02.07.18

Senators Call for Scott Pruitt to Recuse Himself from all Clean Power Plan-Related Rulemaking

‘The evidence for Pruitt’s inalterably closed mind on CPP rulemaking is overwhelming’

Washington, DC – Senators Sheldon Whitehouse (D-RI), Jeff Merkley (D-OR), Brian Schatz (D-HI), and Edward J. Markey (D-MA) have submitted an official comment in the docket for the repeal of the Clean Power Plan (CPP), in which they called for EPA Administrator Scott Pruitt to recuse himself from all aspects of the rulemaking process.  As Attorney General of Oklahoma, Pruitt launched numerous legal challenges to the plan, the 2015 EPA rule to reduce carbon dioxide emissions from American power plants, and frequently railed against the Obama administration for what he characterized as regulatory overreach.  Meanwhile he built close political and financial ties with fossil fuel interests opposed to the plan, regularly parroted industry talking points at official events and in the media, and even went so far as to submit industry-drafted documents word-for-word to federal regulators on his Oklahoma Attorney General letterhead.

“The evidence for Pruitt’s inalterably closed mind on CPP rulemaking is overwhelming,” the Senators write in their comment.  “It falls into three categories: (1) his deep and wide financial ties to the fossil fuel industry which is ferociously opposed to the CPP; (2) his status as a previous petitioner suing the EPA to block the CPP; and (3) his numerous statements denouncing the CPP, questioning the ability to regulate carbon emissions under the [Clean Air Act] as the CPP proposes to do, and casting doubt on climate science.”

As the Senators note, the energy sector and political groups associated with it have given over $1.25 million directly to Pruitt’s election campaigns.  Pruitt and groups he has started or run have consistently accepted large donations from fossil fuel companies and trade groups, including Koch Industries, the American Coalition for Clean Coal Electricity, coal giant Murray Energy, the American Fuel and Petrochemical Manufacturers, and natural gas and oil company Devon Energy. 

Pruitt has clearly made up his mind, the Senators argue, and is now attempting to accomplish through the regulatory process what he failed to do in the courts as Oklahoma Attorney General:  roll back the CPP.  His involvement in a process that amounts to litigation means that his participation in CPP-related rulemaking would violate federal rules governing impartiality in performing official duties.  He therefore cannot take part in CPP-related rulemaking and must step aside from the process.

Text of the Senator’s submission is below. 

Attention:        Docket ID No. EPA-HQ-OAR-2017-0355

                        Rescission of Clean Power Plan

Re:                   Comments on EPA Administrator Scott Pruitt’s improper involvement in Clean Power Plan-related rulemaking

Environmental Protection Agency (EPA) Administrator Scott Pruitt must recuse himself from overseeing any and all rulemaking with respect to the Clean Power Plan (CPP).  There is ample evidence that Pruitt has an inalterably closed mind with respect to the CPP and section 111 of the Clean Air Act (CAA) in particular and climate change in general.  Association of National Advertisers v. FTC^[1] holds that when clear and convincing evidence exists that a regulator possesses an inalterably closed mind about a subject covered by a rulemaking, s/he is not permitted to participate in the rulemaking. 

The evidence for Pruitt’s inalterably closed mind on CPP rulemaking is overwhelming.  It falls into three categories: (1) his deep and wide financial ties to the fossil fuel industry which is ferociously opposed to the CPP; (2) his status as a previous petitioner suing the EPA to block the CPP; and (3) his numerous statements denouncing the CPP, questioning the ability to regulate carbon emissions under the CAA as the CPP proposes to do, and casting doubt on climate science. 

Moreover, given that the instant CPP rulemaking is functionally indistinguishable from litigation seeking to invalidate the CPP and in which Pruitt was himself a petitioner, part 2635 of the Code of Federal Regulations, subpart E governing impartiality in performing official duties should apply.^[2]  Pruitt’s extensive involvement in CPP litigation means that he cannot be impartial in CPP rulemaking and therefore must recuse himself. 

