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.




CEMENTING AN ALLIANCE

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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HOW THE GAME IS PLAYED

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."




HOW INDUSTRY SPELLS RELIEF

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 CAMPAIGN FINANCE WAR

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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