Commentary: Lawsuit against Clean Air Act by members of Congress

Raises Conflict-of-Interest Questions

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 Updated:

WASHINGTON, September 5, 2000 — For nearly a quarter-century, almost since the very day of his swearing in as a U.S. senator, Utah Republican Orrin Hatch and others have waged war on the federal Clean Air Act, using virtually any and every weapon at hand. But when Hatch, former White House counsel C. Boyden Gray and Representative Tom Bliley, R-Va., fired their latest shot — a "friend of the court" brief filed in federal court arguing that the law is unconstitutional — they advanced the cause of corporate polluters — and arguably violated congressional ethics rules.

Hatch and his allies — Gray, Washington lobbyist Alan Charles Raul and Bliley, R-Va., chair of the powerful House Committee on Energy and Commerce — delivered a victory that the oil, chemical, coal, trucking, auto and other polluting industries have been seeking for three decades: namely, a May 14, 1999, ruling by the U.S. Court of Appeals for the District of Columbia blocking enforcement of a key provision of the Clean Air Act. (The Supreme Court has agreed to review the appeals court’s decision in American Trucking Associations, Inc., v. EPA, and has set oral arguments for November 7.)

In pursuing this case, one or more of these influential Washington insiders might have violated requirements of the ethics and lobbying rules. Even more troubling is that they succeeded in invoking the assistance of the Congress and the courts in pursuit of the agenda of a narrow special interest — and kept the extent of their ties to and coordination with these interest groups largely hidden from public scrutiny. In addition, the implications of the appeals court’s decision sweep far beyond the confines of the Clean Air Act, and cast a shadow over virtually every federal law, ranging from laws that protect workers to others that dictate the design of highways.

But in order to win that prize, Hatch and Bliley each filed briefs, which were written by Gray and Raul. They are worth, in all likelihood, tens of thousands of dollars. Lawyers disagree as to whether a friend of the court brief constitutes a gift, which would be a violation of congressional ethics rules. But it is clear that the work of Gray and Paul advanced the cause of corporate polluters. What’s more, by adding their names to the briefs, Hatch and Bliley increased their worth inestimably. If the briefs do not constitute a gift, then the ethics laws have a loophole big enough for a truck — or in this case, the American Trucking Associations — to drive through.

The interest of these two lobbyists in the outcome of the case was by no means academic. Gray was one of the Clean Air Act’s harshest and most tenacious critics, and his lobbying clients at the time the briefs were written included the New England Electric System, an electric utility with a substantial stake in the outcome of the lawsuit. He also lobbied from January 1, 1996, to July 1, 1997, for Geneva Steel, a Provo, Utah, firm that emits a prodigious amount of the air pollutants that would be regulated by the proposed rule. Raul had lobbied for the American Automobile Manufacturers until July 1, 1997. Both were also registered to lobby for a variety of other companies, though none with a direct connection to the air pollution rule. In addition, both of their law firms were registered lobbyists for chemical, mining and other associations and companies that were parties to the lawsuit. Prominently displayed on the cover of both briefs were the names of Gray and Raul, as well as their gilt-edged law firms, Wilmer, Cutler & Pickering and Sidley & Austin, respectively. Yet neither the briefs nor the many other filings and reports required by federal ethics and lobbying laws disclosed the conflicts. These and other facts raise the question whether Gray or Raul might have violated requirements of the Lobbying Disclosure Act, violations of which can trigger fines up to $50,000.

Bliley, Hatch arguments endorsed

The briefs they filed played a pivotal role in the suit’s outcome. Bliley’s, the first of the two to be submitted, arrived in the Court of Appeals on March 23, 1998, the deadline that had been established by the court for filing. Hatch and Bliley sought neither the permission of parties to the lawsuit, nor the consent of the court to file the briefs, arguing that as members of Congress, each was a federal “agency” and thus exempt from the usual notice and consent requirements. The U.S. Department of Justice argued against Hatch and Bliley on this, but the three-judge panel found in their favor. Then, when the court issued its decision on May 14, 1999, it rejected most of the industry arguments, embracing instead those advanced by Bliley and Hatch – or should that be Gray and Raul? In holding that the language used by Congress in the Clean Air Act is unconstitutionally vague, the Court of Appeals rejected language that is a paragon of specificity compared with many laws that have previously been upheld by the Supreme Court. The Clean Air Act requires air pollution standards “the attainment and maintenance of which in the judgment of the Administrator, based on (air quality) criteria, and allowing an adequate margin of safety, are requisite to protect the public health.” In contrast, the federal Communications Act of 1934 requires the Federal Communications Commission to regulate broadcasting in the “public interest,” while the now defunct Federal Power Commission was to establish “just and reasonable” electricity rates. Bliley, Hatch, Gray and Raul, with remarkable ease and little public attention, persuaded a court second in prestige only to the Supreme Court to cast a shadow over the legality of virtually every federal regulatory law on the books. That they did so ought to be a matter of grave concern. Yet outside the small community of air pollution regulators, lawyers, lobbyists and scholars, few officials, reporters — and certainly virtually no ordinary citizens — know the full extent of this case and its implications.

