February 12, 2001 — The composition of the team that advised George W. Bush on the Environmental Protection Agency during his transition to the presidency signals a new era of a weakening federal role and a bias toward free-market solutions in complying with environmental regulations, say veteran EPA observers.
Just over half of the team comes from companies, industry associations, investment firms or lawyer-lobby shops that routinely represent corporate views on Capitol Hill or in litigation against the agency. The team still holds sway with EPA Administrator Christine Todd Whitman.
The new direction disheartens environmentalists, who prefer strong federal government and regulations, but thrills those who believe the next level of environmental performance lies with market-driven measures.
The 45-member advisory team submitted policy and organizational ideas, identified priorities and made hiring recommendations to the Bush-Cheney transition staff that were forwarded to Whitman in January, said Christopher DeMuth, Bush’s chief environmental adviser during the 2000 campaign. And some members will likely get high-level EPA positions themselves.
Talked with their wallets
Roughly two-thirds of the advisers also talked with their wallets during the last election cycle, with several giving in five or six figures. Collectively, they chipped in $133,583 — mostly to Republican races, if not directly to the Bush campaign — and that’s not counting any donations that might have gone to recount, transition, inaugural or other special funds not monitored by the Federal Election Commission. Nor does it include any contributions from spouses. Of the total, $20,000 went directly to Bush.
(Some of the advisers crossed party lines to give at least $17,700, roughly 13 percent of their collective contributions, to Democratic campaigns or political action committees, including those of former Vice President Al Gore and his opponent in the primary race, former Sen. Bill Bradley of New Jersey. Sen. Joseph Lieberman of Connecticut, second-term Sen. Mary Landrieu of Louisiana, freshman New York Sen. Hillary Rodham Clinton and the League of Conservation Voters, among others, also received cash.)
While the advisory team’s written work and conference calls have pretty much ended, Whitman is likely interviewing some of the advisers. “I’m sure Whitman will call some of the advisers in. Some she is considering for senior positions,” DeMuth, who is president of the conservative American Enterprise Institute and a member of the transition advisory team, told The Public i. “Often the head of an agency will be talking to people, getting their ideas, but also seeing if she’d like to have them on board.”
Calls seeking comment from Whitman’s office and the White House were not returned.
Aside from the 23 EPA advisers who come from or represent industry, eight are from nonprofit think tanks or universities — some of whom are considered moderate or neutral, some of whom have conservative or libertarian leanings. Four members are identified as working for environmental organizations that embrace voluntary or incentive-based “free market” measures to reduce pollution. Other mainstream environmental groups that prefer mandates and regulations — such as the Sierra Club, Natural Resources Defense Council and Friends of the Earth — are not represented.
Ten advisers come from Republican state or city administrations, or the interstate regulators’ organization, the Environmental Council of the States. Environmentalists are quick to point out, however, that these regulators are not leaders in enforcement — and that many of these states have fought hard with the EPA in recent years over who has local control. For example, Virginia — whose Natural Resources Secretary John Paul Woodley Jr. is on the team – has been accused of lax enforcement by EPA for the past few years. And the Texas Natural Resource Conservation Commission, whose executive director Jeff Saitas is another team member, is “a train wreck” that appointed industry stewards and is not much of a watchdog, according to one environmentalist who considers the commission a disaster.
“The commission is called a train wreck because they have traditionally been industry-influenced, especially under [then-Gov.] George W. Bush,” Joan Mulhern, legislative counsel for Earthjustice Legal Defense Fund, said in an interview. (Formerly called the Sierra Club Legal Defense Fund, Earthjustice is a separate organization that continues to represent the club in legal matters.) “They are the ones who came up with this bogus clean-air rule where industry would voluntarily clean up emissions from older sources. The Bush administration [in Texas] touted this as being a model, and the environmental community — I think universally — called it a sellout,” Mulhern continued.
Many environmentalists are discouraged. “When we saw that team [announced], it was real grim, especially the lack of grass roots-based organizations, the predominance of corporate interests, and the swinging door between industry and government,” said Jane Nogaki, pesticide program organizer for the New Jersey Environmental Federation, a coalition of 90 groups.
‘Not at the table’
“There’s everything from oil to agriculture, which are two industries that will be tightly regulated in the way of pesticides, [water] pollution and air quality. Where’s the Clean Air Council, Clean Water Action or the Public Interest Research Group? These are the groups doing the activist work, and they’re not at the table,” Nogaki continued.
But Robert Murphy, an environmental lawyer in Binghamton, N.Y., who specializes in the contaminated, former industrial sites called “brownfields”, said the Bush-Cheney staff rounded up a group of national organizations, related industries and large law firms “which unsurprisingly have an overall Republican bent. The major segments of the environmental stakeholders are represented, but I would not expect environmentalists with a strong Democratic bent to be totally satisfied.”