This comment will first lay out the factual evidence demonstrating Pruitt’s inalterably closed mind and the nearly identical nature of the CPP litigation and the CPP rulemaking before turning to the legal authorities for challenging a rulemaking overseen by a regulator who possesses an inalterably closed mind and/or is unable to perform his official duties in an impartial manner.

I.          Facts

A.        Pruitt Has Raised Significant Political Money from Companies with a Direct Stake in the Outcome of this Rulemaking. 

Pruitt’s political career has been underwritten by the energy industry, the industry most affected by the CPP.  In his four campaigns for elected office in 2002, 2006, 2010, and 2014, Pruitt collected more than $350,000 from corporations and individuals in the energy and natural resources sector, or 13 percent of total campaign contributions he received (and 15 percent of campaign contributions that can be tied to a particular industrial or other sector).^[3]  By way of comparison, campaign contributions made by the energy and natural resources industry averaged just three percent of total contributions made to state attorney general candidates across the country since 2000.^[4]

In addition to contributions directly tied to the energy industry, Pruitt also received considerable financial support from industries closely linked to the energy industry: “legal services and lobbying” that advocate for the energy industry and “general business” and “construction” that service the energy sector.  Pruitt’s campaigns also received donations from political action committees (PACs) and issue advocacy groups that were at least partially funded by the energy industry.^[5]

Including all of these categories, the energy sector and industries and groups associated with it gave over $1,250,000 to Pruitt’s campaigns, 44 percent of the total and 55 percent of total donations that can be tied to a particular industrial or other sector.

Tellingly, contributions from the energy industry to Pruitt’s 2014 re-election campaign actually increased by 13 percent compared to 2010 contributions, despite the fact that in 2014, Pruitt ran unopposed in both the primary and general elections.  Contributions from almost every other sector fell in 2014, as might normally be expected when a candidate is running without opposition. 

The energy industry’s increasing support of Pruitt coincided with its growing apprehension about EPA’s plans to reduce carbon emissions in the power sector.  In early 2014, the energy industry, its corporate lawyers, Republican strategists, and the U.S. Chamber of Commerce had already begun plotting strategy to oppose the forthcoming CPP.  Pruitt was among the key strategists involved in this early planning.^[6]  Pruitt’s leadership role in piloting the opposition to the CPP provided the energy industry with a compelling reason to further shower money on one of its best and most promising soldiers in the industry’s war against any emissions reducing policies that might also reduce industry profits.  From industry’s perspective, money spent on Pruitt – even a Pruitt running unopposed – was money well spent.

And industry support for Pruitt went beyond direct contributions to his campaigns.^[7]  In Pruitt’s 2010 campaign for attorney general, an outside group by the name of the Republican State Leadership Committee (RSLC) spent $150,000 on his behalf.^[8]  The U.S. Chamber of Commerce, long a deep-pocketed foe of action on climate change^[9], was RSLC’s largest donor, donating almost $4 million to the group. Devon Energy, also a top ten donor, contributed $350,000 in 2010.^[10]

Pruitt wasn’t only on the receiving end of spending by outside groups.  He and his supporters created PACs to expand his influence and provide other avenues for him to direct fossil fuel and industry money to like-minded politicians.  Run by Pruitt, the Oklahoma Strong Leadership PAC raised roughly $400,000 during 2016 election cycle, almost 20 percent of which came from energy interests.^[11]  Liberty 2.0, a super PAC created by Pruitt’s supporters,^[12] raised approximately $450,000 during the 2016 election cycle, over a third of which came from energy interests.^[13]  Of its nine largest donors, four are in the energy industry including the second largest donor, Murray Energy, which gave $50,000.^[14]

During this period, Pruitt also served as a chairman of the Republican Attorney Generals Association (RAGA) and was on its executive committee.  Under Pruitt’s leadership, RAGA raised an enormous amount of money for its 527 outside spending organization from the U.S. Chamber of Commerce and the energy industry.  During the 2014 and 2016 election cycles, the Chamber was by far the largest donor to RAGA’s 527, giving the organization over $4 million.  Koch Industries (almost $500,000), the American Coalition for Clean Coal Electricity (more than $300,000), Murray Energy ($250,000), the American Fuel and Petrochemical Manufacturers (almost $200,000), and Devon Energy ($125,000) were all among the largest donors to RAGA’s 527 during this period.^[15]