Origins date to 1995

The suit’s origins date to 1995 when, after having been sued by the American Lung Association, the administrator of U.S. Environmental Protection Agency, Carol Browner, was ordered by a federal court to revise the standards for ground level ozone, or smog. She started that process, and decided to include a standard for fine particulate matter as well, because many of the sources are the same and so are the controls. Throughout the five years since, Browner and the EPA have been dogged by Hatch, Bliley, Raul and especially Gray, who has fought to eviscerate air pollution rules since he was chosen in 1981 to manage Ronald Reagan’s Presidential Task Force on Regulatory Relief. As the deadline for proposing new standards approached, the oil, coal, steel, chemical, trucking and other industries created the National Air Quality Standards Coalition. Organized to mobilize enough congressional opposition to kill the EPA proposals before they could be formally issued, the AQSC was described by Industry Week as “one of the largest and richest Washington lobbying coalitions in memory.” The magazine added: Comprising “nearly 800 companies, trade associations, small-business organizations, and local-government groups, the alliance is growing daily. Among its leaders are the National Association of Manufacturers, the American Petroleum Institute, Geneva Steel, the National Mining Association, and the American Automobile Manufacturers Association. “Its chief strategist,” the magazine continued, “is Washington lawyer C. Boyden Gray, a White House counsel in the Bush Administration.” Gray was involved with the coalition in part because of his client Geneva Steel, an independent steel maker located just outside Salt Lake City. Headed by Joe Cannon, who ironically was EPA’s assistant administrator for air and radiation during the Reagan administration, Geneva Steel was threatened by the proposed rules because its World War II-vintage facility emits prodigious amounts of the fine particulate pollution that they target. Indeed, the Geneva mill was the source of much of the most reliable information on the health effects of fine particulate matter. Studies of those living near the mills linked its pollution to increased respiratory infections, doctor visits and a variety of other ills. The Coalition, with Geneva Steel as an active member, began meeting in early- to mid-1996. As sometimes happens in Washington, not everybody attending Coalition meetings agreed with its objectives and tactics. Thus, even though its meetings were closed to the public, one person took careful notes, which were subsequently leaked to the press. These notes make it clear that Gray played a pivotal leadership role.

Harvard scientist labeled “enemy”

Notes from the November 1, 1996, meeting, for example, said “Boyden Gray . . . and just a few others are calling all the shots.” At a July 31 meeting, Gray was “sitting across from the committee chairman, Richard Clayton in muffled conversation. . . . While Gray said nothing during the meeting, it was clear that he was the star attraction.” Gray also played a substantial role in developing the AQSC strategies. At the February 6, 1997, meeting, for example, discussion turned to the scientist whose ground-breaking research helped support the EPA’s efforts at issuing the new rules, Joel Schwartz of the Harvard University School of Public Health. The notes say:

“Spent a lot of time on Schwartz. Gray spoke of impeaching his reputation, later changed to discrediting him. This crowd feels    Schwartz is ‘the enemy,’ and can be intellectually embarrassed.”

Within days, members of Congress were demanding the raw data that Schwartz and his colleague, Douglas Dockery, had collected for their research, and accusing EPA of using “secret science.” Chief among the accusers: Representative Tom Bliley.

Huge nationwide campaign

Starting in July 1996, the Coalition mounted a huge nationwide campaign designed to kill the rules before they could be effected. The EPA proposals were a prime topic at virtually every industry trade association meeting as well as at gatherings of state and local government officials and of environmentalists. Speaking at one conference, Browner said that the proposal was drawing a record number of comments. “They’re coming in by the boxloads — by the truckloads,” she said. Much of this was caused by the coalition’s campaign, and much of that could be attributed to Gray personally, for he not only attended numerous Coalition meetings, but made special recruiting trips. For example, National Journal reported that in December 1996, Gray “swept into Massachusetts to recruit fresh troops for a ground offensive against the Environmental Protection Agency” and make speeches to local business owners. Despite this and other trips, plus appearances on radio and television programs, meetings with EPA and White House officials, and many other activities, Gray’s filings with the Senate Office of Public Records indicate that he spent very little time engaged in lobbying activities.

