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SENATORS JEFFORDS/LEAHY SEEK ANSWERS FROM EPA'S HOLMSTEAD ON CLEAN AIR TESTIMONY
November 18, 2003

November 18, 2003

The Honorable Jeffrey R. Holmstead
Assistant Administrator for Air and Radiation
U.S. Environmental Protection Agency
1200 Pennsylvania Avenue, NW
Washington, DC 20460

Dear Assistant Administrator Holmstead:

On July 16, 2002, you appeared before a joint hearing of the Senate Committee on the Judiciary and the Senate Committee on Environment and Public Works concerning the Administration's plans to make changes to the New Source Review (NSR) program of the Clean Air Act. Your testimony clearly indicated that the NSR changes would not negatively impact pending enforcement cases[1](see below).

A recent General Accounting Office (GAO) report has uncovered some very troubling statements from current and former enforcement staff at the Environmental Protection Agency (EPA) and the Department of Justice (DOJ) that directly contradict your testimony. In fact, interview notes that the GAO compiled for their report show that EPA and DOJ enforcement staff informed you and other senior officials that they were concerned the NSR rule changes could have negative impacts on current enforcement cases. The interview notes also show that EPA and DOJ enforcement staff believed that your Senate testimony was highly misleading. One former official of EPA's Office of Enforcement and Compliance Assurance (OECA) went so far as to say your statements were "flat out false," and that the reforms will be "very damaging to the enforcement cases."

More specifically, the GAO interview notes show that attorneys from EPA's OECA told GAO that they had expressed concerns to EPA management, including EPA's Director of Air Enforcement, that the NSR proposals would have a negative effect on their ability to pursue new cases and settle existing ones. OECA attorneys also said that they had held discussions with DOJ staff about such potential impacts, and that DOJ officials expressed concerns directly to you. Mr. Bruce Buckheit, Director of EPA's Air Enforcement Division, confirmed to GAO that he and other senior EPA officials knew that none of the DOJ attorneys believed that the revisions would not have a significant impact on the enforcement cases. Furthermore, at least one EPA enforcement staff person was so surprised by your July 2002 testimony, claiming that EPA and DOJ "enforcement folks" agreed that NSR changes would pose no threat to the enforcement cases, that the person asked GAO, "if you can find the person who told him that, let me know."

Written confirmation exists that, prior to the July 16, 2002, hearing, at least one official in the EPA Office of Enforcement and Compliance Assurance expressed directly to you clear concern that the NSR reforms, as proposed and certainly if finalized, would have negative impacts on ongoing and future enforcement cases. In a memo to you dated June 3, 2002 "written over a month before your appearance before the Senate Judiciary and Environment and Public Works Committees" then-Principal Deputy Assistant Administrator Sylvia Lowrance said, "There are a number of proposals for New Source Review reform that could undermine current enforcement activities if promulgated as final rules." In addition to highlighting other concerns, she stated that just one specific component on the matter of equipment replacement as part of the New Source Review changes, "sets out a very specific change in EPA's interpretation of the current law and may require the Justice Department to dismiss the currently filed cases. If applied only on a prospective basis it would still impair our ability to obtain appropriate controls either in settlement or by way of injunctive relief." Ms. Lowrance confirmed in an October 2002 letter to Senator John Edwards that OECA raised such concerns with top EPA officials on several occasions.

It is critically important that Administration officials give forthright and accurate testimony before Congress. Since the GAO report and interview notes raise serious questions about the accuracy of your testimony, we request that you provide us with the following information:

1. Please identify the dates, times, and a list of participants for all meetings that you referenced in your testimony, specifically emphasizing those whose opinions you relied upon in arriving at the belief that the NSR changes will not have a negative impact on the NSR enforcement cases. Also, please identify who "we" is in your first response to Senator Leahy.

2. Please identify the specific Environmental Protection Agency "enforcement folks" who informed you that they did not believe these NSR changes will have a negative impact on the enforcement cases and the dates you were so informed. Are there any contemporaneous documents (written prior to your July 16, 2002, testimony) that support your testimony in this regard? If so, please provide a copy. If there are no documents of support, please summarize the oral communications you had with the "enforcement folks," including the date and identity of all participants in the communication(s).

3. Please identify who at the Department of Justice gave you the understanding that the NSR changes would not have any effect on the multi-billion dollar NSR enforcement cases that had been filed. Are there any contemporaneous documents (written prior to your July 16, 2002, testimony) that support your testimony in this regard? If so, please provide a copy. If there are no documents of support, please summarize the oral communications you had with the "enforcement folks," including the date and identity of all participants in the communication(s).

4. Please describe the process of preparation for your July 16, 2002, testimony before these Committees, and provide us with a copy of all memoranda, draft statements, or other materials provided to you in preparation for your testimony.

5. Following your testimony on July 16, 2002, did any EPA or DOJ employee discuss concerns about the accuracy of your testimony? Please summarize such concerns, including the identity of any such employee who expressed the concern, and provide copies of any relevant documents.

6. Did any EPA or DOJ employee ever advise you prior to your testimony on July 16, 2002, that he or she believed that there would be a negative impact on the proposed rule? Please identify said employees by name and provide a copy of any documents in support or, if none exist, please summarize the substance of any such conversation, including the date of the conversation and the identity of any participant.

Thank you for your cooperation. We look forward to a prompt response to our request and look forward to having this matter cleared up quickly.

Sincerely,

James M. Jeffords

Patrick Leahy

[1]Senator Leahy: Did you go into a question of how these proposals would impact either prospective or retrospective NSR enforcement cases?

Mr. Holmstead: Yes, that was one of the primary issues that was discussed. What I can say is, based on numerous meetings that I have had, which have included staff attorneys from Tom [Sansonetti's] office as well as attorneys from our own enforcement office is we do not believe these changes will have a negative impact on the enforcement cases.

Senator Leahy: So you were advised by DOJ that they would not have an impact?

Mr. Holmstead: I cannot say that I have had specific advice from Tom [Sansonetti], but....based on conversations between our staffs, I have been informed by our enforcement folks as well as by people in Mr. Sansonetti's office that they do not believe these will have a negative impact on the enforcement cases.

Senator Leahy: On these multi-billion dollar cases that have been filed, your understanding from DOJ is that this would not have any effect?

Mr. Holmstead: That is correct.




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