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Tuesday, May 12, 2026 | 2 a.m.
Editor’s note: “Behind the News” is the product of Sun staff assisted by the Sun’s AI lab, which includes a variety of tools such as Anthropic’s Claude and Google Gemini.
A senior Trump administration official at the Interior Department faces intensifying scrutiny from ethics watchdogs, Democratic lawmakers and legal experts over what critics describe as brazen conflicts of interest between her policymaking role and her family’s multimillion-dollar ranching operations on federal land, including in Nevada.
Karen Budd-Falen, who serves as associate deputy secretary of the Interior — the agency’s third-highest post — has drawn fire after a video surfaced showing her acknowledging her role in shaping federal grazing policy that directly benefits her family’s business interests. The remarks, delivered at a Senate Western Caucus event in December and posted to YouTube by Sen. Cynthia Lummis, R-Wyo., set off a cascade of calls for a federal investigation. [1]
“I mean, people talk a lot about oil and gas … but my job in Interior is really the everything else. I’m a rancher, and so the thing that was probably the closest to my heart was grazing regulations,” Budd-Falen said at the event. [2]
Financial stakes
Budd-Falen and her husband, Frank Falen, own at least five cattle or ranch operations in Nevada and Wyoming, each valued at more than $1 million, according to her federal financial disclosure forms. [1] Their companies hold permits to graze cattle on roughly 250,000 acres of Bureau of Land Management land that Interior oversees. [4]
The scale of those holdings sits at the heart of the conflict-of-interest allegations. Ethics watchdogs argue that Budd-Falen’s work on policies that expand grazing access — including the use of “categorical exclusions” that bypass certain environmental reviews — directly enriches her family. [1]
“The situation with Karen Budd-Falen seems to be quite brazen in the scheme of conflicts of interest,” said Michelle Kuppersmith, executive director of Campaign for Accountability, a nonpartisan watchdog group. “She is, by her own admission, working on policy for grazing that will likely directly impact her own financial interests. And they’re not even trying to hide it.” [6]
Richard Painter, who served as chief ethics lawyer in the George W. Bush administration, went further. If Budd-Falen has received federal grazing rights from Interior while simultaneously crafting grazing policy, he said, “that would be a pretty slam-dunk financial conflict of interest.” [1]
A reversal from the first term
The controversy deepens when set against Budd-Falen’s own history at the department. When she joined Interior as a high-ranking legal official in 2018 during Trump’s first term, she signed ethics documents that explicitly barred her from participating in — or even discussing — grazing matters. [8]
“I will recuse myself from any discussion of grazing matters or the Department’s process for issuing grazing permits for the duration of my appointment,” reads the disqualification statement she signed. [8]
Budd-Falen returned to Interior in 2025 as associate deputy secretary, a position that does not require Senate confirmation. [10] Her 2025 financial disclosure shows her ranching interests are largely unchanged from her first term — yet she began working on grazing policy without an updated recusal or waiver in place. [11]
It was not until March 11, 2026 — the day the investigative outlet Public Domain sent an inquiry to Interior about her involvement in grazing matters — that ethics officials issued Budd-Falen a conflict-of-interest waiver authorizing her to work on grazing policy and permitting. The waiver appeared in the U.S. Office of Government Ethics disclosure database the following day. [12]
The waiver contains forward-looking language and does not appear to be retroactive — meaning it may not cover months of grazing work Budd-Falen had already carried out. [12]
The waiver acknowledged her push to remove the earlier restriction: “You have advised us that, although recusal was initially successful and workable, it is limiting your ability to fully engage in policy discussions related to grazing permits and other relatable policies,” Interior ethics official Heather Gottry wrote. “Further, recusal has become overly burdensome and deprives the Department of your knowledge and expertise.” [12]
Interior Department spokeswoman Aubrie Spady told The Washington Post that Budd-Falen “has complied, and continues to comply, with any and all legal requirements, ethical standards and ethics guidelines” in her job. [6]
Policy agenda
In the December video, Budd-Falen described specific policy goals that would benefit ranchers — including her own operation. She discussed easing grazing restrictions through categorical exclusions under the National Environmental Policy Act, a move that would allow grazing permit actions to bypass the full environmental review process. She also expressed a desire to increase the number of grazing allotments handed out to ranchers and to scale back “critical habitat” designations for endangered species. [16]
Public Domain also reported that she indicated a categorical exclusion she helped shape would benefit land controlled by her father-in-law. [1]
Ranchers have lobbied the Trump administration broadly to relax environmental restrictions and expand their access to public land for grazing, while environmental advocates say increased grazing degrades ecosystems and imperils threatened species. [3]
Budd-Falen has also been involved in a contentious dispute over cattle grazing at Point Reyes National Seashore in California — another matter with direct implications for the ranching interests she spent her career representing before returning to government. [8]
The Thacker Pass question
The grazing controversy is not Budd-Falen’s only ethics problem. A separate set of allegations involves the Thacker Pass lithium mine in Humboldt County — the largest known lithium deposit in the United States.
