Regulatory Capture Comes Full Circle at the EPA

by William Yeatman on May 15, 2014

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By 1970, it was commonly held that New Deal era regulatory agencies had been “captured” by the industries they were supposed to oversee. According to this influential school of thought, industry’s political spending and also its close cooperation with regulators led to cozy relationships that undermined effective oversight. The most conspicuous manifestation of regulatory capture was a “revolving door” of employment between regulatory agencies and industry.

The 1970 Clean Air Act was supposed to be the antidote to regulatory capture. The law was unusually long and detailed; it was, moreover, replete with deadlines, which were then a novel legislative tool. Most consequential of all, Congress empowered environmental special interests to litigate in order to enforce the law’s many duties. By so crafting the statute, Members of Congress intended to supplant agency discretion with legislative direction and public oversight, and thereby curtail the possibility of regulatory capture.

Since the enactment of the Clean Air Act, environmental special interests have prospered, primarily by leveraging the unique authorities they were accorded in the statute. In 2012, for example, NRDC and Sierra Club had revenues of approximately $100 million and $80 million, respectively. Thus enriched, both organizations now operate sophisticated campaign to influence political outcomes.**Moreover, by employing a legal strategy known as “sue and settle,” these environmental groups have seized EPA’s regulatory initiative. (Paradoxically, “sue and settle,” which is a means of contemporary regulatory capture, is made possible only by virtue of the Clean Air Act’s many deadlines—i.e., the supposed “solution” to regulatory capture in 1970.) In short, environmental special interests are exhibiting virtually all of the behaviors that defined regulatory capture 40 years ago…

…including a revolving door. Consider the following, non-comprehensive list of current and recent EPA political appointees that have come from green litigation groups (and vice-versa):

  • Joseph “Joe” Goffman, senior counsel in the agency’s Office of Air and Radiation, who is playing a big role in pending greenhouse gas regulations, was a senior attorney at the Environmental Defense Fund between 1992 and 2004.
  • EPA science advisor Glenn Paulson formerly was at the Natural Resources Defense Council.
  • Ex-EPA Region 8 administrator James Martin, who resigned in early 2013 after misrepresenting his use of private email to conduct official business,  had worked for a decade as an attorney at Environmental Defense prior his appointment.
  • In April, Environmental Protection Agency (EPA) official Lisa Garcia joined the prominent environmental law group Earthjustice.
  • Alfred “Al” Armandariz, the infamous former EPA Region 6 administrator who compared his environmental enforcement strategy to “cruxifiction,” was a technical advisor to WildEarth Guardians and also associated with Sierra Club before his appointment; after he resigned in a storm of controversy, he quickly found employment at Sierra Club’s “Beyond Coal” campaign.
  • Current EPA Region 9 administrator Jared Blumenfeld, previously worked at the Natural Resources Defense Council and the Sierra Club Legal Foundation.
  • EPA Acting Assistant Administrator for Water, Nancy Stoner, is a veteran of the Clinton administration EPA, and in between her public service, she served as the Co-Director of the Natural Resources Defense Council’s Water Program.
  • In 2009, Micahel Goo went from being NRDC’s legislative director to special counsel for (then Rep., now) Sen. Ed Markey on the (now defunct) House Select Committee on Energy Independence and Global Warming. From there, he became associate administrator of the EPA’s Office of Policy, in which role he coordinated with green groups on climate regulations. In late 2013, Goo moved to the Department of Energy. The revolving door spins fast with this one.
  • Michael Tejada, who currently heads EPA’s Environmental Justice Office.  Before joining EPA, he worked for Air Alliance Houston, on whose behalf he filed a lawsuit against EPA, alleging the agency had failed to regulate hazardous air pollution from refineries.  Six months later, in March 2013, Tejada was appointed to head EPA’s Environmental Justice office.  Last August, EPA and the plaintiffs settled the suit, thereby binding the agency to a deadline for action.
  • Earlier this week, EPA Inspector General reported that it had “counseled” an EPA employee for a violation of an ethics pledge, for having participated in any matters, substantially or directly, related to a former employer. The IG investigation disclosed 13 incidences in which the appointee violated the ethics pledge by having communications and/or meetings relating to the performance of his official duties with the two organizations.

N.B. The themes established in the first three paragraphs of this post are the subject of a forthcoming law review article I’ve authored, which I’ll post when published.

** On Sierra Club’s Politics & Elections webpage, the organization boasts of how, “Working closely with Obama for America, we recruited more than 12,000 members to join Environmentalists for Obama, to participate in ‘Get Out the Vote’ (GOTV) shifts on Election Day, and to plug into the Obama campaign’s dashboard to make over 30,000 phone calls…It worked.  On November 9, the Obama campaign acknowledged our contribution this cycle, stating the Club was ‘an integral part of (the) win’”).

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