This Is What “Regulatory Capture” Looks Like

“Industrial Stakeholders” Hollow Out DEP Air Permit & Enforcement Programs From The Inside

Corruption, right out in the open

[Intro Note: If readers think I exaggerate in my criticism, please check out the rigorous review conducted by US EPA for conflicts of interest, and appearance of conflicts, for membership on an EPA Science Advisory Board Panel.

Then ask yourself in ANY DEP Stakeholder or ISG participant meets the EPA standards – and note that the NJ DEP conducts no such review – none at all.]

I’ve previously written about how a “by invitation only” “Stakeholder” group of major polluting corporations co-wrote NJ DEP guidelines for pipeline reviews, as well as the technical contents of the DEP’s site remediation program, see: The Oil and Gas Industry Wrote NJ DEP Pipeline Review Guidelines

Today, we take a brief look at how similar abuses occur in DEP’s air quality program.

Importantly, that program not only is supposed to protect public health and environment from the emission of traditional and toxic air pollutants, but – because greenhouse gases are defined as air pollutants under NJ state law – it also has responsibility for climate change mitigation, i.e. regulation of emission sources and reducing emissions of greenhouse gases (a regulatory power DEP has failed to implement or enforce).

I) The Origins of Institutionalized Corruption

Initially during the “Open for Business” deregulatory Whitman administration (1994 – 2002), DEP mangers formed what is now called the “Industry Stakeholders Group” (ISG). During the Whitman DEP, Commissioner Bob Shinn euphemistically called this a “re-engineering” initiative, whereby private corporations and their consultants were given carte blanche to literally re-design the air permit and enforcement programs and write the technical content of DEP air programs (this was where later DEP initiatives like “Technical Manuals” and “Permit Efficiency” came from).

(Skeptics can read Whitman’s STARR Report (see p. 46 summary) “Strategy to Advance Regulatory Reform” (Department of State, Office of Business Ombudsman, July 1995) and read Whitman’s first State of The State address for examples of her no holds barred assault on DEP and regulation. Whitman abolished the Office of Environmental Prosecutor via Executive Order #9 and created the anti-regulatory Business Ombudsman’s Office via Executive Order #15) Whitman sought to roll back stricter NJ state standards to federal minimums via Executive Order #27. These are just a few of Whitman’s attacks that have been expanded upon by Gov. Christie and embraced by Gov. Murphy.)

II)  What Is The Industrial Stakeholders Group?

Currently, the DEP air quality permit and enforcement staff regularly meet with the ISG.

The ISG meetings are comprised exclusively of major polluting corporations in NJ and their paid consultants, including:

• Dupont (Chemours)
• Merck
• PSEG
• Corning Glass
• South Jersey Industries (South Jersey Gas)
• NAES Corp.
• Covanta

Although the ISG meetings are technically “open”, there are no public, environmental group, or academic participants on the ISG (the sporadic Rutgers participant is a compliance officer, not an academic expert).

I could find no evidence of agenda items or public attendance at or participation in ISG meetings. I suspect that the ISG meetings are not widely advertised or promoted by DEP and that the media and environmental groups are not even aware of the ISG.

Here’s how DEP describes the mission of the ISG:

WHAT IS THE ISG?

The Industrial Stakeholders Group or ISG focuses on Air Quality Permitting in the State of New Jersey.  The group is composed primarily of DEP air quality permitting staff, DEP air quality enforcement staff and representatives of regulated industries.  Attendance is open to anyone with an interest in Air Quality Permits.  The group meets quarterly to discuss ways of promoting effective and consistent permits that are protective of the environment and consider the concerns of the regulated community.

Note that the co-equal purpose includes to “consider the concerns of the regulated community.”

The DEP staff provide ISG participants briefings on regulatory issues – including interpretation of existing and development of any new regulations. That regulatory briefing affords crucial strategic opportunities for industry to intervene in, kill, and shape the design and technical content of regulations and how they are enforced.

Consider also how the ISG regulatory briefings integrate seamlessly with Gov. Christie’s Executive Order #2, where industry is given “advance notice of rules” explicitly to provide industry an opportunity “to prevent unworkable, overly-proscriptive or ill-advised rules from being adopted.”

Gov. Murphy and his DEP Commissioner McCabe have retained and promoted the same abuses initially advanced by the deregulatory Whitman DEP and the anti-regulatory Christie DEP’s.

The DEP staff also provide technical assistance to ISG members on how to comply with DEP regulations. In essence, public employees effectively work as consultants to corporate polluters. Again, this practice allows industry to manipulate or skirt compliance obligations. (hit this link to see ISG agendas and participants)

I am not aware of any DEP “Stakeholder” group comprised exclusively of public, community, scientific and academic community experts and advocates that work on developing much needed new regulations or enforcement of existing regulations to protect public health and the environment and address climate change (i.e. mitigation, or reduction in greenhouse gas emissions). 

So, I sent the DEP ISG program manager the following question:

Hank – I note from the DEP ISG website you provided a link to that the mission of the ISG is:

“The group meets quarterly to discuss ways of promoting effective and consistent permits that are protective of the environment and consider the concerns of the regulated community.”

Is there a DEP air permit group that meets regularly to consider the concerns of the public, climate science, and public health communities?

Appreciate your timely reply,

III) How Far We’ve Fallen: From Polluters To Customers

When I began as a DEP professional in 1985, there were institutions and Offices (e.g. the Bureau of Community Relations, numerous workgroups and Advisory Committees) and initiatives that were well staffed by DEP and expressly designed to solicit public concerns, inform and listen to the public, and serve the public interest.

In contrast, there was an arms length, and often adversarial, relationship between DEP and industrial polluters.

But since then, public oriented DEP institutions have been dismantled and efforts to advance the public interest have been abandoned.  Worse, what were once considered polluters became called “the regulated community”.

Continuing down that path, “the regulated community” are now called “customers” that are to be provided “customer service” by DEP staff and “Stakeholders” that must be listened to and coddled with “stewardship” and “voluntary compliance”, not subject to “command and control” “red tape” regulation and “Soviet style” “enforcement sanctions”.

The dominance and “regulatory capture” of DEP by polluting corporate industries has gotten so bad that DEP professionals are not even aware of it and don’t try to hide it.

It’s corruption, right out in the open.

[End note: the dismantling of DEP public interest focus and rigorous regulatory regimes parallels the rise of NeoLiberalism, and can be explained by many things, including the Powell memo, the rise of Public Choice theory, The Chicago School, The Federalist Society, the Koch Brothers and failures of the Liberal Class to defend New Deal values and government institutions.]