Toxic Cash: How Lobbyists Poisoned the EPA

When 58 House Republicans bucked their party leadership in November and voted down 17 budget riders designed to give particular industries special dispensation from environmental laws, it seemed like the corporate lobbyists had finally been beaten back. Until then, the story of environmental legislation in the 104th Congress was of unprecedented industry influence--corporate lawyers for well-known polluters ghostwriting amendments, even whole bills.

But the November victory over the budget riders was hardly conclusive. Although the riders represented the most egregious giveaways, the Republicans have offered their corporate sponsors lots of other goodies. They have tried to weaken the provisions of specific environmental laws, from the Clean Water Act to the Safe Drinking Water Act and Superfund. They have sought generally to curtail federal rule-making by setting steep cost-benefit tests and creating new opportunities for polluters to go to court. And, while insisting that the Environmental Protection Agency (EPA) and other federal departments justify regulation with more data, they have sought to cut the EPA's budget by 23 percent, effectively hamstringing the agency's standard-setting and enforcement capacity.

At this writing, President Clinton is defending the EPA and threatening to veto the efforts to nullify the nation's environmental laws. But at least some of the Republican measures are likely to make it into a final budget deal, and even the proposals dropped from the budget, such as the 17 infamous riders, will return attached to other legislation. What follows is the tale of how some of these provisions became part of the Republican budget.




Congressman Joe Barton's Sixth District of Texas is splattered across suburban Dallas, touching Fort Worth and Arlington in disconnected, Rorschachian blotches resembling a gerrymanderer's nightmare. Lodged in one blotch is Midlothian, the self-proclaimed "cement capital of the world," home to several cement plants, including one operated by Texas Industries. That plant, according to Barton's office, collects and burns hazardous waste to fire its factory.

Perhaps not surprisingly, Barton is a close ally of the cement industry. As chairman of the oversight subcommittee of the House Commerce Committee, he also happens to be a key player on environmental issues and chief gatekeeper over the Clean Air Act. Another friend to the cement industry is Jim Chapman, a fellow Republican, who represents Texas's rural First District, which roughly neighbors Barton's and is nestled along the Oklahoma and Arkansas borders. Last summer, according to sources on Capitol Hill, Chapman convinced some friends in the Republican majority to attach a modest rider to a House Appropriations Committee spending bill, the one governing, among other things, the Environmental Protection Agency.

Little noticed at first, cloaked in technical language, the rider would have prevented the EPA from issuing or enforcing strict standards to control air pollution created by cement kilns that burn hazardous waste. Because the EPA is currently developing combustion rules intended to limit public exposure to the emission of dioxin, mercury, and other pollutants from these facilities, the rider would effectively have cut off the EPA at the knees while saving the cement industry tens of millions of dollars. According to an EPA background paper, "The rider will likely have the immediate effect of creating less stringent emission standards for a universe of the 190 or so incinerators, cement kilns and aggregate kilns that burn hazardous waste as fuels." About 24 cement kilns burn such waste, and the EPA estimates that each would be required to install between $1.4 and $1.8 million worth of antipollution equipment.

Chapman's suggestion got a warm reception from the House Republican leadership, including Appropriations Committee chairman Bob Livingston of Louisiana and the relevant subcommittee chairman, Jerry Lewis of California. Living ston and Lewis, in turn, shipped a copy of the cement industry rider over to Barton, for his approval, and of course, they got it. The rider became one of the infamous 17 that made it into the House appropriations bill.

How is it possible that the cement industry managed to win such an explicit, narrowly focused favor buried deep inside a multibillion-dollar appropriations bill? The flow of campaign money provides a good hint. The cement industry had raised enormous sums of money for the Republican Party. On May 16, 1995, Richard Creighton, president of the American Portland Cement Alliance (APCA), took his place at the head table as one of three cochairs of the "1995 Republican Senate-House Dinner," a fundraising gala that pulled in millions of dollars for the Republican Party's campaigns. An April 28 memo from Senator Paul Coverdell, Republican of Georgia, cites Creighton as one of "our top fundraisers" and lists him as having raised $161,500.

