New EPA Chief on Collision Course Over Conflicts of Interest

(Bloomberg) -- The former energy lobbyist tapped to run the Environmental Protection Agency has promised to stay away from decisions that affect his old clients. But it might not be that simple.

Ethics watchdogs warn that Andrew Wheeler’s commitment to recuse himself is unlikely to be enforced if broken, and can be waived by the very staff that Wheeler now oversees. The result, they say, is that Wheeler’s pledge may not count for much.

“The public should be very concerned,” Craig Holman, a government affairs lobbyist at the Washington advocacy group Public Citizen, said in a phone interview. “The industries that are being overseen by the Environmental Protection Agency are now in control of the Environmental Protection Agency.”

An EPA spokeswoman, Kelsi Daniell, told Bloomberg in June that Wheeler has recused himself from “specific party matters involving former clients” until April 2020. The EPA on Friday referred back to its earlier comment and didn’t respond to a request for more detail on the recusal process.

Before Wheeler became EPA’s deputy administrator in April, he lobbied for companies affected by the agency’s policies, including the coal producer Murray Energy Corp., the utility Xcel Energy Inc. and Energy Fuels Inc., a uranium miner. To address any potential conflicts of interest, Wheeler promised EPA ethics officials, as well as the U.S. Office of Government Ethics, that he would “not participate personally and substantially” in matters involving those companies.

That pledge comes with exceptions, though.

Federal ethics laws bar officials from taking part in some decisions that have a financial impact on former employers and clients for one year. Wheeler can take part in general policy matters that affect a broad range of companies including his clients. But he’d have to recuse himself from “particular matters,” which could include regulatory decisions affecting a single industry in which he had clients.

Wheeler could also get a waiver from the EPA’s ethics office, which issued at least six such waivers in 2017. In some cases, EPA officials would need to inform the Office of Government Ethics. But the OGE lacks the authority to overrule EPA staff about the appropriateness of such waivers.

When Donald Trump became president, he signed an executive order extending the recusal period to two years. Trump’s order also banned former lobbyists from participating in specific issue areas in which the particular matters they lobbied on.

For Wheeler, who listed “general energy and environmental issues” on some lobbying disclosures, that could pose a problem, says Scott Amey, general counsel of the Project on Government Oversight, a watchdog group.

“This is going to be a real chore for the EPA ethics office, to get the specifics of what he was actually lobbying on,” Amey said, adding that Wheeler would either need waivers or lists of issues he’ll have to recuse himself from.

But unlike federal ethics laws, it’s not clear how the Trump administration would enforce that executive order were Wheeler to violate it. “I imagine they would push for him to correct the violation and that’s about it,” Amey said.

Wheeler isn’t the first former lobbyist in Trump’s EPA to get a job that gives him power over issues that affect his former clients. Nancy Beck was appointed as the deputy assistant administrator of the EPA’s chemical safety office, despite having previously pressed for less stringent requirements on behalf of the American Chemistry Council and its member companies, including Dow Chemical Co., DuPont Co. and Exxon Mobil Corp.

Since taking the EPA post, Beck has made things easier for industry by revising an Obama-era proposal for prioritizing and evaluating thousands of existing chemicals for their risks.

Beck had permission to tackle chemical safety issues -- and general matters involving the council -- because she’s technically an “administratively determined” employee who’s exempt from the Trump ethics pledge.

“I’ve never seen myself as an industry person, and I’ve never been a lobbyist,” Beck said in an interview. “I’m a scientist first -- and the fact that I have experience working with a trade association and have an understanding of how industry works doesn’t make me any less of a scientist.”

Companies on whose behalf Wheeler lobbied said they didn’t think his previous work creates a conflict.

Follow the Law

Curtis Moore, a spokesman for Lakewood, Colorado-based Energy Fuels, said the company “would expect Mr. Wheeler to follow all applicable laws, rules and regulations concerning any potential conflicts of interest arising from his limited work ” for the company.

Moore added that Wheeler didn’t lobby the EPA on behalf of Energy Fuels, but rather lobbied other agencies, such as the Department of the Interior.

A spokesman for Liquefied Natural Gas Ltd., Micah Hirschfield, said by phone that Wheeler’s firm lobbied for the company in 2015 and 2016. But he said the company has no “dockets or issues currently in front of the EPA.”

“We do not see potential for any conflict of interest solely based on those facts,” Hirschfield said.

Robert Murray, chief executive officer of Murray Energy, said by email that he’d had no contact with Wheeler since he joined the EPA. “As such, we are unable to provide any further comment,” Murray said.

©2018 Bloomberg L.P.