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#157 - Part Two Of Two Parts: Reilly Plans Investigation Of Himself, 27-Nov-1989

EPA chief William Reilly is the object of a criminal investigation
because he reversed an important national environmental policy,
apparently with no more basis than the urging of four representatives
of Waste Management, Inc. (WMI), who lobbied him at a private breakfast
March 16, 1989 (see RHWN #151 and #156). A preliminary investigation
exonerated Reilly of all charges. Now however, there is strong evidence
that several people, perhaps including Reilly himself, lied to
investigators, which is a felony. Furthermore, it is now clear that
Reilly himself helped plan the investigation of his own alleged
wrongdoings, and that the investigation was carried out not by
independent investigators but by people who report to Reilly--a direct
violation of EPA guidelines on investigations. Clearly, it is time for
a special prosecutor to conduct a credible inquiry.

It all began when two EPA officials, Hugh Kaufman and Bill Sanjour,
lodged a formal complaint against Reilly with the EPA's Inspector
General, John Martin, on May 17, 1989. An investigation ensued.
However, the investigation began in a most unorthodox way: Inspector
General Martin met with Reilly May 19 and together they planned how the
investigation should proceed. Furthermore, between May 19 (when Martin
and Reilly planned how to investigate Reilly), and the time when the
formal investigation was opened, 39 days lapsed. Why the delay? Were
the principal suspects given time to get their stories straight during
this period? It would appear so, because when investigative interviews
began, all the principals told the same story and it was a story
contradicted both by physical evidence and by an interview Reilly had
given to newspaper reporters before he knew he was under suspicion.

The official stories abound with inconsistencies. The most serious is
that three officials of Waste Management say they did not favor Reilly
reopening a public hearing on North Carolina (NC) in preparation for
taking away that state's RCRA [Resource Conservation and Recovery Act]
waste-facility permitting privileges. Let's look at the physical
evidence, then look at what WMI officials told investigators:

At breakfast, James Range, who is WMI's vice president for governmental
affairs, handed Reilly a WMI "briefing paper" entitled STATE
INITIATIVES TO INHIBIT DEVELOPMENT OF HAZARDOUS WASTE DISPOSAL CAPACITY
AND TO RESTRICT INTERSTATE SHIPMENT OF HAZARDOUS WASTE.

The WMI briefing paper describes a "troubling trend heading for a full-
tilt stampede" in which states are imposing "two types of restrictions
on wastes: disallowing facility development and resisting interstate
waste transport."

The WMI briefing paper says "the first visible domino fell" when North
Carolina passed a law that prevented construction of a GSX waste
processing plant on the Lumber River in 1987 (see RHWN #156.) The next
domino was South Carolina's move to restrict interstate shipment of
waste. The WMI briefing paper goes on to say that Waste Management's
facility at Emelle, Alabama--the only commercial chemical dump in
Alabama--is now directly threatened because the Alabama state
legislature will "probably approve" measures preventing import of
wastes into Alabama. The WMI briefing paper says "proponents of these
measures [in the Alabama legislature] are citing EPA's apparent
acquiescence in the North Carolina and South Carolina situations...."
The WMI briefing paper concludes, "There is only one solution here: EPA
must break its silence immediately. If EPA emphatically restates its
opposition to these State actions and indicates that RCRA program
withdrawal is the logical result, then cooler heads in the state
legislatures will have something to rely upon...."

So there you have it in black and white: The WMI position at breakfast
March 16 was to urge Reilly to reverse EPA policy so EPA would threaten
once again to take away NC's RCRA authority. (See RHWN #151.) The
alternative position, which was EPA's official position at the time of
the breakfast meeting, was to allow North Carolina (and other states)
to pass laws restricting development of waste processing capacity but
to use the Superfund [CERCLA] "capacity planning" provisions to require
states to develop sufficient capacity to handle their own wastes. The
waste hauling industry fears use of CERCLA in this way because states
can meet the CERCLA requirements by reducing waste production as an
alternative to building new waste facilities, if they choose to. If
states reduce wastes to meet CERCLA requirements, the waste industry
will be hurt badly. WMI alone has billions at stake.

Twenty-one days after the breakfast meeting, on April 6, William Reilly
decided to give WMI precisely what they had asked for at breakfast and
on April 19 Reilly announced EPA would reverse its policy and resume
the public hearing on North Carolina's loss of its RCRA privileges as
punishment for its self-protective state law. The CERCLA approach was
being abandoned. Reilly was doing precisely what Waste Management's
briefing paper had urged him to do.

When asked April 20 by a newspaper reporter (Jon Healey) about this
major reversal of policy, Reilly readily admitted he was lobbied to do
it by Dean Buntrock at the breakfast meeting. "Jay Hair [director of
National Wildlife Federation] hosted the breakfast at which I was
lobbied to do the very thing that we are doing," Reilly told Healey. In
fact, Reilly volunteered that information to Healey. A later interview
with Healey reveals that it was Reilly who brought up the subject of
the breakfast meeting; Healey had known nothing about it. Reilly
volunteered the information that he had been lobbied and it was he who
selected the term "lobbied" to describe what occurred at the breakfast
meeting; until Reilly spoke, Healey had not had a clue. Reilly offered
the name of Dean Buntrock as the person who had lobbied him; Healey
says he did not even know who Dean Buntrock was at the time. Healey has
full notes from the Reilly interview. But Healey was never interviewed
as part of the official EPA investigation.