"You don't buy influence," Creighton says. "The money doesn't impress the legislators." Creighton himself is impressed, however, by the sheer number of political action committee (PAC) solicitations he gets. "I had a call from a congresswoman asking if we would support her for a fundraiser on [November 1]," he said. For that one day he had 14 invitations, ranging in price from $500 to $1,000. "We will sit down in the office, review those seeking financial support, and decide whether that particular member is someone who we believe deserves our support."

Creighton says the work on this particular rider was handled not by his group but by a related cement industry group, the Cement Kiln Recycling Coalition (CKRC), though the two cement groups have members in common. Remarkably, unusual technical language used in a July 1995 petition to the EPA by a law firm paid by CKRC appears, word for word, in the cement kiln rider that was attached to the appropriations bill just a few weeks later. According to an EPA paper, "It is hard to draw any other conclusion than that the bill language came directly from a downtown law firm."

On the day that the House convened to begin debate on the merits of the 17 riders, including the one pertaining to cement kilns--the vote was postponed--the House chaplain began the proceeding with an unintentional reminder of how the Congress all too often works. "Remember," he intoned, "it is in giving that we receive." The cement industry could not agree more.



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The attack on Superfund is another case study in the changing nature of lobbyist influence and the willingness of Republicans to ignore traditional congressional procedures in order to ram through industry-friendly legislation.

Created in 1980 by the Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund program is responsible for emergency response and cleanup at tens of thousands of hazardous-waste sites, contaminated by chemical and oil dumps, leaking underground tanks, and abandoned industrial sites. Nearly 1,300 Superfund priority sites are listed as needing urgent attention.

Partly funded out of general tax revenues, the Superfund program is also financed by a tax on oil and chemical companies, much to the companies' dislike. A much wider circle of companies is concerned about Superfund because of actual or potential liability for the cleanup of toxic-waste dumps, since the law holds polluters liable for cleaning up messes they have made. When the Republicans came to power in Congress, dozens of oil, chemical, transportation, and industrial firms, along with major insurance companies, joined the Superfund Reform `95 coalition and began their frontal assault.

Three distinct offensives emerged. The overall regulatory reform bill promised to paralyze Superfund enforcement by imposing onerous cost-benefit analyses and inviting even more tangled litigation over existing sites. Wholesale budget cuts of up to 36 percent ($560 million) threatened to "restrict and slow cleanups in hundreds of communities nationwide," according to the EPA. And under the stewardship of Representative Mike Oxley, chairman of the hazardous materials subcommittee of the House Commerce Committee, a drastic rewrite of the Superfund law itself was under consideration.

But while concentrating on different areas of the Superfund machine, the offensives all followed the same basic process:

Step One: The Cash Flows. Republican Mike Oxley's Fourth District of Ohio is located in the heart of the Corn Belt in the north central part of the state, filled with farms and small towns. Unlike areas in such states as New Jersey, Texas, and Louisiana, Ohio's Fourth does not rank high on the list of congressional districts containing Superfund sites. In 1994, Oxley was so popular that he managed to win 100 percent of the vote, doubtless because he had no opponent. Yet, to scare off ghostly challengers, Oxley raised more than $470,000 during the 1993-94 cycle. Nearly two-thirds of that sum came from PACs, and 99 percent of the PAC total derived from business PACs, the Federal Election Commission (FEC) reports.

Nearly $45,000 of that total--about 10 percent of Oxley's 1993-94 campaign receipts--came from companies that belong to Superfund Reform `95, according to the Environmental Information Center, using FEC data. And, says the EIC, "With the exception of one Ohio business, all these contributions came from outside Oxley's state. Who is he representing?" In all, since 1989, Oxley has pulled in $321,310 from corporate PACs representing industries that have a direct interest in reducing their liability under Superfund, the EIC reports.