Panel’s composition signals ‘cooperative’ direction
Environmentalists and other observers say the EPA advisory team’s composition signals the new administration’s approach to compliance and general management: incentives, voluntary and “cooperative” programs for companies to be good actors, and more devolution of power to the states. They cite Whitman’s speech at her Jan. 17 Senate confirmation hearing, in which she told the Environment and Public Works Committee: “We are ready to enter a new era of environmental policy — an era that requires a new philosophy of public stewardship and personal responsibility. To discover what this new era will look like, one need only look to the states.” Whitman then described her home state of New Jersey as “moving beyond the ‘command and control’ model of mandates, regulations and litigation. We are, instead, working to forge strong partnerships among citizens, government and business that are built on trust, cooperation and shared mutual goals.”
As examples of the new philosophy, Whitman pointed to New Jersey incentives to encourage voluntary reductions of greenhouse gas emissions, the promotion of energy efficiency and renewable technologies, and the provision of $15 million to help towns clean up brownfield sites and market them for reuse.
“Mine is the only state in America with a reimbursement program for private parties that voluntarily clean up sites,” the former governor said. In case any points were lost on the senators, she told them, “I do expect to bring to my job an understanding — and an empathy — for what it is like to be on the receiving end of directives from Washington.”
23 represent industry
Among the 23 corporate, lawyer or investment firm representatives on the EPA advisory team are Jamie Conrad, senior counsel for the American Chemistry Council (formerly the Chemical Manufacturers Association), and Jim Ford, the American Petroleum Institute’s federal regulations director. Andrew Sharkey III, president and CEO of American Iron and Steel Association, and Steve Sandherr, CEO of Associated General Contractors, are also on the team. All four of these groups regularly appear before lawmakers concerning regulatory matters.
The National Cattlemen’s Beef Association, which is represented on the panel by its executive director of legislative affairs, Dale Moore, is suing the EPA for trying to tighten water pollution regulations. And Charles Grizzle, who heads up his own environmental consultancy in the Washington area, advises his clients on how to prepare for, or prevent, regulatory action. Among the Grizzle Co.‘s clients is the International Council of Shopping Centers.
Of the EPA advisers, Grizzle is also the second-biggest donor, having doled out $15,250 to various campaigns and PACs in the 1999-2000 election cycle, of which $2,000 went directly to the Bush campaign, according to the Federal Election Commission records.
Many of the advisers from industry have followed a career path so common in Washington, D.C.: garnering early experience on Capitol Hill or in a federal agency, then turning to legal-lobby shops or industry associations later in life. Several have top-level experience at the EPA itself, including two former administrators under Republican presidents. Those two are founding administrator William D. Ruckelshaus, now a strategic director of the Madrona Venture Group and chairman of the World Resources Institute, and Aqua International founder William K. Reilly, who is identified by the Bush team in his role with the World Wildlife Fund, the world’s largest private conservation organization.
President Nixon chose Ruckelshaus as EPA’s first director in 1970; he came back for a second stint during the Reagan administration. In the interim, he started up his own law firm — the precursor to today’s Beveridge and Diamond, which still specializes in environmental law and represents corporate interests before the EPA — and then joined timber company Weyerhaeuser as a top executive.
Ruckelshaus pushed the revolving door again after his second EPA tour of duty, serving as a board member of several companies, starting up his own environmental consulting firm, and eventually joining Houston-based waste disposal company Browning-Ferris Industries.
His appointment as a Browning-Ferris director in June 1987 came roughly one month after the EPA had filed a $70 million lawsuit alleging thousands of violations by the company at a Louisiana landfill. In August 1988, Browning-Ferris and the EPA agreed to a controversial $1.1 million settlement, and the next month, Ruckelshaus was named president and CEO at a salary exceeding $1 million, Industry Week reported at the time. (In Toxic Temptation, a 1993 report by the Center for Public Integrity, Philip Angell, then Browning-Ferris’ spokesman, said that Ruckelshaus accepted only $800,000.)
Gary Baise, now a lawyer at Baise Miller & Freer, was chief of staff to Ruckelshaus at EPA, then became the director of its office of legislation before holding two posts at the Justice Department in the mid-1970s. In recent years, Baise has defended New Albany, Ky., against the EPA over sewage overflows into the Ohio River and the Washington Association of Wheat Growers (he represents the national group as well) against state regulators over the practice of field burning, used by farmers as a cheap, efficient way to clear, weeds and disease-bearing pests. Baise’s firm has also been involved in a national challenge in the Supreme Court over EPA’s small-particulate, or soot, standard.
