Politics Seen to Limit E.P.A. as It Sets Rules for Natural Gas
By IAN URBINA
The New York Times
When Congress considered whether to regulate more closely the handling of wastes from oil and gas drilling in the 1980s, it turned to the Environmental Protection Agency to research the matter. E.P.A. researchers concluded that some of the drillers’ waste was hazardous and should be tightly controlled.
But that is not what Congress heard. Some of the recommendations concerning oil and gas waste were eliminated in the final report handed to lawmakers in 1987.
“It was like the science didn’t matter,” Carla Greathouse, the author of the study, said in a recent interview. “The industry was going to get what it wanted, and we were not supposed to stand in the way.”
E.P.A. officials told her, she said, that her findings were altered because of pressure from the Office of Legal Counsel of the White House under Ronald Reagan. A spokesman for the E.P.A. declined to comment.
Ms. Greathouse’s experience was not an isolated case. More than a quarter century of efforts by some lawmakers and regulators to force the federal government to police the industry better have been thwarted, as E.P.A. studies have been repeatedly narrowed in scope, and important findings have been removed.
For example, the agency had planned to call last year for a moratorium on the gas-drilling technique known as hydrofracking in the New York City watershed, according to internal documents, but the advice was removed from the publicly released letter sent to New York.
Now some scientists and lawyers at the E.P.A. are wondering whether history is about to repeat itself, as the agency undertakes a broad new study of natural gas drilling and its potential risks, with preliminary results scheduled to be delivered next year.
The documents show that the agency dropped some plans to model radioactivity in drilling wastewater being discharged by treatment plants into rivers upstream from drinking water intake plants. And in Congress, members from drilling states like Oklahoma have pressured the agency to keep the focus of the new study narrow.
They have been helped in their lobbying efforts by a compelling storyline: Cutting red tape helps these energy companies reduce the nation’s dependence on other countries for fuel. Natural gas is also a cleaner-burning alternative to coal and plentiful within United States borders, so it can create jobs.
But interviews with E.P.A. scientists, and confidential documents obtained by The New York Times, show long and deep divisions within the agency over whether and how to increase regulation of oil and gas drillers, and over the enforcement of existing laws that some agency officials say are clearly being violated.
Agency lawyers are in a heated debate over whether to intervene in Pennsylvania, where drilling for gas has increased sharply, to stop what some of those lawyers say is a clear violation of federal pollution laws: drilling waste discharged into rivers and streams with minimal treatment. The outcome of that dispute has the potential to halt the breakneck growth of drilling in Pennsylvania.
The E.P.A. has taken strong stands in some places, like Texas, where in December it overrode state regulators and intervened after a local driller was suspected of water contamination. Elsewhere, the agency has pulled its punches, as in New York.
Asked why the letter about hydrofracking in the New York City watershed had been revised, an agency scientist who was involved in writing it offered a one-word explanation: “politics.”
Natural gas drilling companies have major exemptions from parts of at least seven of the 15 sweeping federal environmental laws that regulate most other heavy industries and that were written to protect air and drinking water from radioactive and hazardous chemicals.
Coal mine operators that want to inject toxic wastewater into the ground must get permission from the federal authorities. But when natural gas companies want to inject chemical-laced water and sand into the ground during hydrofracking, they do not have to follow the same rules.
The air pollution from a sprawling steel plant with different buildings is added together when regulators decide whether certain strict rules will apply. At a natural gas site, the toxic fumes from various parts of it — a compressor station and a storage tank, for example — are counted separately rather than cumulatively, so many overall gas well operations are subject to looser caps on their emissions.
An Earlier Reversal
The E.P.A. also studied hydrofracking in 2004, when Congress considered whether the process should be fully regulated by the Safe Drinking Water Act.
An early draft of the study discussed potentially dangerous levels of contamination in hydrofracking fluids and mentioned “possible evidence” of contamination of an aquifer. The final version of the report excluded these points, concluding instead that hydrofracking “poses little or no threat to drinking water.”
Shortly after the study was released, an E.P.A. whistleblower said the agency had been strongly influenced by industry and political pressure. Agency leaders at the time stood by the study’s findings.
“It was shameful,” Weston Wilson, the E.P.A. whistleblower, said in a recent interview about the study. He explained that five of the seven members of that study’s peer review panel were current or former employees of the oil and gas industry.
“The study ended up being the basis for this industry getting yet another exemption from federal law when it should have resulted in greater regulation of this industry,” Mr. Wilson added.
