Industry groups with close ties to EPA Administrator Scott Pruitt are considering a highly unusual approach to undoing the Obama administration’s most controversial water regulation — pushing Pruitt to hand the job to private lawyers.
Such an approach would help Pruitt bypass the Environmental Protection Agency employees who spent five years writing the Waters of the U.S. regulation — the kinds of career federal bureaucrats whom supporters of President Donald Trump often deride as the "deep state." Trump has ordered the agency to replace the water rule, a sweeping regulation that has stirred up opposition from groups including the agriculture, oil and gas, and development industries.
But legal experts say privatizing the rule-making process in this manner would be almost unheard of. Although it’s likely legally doable, they say, it would raise a host of ethical questions, while probably limiting the public’s view into decisions about which streams, lakes and wetlands get federal protection.
Environmentalists call it alarming that anyone would even seriously discuss the possibility.
“To then say it’s OK for a cabal of industry groups to put some gun for hire in charge of writing the rule, that just seems absolutely, wildly unethical,” said John Rumpler, who directs the clean water program for Environment America. His group supports the 2015 rule, which increased the number of creeks and wetlands that receive automatic protection under the Clean Water Act after two muddled Supreme Court decisions.
Sen. Tom Carper of Delaware, the top Democrat on the Environment and Public Works Committee, expressed “incredulity” Tuesday after reading POLITICO’s reporting on the potential outsourcing.
“I urge you in the strongest possible terms to disavow this reported industry plan, if true,” Carper wrote Pruitt in a letter. He added, “I question the legal validity of allowing industry to assist the agency in writing a rule-making proposal, and consider it an utter and complete abdication of EPA’s responsibility to protect the water and people of this country.”
EPA has not responded in detail to questions about the issue. “To my knowledge, we are not contracting with an outside firm at this time for WOTUS,” spokeswoman Liz Bowman said, using an acronym for the water regulation.
The idea of turning to private lawyers is taking shape in discussions among members of the Waters Advocacy Coalition, which advocates restraining the scope of federal water regulation on behalf of more than 60 industry groups including the American Farm Bureau Federation and the National Mining Association. The coalition is represented by the firm Hunton & Williams, whose lawyers fought Obama-era environmental regulations alongside Pruitt when he was Oklahoma’s attorney general.
Supporters of outsourcing the rule rewrite want to help Pruitt replace the Obama-era regulation quickly despite the agency’s dearth of political appointees, multiple industry sources said, requesting anonymity to divulge private conversations. Industry insiders have reached out to lawyers who might be interested in leading a water-rule rewrite from outside the agency, according to an environmental lawyer who served in a previous Republican administration and recently received one such overture.
But members of the coalition appear torn on whether privatization is the right approach, according to sources familiar with the internal debate. It is unclear whether anyone has taken the idea to Pruitt or his staff, or whether the administration would be open to it.
EPA and other agencies routinely hire contractors to produce technical analyses or sort through public comments related to rule-makings, but tapping them to write the actual rule would be rare. And legal experts say it would stretch the limits of federal contracting law and present ethical questions for any lawyer who took on the work.
Environmentalists like Rumpler say key decisions about regulations are supposed to be made by people in Senate-confirmed positions to ensure a transparent, accountable rule-making process.
Still, outsourcing government work would not necessarily be out of character for Pruitt. As Oklahoma’s attorney general, he regularly hired outside counsel to work on litigation and worked closely with industry groups to challenge environmental rules. In some cases he took industry-drafted language almost verbatim and sent it out on his office’s letterhead, a 2014 New York Times article found.
Pruitt also has a history with Hunton & Williams, the water coalition’s law firm. In 2013, the firm’s senior director of governmental relations, Roderick Hastie, prepared talking points against an EPA rule that he encouraged Pruitt’s deputy solicitor general to “cut and paste,” according to emails released after an open-records lawsuit in Oklahoma. Pruitt also invited one of the firm’s top attorneys to a 2013 Summit on Federalism and the Future of Fossil Fuels he hosted in Oklahoma City.
Don Parrish, senior director for regulatory relations at the American Farm Bureau Federation, said the idea has not been discussed at formal meetings of the Waters Advocacy Coalition, which he chairs.
“That’s something that our coalition has not talked about nor would we take a position on,” he said.