Gordon L. Binder is another who spun the turnstile from EPA to the private sector. The chief of staff of former administrator Reilly during the first Bush administration, Binder continues to work at Reilly’s side at Aqua International Partners, a $232 million, San Francisco-based fund that invests in water services to developing countries. Aqua International was founded with support from the U.S. Overseas Private Investment Corporation and is a member of the Fort Worth investment firm Texas Pacific Group.
Binder has also been a senior fellow at the World Wildlife Fund since 1993 and is a member of an environmental technologies trade committee advising 19 federal agencies.
Reilly considers the “always objective” Binder to have been “the unsung hero” of his tenure at EPA, he told the agency’s History Office in an interview. “Gordon missed nothing, spotted problems and quietly fixed them, shaped up personnel, alerted me to various agency weaknesses or threats, and faithfully communicated my views,” Reilly told the EPA historians. “No one was more helpful to me or to the agency in the Bush administration than Gordon Binder.”
Another lawyer-lobbyist with executive branch experience, Jeff Holmstead is now with Latham & Watkins in Washington, where he is registered to lobby for wireless technology companies “on measures designed to promote competition and eliminate entry barriers,” according to lobbying records. Latham & Watkins’ other clients include the Ad Hoc Industry Group on Regulatory Reinvention, the Alliance for Constructive Air Policy, Bell Atlantic, Bristol-Myers Squibb, Montrose Chemical Co. and the Semiconductor Industry Association. Holmstead was a lawyer in the Office of White House Counsel under the senior Bush administration.
And Elliott Laws, a former EPA official and environmental litigator for the Justice Department, now heads Texaco’s safety, health and environment division. Texaco is an associate member of the National Petrochemical and Refiners Association, which on Jan. 23 sued the EPA over its new diesel sulfur rule, claiming it is “too strict” and costly. The industry group also opposes EPA’s mandate to add ethanol as an oxygenate to reformulated gasoline, and is in favor of voluntary and self-compliance measures, such as toxicity testing of substances known as high production volume chemicals.
Rich Innes, who runs his own consulting shop in the Washington area, was once a staff member for the late Sen. John Chafee, R-R.I. (Widely admired for his ability to work across party lines, Chafee was a moderate who, for instance, opposed drilling in the Arctic National Wildlife Refuge; opening the refuge is a Bush priority.) Innes now lobbies for Browning-Ferris Industries, where he used to be the chief in-house lobbyist, and for the National Fish and Wildlife Foundation. He and Ruckelshaus are considered to be close associates.
Bob Grady, a bureaucrat-turned-venture capitalist, started out working at the gubernatorial and congressional level, became the chief speechwriter and senior adviser for the 1988 Bush-Quayle campaign, and then served in that administration’s Office of Management and Budget. He now counts himself among the heavy hitters at the Carlyle Group, where he is a partner and managing director in venture capital. (Carlyle is headed by former Defense Secretary Frank Carlucci, who has recruited several ex-Reagan and Bush staffers, including former Secretary of State James Baker and past budget chief Richard Darman. Billionaire financier George Soros and members of the Mellon family are also partners.) Grady also gave $9,000 to various federal campaigns in the past two years, $1,000 of that directly to Bush.
Having acted as lead counsel on the Clean Air Act for the House Energy and Commerce Committee when Republicans were in the minority in the early ’90s, Charles Knauss is now a partner at Swidler Berlin Shereff Friedman in Washington. He represents the industry group Air Quality Standards Coalition, whose 600-plus business and industry members — including the National Association of Manufacturers, American Petroleum Institute and auto makers — opposed EPA’s tightened standards for soot and smog. He also lobbies for Exxon Chemical Co., General Electric, and the National Sediments Coalition — other clients whose business comes before his old committee.
And Ray Ludwiszewski (who is also on Bush’s Justice advisory panel) of the D.C. law firm Gibson, Dunn & Crutcher represents Lockheed Martin Corp. Another regulator-turned-lobbyist, Ludwiszewski was general counsel for EPA and the agency’s assistant administrator for enforcement under the first Bush administration.
Among the state regulators, environmentalists point out that in the early 1990s, James Seif, secretary of Pennsylvanias Department of Environmental Protection, was a lawyer-lobbyist for such oil, energy, chemical, aerospace and other interests as Mobil Corp., Tennessee Gas Pipeline, Bio-Chem Technology and the Boeing Co. He was also a regional lobbyist for AT&T in the mid-1980s.