Some E.P.A. scientists say this pattern may be playing out again in the national study of hydrofracking that Congress will consider as it decides whether drillers will have to operate under stricter rules.
Internal documents from early meetings, obtained through public-records requests filed by The Times and provided by E.P.A. officials who are frustrated with how research is being handled, show agency field scientists demanding that certain topics be included in the study. And earlier versions of the research plan indicate that many of those topics were to be included.
For example, the study was to consider the dangers of toxic fumes released during drilling, the impact of drilling waste on the food chain and the risks of this radioactive waste to workers.
But many of these concerns, cited by field scientists in earlier documents as high priorities, were cut from the current study plan, according to a version of it made public on Feb. 8.
Earlier planning documents also called for a study of the risks of contaminated runoff from landfills where drilling waste is disposed and included detailed plans to model whether rivers can sufficiently dilute hazardous gas-well wastewater discharged from treatment plants.
These topics were cut from the current study plan, even though E.P.A. officials have acknowledged that sewage treatment plants are not able to treat drilling waste fully before it is discharged into rivers, sometimes just miles upstream from drinking water intake plants. While the current study plan clearly indicates that the agency plans to research various types of radioactivity concerns related to natural gas drilling, this river modeling, which E.P.A. scientists say is important, has been removed.
In interviews, several agency scientists and consultants, who declined to be named for fear of reprisals, said the study was narrowed because of pressure from industry and its allies in Congress, as well as budget and time constraints.
Brendan Gilfillan, an agency spokesman, said that the plan remained broad and that the agency had taken additional steps to investigate the impacts of drilling, including recently issuing a subpoena against the energy services company Halliburton to force the company to provide fuller disclosure about its drilling operations.
To Read the Rest of the Article
Showing posts with label Regulation. Show all posts
Showing posts with label Regulation. Show all posts
Thursday, March 03, 2011
Tuesday, February 22, 2011
Matt Taibbi: Why Isn't Wall Street in Jail?
[Courtesy of Democracy Now's interview with Taibbi]
Why Isn't Wall Street in Jail? Financial crooks brought down the world's economy — but the feds are doing more to protect them than to prosecute them
by Matt Taibbi
Rolling Stone
Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.
"Everything's fucked up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."
I put down my notebook. "Just that?"
"That's right," he said, signaling to the waitress for the check. "Everything's fucked up, and nobody goes to jail. You can end the piece right there."
Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.
...
Here's how regulation of Wall Street is supposed to work. To begin with, there's a semigigantic list of public and quasi-public agencies ostensibly keeping their eyes on the economy, a dense alphabet soup of banking, insurance, S&L, securities and commodities regulators like the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC), as well as supposedly "self-regulating organizations" like the New York Stock Exchange. All of these outfits, by law, can at least begin the process of catching and investigating financial criminals, though none of them has prosecutorial power.
The major federal agency on the Wall Street beat is the Securities and Exchange Commission. The SEC watches for violations like insider trading, and also deals with so-called "disclosure violations" — i.e., making sure that all the financial information that publicly traded companies are required to make public actually jibes with reality. But the SEC doesn't have prosecutorial power either, so in practice, when it looks like someone needs to go to jail, they refer the case to the Justice Department. And since the vast majority of crimes in the financial services industry take place in Lower Manhattan, cases referred by the SEC often end up in the U.S. Attorney's Office for the Southern District of New York. Thus, the two top cops on Wall Street are generally considered to be that U.S. attorney — a job that has been held by thunderous prosecutorial personae like Robert Morgenthau and Rudy Giuliani — and the SEC's director of enforcement.
The relationship between the SEC and the DOJ is necessarily close, even symbiotic. Since financial crime-fighting requires a high degree of financial expertise — and since the typical drug-and-terrorism-obsessed FBI agent can't balance his own checkbook, let alone tell a synthetic CDO from a credit default swap — the Justice Department ends up leaning heavily on the SEC's army of 1,100 number-crunching investigators to make their cases. In theory, it's a well-oiled, tag-team affair: Billionaire Wall Street Asshole commits fraud, the NYSE catches on and tips off the SEC, the SEC works the case and delivers it to Justice, and Justice perp-walks the Asshole out of Nobu, into a Crown Victoria and off to 36 months of push-ups, license-plate making and Salisbury steak.