Gray’s lobbying report to the Senate for that six-month period stated that he received only $20,000 in income from Geneva Steel. If Gray’s billing rate were the same $360 per hour as Raul’s, this would mean that from July 1, 1996, to January 1, 1997, he worked fewer than 56 hours for the Utah firm, or a bit more than two hours per week. Of course, it’s possible that some of Gray’s time was spent not working for Geneva Steel, but while wearing another of his hats – perhaps that of Citizens for a Sound Economy.

Based in Washington, D.C., CSE describes itself as an organization of “grassroots citizens dedicated to free markets and limited government.” However, it is commonly known as what Public Relations Quarterly has called a “corporate front group.” The publication explained that “the use of such ‘front groups’ enables corporations to take part in public debates and government hearings behind a cover of community concern [in order to] oppose environmental regulations, and to introduce policies that enhance corporate profitability.” Starting in March 1997, CSE launched a radio blitz attacking the proposed standards, running advertisements on 80 stations in 20 markets. The CSE campaign was costing a “healthy” six figures per week, CSE communications director Brent N. Bahler told National Journal.

Although CSE describes itself as “an army of activists committed to improving the well-being of American consumers through common-sense economic policies,” most of its money comes from corporations with a vested interest in the outcome. For example, The Washington Post reported that soon after CSE began opposing an Army Corps of Engineers plan to restore thousands of acres of the Florida Everglades, it received $700,000 in contributions from Florida’s three biggest sugar enterprises, which stood to lose lands on which they were growing cane. The Post continued:

“The sugar contributions were never disclosed publicly but were outlined in internal CSE documents that detail how various corporate interests donated millions to the group to bankroll its efforts on issues of direct interest to them, from global warming to Florida tort reform. Along with those earmarked contributions, from companies such as Exxon Corp. and Hertz Corp., the organization received more than $ 1 million from Philip Morris Cos. at a time when CSE was opposing cigarette taxes. Phone company U S West Inc. gave $ 1 million as CSE pushed deregulation that would let U S West offer long-distance service.”

Gray chairs CSE’s board of directors, so it is not surprising that the organization committed itself wholeheartedly to upending the EPA proposals. From April 1997 to May 1999, Citizens for a Sound Economy issued 18 publications on the environment, eight of which were devoted to EPA’s proposed standards. CSE was registered during this period to lobby on “clean air standards,” and it did, although nowhere on CSE’s registration does it identify its chairman, Gray, as a lobbyist. This was only the tip of the iceberg of CSE involvement in this issue, however. As the organization boasted:

“Over the past three years, CSE activists throughout the country worked to defeat the Clinton-Gore power grab. More than 14,000 CSE members wrote letters, made phone calls to and showed up at town hall meetings of targeted policy makers. CSE Foundation briefing papers forced EPA to twice revise its claims about the health benefits of the new regulations, and advanced the case that the EPA had not relied on sound science. CSE Chairman Gray participated in a nationally televised debate over the EPA’s rules with EPA Administrator Carol Browner.”

Gray’s many hats

In a lengthy profile of Gray in 1997, The New Republic magazine wrote “So many different money trails lead to, by and through Gray it is bewildering.” There is Gray the lobbyist, Gray the lawyer, Gray the former White House counsel, Gray the chairman of Citizens for a Sound Economy, Gray the head of the Alliance for Reasonable Regulation, Gray the co-chair of the Air Quality Standards Coalition, Gray the board member of The Federalist Society, Gray the major “soft money” contributor to the Republican Party, Gray the friend of judges and justices (many of whom owe their jobs to him), to name but a few. Until the filing of the Hatch and Bliley briefs, Gray’s principal involvement in the EPA rules had been in the context of the Air Quality Standards Coalition. These complex relationships raise the question of whether, for legal purposes, lobbying ceases when Gray doffs one hat and dons another – that is, if he appears on television as chairman of CSE, but is carrying the message of Geneva Steel and the Air Quality Standards Coalition, do the acts constitute lobbying activities? Or, if Gray writes a friend-of-the-court brief that is paid for by a nonprofit corporation that received a tax-deductible contribution from an oil company that is one of his firm’s clients and whose employees made campaign contributions to the member of Congress that signed the brief, is that lobbying?

