San Diego — When Diversa Corporation, a biotech company based in La Jolla, signed the first commercial prospecting agreement in a national park four months ago, Vice President Al Gore applauded it as a landmark alliance between the private and public sectors. But it set off alarms among environmental groups, two of which filed petitions to block the arrangement days before it was made public. The environmental groups promise to file lawsuits if the National Park Service and the Department of the Interior don't respond soon.

The park involved is not just any park, but Yellowstone National Park. And the agreement is even more unusual. It gives Diversa the rights to carry out bioprospecting -- the hunt for microbes -- for profit. Diversa's specific targets are the chemical- and heat-resistant extremophile microbes that inhabit Yellowstone's roughly 10,000 geysers and hot springs.

Under the unique arrangement, Yellowstone is to share in Diversa's profits, though both parties have refused to disclose precisely to what degree. Biotech promoters are hoping to score some goodwill inherent in a national icon like Yellowstone.

It is a coup for Diversa, a privately held company with a low public profile. Founded in 1994 in a Pennsylvania suburb and now on its fourth corporate name, Diversa has 800 employees in its La Jolla labs. The operation moved to the San Diego area in March of this year and counts among its founders the noted Cal Tech biologist Melvin Simon, a force behind one of San Diego's highest-flying biotechs, Agouron Pharmaceuticals.

According to Diversa CEO Terrance Bruggeman, Diversa is "the developer of leading-edge biotechnology. We have invested more than $50 million in our technology and have about 120 customers worldwide," among the better known being Dow Chemical Company. "We are really changing the way chemicals are made" through the use of enzymes, Bruggeman said.

"I don't have anything against Diversa," says Beth Burrows, director and president of the Edmonds Institute, a small nonprofit environmental group in Edmonds, Washington. Edmonds Institute, along with the Washington, D.C.-based International Center for Technology Assessment (CTA), has petitioned the National Park Service and the Department of the Interior to call off the agreement. They have also asked for a moratorium on all commercial bioprospecting in national parks until completion of a thorough public review and environmental impact statement.

"This is a major policy change, and it has not been discussed publicly," Burrows argues. "Public discussion means putting it down in the Federal Register for people to attend hearings, not just having a nice guy willing to answer the phone. I was astonished that such a major change in policy had not been negotiated in a public forum.

"One, did the American public see this as the relationship they wanted toward nature, particularly the nature they wanted to steward? Two, had the agreement been negotiated in a public way with access available to all parties, so that we had a public policy in place that we had agreed as a nation to commercialize nature wherever we could? Then it would be still incumbent upon us to have competitive bidding. I'm not saying I want that, but there's a whole raft of issues.

"The forum wouldn't be the usual Beltway participants, the usual insiders. After all, this is Yellowstone; it belongs to all of us, was given to all of us."

Commercial bioprospecting has been conducted for several years, largely in remote third world countries with little notice in the U.S. mainstream press. But with Yellowstone about to be opened to for-profit microbe hunters, the debate promises to generate attention. The issues include private ownership of naturally occurring life forms and the ownership of biotech discoveries based on substances collected from public land.

As Burrows pointed out, the Diversa agreement hadn't even been mentioned in the Federal Register, the official organ where the federal government posts notices of its regulatory actions. Edmonds Institute and the Center for Technology Assessment only heard about the proposal by word of mouth.

Much of the work on the agreement was carried out not by government officials but by a private, nonprofit foundation, the World Foundation for Environment and Development (WFED). Yellowstone hired the agency on a two-year, $200,000 contract to help it devise a bioprospecting policy. (Several other firms are reportedly eager to sign on to arrangements like Diversa's.)

Participants in the two years of conferences and meetings leading up to the agreement were predominantly from the biotech industry and the park service. Notice of the gatherings was largely restricted to those groups. The Salt Lake Tribune, the only media outlet to cover the Diversa announcement in detail, had to file Freedom of Information Act requests to force Yellowstone officials to hand over documents pertaining to the agreement. Even so, the park service refused to reveal financial details, saying they were proprietary.

Communication has been so restricted that Diversa and the director of the National Park Service, who is Yellowstone's immediate overseer, don't agree on the status of Diversa's proposal. By an accident of bureaucratic politics, a new park service director, Robert Stanton, was taking office as the deal was nearing completion.

"It is still in the review process," said Cindy Daley, a park service spokeswoman in Washington, D.C., two weeks ago. "The Federal Technology Transfer Act allows 60 days" for a federal agency review. "Diversa knew it was a major agreement." Would the review be complete in the next week or so? "It's not that imminent," Daley said. "By the end of the year, but even that's not set."

Bruggeman, speaking a few days later, had a different interpretation. "The review period has expired, and we've heard nothing from the Department of the Interior and thus we assume it's in effect," he said last week.