That's the way it's supposed to work. But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals. This institutional reality has absolutely nothing to do with politics or ideology — it takes place no matter who's in office or which party's in power. To understand how the machinery functions, you have to start back at least a decade ago, as case after case of financial malfeasance was pursued too slowly or not at all, fumbled by a government bureaucracy that too often is on a first-name basis with its targets. Indeed, the shocking pattern of nonenforcement with regard to Wall Street is so deeply ingrained in Washington that it raises a profound and difficult question about the very nature of our society: whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are. The SEC and the Justice Department have evolved into a bizarre species of social surgeon serving this nonjailable class, expert not at administering punishment and justice, but at finding and removing criminal responsibility from the bodies of the accused.
The systematic lack of regulation has left even the country's top regulators frustrated. Lynn Turner, a former chief accountant for the SEC, laughs darkly at the idea that the criminal justice system is broken when it comes to Wall Street. "I think you've got a wrong assumption — that we even have a law-enforcement agency when it comes to Wall Street," he says.
To Read the Entire Essay
Why Isn't Wall Street in Jail? Financial crooks brought down the world's economy — but the feds are doing more to protect them than to prosecute them
by Matt Taibbi
Rolling Stone
Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.
"Everything's fucked up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."
I put down my notebook. "Just that?"
"That's right," he said, signaling to the waitress for the check. "Everything's fucked up, and nobody goes to jail. You can end the piece right there."
Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.
...
Here's how regulation of Wall Street is supposed to work. To begin with, there's a semigigantic list of public and quasi-public agencies ostensibly keeping their eyes on the economy, a dense alphabet soup of banking, insurance, S&L, securities and commodities regulators like the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC), as well as supposedly "self-regulating organizations" like the New York Stock Exchange. All of these outfits, by law, can at least begin the process of catching and investigating financial criminals, though none of them has prosecutorial power.
The major federal agency on the Wall Street beat is the Securities and Exchange Commission. The SEC watches for violations like insider trading, and also deals with so-called "disclosure violations" — i.e., making sure that all the financial information that publicly traded companies are required to make public actually jibes with reality. But the SEC doesn't have prosecutorial power either, so in practice, when it looks like someone needs to go to jail, they refer the case to the Justice Department. And since the vast majority of crimes in the financial services industry take place in Lower Manhattan, cases referred by the SEC often end up in the U.S. Attorney's Office for the Southern District of New York. Thus, the two top cops on Wall Street are generally considered to be that U.S. attorney — a job that has been held by thunderous prosecutorial personae like Robert Morgenthau and Rudy Giuliani — and the SEC's director of enforcement.
The relationship between the SEC and the DOJ is necessarily close, even symbiotic. Since financial crime-fighting requires a high degree of financial expertise — and since the typical drug-and-terrorism-obsessed FBI agent can't balance his own checkbook, let alone tell a synthetic CDO from a credit default swap — the Justice Department ends up leaning heavily on the SEC's army of 1,100 number-crunching investigators to make their cases. In theory, it's a well-oiled, tag-team affair: Billionaire Wall Street Asshole commits fraud, the NYSE catches on and tips off the SEC, the SEC works the case and delivers it to Justice, and Justice perp-walks the Asshole out of Nobu, into a Crown Victoria and off to 36 months of push-ups, license-plate making and Salisbury steak.
That's the way it's supposed to work. But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals. This institutional reality has absolutely nothing to do with politics or ideology — it takes place no matter who's in office or which party's in power. To understand how the machinery functions, you have to start back at least a decade ago, as case after case of financial malfeasance was pursued too slowly or not at all, fumbled by a government bureaucracy that too often is on a first-name basis with its targets. Indeed, the shocking pattern of nonenforcement with regard to Wall Street is so deeply ingrained in Washington that it raises a profound and difficult question about the very nature of our society: whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are. The SEC and the Justice Department have evolved into a bizarre species of social surgeon serving this nonjailable class, expert not at administering punishment and justice, but at finding and removing criminal responsibility from the bodies of the accused.
The systematic lack of regulation has left even the country's top regulators frustrated. Lynn Turner, a former chief accountant for the SEC, laughs darkly at the idea that the criminal justice system is broken when it comes to Wall Street. "I think you've got a wrong assumption — that we even have a law-enforcement agency when it comes to Wall Street," he says.
To Read the Entire Essay
Monday, October 18, 2010
Joseph Torres: Google's Evil Plan
Google's Evil Plan
By Joseph Torres
Save the Internet
...