But Pruitt has touted the administration’s move to roll back the water rule to industry groups. He vowed that “relief” was coming soon to farmers when he spoke at the Farm Bureau’s Washington-based Advocacy Conference in February, just hours after Trump signed the executive order directing his agency to review and rewrite the Obama administration’s water rule. Parrish said the coalition as a whole has not met with Pruitt or his team, but would not address whether individual members have.
It is not unusual for EPA to hear from experts representing both industry and environmental groups when writing rules, although the agency generally tries to avoid getting too close so as not to violate the Administrative Procedure Act. That law requires that all material and communications that inform the agency’s decision be placed in the public record.
Past administrations have faced accusations that they got too close to that line. Conservatives criticized the Obama administration’s closeness to environmental groups such as the Natural Resources Defense Council, accusing them of “secretly” colluding on climate change regulations, while Democrats denounced the secrecy of the meetings that former Vice President Dick Cheney’s energy task force held with industry groups.
One argument in favor of outsourcing EPA’s rule-writing now is a shortage of political appointees to handle the job. Trump has not nominated anyone to lead the agency’s water and general counsel offices — two positions that were critical to writing the Obama-era rule — and it is an open question whether he will.
For now, the rewrite effort is being shepherded by Sarah Greenwalt, a senior adviser to Pruitt at EPA who went to work for him in Oklahoma just after finishing law school. But the bulk of the work is being done by career staffers in EPA’s Office of Water. Nearly all of those staffers spent years building the Obama administration rule, raising concerns among some of Pruitt’s allies about whether they can be trusted to dismantle it.
Meanwhile, some of the legal experts whom industry groups would like to lead the rewrite are reluctant to join the agency’s staff.
Working as outside counsel on the rewrite could offer a seasoned lawyer more flexibility and more money than a government position would, while sidestepping a Senate confirmation fight. And experts say few legal obstacles would prevent the agency from tapping an outside lawyer for the task — despite rules that prohibit hiring outside contractors for “inherently governmental functions … such as determining the content and application of regulations.”
Agencies across government have become more and more reliant on contractors in recent decades. But typically, agencies that bring in outsiders for regulatory work specify in the paperwork that the contractor is offering only assistance, and that federal officials will make the final decision, said Dan Guttman, an expert on federal contracting at New York University Shanghai.
“You end up with this fiction that as long as the official signs the final document, it doesn’t matter,” Guttman, who investigated federal contracting as an aide to then-Sen. David Pryor (D-Ark.). “You deal with this by wordsmithing.”
Laws designed to prevent conflicts of interest among federal contractors also may not prove much of a barrier, despite the likelihood that any law firm with the requisite Clean Water Act expertise would likely have a long roster of clients with a stake in a new regulation’s outcome.
Any firm EPA hired would have to disclose its potential conflicts, but it could still win a contract if it demonstrates it is taking steps to avoid any impropriety — such as walling off its attorneys working on the rule from those representing clients with a stake in its outcome — and convinces Pruitt that its work would be in the government’s interest.
Meanwhile, rules governing individual conflicts of interests, rather than corporate conflicts of interest, wouldn’t apply to a contractor unless they were written into the contract, said Kathleen Clark, a Washington University Law School professor. For example, a federal employee with a weekend job working for a coal company would be automatically barred from working on a regulation that affected the coal industry — but a contractor in the same position would not, she said.
A bigger challenge could be finding a lawyer willing to do the work. Attorneys risk being disbarred if they represent opposing sides in litigation, and they take pains to avoid conflicts among their clients. Taking on a rewrite of the water rule could raise red flags at some of the firms with the most expertise in the Clean Water Act.
Even if these hurdles could be overcome, it’s not clear that hiring an outside lawyer to run EPA rule-making would gain the agency anything besides a giant headache, said Cary Coglianese, who leads the University of Pennsylvania Law School’s Program on Regulation. He said the rule-making process already allows ample opportunities for industry groups to weigh in, often in less obvious ways.
“What good lawyers always worry about is not only real conflicts of interest, but the appearance of conflicts of interest,” Coglianese said. “If, indeed, you’ve got someone who looks too partisan and the agency’s trying to basically circumvent the nomination and confirmation process by having a general counsel that’s essentially on retainer — that’s just the kind of swampy arrangement that the administration has claimed it wants to drain.”