If Stanton balks, it could lead to a standoff between him and his underlings at Yellowstone. They are eager to use royalties from commercial bioprospecting permits to generate much-needed cash and corporate support for the park. Already roughly 50 permits have been granted at Yellowstone for noncommercial research; about half belong to private, for-profit corporations or researchers who are funded by them.

"One of the reasons the lawsuit exists is that a deal was developed without public scrutiny, without anybody in the park service outside Yellowstone looking critically at it," says Joe Mendelson, CTA's lead attorney on the petition. "The park service, unlike the Bureau of Land Management or the forestry service, doesn't sell its resources. This is the first time the park is essentially selling a natural resource."

"Is a sale going on? Unequivocally no," counters Preston Scott, a director of WFED, who shepherded the deal. "What Diversa is permitted to do has been done since 1898, when a professor from Berkeley got permission to collect microbes from the hot springs. Nothing has changed. What Diversa has is the right to use them for research purposes," that is, not patent the microbes themselves, but patent whatever materials Diversa can derive from them.

"What this foundation is saying to snake around the law is that they're selling research results," Mendelson says. "That's like saying that a logging agreement is not selling trees because the timber companies are making them into two-by-fours."

"It is not sleight of hand," Scott says. "It's a distinction based on the intellectual property law of this country." That Mendelson and Burrows filed their petitions before seeing the agreement shows they are acting only "to advance their cause. There's no environmental impact to study because nothing's affected. They would like all genetic research to cease. Unfortunately, that is not a decision the Department of the Interior can make."

Scott defended the decision to keep the royalty rate secret based on federal laws protecting private companies' proprietary information when they do business with the government. Mendelson argued in his legal filings that it was the park service that set the dollar figures, which automatically makes them public information.

As for alerting the rest of the public, the announcement has "been in all the papers," according to Scott."We will be holding workshops explaining the agreement."

The documents that the park service eventually did release under the Freedom of Information Act requests show an awareness by the foundation and the park service of the problematic public relations image connoted by bioprospecting -- in particular, bioprospecting in the national parks.

"The media has an immense interest in this issue," states a National Park Service briefing paper prepared for then-director Roger Kennedy in February of this year. "The most common media 'spin' has been that free bioprospecting being allowed in the parks is yet another 'rip-off' of the American taxpayer."

The prime example that haunts park service discussions is the case of Thermus aquaticus, a microbe discovered in 1966 by biologist Thomas Brock in a Yellowstone hot spring. Brock filed a sample of the microbe with the American Type Culture Collection, the federal repository for biological materials.

In 1983, a small pharmaceutical company in Emeryville, California, named Cetus, isolated an enzyme from Thermus aquaticus that proved the basis for dozens of chemical processes, the best-known being DNA fingerprinting. Some years later, the patent for the enzyme was sold to pharmaceutical giant Hoffman-LaRoche, which now earns a reported $200 million annually from the enzyme, without a penny in royalties reverting to the American public.

"Should profit-sharing be considered an appropriate condition concerning future research permits?" a park service document on bioprospecting opines. Or "[w]ould precedent-setting contracts with bioprospecting agents lead to the demise of the 'preservation umbrella' that protects national parks from consumptive use?"

Internal documents show these are questions the park service and their private-sector proxy, WFED, would prefer not to be aired without proper control in the media.

"Dear John," Scott writes to John Varley, the director of the Yellowstone Center for Resources, in a January 6, 1997, fax subtitled "Re: Happy New Year Greetings from The Washington Post.

"I hope you had a great Christmas and New Year and are ready to hit the ground running. In this connection, The Washington Post in its wisdom has run two articles in the past week about park fee increases for 1997....

"The relevance of all this is how the spin doctors could play with public perceptions/attitudes to the effect that park fees have increased for the 'average citizens' while biotech companies are still getting a free ride (blah-blah-blah -- you get the drift). I am also concerned that we not lose the momentum generated before Christmas (like you, I also like playing 'offense'!)"

Park service officials don't seem to have followed Scott's advice as well as he might have wished. Immediately after Diversa's permit was announced earlier this year, Yellowstone officials decided they might need "designation/recognition of national parks as 'federal laboratories' for scientific research purposes." Just in case the permit was challenged.

"We presume that the National Park Service did what was required of them," Bruggeman said last week. "If they were to change their mind or think there needs to be modification, we'd certainly be open to listening to their suggestions. They've been very supportive of our effort."

"This is either complete ineptitude on the park service's part," CTA's Mendelson says, "or it's a backroom deal that a couple of people are going to benefit from, and they're trying to slide it through on the sly." Either way, Mendelson says he's going to press forward with legal action if the agreement is approved. "I've got the time," he says.