The irony is that, while Google is colluding with Verizon on a deal that would allow for corporate censorship on the Internet, it is also working the State Department to pressure foreign countries to open up their markets to prevent government censorship abroad.
What makes this deal so problematic is that a federal court ruled in April that the Federal Communications Commission (FCC) did not have the authority to regulate the broadband industry. The decision threw out the legal framework adopted by the Bush administration to deregulate the broadband industry, a framework that has resulted in a broadband market dominated by companies like Verizon, Comcast, and AT&T.
At this moment, the FCC does not have the authority to prevent companies like Verizon from engaging in online corporate censorship by blocking or discriminating against certain content online. The FCC, however, can reestablish its authority to reregulate the broadband industry and protect the public from discriminatory business practices.
FCC Chairman Julius Genachowski has faced relentless pressure from the phone and cable companies to stop the FCC from moving forward. Instead of standing up for the public, his office has held closed-door meetings with Google, AT&T, Comcast, and Verizon, allowing these companies the opportunity to write their own rules that would restrict our free speech rights online.
The chairman announced last week that his office will end the backroom negotiations. But no matter how the chairman tries to put a positive spin on what went on at these meetings, we all know nothing good comes from federal agencies allowing themselves to be captured by industry.
If we are witnessing the beginning of the end of the open Internet as we know it, Chairman Genachowski wouldn't be the only one who deserves blame.
While the news media have been obsessed by the lack of bipartisanship in Washington, one story they have missed is how corporate campaign contributions have united both Democrats and Republicans to work together to kill an open Internet. Close to 80 Democrats have formed an alliance with House Republicans to kill net neutrality. They have written to the FCC, urging the Commission not to move forward with protecting an open Internet.
Rep. Gene Green (D-Texas), who has led the effort among Democrats in the House to undermine the FCC, and Rep. Fred Upton (R-Mich.) just introduced bipartisan legislation that would prevent the commission from acting to protect the public.
President Obama campaigned on a promise to take a "back seat to no one" in his support of network neutrality, a position he restated earlier this year. There's worry the White House now might retreat from that position since it wants the phone and cable companies to continue writing checks to Democrats during this midterm election.
To Read the Rest of the Report
By Joseph Torres
Save the Internet
...
The irony is that, while Google is colluding with Verizon on a deal that would allow for corporate censorship on the Internet, it is also working the State Department to pressure foreign countries to open up their markets to prevent government censorship abroad.
What makes this deal so problematic is that a federal court ruled in April that the Federal Communications Commission (FCC) did not have the authority to regulate the broadband industry. The decision threw out the legal framework adopted by the Bush administration to deregulate the broadband industry, a framework that has resulted in a broadband market dominated by companies like Verizon, Comcast, and AT&T.
At this moment, the FCC does not have the authority to prevent companies like Verizon from engaging in online corporate censorship by blocking or discriminating against certain content online. The FCC, however, can reestablish its authority to reregulate the broadband industry and protect the public from discriminatory business practices.
FCC Chairman Julius Genachowski has faced relentless pressure from the phone and cable companies to stop the FCC from moving forward. Instead of standing up for the public, his office has held closed-door meetings with Google, AT&T, Comcast, and Verizon, allowing these companies the opportunity to write their own rules that would restrict our free speech rights online.
The chairman announced last week that his office will end the backroom negotiations. But no matter how the chairman tries to put a positive spin on what went on at these meetings, we all know nothing good comes from federal agencies allowing themselves to be captured by industry.
If we are witnessing the beginning of the end of the open Internet as we know it, Chairman Genachowski wouldn't be the only one who deserves blame.
While the news media have been obsessed by the lack of bipartisanship in Washington, one story they have missed is how corporate campaign contributions have united both Democrats and Republicans to work together to kill an open Internet. Close to 80 Democrats have formed an alliance with House Republicans to kill net neutrality. They have written to the FCC, urging the Commission not to move forward with protecting an open Internet.
Rep. Gene Green (D-Texas), who has led the effort among Democrats in the House to undermine the FCC, and Rep. Fred Upton (R-Mich.) just introduced bipartisan legislation that would prevent the commission from acting to protect the public.
President Obama campaigned on a promise to take a "back seat to no one" in his support of network neutrality, a position he restated earlier this year. There's worry the White House now might retreat from that position since it wants the phone and cable companies to continue writing checks to Democrats during this midterm election.
To Read the Rest of the Report
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