If it’s not considered lobbying, it should be

Here again, lawyers disagree as to whether Gray’s activities constitute lobbying and, in truth, the question probably cannot be answered with certainty without access to his billing and other records. However, a case can certainly be made that Gray’s conduct constitutes lobbying and, if it doesn’t, it certainly should. Legally, lobbying activity includes “efforts in support of (lobbying) contacts, including preparation and planning activities, research and other background work that is intended, at the time it is performed, for use in contacts, and coordination with the lobbying activities of others.” Thus, if the law is read literally, Raul and Gray’s work in writing friend-of-the-court briefs could constitute “lobbying activity,” since notes from meetings of the AQSC indicate that litigation was discussed as one of the strategic options for dealing with the EPA standards on least one occasion, November 5, 1996, .

The point here is not that either CSE’s lobbying or Gray’s non-registration as a lobbyist were possibly illegal. Rather, it is that this is a loophole through which vested interests can and do funnel a river of dollars for the express purpose of influencing legislation. Time and again, CSE, Gray and a variety of industries, ranging from Phillip Morris when the subject was smoking to Exxon when it was the environment, collaborated to kill or cripple regulations and laws, with not one penny of their efforts being disclosed to the public. Contrary to conventional wisdom, mere disclosure is insufficient to prevent wrongdoing. As this case demonstrates, wrongdoers can hide in the shadows of even the brightest searchlight. As lobbyists, Gray and Raul are both subject to the Lobbying Disclosure Act, which was enacted in 1995, supposedly to toughen penalties and tighten loopholes. The basic idea is fairly simple: if, say, a chemical company hires a Washington lawyer that spends 20 percent or more of the time devoted to the chemical company on lobbying “activities,” including at least one lobbying “contact,” the lawyer must register under the law as a lobbyist. Once a registration is filed, lobbying reports must be filed every six months, even if there is no actual lobbying going on during that time. If there has been lobbying activity, the law requires reports to contain “a list of specific issues (including) bill numbers” as well as “a statement of the Houses of Congress and the Federal agencies contacted.” When the relationship ends, a notice of termination must be filed. Violations of the law can trigger fines up to $50,000. Gray and Raul are both registered lobbyists, and have filed their reports regularly-not that the filings reveal much. Gray, for example, was a registered lobbyist in 1996, 1997 and 1998 for New England Electric, an electric utility serving about 1.4 million customers in Massachusetts, Rhode Island and New Hampshire. His February 12, 1996, registration filed with the Senate Office of Public Records states that the specific lobbying issue on which Gray would focus was “Clean Air Act.” However, none of the lobbying reports Gray filed over the following three years disclosed any actual lobbying by him on air pollution issues. That’s peculiar, because some former Senate staff members definitely remember Gray’s presence at a meeting during this time to discuss the impact of power plant emissions in the northeastern United States.

Taking the utilities’ line

“I don’t remember the words that he said,” remembered one former Senate aide, but it was “clearly a utility view.” The aide recalled that the meeting was to be a discussion between state officials and Senate staff whose members were from the Northeast to discuss air pollution from power plants, so Gray’s presence was a surprise to many participants.

“Pretty much everybody from the Northeast was there,” the aide said of the Senate staff attending the meeting and Gray was “kind of sniping” and “taking the line that was very much the line of the utilities.”

Gray’s presence at this meeting and his communications with the dozen or more Senate staff are not revealed in his lobbying reports. The law requires disclosure of both “the specific issues upon which a lobbyist . . . engaged in lobbying activities” and “the House of Congress . . . contacted,” but Gray mentions only working on the subject of “Schaefer bill (H.R.3790), ‘The Electric Consumers’ Power to Choose Act of 1996’,” and says nothing of the air pollution session. Despite Gray’s dogged efforts to kill the EPA rules, he failed. That left him, his clients and allies with only one alternative: a lawsuit.

In September 1997, virtually every polluting industry in America joined forces in a lawsuit to overturn the rules, filed with the U.S. Court of Appeals for the District of Columbia. Of the three judges assigned to the case two, Douglas Ginsburg and Stephen Williams, were appointed in 1986 by Ronald Reagan while Gray was in the White House. They, like Gray and Hatch, are active in affairs of the Federalist Society, an immense but low-profile cadre of conservative, and mostly corporate, lawyers, described by The Washington Monthly magazine as follows:

“With 25,000 members plus scores of close affiliates nationwide – including Supreme Court Justices [Clarence] Thomas and Antonin Scalia, Senate Judiciary Committee Chairman Orrin Hatch, and University of Chicago brain-boxes Richard Epstein and Frank Easterbrook (also a federal appellate judge) — the Federalist Society is quite simply the best-organized, best-funded, and most effective legal network operating in this country. Its rank-and-file include conservative lawyers, law students, law professors, bureaucrats, activists, and judges. They meet at law schools and function rooms across the country to discuss and debate the finer points of legal theory and substance on panels that often include liberals – providing friction, stimulus, and the illusion of balance. What gets less attention, however, is that the Society is accomplishing in the courts what Republicans can’t achieve politically.”

