"This hopefully will be a breath of fresh air," exclaimed National Mining Association spokesman John Grasser, with no intended irony, after he learned that J. Steven Griles had been nominated as the Department of the Interior's deputy secretary. Griles, who epitomizes the revolving door between government and industry, has alternated between getting rich working for industry and serving at high-level government posts, where he has devised industry-friendly policies to open public lands to drilling and mining.
During the Reagan years, Griles presided over the gutting of the Interior Department's Office of Surface Mining. He was accused of suppressing U.S. Fish and Wildlife Service reports revealing the environmental hazards of offshore drilling in California in order to speed lease sales. And on his way out in 1988, he gave a "farewell gift" to big coal, reducing royalty rates just before taking a job in the industry.
Between his government stints, Griles served as a vice president for the mining giant United Co. and worked as a lobbyist for leading oil, gas and mining companies.
During his 2001 Senate confirmation hearings, Griles attempted to show genuine remorse for his activities during the Reagan years, insisting to a skeptical Sen. Ron Wyden (D-Ore.) that he had grown "older, and perhaps wiser," and "learned that through listening and bringing people together better solutions can occur." But Griles' recent activities offer precious little evidence that he has changed.
Beneath the rolling ranches of central Wyoming's Powder River Basin, lies a rich source of clean-burning natural gas known as coal-bed methane; it's arguably the equivalent of more than a year's gas supply for the entire country. While the federal government owns only 10 percent of the basin's surface land, it owns 63 percent of rights to the area's underground minerals. But most ranchers living above coal-bed methane deposits first learned of their property's subterranean riches when industry representatives knocked on their doors. The Interior Department had already sold the underground mineral leases to the oil and gas companies; only the details of surface damage could be negotiated. And with 51,000 wells slated to be drilled in Wyoming over 10 years, the damages on the surface will amount to more than just a blemish: 17,000 miles of mostly dirt and gravel roads, 20,000 miles of new pipeline, and close to 5,000 containment pits for the more than 1 trillion gallons of non-irrigable water pumped from underground.
The master industry strategist of this project was one J. Steven Griles. From 1998 to 2001, Griles worked as a lobbyist for National Environmental Strategies (National), a firm founded by former Republican National Committee Chairman Haley Barbour. Griles also lobbied for NES Inc. and his own firm, J. Steven Griles and Associates, during which time he represented the Coalbed Methane Ad Hoc Committee, as well as Western Gas Resources, Devon Energy and Redstone, all major players standing to benefit from drilling in the Powder River Basin. After his appointment at the Interior Department, Griles sold his client base to colleagues at National and NES Inc. in exchange for an annual paycheck of $284,000 over a period of four years. In a letter Griles sent to the Interior Department's human-resources office in April 2001, three months prior to his appointment, he pledged to recuse himself for "the duration of this continuing financial interest," and "for two years after the final payment is received" from any matters that might affect National and NES Inc.'s abilities to make their annual payments (or any matters involving the two firms or their clients).
But by August 2001, Griles had reduced the recusal period to just one year. That recusal lapsed earlier this month, and Griles is now technically free to supervise matters involving National and NES Inc., which continue to represent the major players in coal-bed methane development. To Griles, the $284,000 annual compensation is "book value" for "the value of the client base I have built." To critics, it's a blatant conflict of interest.
Kristin Sykes of Friends of the Earth says of Griles: "He's so embroiled. He worked for the Coalbed Methane Ad Hoc Committee, then he goes to Interior and greases the skids. He's been working on it from start to finish and just happens to be finishing it up while he's in the public sector."
Griles' behavior has even drawn the ire of conservatives, including Tom Fitton of the right-wing Judicial Watch, known for hounding President Clinton in the Monica Lewinsky case. "He's receiving money from a company whose finances are dependent on decisions he's making," Fitton says of Griles. "They've put what many believe are needed energy reforms in jeopardy because of appearances of impropriety." As of press time, the Department of the Interior had not responded to any of the Prospect's questions regarding the appearance of impropriety.
Griles' conflict of interest came into even sharper relief this April, when he intervened after learning that the Environmental Protection Agency planned to reject an industry-friendly environmental-impact statement on the Powder River Basin. The draft statement was prepared by Greystone Environmental Consultants, a private firm. Incidentally, Greystone had been recommended to the Interior Department in June 2000 by Western Gas Resources, a client of Griles' at the time. Griles sent a memo to Linda Fisher, the EPA's second-in-command, urging her not to release an evaluation that "will create, at best, misimpressions and possibly impede the ability to move forward in a constructive manner."