Pruitt’s deep ties to the energy industry did not simply dissolve once he left Oklahoma to run the EPA.  During his nomination process, the America Rising super PAC, which has received large donations from fossil fuel interests,^[16] funded a campaign in support of his confirmation.^[17]  This campaign included ads targeting Democratic senators and a ConfirmPruitt.com website.^[18]

B.         Pruitt’s Official Actions Have Been in Lock-Step with his Political Donors’ Interests.

As Oklahoma Attorney General and EPA Administrator, Pruitt has used his official position to execute the agenda of his industry political patrons, on the CPP and other environmental issues.  Given this history, there is no doubt what the result of this rulemaking will be if Pruitt is involved. 

As Attorney General of Oklahoma, Scott Pruitt sued the EPA 14 times.^[19]  Four of these lawsuits sought to block the CPP.  Pruitt was so eager to prove his fealty to the energy industry funding his political career that the first three of his lawsuits against the CPP were filed before the final rule had been published. All were dismissed as premature.  In his fourth suit, rather than join a joint lawsuit filed by 24 state attorneys general, Pruitt filed his own.^[20]  Pruitt argued that it was an unlawful overreach of federal bureaucratic power and was not authorized by the CAA^[21] - exactly the same legal arguments that Pruitt’s EPA is now making in the Notice of Proposed Rulemaking that marked the official beginning of the process to rescind the CPP.^[22]   

A week before Pruitt and other state attorneys general filed their lawsuits, Murray Energy and the Southern Company (both of which filed separate lawsuits seeking to block the CPP) paid to attend a RAGA summit where they met with Pruitt.^[23]  At this same summit, Pruitt appeared on a panel entitled “The Dangerous Consequences of the Clean Power Plan & Other EPA Rules.”  With him on this panel were representatives from Murray Energy and the American Coalition for Clean Coal Electricity,^[24] yet another petitioner in litigation against the CPP.

Multiple companies and trade associations also filed petitions against the CPP.  Six had donated to Pruitt and/or to outside groups involved with him: the American Coalition for Clean Coal Electricity (at least $329,650), the American Fuel and Petrochemical Manufacturers (at least $187,650), Murray Energy (at least $300,000), Peabody Energy (at least $13,750), the Southern Company (at least $250), and the U.S. Chamber of Commerce (at least $6,658,546).

Pruitt’s fealty to the energy industry was not limited to attacks on the CPP.  Pulitzer Prize-winning reporting by the New York Times in 2014 uncovered that Attorney General Pruitt used official letterhead to press the case of Devon Energy, one of his biggest donors, before EPA.  Devon claimed the EPA was overestimating the amount of air pollution caused by natural gas drilling.  The company’s lawyers drafted a letter on this subject, sent it to Pruitt’s office, which then cut and pasted it onto official state government stationary with only a few word changes and sent it to Washington over Pruitt’s signature.^[25] 

Documents uncovered from public records requests to the Oklahoma Attorney General’s Office also showed how Pruitt worked on behalf of the American Fuel and Petrochemical Manufacturers, a major donor and CPP petitioner.  That group gave Pruitt template language for a petition and urged him to sue the federal government over the Renewable Fuel Standard.  The trade association noted that “this argument is more credible coming from a state.”^[26]  Pruitt followed the group’s suggestion and sued.^[27] 

Although now officially barred from political fundraising by the Hatch Act, Pruitt has maintained his contacts with industry as EPA Administrator.  In just his first several weeks on the job, Pruitt met with more than 40 energy interests; sixteen are petitioners in litigation against the CPP.  During this same period of time, Pruitt met with almost no environmental groups.^[28]  At EPA’s first and so far only public comment session on CPP rescission, Bob Murray, CEO of Murray Energy and a petitioner in the CPP litigation, and three of his executives were offered prime speaking slots.^[29]  Other speakers included representatives from the U.S. Chamber of Commerce, the West Virginia Attorney General, the West Virginia Coal Association, and the Utility Air Regulatory Group, all petitioners in the litigation against the CPP.^[30]  And as of January 8, 2018, CPP petitioners the American Council for Clean Coal Electricity, the Utility Air Regulatory Group, Murray Energy, and the West Virginia Coal Association have all submitted written comments urging that the CPP be repealed.^[31]