Step Two: The Partnership Develops. Like the cement kiln rider, Oxley's Superfund reform bill appears to have been written not by Commerce Committee staff but by the American Petroleum Institute (API) and the National Environmental Development Association (NEDA), another industry group. After a series of meetings between Superfund Reform `95 lawyers and lobbyists with Oxley's staff in August, lawyers for API and NEDA presented draft bills to the committee. When the EIC compared the language in the industry-written drafts to that of an official Commerce Committee draft of the bill, entire sections appeared lifted virtually verbatim from one to the other.

So closely did Oxley's staff follow industry's lead in transcribing the lobbyist-provided language that in one case they got the name of their own bill wrong. While Oxley called his bill "The Reform of Superfund Act," the API called the bill "The Superfund Reform Act"--a name that shows up in at least one paragraph of the actual bill.

"We did not write that bill at all," says API spokesman Joe Lastelic. "We provided the information they desired. And the committee decided that's the language they wanted to use." Lastelic says that it is an "error" to think that money from the oil industry sways votes on the Hill. But he readily admits that oil industry PACs give money to elect members of Congress that favor their point of view. "That's the way the system in America works," he says. "There's no way to get elected without money in this country, is there?"

Oil and gas PACs, among the most generous givers to Congress, apparently understand this. In 1993-94, according to data gathered from the FEC by the Center for Responsive Politics, oil and gas PACs pumped $6.3 million into congressional campaigns. Exxon's PAC sent $495,000 into the treasuries of federal campaigns, 94 percent of which went to Republican candidates.

Theresa Larson, who coordinates Superfund work for the National Association of Manu facturers, acknowledges that the climate has changed significantly since the new Republican majority was elected. "The doors are more open for us to get our two cents in," she says, with some understatement.

Step Three: Congress Rushes to Judgment. Changing the enormously complex Superfund law, especially over the resistance of most Democrats and a growing bloc of moderate, pro-environment GOP members--not to mention a presidential veto--was daunting to the Superfund Reform `95 group. Early on, a version of the legislation Oxley introduced was modified to take into account the concerns of less radical legislators.

Yet Karen Florini, senior attorney at the Environmental Defense Fund and a specialist on Superfund, says Oxley's committee gave her group short shrift. The EDF could not meet with the committee before the draft bill was released, and had only one pro forma meeting afterward, she says, to no avail. In testimony before Oxley's subcommittee on October 18, Velma Smith of Friends of the Earth said that the bill "abandons the notion of restoration" and offers no more than "fences and filters on the tap." (Because the bill would scale back efforts to clean up many Superfund sites and instead opt to contain them, critics of the Oxley bill refer to it as "Superfence.")

NAM's Larson is pleased that Oxley is so eager to move the bill quickly. Along with Commerce Committee chairman Thomas Bliley of Virginia, and Pennsylvania's Bud Shuster, chairman of the House Transportation and Infrastructure Committee and chief sponsor of the bill revising the Clean Water Act, Oxley is "excited to be in the leadership" and working hard. "They're saying, `Let's show `em we are doers,'" Larson says with satisfaction.

Given the fact that the most radical revisions of Superfund and the Clean Water Act stand little or no chance of being enacted into law, however, what accounts for the fact that Oxley, Bliley, and Shuster are so willing to drive industry-authored extremist bills so hard? Because whether or not the bill eventually becomes law, such abject favor-currying by key committee chairmen is almost guaranteed to pay off in the form of continued substantial PAC contributions in 1996. In the queer calculus of Capitol Hill dealmaking, the end result matters less than what side you are on: Just show the PACs that you are a "doer."




Even if moderates pare the most radical bills, the Republicans' regulatory reform and drastic cuts in the EPA and Superfund budgets will neuter federal enforcement of existing laws. The story of regulatory reform in the 104th Congress is perhaps the most egregious example of Big Business literally setting the agenda, writing the legislation, and then guiding it through the legislative process with the full cooperation of the House and Senate leadership. The regulatory bill, the "Jobs Creation and Wage Enhancement Act" (H.R. 9), and its Senate companion would hurl dozens of monkey wrenches into the machinery of the federal government's regulatory machine. (See David C. Vladeck and Thomas O. McGarity, "Paralysis by Analysis," TAP, Summer 1995.)