Justin P. Wilson, who is Tennessee Gov. Donald Sundquist’s top policy aide, has faced off with the federal government, on the side of Tennessee industries, over ground-level ozone emissions, commonly called smog, that harm northeastern states. He was a partner in the Nashville law firm of Waller Lansden Dortch & Davis until he was appointed to be the state Department of Environment and Conservation’s commissioner from 1996 to 1997.
Wilson had the deepest pockets on the advisory team, having contributed $22,000 to federal election campaigns in the last two years, with $1,000 going straight to Bush.
Shades of gray
Raw figures and titles, of course, don’t tell the whole story. An analysis by The Public i shows that several of the EPA advisory team members are more vigorous on environmental compliance or enforcement than their corporate clothing might indicate.
Known also for his role in Watergate — he resigned as deputy attorney general in 1973 rather than execute Nixon’s orders to fire Special Prosecutor Archibald Cox — Ruckelshaus shaped the EPA in its early days. “In two and a half years, he laid the foundation for EPA, hiring its leaders, defining its mission, deciding priorities and selecting an organizational structure,” according to a biography by EPA historian Michael Gorn. Furthermore, Ruckelshaus is considered by moderates to have been a tough regulator, having ordered cities such as Atlanta, Detroit and Cleveland to bring their sewage treatment plants up to federal standards — or face litigation. He filed suits against industrial polluters such as United States Plywood-Champion Papers, ARMCO Steel and ITT-Rayonier. And when Ruckelshaus took charge of the EPA a second time in 1983, after Anne Gorsuch Burford’s scandal-plagued tenure, he was responsible for restoring internal morale and public confidence in the agency.
Ruckelshaus also contributed $13,000 to various campaigns at the federal level in the past election cycle, with $1,000 of that going to Bush himself.
On the state level, Mary Gade, the top environmental lawyer at Sonnenschein, Nath & Rosenthal in Chicago, was reportedly on Bush’s short list for the top EPA job. (The New York Times reported that two other finalists from the advisory team were Seif and David Struhs, Florida’s Department of Environmental Protection secretary.) Although Gade now represents corporations, she is the past director of the Illinois Environmental Protection Agency and is considered a moderate; she advocates turning over more of EPA’s authority to the states and eliminating “duplication” at the federal level, but has been a longtime believer in scientific evidence of global climate change.
Struhs also has an industry and federal government background: he was vice president of the Canyon Group, an electric and gas utility consulting firm, where he developed voluntary programs for industry and government. He was the chief of staff to the senior Bush’s Council on Environmental Quality, and he led Massachusetts’ environmental agency before heading to Florida.
And despite previously being a lawyer-lobbyist, Pennsylvania Department of Environmental Protection Secretary Seif started out his legal career in 1971 as a Department of Justice assistant attorney, where he handled some of the nation’s earliest environmental cases. He then got experience in EPA Region III’s legal branch in Philadelphia and, 10 years later, returned to become the region’s administrator — which put him in charge of federal programs in six mid-Atlantic states — from 1985 to 1989.
“Jim Seif is a man of enormous integrity,” Joel Bolstein, Seif’s former deputy and a partner at Dechert, Price & Rhoads (where Seif worked until Gov. Tom Ridge appointed him in 1995) said in an interview. “Even if he represented people (in his lobbying past), he’s already been secretary for six years. There has never been an allegation that he was influenced by anything he did in private practices.” Bolstein said that when the two worked together at the department, “He didn’t want me to attend various functions because of a potential conflict of interest.”
And Seif couldn’t get a more ringing endorsement than he does from the Democratic Region III administrator whose appointment just expired with the Clinton administration, Bradley Campbell. “Jim Seif is surely the best of the lot in terms of Republicans who might get appointed to high office in environmental policy. He is, or should have been, the environmental community’s top choice to be administrator, as he is among the smartest, most innovative and most effective state environment secretaries of either party now in office,” Campbell said in an interview. “If President Bush had chosen Jim to be administrator, it would have been one sign — and, to date, perhaps the only sign — that the new administration has a genuine interest in enhancing protection of the environment and natural resources.”
As secretary, Seif has reorganized the department, streamlined the permitting system and added “money-back guarantee” timetables to reduce government bureaucracy. He also improved public access to the state’s compliance tracking system and made Pennsylvania the first state to make inspection results available on the Internet. Perhaps more controversially, he also set liability limits for lenders to owners of brownfields who default but are responsible for land or groundwater contamination.
Bolstein said Seif and his department had won numerous distinctions in the past few years, including the Harvard Kennedy School of Government’s “innovations in government” award for its brownfields program, and the Pennsylvania Resources Council’s award for general environmental stewardship.