The relationships he established through his political activities as Attorney General continue to pay off for his donors now that Pruitt is EPA Administrator.  Within weeks of Pruitt’s assuming control of EPA, the agency withdrew its request that oil and gas companies provide it with detailed information regarding methane emissions at facilities they operate.^[32]  A few weeks after that, EPA announced that it was postponing the implementation of a rule that would have required oil and gas companies to retrofit equipment in order to prevent leaks of methane and other dangerous gases.^[33]  These decisions are estimated to save oil and gas companies – many of them donors to Scott Pruitt and/or outside spending groups affiliated with him – millions of dollars.^[34]

C.        Pruitt’s Public Statements Have Been in Lock-Step with his Political Donors’ Interests.

Suing to block the CPP is not the only way in which Pruitt expressed his profound opposition to the rule.  In April 2014, he released a plan in which he argued against the policy ideas that undergirded the then-yet-to-be-finalized CPP.^[35]  In this plan, he argued that the CAA gave the EPA at best limited authority to regulate power plant emissions.^[36]  Pruitt’s plan advanced the idea that it should be largely left to the states to determine how and if they wanted to regulate power plant emissions.

Pruitt followed this preemptive shot across EPA’s bow with an avalanche of statements criticizing the finalized CPP and vowing to see it blocked in court.  He appeared before both the Senate^[37] and the House^[38] to denounce the CPP.  In his Senate testimony, Pruitt stated that, “in reality, the Clean Power Plan is nothing more than an attempt by the EPA to expand federal agency power at the expense of state energy and power generation.”  In his testimony before the House, Pruitt went so far as to label the CPP an “audacious assertion of authority” by the EPA that was “more far-reaching than any previous effort by the agency.”^[39]

Pruitt has attacked the CPP in the press and social media.  He told Reuters that the CPP was a form of federal “coercion and commandeering.”^[40]  His old Oklahoma Attorney General Instagram^[41] account shows him attacking the CPP to audiences including a group of electric cooperatives, a talk radio host, and generally attacking EPA to CPP petitioners the American Fuel and Petrochemical Manufacturers.

Pruitt’s Attorney General Instagram also buttresses what is known about Pruitt’s affinity for groups that deny climate science and don’t believe in regulating carbon emissions.  Pruitt is known as a frequent guest at conferences organized by climate-denying groups like the Heritage Foundation and the Texas Public Policy Foundation.  Of course, these climate-denying groups also receive much of their funding from the energy industry and those tied to it.^[42]  At these conferences, Pruitt often joined guest lineups featuring prominent climate deniers and industry-funded scientists, some of whom gave presentations purporting to make “the moral case for fossil fuels.”^[43]  Consistent with this affinity for climate denial, his Instagram shows him participating in a panel entitled “the War on Carbon” at the Koch-funded George Mason University School of Law (since renamed the Antonin Scalia School of Law).

Pruitt’s climate denial isn’t just a thing of the past, however.  As recently as March 2017, Pruitt denied that carbon dioxide emissions were a primary contributor to global warming, stating “I think that measuring with precision human activity on the climate is something very challenging to do and there’s tremendous disagreement about the degree of impact, so, no, I would not agree that [carbon dioxide] is a primary contributor to the global warming that we see.”^[44]

Pruitt’s history of engaging in climate denial and consorting with people and groups that promote climate denial of course also bears on his ability to oversee the CPP rescission rulemaking process.  Given that the raison d’être of the CPP is to reduce carbon emissions in order to help combat climate change, if Pruitt doesn’t accept the overwhelming scientific consensus that human-caused carbon emissions are driving climate change, then it is difficult to see how he could approach the CPP rescission rulemaking process with anything but an inalterably closed mind.