Regulatory reform was Big Business's chief legislative agenda item in 1995, says John Cohen, executive director of the NAM's Alliance for Reasonable Regu lation. The ARR tirelessly worked regulatory reform during the year, along with a parallel organization representing smaller businesses, called Project Relief. Where the ARR brought together the large auto companies, steel makers, chemical firms, oil refiners, and the like, Project Relief was cobbled together by the kinds of medium-sized businesses that most fervently supported the Republican right and the Contract with America in 1994, and who maintain a lot of clout with Speaker Newt Gingrich and the crop of hard-edged Republican freshmen who viewed the Contract as the legislative equivalent of the Ten Com mandments, only more so.

Together, ARR and Project Relief have literally tens of millions of dollars in campaign contributions at their disposal. Widely reported earlier in the year was the fact that Project Relief was established in close coordination with the office of Texas Republican Tom DeLay, the Republican majority whip, who received more than $38,000 from businesses belonging to Project Relief. (In all, PACs linked to Project Relief funneled $37 million to members of Congress from 1989 to 1994.) DeLay, along with Gingrich--who pulled in $87,000 from Project Relief PACs during that period--and the House leadership, rammed H.R. 9 through a vote in the first 100 days of the new Congress. The Washington Post reported that 50 lobbyists from Project Relief firms served as lieutenants for DeLay and company in an all-out effort to win enough Democratic votes to make H.R. 9 veto proof. They almost succeeded, winning 51 Democrats in a 276-to-146 victory on February 23. "I don't think I've ever seen anything as blatant and naked as this was," says Gary Bass, coordinator of a coalition of consumer, labor, and environmental groups opposed to H.R. 9.


The course of regulatory reform became even more interesting in the Senate. There, almost from the beginning, Majority Leader Bob Dole took charge of the legislation, the Comprehensive Regulatory Reform Act (S. 343). Reaching out to a law firm that had a widely respected regulatory and government affairs practice, Dole hired Kyle McSlarrow from Hunton and Williams, an old-line Virginia firm with a high-powered Washington, D.C., office. In 1994 McSlarrow had run for Congress in northern Virginia and lost to Representative James Moran, a Democrat. But McSlarrow, who would become Dole's point man on regulatory issues, had been left with a significant campaign debt. Between the time that Dole announced McSlarrow's appointment in early January and his taking the position two months later, McSlarrow reaped a windfall, picking up a steady stream of PAC contributions and big-dollar individual gifts to help retire his campaign debt. According to an accounting of McSlarrow's postelection fundraising put together by the Center for Responsive Politics from FEC data, McSlarrow pulled in more than $29,000 in PAC contributions after Dole announced his new position, and, in one two-day period (February 13 and 14, 1995), another $36,500 from individuals at a fundraiser, largely from Washington lawyers and lobbyists.

But Hunton and Williams did more than send a junior lawyer to Dole's staff. Hunton and Williams, which has long represented electric utilities, especially those that make use of polluting, coal-fired generating plants targeted by EPA, cast a wide net immediately after the election seeking clients willing to utilize Hunton and Williams as their Washington technicians in securing regulatory reform. (In addition to the Edison Electric Institute and Long Island Lighting Company, Hunton and Williams also represented AT&T, Philip Morris, a number of drug companies, utilities, General Electric, and Digital Equipment Corporation.) As in the case of the cement kiln rider, the Superfund bill, and the revised Clean Air Act, special interest attorneys were openly involved in writing key sections of S. 343. Three Hunton and Williams lawyers, George Freeman, Turner Smith, and Henry Nickel, took charge of a briefing on March 29 for members on both sides of the aisle for the Senate Judiciary Committee, demonstrating far more knowledge of S. 343 than Larry Block, the committee's staff director.