And of the corporations on the team, Texaco got favorable press in 2000 by being the first U.S. oil company to drop out of the industry lobbying group opposed to the Kyoto Protocol on climate change, the Global Climate Coalition. The company also invested $67.3 million for a 20 percent stake in Energy Conversion Devices Inc., an alternative energy technology firm. Its hiring of Elliott Laws to head its environmental division was considered by some to signify the company’s move to the center on environmental issues.
Split environmental camp
But in that same vein, those with an environmentalist tag on the Bush advisory team are proponents of voluntary or incentive-based programs — and are thus more centrist than purist “greens” who don’t believe the marketplace goes far enough in protecting the environment. Henry “Hank” Habicht, president and CEO of the Global Environment & Technology Foundation — a nonprofit organization that deploys technologies toward “sustainable development” — is in the former camp. Habicht was deputy EPA administrator under Reilly and worked under Ruckelshaus at Justice, too.
And Reilly himself? Tapped by the first President Bush for the top EPA spot, Reilly came directly from being president for 15 years of two conservation organizations. At EPA’s helm from 1989 to 1993, he earned the reputation of being a “big command-and-control guy who went after polluters,” says Eric van Gestel, a Clinton-era EPA staff member-turned-environmental consultant in San Francisco. “I think the world of him and Mary Gade.”
While at EPA, Reilly made pollution prevention a priority and negotiated voluntary agreements with industry to reduce toxic emissions, promote energy efficiency and encourage recycling and waste reduction. He played a key role in re-authorizing the Clean Air Act in 1990 and drew attention to restoring the health of natural systems, including the Great Lakes and the Gulf of Mexico.
Under Reilly’s watch, EPA vetoed three water resource projects for adverse environmental impacts, including the Two Forks dam in Colorado. And in 1992, he headed the U.S. delegation to the Earth Summit in Rio de Janeiro. Reilly is now back at the World Wildlife Fund, as chairman of the board.
But like Environmental Defense and World Resources Institute — whose respective directors, Fred Krupp and Jonathan Lash, are also Bush advisers — the World Wildlife Fund sometimes clashes with other environmentalists over working with polluters or embracing measures that the less-corporate-friendly groups say come at local communities’ expense.
“In some cases, (these groups) take positions not considered to be in grass roots-based organizations’ interest,” said Nogaki of the New Jersey Environmental Federation. “In some cases they favor technologies like incineration, or worked on pollution trading agreements — inside the Beltway stuff — without consulting with people living next to these waste facilities.”
Environmental Defense’s Krupp was a key figure behind the 1990 Clean Air Act, created the group’s widely hailed “scorecard.org” toxins database, and helped initiate a task force with McDonald’s to reduce solid waste. He was also a member of President Clinton’s Commission on Sustainable Development and Clinton’s advisory committee for trade. The World Resources Institute (where Ruckelshaus wears another hat as chairman) focuses on sustainable development, having researched subjects such as tradable water pollution permits and making capital markets more environmentally friendly.
The EPA advisory team also includes think-tank voices such as the libertarian Pacific Research Institute for Public Policy’s senior fellow, Steven Hayward, and Reason Foundation director Lynn Scarlett. The Progressive Policy Institute — the centrist Democratic Leadership Council’s in-house think tank — has environmental policy director Debra Knopman on board. So does the Health Effects Institute, a nonprofit research “partnership between EPA and industry,” with president Dan Greenbaum, who was the chairman of a 1999 EPA panel on oxygenates in gasoline and Massachusetts’ Environmental Protection commissioner from 1988 to 1994.
DeMuth acknowledged that Bush’s transition advisory teams — one for every Cabinet-level agency — were composed of people whose views jibed with the new president’s governing philosophy, “and beyond that, a few other opinions” for some balance. “Regarding EPA, that meant decentralization. ‘New environmentalism’ is the new buzzword, with a results-oriented outcome — that means improvements in air, land and water quality — as a substitute for the environmental edifice built over the last 30 years, where we built up regulations, were command-and-control and centralized in D.C.,” DeMuth explained. “There were many achievements, but that’s probably run its course.”
Those sentiments ring true for van Gestel, who is not a Bush adviser. “Environmental enforcement, which started out as command-and-control, has now evolved into market-driven solutions, which is a good thing,” he said.
Still, many environmentalists complain that Bush’s advisory teams on the EPA and the Interior and Energy departments are industry-heavy. “They are laden with representatives of industry and polluting organizations. They’re very unbalanced,” said Earthjustice’s Mulhern. “There are a couple of token environmentalists, but they’re clearly industry-driven.”
[The original posting of this report inadvertently identified the wrong Gordon Binder as a corporate representative on the EPA advisory team.]
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