In addition to denying the science of climate change, Pruitt has also repeatedly called into question the EPA’s authority to regulate carbon emissions under the CAA.  For example, at a conference hosted by the climate denying American Legislative Exchange Council (ALEC), Pruitt stated, “We have an EPA that is engaged in rulemaking, proposed rulemaking, that seeks to exert itself in a way that the [CAA] doesn’t authorize at all.”^[45]  He has also argued that the CAA was never intended to regulate carbon emissions and was instead “set up to address local and regional air pollutants.”^[46]  Of course, the Supreme Court ruled otherwise in Massachusetts v. EPA^[47], holding that the EPA may regulate carbon emissions as a pollutant under the CAA.

II.        Legal Argument

1.  Pruitt Has an Inalterably Closed Mind on the Clean Power Plan. 

Those interested in a rulemaking “have a right to a fair and open proceeding; that right includes access to an impartial decisionmaker.” Ass’n of Nat’l Advertisers, Inc. v. FTC, 627 F.2d 1151, 1174 (D.C. Cir. 1979). In Association of National Advertisers, the D.C. Circuit held that regulators should be disqualified from a rulemaking “when there has been a clear and convincing showing that the [regulator] has an unalterably closed mind on matters critical to the disposition of the proceeding.”^[48]  In that case, the only evidence presented was that the chairman had given a speech where he made statements about regulating children’s advertising that industry claimed prejudged a similar issue under consideration in a rulemaking.  The court concluded that the one speech did not present clear and convincing evidence of an unalterably closed mind. 

In Lead Industries Association v. EPA, the D.C. Circuit again examined the question of whether a regulator should be prohibited from overseeing a rulemaking due to an inalterably closed mind.  The regulator at issue had made general statements about lead during congressional testimony prior to becoming Assistant EPA Administrator for the air office.  The Lead Industries court found that these general statements were again not sufficient to demonstrate an inalterably closed mind.^[49]

While neither of the regulators in the Association of National Advertisers and Lead Industries cases were found to have an inalterably closed mind, the evidence in those cases pales in comparison to Administrator Pruitt’s years long, industry-funded campaign against the CPP.   His deep industry ties and history of doing industry’s bidding combined with his own legal combat against the CPP and his rich record of making highly critical statements about the CPP, climate science, and the CAA’s statutory authority to regulate carbon emissions make a clear and convincing showing of his inalterably closed mind on these subjects. 

Indeed, given the essentially identical legal arguments and players in both the CPP litigation and the CPP rescission rulemaking, it is difficult to imagine a fact pattern that more clearly and convincingly demonstrates an inalterably closed mind than the one at hand.

Both Association of National Advertisers and Lead Industries stand for the simple and reasonable proposition that those in charge of rulemaking should not approach their important jobs with a completely closed mind.  The public has “a right to a fair and open proceeding; that right includes access to an impartial decisionmaker.”^[50]  Allowing the regulatory process to be guided by those who are incapable of adjusting their positions in the face of evidence and arguments amassed during the rulemaking process would make that statutory process irrelevant.  Regulators must be able to look at the evidence and arguments objectively if they are to issue regulations that serve our nation’s best interests.  It is abundantly clear that Pruitt is not capable of doing this.  His involvement in the CPP rulemaking process makes a mockery of the regulatory process.  

1. Pruitt’s Participation in the CPP Rulemaking Violates His Duty of Impartiality under the Ethics in Government Act.

Pruitt’s participation in CPP-related rulemaking contravenes part 2635 of the Code of Federal Regulations, subpart E^[51] governing impartiality in performing official duties.^[52]  These rules apply to official duties a government official may undertake regarding a “particular matter.”^[53]  According to the Office of Government Ethics, a rulemaking is not generally considered a “particular matter” and therefore normally falls outside the purview of these rules.^[54]   However, in the instant case, where the CPP litigation and CPP rulemaking cover the same subject matter and legal issues and involve the same parties, the CPP rulemaking should be treated as a particular matter to which impartiality requirements apply.

