Obama and Exelon – It’s Not Corrupt Crony Capitalism, It’s a “Shared Vision”

Obama White House Intervenes at EPA at Request of Exelon 

Obama Worse than Bush On Industry Access and Control Over Regulations

EPA Administrator Lisa Jackson – A “Pliant Bureaucrat” – Rolls Over

The New York Times ran a devastating page one investigative story yesterday about how corporate energy giant Exelon used political influence with the Obama administration to over-ride science to delay, weaken, and kill environmental regulations  – including dodging major safety reforms in light of the Japanese Fukushima nuclear disaster– while securing huge subsidies.

The story in many ways parallels the corrupt science and regulatory policies and practices of the Bush Administration, which were severely criticized by environmental organizations, who now seem curiously silent as the Obama Administration does much the same thing.

The industry access and regulatory favors are especially galling, coming from the Obama administration after the President (via Executive Orders) and EPA Administrator Lisa Jackson have repeatedly emphasized scientific integrity , reforms to the regulatory process, and pledged to reduce the role of lobbyists in policy (for example, Lisa Jackson testified that scientific integrity was “the backbone  of my leadership at EPA”  and the “compass of environmental protection”). 

The NY Times wrote:

Ties to Obama Aided in Access for Big Utility

 

White House records show that Exelon executives were able to secure an unusually large number of meetings with top administration officials at key moments in the consideration of environmental regulations that have been drafted in a way that hurt Exelon’s competitors, but curb the high cost of compliance for Exelon and its industry allies. […]

White House officials and top executives at Exelon, which operates the nation’s largest fleet of nuclear power plants, say the relationship does not reflect favoritism, but rather a shared vision of moving the nation toward a cleaner energy future.

We previously wrote in detail about some of these same issues, particularly the role of Cass Sunstein in promoting unprecedented access and accommodation to industry in regulatory policy decisions. On August 4, 2012, we wrote:

Obama “Regulatory Czar” Steps Down

The fact that critical life and death decisions and the health of the planet can be determined based on flawed economics in corporate dominated back room deals should outrage all Americans.

Let’s hope Sunstein’s departure can shed some light on and engage dialogue on those issues.

Cass Sunstein, President Obama’s head of the powerful but virtually invisible Office of Information and Regulatory Affairs (OIRA), is stepping down..

OIRA review and approval is required before any major federal regulation can be approved. Sunstein leveraged that role – with direct access to his close friend and former University if Chicago colleague, President Obama – to wield enormous power in a destructive way.

Sunstein was an advocate of cost benefit analysis – and other flawed pro-industry tools used to promote a corporate agenda.

He used those tools not only to block, weaken, and delay regulations, but also to provide an unprecedented level of corporate access and influence on regulatory policy.

According to a report by the Center for Progressive Reform: Behind Closed Doors at the White House: How Politics Trumps Protection of Public Health, Worker Safety, and the Environment,  astonishingly, Sunstein’s Office  intervened to change over 80% of EPA regulations to benefit industry at the expense of the environment.

Well, the NY Times has shown a bright spotlight on exactly those issues and validated our analysis. (see also Why Lisa Jackson Should Not Run EPA)

The Times reports that industry lobbyists had an open door at the White House and with regulatory agencies. The Times reports:

But the lobbying campaign over clean air and water rules illustrates the company’s unusual access. White House records show that Mr. Rowe, before his retirement, visited eight times, far more than chief executives of coal-centered companies like American Electric Power that were fighting parts of the rules that Mr. Rowe was supporting.

Exelon’s efforts peaked in 2011, White House meeting records show. Mr. Rowe flew to Washington in March, and met with William M. Daley, then Mr. Obama’s chief of staff; Cass Sunstein, then the head of the White House office that oversees all federal regulations; Lisa P. Jackson, administrator of the Environmental Protection Agency; and Gina McCarthy, the agency’s top air pollution official. 

The Times documents that this access produced results for Exelon, particularly on the Clean Water Act cooling tower issue (we have blasted Governor Christie for caving in on mandating cooling towers at the Oyster Creek NJ plant). The Times reports:

In the weeks before the draft rule was issued, Exelon lobbyists attended two other White House meetings, records show, giving it greater White House access than any other company or environmental group trying to influence the outcome. The Exelon meetings included Mr. Sunstein, who supervised the process, while utilities arguing against the regulations also made their case, but to lower-level staff members, the records show.

At the same time, Exelon was working with other power companies to block or weaken a provision of proposed clean water regulations that were also under review. The E.P.A., aiming to prevent water intakes at power plants from killing fish and other aquatic life, was proposing regulations that the companies feared would require extensive renovations.

Exelon lobbyists and their allies, over the last year, have again secured unusual access to White House meetings, pressing for dozens of changes, even proposing how to redraft entire sections of the regulation, according to its written presentations to the E.P.A.

The Times managed to procure White House emails that show that Exelon’s meetings produced specific results. It is often difficult to connect the dots and show direct industry fingerprints on regulatory outcomes, but believe me, in my experience, it is a routine practice.

That’s why we opposed Gov. Christie Executive Order #2 to provide “regulatory relief” and more access to industry in rule making and the recently enacted legislative changes to rule making procedures that provide more industry access and allow DEP to change the text of regulations after the fact to accommodate industry concerns (AKA the “bait and switch” bill).

Outrageously, in this case, Exelon drafted the text of the regulations, saving Exelon hundreds of millions of dollars. The Times reports:

Days after a March 2011 meeting with Exelon executives, a White House official instructed the E.P.A. official in charge of drafting the water intake rule to rewrite major portions, according to White House e-mail records.

The E.P.A. official, Mary T. Smith, was called to a meeting shortly after lobbyists for Exelon and industry associations appealed for changes, and told to rewrite the regulation, agency e-mails show. …

The rewrite effectively narrowed the circumstances under which nuclear plants would be required to spend hundreds of millions of dollars to eliminate the hazard for aquatic life.

This could not happen without the knowledge and support of EPA Administrator Lisa Jackson who – just as we predicted prior to her confirmation hearings – has shown to be  a “pliant bureaucrat” willing to follow political orders.

Cass Sunstein – without providing any evidence or rationale – denies that Exelon’s access was corrupt:

Mr. Sunstein, in an interview, said that any action his office took was not a result of requests from Exelon, or other companies that sought changes, including PSEG of New Jersey.

“It is a huge mistake to associate the number of meetings with the ultimate product of the rule-making process,” said Mr. Sunstein, who resigned his post this month. “And I want to put ‘huge’ in bold letters.”

Cass Sunstein is a liar – the Times documented how access produced specific outcomes that REDUCED Exelon’s compliance costs by hundreds of millions of dollars and allowed their plants to continue to slaughter billions of fish and aquatic life.

I’d love to sit in on his Harvard classes and see how he explains and justifies this immoral and unethical crap to his students.

[End Note: That headline was no accident.

The cornerstone of FDR’s New Deal was the “Civilian Conservation Corps” (CCC).

In a perverse irony, coming full circle, Obama can be proud that his “Raw Deal” is based on  another kind of “CCC” – “Corrupt Crony Capitalism”.