the private sector portion of these negotiations? Dennis Washington, now a billionaire with a five-story yacht, ended up buying the mine after Don Peoples and the rest of the governmental entities in Montana had sweetened the deal. What were the conversations like between Washington and the people at Anaconda/ARCO, and how did the deal actually go down? We take a look behind the scenes with Frank Gardner, after we come back. This is Life Underground.
Frank Gardner was born in 1935 on Wyoming Street in Butte. Aubrey Jaap and I interviewed him in his home in Missoula in 2020. Frank started working underground after high school and eventually went to Rice University. In 1961, he went to work for Parsons Jordan as a inspector, bringing the water line in from Silver Lake into Butte for the concentrator, which was being built at that time, the very facility that Don Peoples would be trying to sell decades later, after the closure. Frank stayed with the Anaconda Company as a mining engineer and endured many a picket line through all the strikes the miners had during their battles with Anaconda. He moved up in the Company. Eventually, he worked all over the world for Anaconda, including Iran in 1974 and Canada from 77-79. That’s when he finally returned to Butte. The Company had been bought by ARCO by then, and the Butte operation was in tough shape.
[Frank Gardner]
So Dennis Washington got the mine in Butte for a pittance, and personally made $61M in the first few years of it operating. During that shutdown in 1984-85, Frank Gardner says it was his idea to bring in Don Peoples, the former mayor we heard from earlier, because no one in Butte would get behind the effort to sell the mine if Frank was leading it. It had to come from someone with credibility in the Butte community.
[Frank Gardner]
After asset disposal turned into a deal for the whole of the ARCO Montana operations, Frank became the President of Montana Resources, a position he held for the next 11 years. Since he worked for Dennis Washington and got to know him personally, I had to ask what the billionaire is like.
[Frank Gardner]
Because Frank Gardner knew so much about the Montana Resources operation and ran the place for so long, I asked him what kind of lifespan the mine has. How long can we count on MR to make money for Butte and for Washington?
[Frank Gardner]
That’s Frank Gardner, former president of Montana Resources, recorded at his home for an oral history as part of the Verdigris Project by Aubrey Japp and myself, Clark Grant.
Montana Resources still operates the Continental Pit today within a 7000-acre complex of mining landscape that resembles the moon. Given the looming environmental burdens this new open pit poses for Butte with its inevitable closure, we can only guess what the future holds for residents of this valley. A tale as old as corporations, Frank Gardner’s part in reopening the Butte mines follows that classic capitalist mantra: privatize the profit and socialize the costs. As he might say, that’s life.
Hearing all these stories about the efforts to re-open the open pit mining operations in Butte made me curious about what the mine is actually like today. How does an open pit mine work, and how does it generate so much wealth? The mines in Butte are all fenced off, so it’s hard to get an inside look, unless of course, you schedule a tour. When we come back, we’ll go behind the fences inside Montana Resources. This is Life Underground.
Our team had scheduled a tour of the mine with Mike McGivern, the VP of Human Resources for MR. We met at the office on Continental Drive in Butte.
[Tour of the Mine]
So the mines of Butte staved off a permanent shutdown in the mid 1980s with the help of men like Frank Gardner and Don Peoples, who wrangled a deal between Dennis Washington and the regulatory agencies that seemed to work for everybody. But as you can see, mines leave a legacy of pollution, and you can’t always predict the longterm affect these massive extractive projects will have on the land and on animals, or people.
In our oral history project, we’ve asked a lot of old timers from the mining industry whether all the mining in Butte was worth it, given the loss of neighborhoods, the enduring environmental problems, and the lack of sufficient reinvestment in the community, which today suffers from widespread poverty and vacancy in the central business district. Granted, there would be no Butte at all without the mining, but still no one really seems to know if it’s all worth it. That may be because the costs of all the mining in Butte can’t yet be calculated. Who knows what problems lie ahead, and what unforeseen consequences of mining will be there down the road, for Butte, Montana.
This is Life Underground and I’m Clark Grant. Thanks for listening.