Hunton and Williams's unashamed involvement in the legislative process led Ralph Nader's Public Citizen to file a complaint with the Senate Ethics Committee charging that the briefing violated Senate rules by "turning over the formal pre-markup staff briefing on the meaning of legislation to outside lobbyists." Unsurprisingly, the Ethics Committee rejected the complaint.

But Hunton and Williams hardly lowered its profile. When Dole's bill ran into trouble on the Senate floor--Dole was three times unable to win enough votes for closure on debate over the bill--the firm joined the Alliance for Reasonable Regulation in a quiet, behind-the-scenes effort to win a handful of Democratic votes. (The Republicans were solidly united behind S. 343, with the 30 cosponsors of the legislation having received a total of $6.6 million from members of Project Relief and the Chemical Manufacturers Association from 1989 through March 1995, according to an analysis by Citizen Action.)

The champion for the renewed push to win Senate approval of Dole's regulatory reform bill was none other than Virginia Democrat Charles Robb. And Robb, it turns out, is an alumnus of Hunton and Williams and maintains close connection with his former law partners. Beginning in August, Robb quietly began canvassing Democratic senators to see whether they would support some sort of slightly modified version of Dole's S. 343.

The Dole-Robb alliance was openly brokered by the Alliance for Reasonable Regulation. "We encouraged Robb's and Dole's staffs to talk to each other," says ARR's Cohen. "They know what our bottom line is, so we don't need to be at the table when they meet." And, concerning the bottom line, an analysis of FEC data by the Environmental Information Center shows that Robb received nearly $40,000 in 1993-94 from Hunton and Williams attorneys and clients, along with an additional $90,000 from corporations that support S. 343.




The assault on the environment continues on so many fronts that it is difficult to keep track of all of them: the opening of Alaskan forests to private industry, the evisceration of the Endangered Species Act, the selling-off of federal lands in the West, and the favors granted to timber, mining, and ranching interests, and more.

Despite the never-ending flow of campaign cash from special interests seeking "relief" from environmental protection laws, however, there are many signs that even within the Republican Party there is growing unease about the scope and pace of the environmental attack. Both polls and the hands-on experience of members of Congress who go back to their districts show that such measures are not supported by public opinion.

Thus, the Republican bloc is fraying at the edges. "We won 16 Republican votes in the House against the regulatory relief measures in the Contract with America, then 34 Republican votes against undoing the Clean Water Act, and finally 51 Republicans who voted against the EPA appropriations bill," said Gene Karpinski of U.S. PIRG. Of course, later 58 Republicans joined the Democrats to stall, at least temporarily, the GOP onslaught. "When members go back home and ask, do we want to weaken environmental laws, the answer is resoundingly no," he says.

The sheer power of the various business coalitions now attacking environmental rules is convincing more and more environmental groups to support campaign finance reform. Campaign contribution reports from the Center for Responsive Politics, Public Citizen, Citizen Action, and other groups have sparked more awareness of the problem among environmental advocates. Such new activist centers as the Environmental Working Group and the Environmental Information Center are rapidly building PAC databases to use as weapons in the battle to protect the environment. The Sierra Club, which is currently debating its own stand on campaign finance reform, has a PAC that it uses to defend pro-environment candidates in close races. According to Dan Weiss of Sierra, the Sierra Club PAC spent $600,000 in 1992 and another $400,000 in 1994 in support of House and Senate candidates, and Weiss cites four races in 1994 in which Sierra's campaign contributions may have provided pro-environmentalist Democrats the margin for victory: Connecticut's Sam Gejdenson, New York's Maurice Hinchey, Oregon's Elizabeth Furse, and California's Jane Harman. But Weiss admits, "We are never going to outspend Exxon, GM, Georgia-Pacific, and other special interests."

The 58 Republican votes in support of the EPA are ultimately more than a slap at the lobbyists; they testify to the continuing grassroots appeal of environmentalism, almost unique among liberal causes. Twenty-five years after the first Earth Day, the environmentalist ethic has become part of the American creed and proven strong enough to withstand even the ferocity and cohesion of the Gingrich onslaught. Even money has its limits.

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