Five conditions have stunted EPA’s efforts to improve enforcement capabilities.
Cynthia Giles has won well-deserved attention for her book on next generation environmental compliance. People should be thinking about what to do if and when, as President Barack Obama famously said in 2014, “the fever breaks.” And she has many good ideas.
But Giles promises that her book is about the “messy, complicated, and expectation-busting facts of real life.” At the risk of criticizing her for not writing a longer or different book, I must admit dismay at the omission or underwhelming consideration of five conditions that any fair analysis of EPA’s struggles in this fraught area must at least acknowledge.
First, huge budget cuts have crippled enforcement, wringing out the consistency that is essential to motivating compliance. EPA enforces, and then it does not, convincing scofflaws that the risks of ignoring the most expensive mandates are well worth taking. Enforcement funding has fallen precipitously for more than a decade, not just during the nightmare Trump years. By the end of that Administration, the Office of Enforcement and Compliance Assurance had lost 950 positions, or 30 percent of its staff. The Biden Administration did little to fill this gap during its first two years, with the number of criminal cases at the lowest level since 1992. A 6 percent budget increase in FY 2023 has allowed incoming enforcement chief David Uhlmann to promise 200 new full-time staff—a step in the right direction but far less than a long-term solution.
Second, the appointments process is a tangled mess, depriving EPA of permanent leadership in such crucial areas as clean air mandates and enforcement, yet President Joseph R. Biden does not decry the role of Republican senators determined to hobble the agency. Uhlman, an impeccable candidate, had to wait two years to be confirmed, thanks to Republican senators’ bizarre interpretation of what it means to advise and consent—that is, to hold nominees hostage to exact concessions from Democratic administrations, usually behind closed doors. Why do Democratic Presidents neglect this crucial issue when they have such an important story to tell?
Third, the agency’s criminal program is far weaker than it should be even though such prosecutions have the greatest potential to deter serious violations by the largest companies. The U.S. Department of Justice’s affinity for deferred prosecution agreements—which allow companies and their executives to avoid pleading guilty to a crime if they agree to pay penalties and promise to comply—exacerbates the deemphasis on criminal enforcement. The BP and Volkswagen settlements required criminal pleas, perhaps because the two companies are based in other countries. Yet fatal violations by Boeing, an American monopolist, resulted in a deferred prosecution agreement.
Uhlmann has written eloquently about how deferred prosecution erodes the deterrent effect of criminal liability. But the Justice Department has proven intransigent on the subject under the Obama and Trump Administrations, in part because it continues to fret over the possibility that a criminal prosecution could put a company out of business. This misguided theory rests on the myth that Arthur Andersen failed after Enron imploded because it was prosecuted for shredding documents and not because its clients ran for the hills when its role in a disastrous, multi-billion Ponzi scheme was exposed.
Fourth, industry lobbyists exert overwhelming dominance over all aspects of rulemaking and are a more serious problem than stove-piping within the agency, a problem Giles discusses at some length. As for the role of corporate lobbyists in shaping laws and regulations, a database kept by Open Secrets shows that in 2022, spending on lobbying was $2.06 billion, and 12,662 lobbyists were in the field. Even these huge numbers reflect a substantial undercount because they exclude the large staffs that back up those registered under Senate rules. Of course, lobbyists operate on and off Capitol Hill, and numbers are not available by agency. Still, regulated industries exert more influence in shaping regulations before they are put out for comment than the EPA internal memos that preoccupy Giles. A group of researchers led by law professor Wendy Wagner discovered that in 90 rulemakings mandated by the Clean Air Act to control emissions of hazardous air pollutants, corporate interests had an average of 84 contacts with EPA staff before a rule was even proposed, compared to an average of 0.7 contacts per rule by public interest groups.
Fifth, state agencies reflect the polarized politics of the nation. Blaming them as an undifferentiated group is a standard fallback for EPA staff but counterproductive as an element of visionary policy. Some big states have disgraceful environmental enforcement—Texas must head that list, but others are doing the best they can with the limited resources like those that plague EPA. Improving state enforcement requires more than a theoretical reset of cooperative federalism, for the same reason that Giles notes the potential of using the states as laboratories of democracy. Perhaps condemning all of the states for hoarding information is not the best place to start, especially if you are trying to educate people outside the Washington Beltway. Generating information costs money, and most states do not have a lot of it.
Giles has written an important book, but these five blind spots undermine its credibility.
This essay is one of a six-part series on The Next Generation of Regulatory Compliance.