This episode led to another spate of outcries from the environmental community. Griles eventually signed a second recusal on May 8 disqualifying himself from any further matters related to these impact statements. But in the eyes of ethics watchdogs, the damage had been done.
Bill Allison, of the nonpartisan Center for Public Integrity, finds the multiple recusals almost comical. "For a person who becomes a federal official, it's not up to him to jump in and out when he wants," Allison says. "You can't recuse yourself except when you feel like weighing in on an issue." And if the recusal is genuinely observed, wonders Allison, then what's the point of appointing someone with so many strong ties to industry to a largely regulatory office? "Why do you want him there if he can't do the job he's there to do?" Allison asks.
And despite the two recusals, it appears that Griles continues to run the show. According to an Interior Department official who wishes to remain anonymous, "Nothing happens here without Griles' signature. He's the secretary of the Interior. I don't know what [Secretary] Gale Norton does all day."
The pattern echoes Griles' earlier career. In 1988, when the Department of the Interior's Fish and Wildlife Service criticized California offshore-drilling lease sales, Griles attacked its comments, saying "[This] is part of the public record and could prove very damaging to this lease sale." In a press conference in April 1989, soon after the Exxon Valdez oil spill, Rep. Mel Levine (D-Calif.) pointed to a Griles memo as "the 'smoking gun' of an agency whitewash." Rep. Leon Panetta (D-Calif.) accused Griles and company of "trying to 'slam-dunk' oil drilling off the California coast without paying attention to its consequences." Despite Griles' assertions to the contrary, the latest EPA episode reveals that little has changed.
Griles' dubious judgment is not limited to the environment. As the Interior Department's deputy secretary, he's also responsible for the Bureau of Indian Affairs, which is currently being sued by 300,000 American Indians in a dispute over mismanagement of federally administered trust accounts dating back to 1887. If victorious, the plaintiffs could collectively receive close to $10 billion. In November 2001, Griles filed an affidavit confirming that he was the Interior Department official responsible for trust reform. Ongoing failure to account for missing trust money has left Norton and Griles facing contempt charges in the ongoing Cobell v. Norton lawsuit.
The Interior Department's bungling of the case became more evident on July 30, when its special trustee for American Indians, Thomas Slonaker, resigned. Slonaker claims he was forced out, and sources close to the case say Griles and White House counsel Kyle Sampson barred Slonaker from telling the Senate Indian Affairs Committee that the Interior Department was unable to live up to its trust responsibility because documents had been destroyed. When Slonaker, in response to a question, nonetheless told the committee the real story, he was gone from the Interior Department within days. An angry Sen. McCain (R-Ariz.) has promised a congressional investigation of Slonaker's so-called resignation.
Griles exemplifies an administration in which high-level appointees move seamlessly from lobbying firms and big corporations into roles where they are charged with regulating the industries from which they came. Despite a 1990 executive order -- which prohibited government employees from accepting "any gift or other item of monetary value from any person or entity seeking official action from, doing business with, or conducting activities regulated by the employee's agency" -- Griles takes in $284,000 per year from his old lobbying firms. They, meanwhile, continue to represent companies (many of them former Griles clients) that are seeking action from, doing business with and are regulated by the Department of the Interior.
Meanwhile, in the Powder River Basin, massive coal-bed methane development is all but certain. Ranchers and environmentalists managed a small victory this year when Interior's Board of Land Appeals upheld their protest against lease sales based on an environmental-impact statement issued before coal-bed methane was even on the map. But the board may not have the final word.
The oil company Pennaco (now Marathon) has since sued the Department of the Interior, and that case is now in federal court. But Norton and Griles don't seem intent on mounting a defense, although the case names them as defendants. On July 18, the Interior Department's solicitors requested reconsideration and a stay. The Wyoming Outdoor Council and others have filed a motion to intervene to ensure a solid defense of the board's decision. "You wonder how hard they're going to defend it," says Wyoming Outdoor Council attorney Tom Darin. Considering what Norton and Griles' old industry buddies stand to lose if the Interior Department wins, it's not surprising.