Pruitt has already acknowledged the ethical problems associated with his continued involvement in court cases to which he was a party as Oklahoma Attorney General.  In a memorandum he drafted laying out his ethics obligations as EPA Administrator, he agreed not to participate in any active cases in which Oklahoma was a party, petitioner, or intervenor.^[55]  The terms of this memorandum require that Pruitt not involve himself in the ongoing litigation over the CPP.  Pruitt’s ethics memo states that he will not participate in any active cases in which Oklahoma is involved in order “to avoid even the appearance of any impropriety under federal ethics or professional responsibility obligations.”^[56]

Given the particular facts of this case, Pruitt’s participation in the CPP rulemaking creates the same appearance of impropriety that necessitated his recusal from CPP litigation.  But for the venues in which the arguments are being presented, everything else is the same.  Take the legal arguments.  As Oklahoma Attorney General, Pruitt made the following legal arguments to the District of Columbia Court of Appeals as to why it should throw out the CPP:

1. The CPP runs afoul of section 111 of the CAA in that it asserts a “vast authority over states’ energy grids without clear congressional authorization.”^[57]
2. The CPP seeks to “invade a traditional state regulatory domain without a clear statement from Congress.”^[58]
3. Section 111 of the CAA “does not authorize EPA to mandate emissions reductions that cannot be implemented at individual regulated ‘stationary sources.’”^[59]
4. The CPP’s interpretation of section 111(d) of the CAA is “contrary to EPA’s regulations and consistent agency practice.”^[60]
5. The CPP’s practice of “setting rates based on ‘generation shifting’ is inconsistence with the definition of ‘standard of performance’” in section 111.^[61]
6. “EPA may not employ section 111(d) to regulate a source category that it has chosen to regulate under section 112.”^[62]
7. The CPP “unlawfully abrogates authority granted to the states by the CAA.”^[63]
8. The CPP “unconstitutionally commandeers and coerces states and their officials into carrying out federal energy policy.”^[64]

As EPA Administrator, Pruitt made the following legal arguments in the notice of proposed rulemaking EPA published in the Federal Register:

1. “[T]he EPA proposes to determine that the CPP is not within Congress’s grant of authority to the Agency under the” CAA.^[65]
2. “[N]umerous states […] warned that the CPP […] invaded traditional areas of state regulation over the mix of energy generation within their borders.”^[66]
3. “The Agency proposes to return to a reading of CAA section 111 […] as being limited to emission reduction measures that can be applied to or at an individual stationary source.”^[67] (emphasis in the original)
4. Limiting emissions reduction measures to individual stationary sources “aligns with the EPA’s prior understanding of CAA section 111 as reflected in the Agency’s prior regulatory actions.”^[68]
5. “Generation shifting fails to comply with” CAA section 111’s requirement that reduction measures be limited to individual stationary sources.^[69]

With the exception of the section 112 argument that Pruitt made to the court, all other arguments are the same. 

Next, consider the parties.  Six of the industry petitioners in CPP litigation donated a total of more than $7,000,000 to Pruitt and/or to outside groups involved with him.  Sixteen of the industry petitioners in CPP litigation met with Pruitt in just his first several weeks as EPA Administrator when he was still determining what course of action to take with respect to the CPP.  Many of the CPP petitioners have now already made statements at a public hearing organized as part of the rescission process or have filed written comments in support of rescission.  

In short, there is such tremendous overlap between the legal arguments, interests, and parties involved in both the CPP litigation and the CPP rescission rulemaking process as to render the two virtually indistinguishable from an ethical point of view.  No neutral observer could seriously believe that someone as deeply involved as Pruitt in the CPP litigation could suddenly act impartially when it came to any sort of rulemaking involving the CPP, and particularly not a rulemaking that seeks to rescind the rule.  Rescinding the CPP has been Pruitt’s goal – and the goal of his industry benefactors – from the outset.  The Pruitt-initiated rulemaking to rescind the CPP clearly exists to accomplish what the Pruitt-led litigation against the CPP did not accomplish.

For the foregoing reasons, Pruitt must recuse himself from any involvement in any rulemaking relating to the CPP.  Any CPP-related rulemaking in which he participates will be impermissibly tainted by his involvement.

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