After the industry plaintiffs instituted their suit to overturn the EPA proposals, the court rules allowed those wishing to file friend-of-the-court briefs 60 days in which to announce their attentions. Bliley and Hatch were silent. Weeks passed, then months. Finally, when March 23, 1998, arrived, the last day on which briefs could be filed on the issue of the proposed ozone standard, so did Bliley’s brief. Excluding the cover page and the list of citations, it was 34 pages long.

Federalist Society connections

On May 7, 1998, Hatch’s brief attacking the fine particulate matter standard was filed. Excluding the cover page and the list of citations, it was 29 pages long. It was written by one member of The Federalist Society board, C. Boyden Gray, to be filed on behalf of another member of The Federalist Society Board, Orrin Hatch, to defend the corporate interests of a member of the Business Advisory Council of The Federalist Society, Joseph Cannon of Geneva Steel, in a case to be heard by two judges, Ginsburg and Williams, who are active participants in Federalist Society events, that will later be appealed to the U.S. Supreme Court to be heard by two justices who are active at Federalist Society events, Antonin Scalia and Clarence Thomas, and a third, David Souter, whose nomination was screened by the Federalist Society member who wrote the brief, Gray.

House and Senate ethics rules alike prohibit members from accepting a gift with a value of $50 or more, unless it falls within one of 23 specific exceptions. Since a gift is defined as any “item having monetary value,” legal services such as those provided by Gray and Raul to Hatch and Bliley are clearly covered. Exceptions range from political contributions to “an item of little intrinsic value such as a greeting card, baseball cap or T-shirt,” but none of those seems to apply here. Finally, there is little doubt that two legal documents totaling nearly 70 pages are worth more than $50. “I couldn’t even print the briefs for less than $2,000,” said a veteran attorney who has argued cases under the Clean Air Act. According to Senate Ethics Committee staff member Kenyen Brown, senators cannot accept legal services from lobbyists, whether paid for with money or provided directly as services. Because House rules differ slightly from the Senate’s, committee staff member Susan Pohl said officials were “not entirely sure” whether Bliley’s acceptance of legal services would be a violation. This precise circumstance “is not explicitly spelled out,” she said. Nevertheless, there is an overarching prohibition in the House rules:

“A Member, officer or employee of the House must never . . . accept a gift that is linked to any official action that the individual has taken or is being asked to take, or accept any other gift, unless acceptance is specifically allowed under one of the provisions of the House gift rule.” (emphasis in original)

In this case, the gift was, by definition, linked to official action because what was being given to Bliley was legal representation in his official capacity as a member of Congress. He not only filed the brief as a member of the House, but went so far as to invoke his official capacity as grounds for preferential treatment, allowing him to submit the document at the last minute and without consent of the court or the parties. Similarly, the provision of legal services under the circumstances of this incident is, according to House ethics experts, not one that is “specifically allowed.” Finally, since Gray and Raul are registered lobbyists, their gifts are treated with disfavor, according to the House rules.

“Access is power”

According to the House of Representatives’ official explanation of the ethics rules, accepting gifts from lobbyists is “objectionable because it impacts policy, albeit in a subtle and indirect way.” Quoting one of the original proponents for tightening the gift limits, the explanation notes that lobbyists “are buying access, and access is power. . . . They buy good will, even if they do not buy access directly. And good will is also power. It can mean the difference between getting your calls returned or your letter taken seriously, and that can translate to millions, even billions of dollars, at the expense of ordinary Americans who have no lobbyist to represent them.”

The public records leave many questions unanswered, including who paid Gray and Raul to write the briefs for Hatch and Bliley. Although that cannot be answered based on documents filed with Congress, the answer can be found on the Web site of the Citizens for a Sound Economy Foundation, an affiliate of CSE. Four days after the decision was announced, the Foundation posted a document taking credit, saying “Boyden Gray’s brief was funded in part by CSE’s education affiliate CSE Foundation.” Why would a foundation concerned with public education fund a lawsuit challenging air pollution standards with its tax-deductible contributions? To answer that question, it helps to know that the chairman of CSEF’s board is David Koch, the founder of CSE and one of the owners of the $20 billion oil company, Koch Petroleum. It is also helpful to have read The Washington Post of July 26, which reported the following:

“Two major oil companies – BP Amoco PLC and Koch Petroleum Group – have agreed to spend $600 million to cut air pollution from 12 refineries and pay $14.5 million in fines for past environmental violations under an agreement announced yesterday.”

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