In 2018, shortly after Budd-Falen joined Interior as deputy solicitor for wildlife, her husband sold water rights from the family’s Nevada ranch to Lithium Nevada Corp., a subsidiary of Lithium Americas, for $3.5 million. The sale was contingent on federal regulators approving the mine. [19]
In November 2019, while still serving as a top Interior official, Budd-Falen met with Lithium Americas executives over lunch in the Interior Department cafeteria. [20] However, her husband has described the meeting as a social occasion and said his wife “knew so little about what was going on” with the water contract. [21]
At the end of Trump’s first term, the Bureau of Land Management approved Thacker Pass through an expedited process that bypassed standard environmental review. The Budd-Falen family ranch received its final payment from the water rights deal in November 2023. [21]
Through all of it, Budd-Falen never disclosed her family’s financial stake in the mine project on her mandatory government financial disclosure forms filed between 2018 and 2021. [23]
“She had an obligation to disclose it,” one ethics expert told Public Domain and High Country News. “It appears she did not disclose it. And therefore, everything else here is tainted.” [24]
Robert Weissman, co-president of the watchdog group Public Citizen, told The New York Times: “It’s not clear that Karen Budd-Falen knew she had a conflict, but it’s clear she should have known, and that the public should have known. It’s also clear that she should not have met with Lithium Nevada.” [21]
Calls for investigation
The video disclosures and reporting by Public Domain, High Country News and The Times have set off a round of congressional and watchdog demands.
In January, Rep. Jared Huffman, D-Calif., ranking member of the House Natural Resources Committee, and Rep. Maxine Dexter, D-Ore., sent a letter to Interior’s acting inspector general calling for a federal investigation. [23]
“Trump said he would drain the swamp, turns out—to little surprise—he’s done the opposite. His highest-ranking officials are using their power to enrich their own families, and the latest example is playing out on our public lands,” Dexter said. “The corruption is clear as day.” [27]
Campaign for Accountability in March announced plans to send letters to the Senate Homeland Security and Governmental Affairs Committee and the House Natural Resources Committee demanding that Congress investigate whether Budd-Falen violated ethics laws and whether Interior’s ethics office failed in its oversight role. [6]
Sen. Richard Blumenthal, D-Conn., the top Democrat on the Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations, said the situation speaks for itself. “You don’t have to be an expert on land management to know that when she talks about how policy changes are going to benefit ‘private landowners,’ she’s talking about herself,” Blumenthal said. [6]
Aaron Weiss, deputy director of the Center for Western Priorities, a Colorado-based conservation group, called on Interior Secretary Doug Burgum to suspend Budd-Falen and investigate.
“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.
The Interior Department has repeatedly refused to release Budd-Falen’s current ethics agreements, leaving unresolved the most basic questions about what constraints — if any — govern her work. [31]
Sources:
2. https://www.aol.co.uk/articles/senior-interior-department-official-says-163451239.html
3. https://www.theguardian.com/us-news/2026/may/11/trump-plans-24m-acres-federal-lands-cattle-grazing
4. https://www.propublica.org/article/politicians-help-ranchers-dodge-oversight
12. https://www.publicdomain.media/p/interior-karen-budd-falen-grazing-ethics
23. https://www.hcn.org/articles/lawmakers-call-for-an-investigation-into-interiors-karen-budd-falen/
24. https://www.publicdomain.media/p/new-ethics-docs-karen-budd-falen
31. https://www.hcn.org/articles/documents-shed-new-light-on-interior-officials-growing-ethics-scandal/
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