When the official investigation finally got under way, Reilly's story
had changed completely. First he told the investigator he "could not
recall" being lobbied at breakfast about North Carolina by Dean
Buntrock. Then he said that what he had told Healey was "wrong" because
at breakfast that day Dean Buntrock had not favored attacking North
Carolina's RCRA privileges as a way of handling the problem of state's
shutting off interstate waste shipments. He told the investigator Dean
Buntrock favored the CERCLA approach (the approach that would spell
serious trouble for the waste industry). We have seen the black and
white evidence showing that WMI's position at breakfast was to urge
Reilly to attack North Carolina's RCRA privileges, not to take the
CERCLA approach. It seems clear that in Reilly's revised story he is
calling black white. Perhaps doing so in Washington is normal, but
doing so in the course of a federal investigation is a felony.

After the two EPA officials, Kaufman and Sanjour, asked for an
investigation on May 17, Inspector General Martin assigned investigator
James Johnson to the case. Johnson interviewed many of the parties
involved.

From Johnson's official reports, it is clear that, like Reilly, WMI
officials made many statements to Johnson that flatly contradicted the
WMI position in the "briefing paper" they gave Reilly at breakfast that
day.

Item from Johnson's report on his interview with Dean Buntrock:
"[Buntrock] had no recollection of any discussion of North Carolina. He
related that his company has no business interests in North Carolina
and it would not be a matter that he or his staff would want to
discuss."

Item from Johnson's report on his interview with Jim Range, WMI's vice
president for governmental affairs (i.e., their chief lobbyist): "WMI
did not want the [North Carolina] hearing reopened...."

Item from Johnson's report on his interview with Jim Banks, WMI's No. 2
Washington lobbyist and author of the briefing paper: "Banks felt the
decision to hold the [RCRA] hearing in North Carolina was the incorrect
action...."

Given the contents of the briefing paper, and the freely-given
published statements by Reilly himself that he was "lobbied" to reopen
the hearing on North Carolina's law, it is difficult to avoid the
conclusion that Reilly and the three WMI officials all lied to the EPA
investigator, which is a felony. Further evidence of WMI's actual
position on this issue is contained in a letter from C.W. Kitto,
General Manager of Waste Management's Chem Waste subsidiary in Sulphur,
Louisiana, to EPA's Region 4 administrator, dated May 11 (less than a
month after Region 4 announced it was reopening the North Carolina
case): "We applaud your recent decision to proceed with the hearing to
examine the consistency of North Carolina's legislation with RCRA and
to withdraw that state's [RCRA] program authorization if warranted."

In this report, we have merely scratched the surface of the
inconsistencies revealed by Johnson's investigation. In fact a
different EPA investigator named J. Richard Wagner has reviewed all
available documents and has written a 21-page criticism of the Johnson
investigation and has submitted it to Congressman John Dingell. It is a
devastating critique.

Why did Johnson's investigation of this breakfast scandal not uncover
and examine the discrepancies we have pointed out here and the many
others pointed out by Richard Wagner? Basically, we believe, because
the investigation was controlled by William Reilly's office from the
start. The official memo to Johnson dated May 19, 1989, appointing him
the investigating officer, says on page 1 that the investigative plan
was "based on staff discussions with OA and IG." OA is the "Office of
the Administrator" William Reilly. So there can be no doubt that Reilly
himself helped direct the course of the investigation of his own
alleged wrongdoings, those of his friend Jay Hair and those of Hair's
unseemly associates at WMI. The EPA's own guidelines say that an
independent agency should conduct such investigations. All the
investigators in this case report to Mr. Reilly, so no independent
inquiry has yet occurred.

Mr. Reilly himself made many inconsistent statements to the
investigators who interviewed him twice, and these inconsistencies were
never investigated or clarified. For example, he claimed not to even
know that anyone from Waste Management would be at the breakfast; did
he not see the hand-written note (see RHWN #156) from "Jay" to "Bill"
asking him to meet for breakfast with "Dean Buntrock, Chairman/CEO,
Waste Management, Inc."?

Reilly told investigators he believed his breakfast with Jay Hair was
"social in nature, not professional" yet Reilly's staff prepared him
with a 126-page briefing file. Does Reilly usually have thick briefing
packages prepared for social meetings?

And what about Jay Hair's statements: "[Reilly] was not informed of the
specific issues Hair wanted to discuss," says investigator Johnson's
report. Did Hair forget the WASHINGTON POST article he attached to, and
referred to in, his hand-written invitation to Reilly? (See RHWN #156.)
And what about this from Johnson's report: "Hair does not feel any
lobbying occurred," which contradicts Reilly's own characterization of
the breakfast. In plain terms, it smells of coverup.

When will these matters be investigated impartially? We are sick to
death of crooks in Washington, including those who call themselves
environmentalists. The American people deserve an independent inquiry
by a special prosecutor.

Hats off to Citizen's Clearinghouse for Hazardous Wastes (CCHW) in
Arlington, VA, who has supplied us with over 100 pages of official
records in these matters.

--Peter Montague

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Descriptor terms: william reilly; epa; investigations; wmi; nc; cercla;
rcra; coverups; malfeasance; misfeasance; inspector general; policies;
enforcement; sc; al; nc; cercla; dean buntrock; jay hair; nwf;
international waste trade;