Tuesday, August 02, 2016

DIRTY-AIRBNB?


A Clean Air Watch Investigation



Did the Koch Brothers, ExxonMobil
 and Friends Rent a Texas Congressman
 — in a Gambit to Relax the Clean Air Act?


[“Beware of the dark side…. If once you start down the dark path, forever will it dominate your destiny.” 
— Yoda, Return of the Jedi]


It’s often said that special interests with ready cash can “buy” politicians, including members of Congress.  The issue came up during the Republican presidential debates when Donald Trump, accused of buying elected officials, readily agreed that he expected a favorable response from politicians who had taken his money (Trump also argued that he was just playing by the rules of a “broken” system.) :http://bit.ly/2a3GHjE

Similarly, we recall a businessman friend bitterly complaining he had to pony up cash that would be bundled and given to then-Senator Hillary Clinton so that she would be receptive to that business’s legislative concerns.

But we believe it’s an overstatement to say politicians are literally “bought.” A more appropriate description could be “rented,” perhaps as one might do with an airbnb.  This happens virtually every day, on numerous issues, in a U.S. Congress awash in campaign contributions.

We sought to explain this concept early this year, when a reporter raised a question about congressional inaction on a major air pollution issue:  Last fall, members of Congress had fiercely denounced new standards by the U.S. Environmental Protection Agency to limit smog, or ozone.  No one was more fierce than a soft-spoken, relatively junior Republican congressman from Texas named Pete Olson. http://bit.ly/2atYncA

Despite the hyperbolic, anti-EPA denunciations, Congress had made no moves to block EPA’s new limits. Why not, asked the reporter?

Our premise: Olson would take action after checks were cut or promised.  With an airbnb, reservations must be made, and so must payments. Likewise, introducing legislation has a price, as does a hearing and subsequent legislative drafting and votes.

We set out to verify this premise by exploring the course of legislation (H.R. 4775) that Olson eventually did introduce and champion. The legislation, which would delay EPA’s standards and generally weaken the Clean Air Act, was sought by a business alliance led by a lobbyist for Koch Industries and several other oil and electric power companies. So we also took a look at the campaign contributions.  (We began this probe because beat reporters could not.)

Here’s what we found:

A flurry of corporate campaign contributions to Rep. Olson from vocal opponents of smog cleanup — chiefly the oil and chemical industries — in a few week-period culminating with the introduction of H.R. 4775.  (See time line below for detail.) A generous $2,500 check from the refinery lobby (American Fuels and Petrochemical Manufacturers) was reported the day before Olson’s legislation was introduced March 17.  ExxonMobil noted in a filing with the FEC that it cut a $2,500 check to Olson campaign committee on February 19, 2016  The purpose: “Event on 3-18-2016” http://bit.ly/2a3JHwy  [See appendix for the ExxonMobil filing with the Federal Election Commission.]   In other words, Olson introduced the legislation one day before the planned fund-raising event.

A second squall of checks, again from the refinery lobby — specifically from Koch, ExxonMobil and related interests — in the days leading up to April hearings by Olson on the legislation. ExxonMobil reported to the FEC that it contributed another $2,500 to Olson on April 14, 2016.  The purpose: “Event on 4-20-2016.” http://bit.ly/2adL2R3

A third gust of gratuities from oil and related lobbies as Olson pressed forward with the legislation through the subcommittee and committee process in May.

Finally, a virtual blizzard of bucks as Olson championed the legislation on the House floor in June.

Were these campaign contributions all mere coincidence — or were they the equivalent of making the reservations, putting down a deposit, and settling the tab?


The Legislation

H.R. 4775 officially bears the innocent-sounding name “The Ozone Standards Implementation  Act of 2016.”  It was officially introduced March 17, 2016 by Rep. Olson and several co-sponsors. http://bit.ly/2au1Bd6

Corporate lobbies, led by the oil industry and the U.S. Chamber of Commerce, backed the legislation. http://uscham.com/2a8MZmO

The legislation was also endorsed by a large coalition of conservative organizations led by the Koch-backed Americans for Prosperity. http://bit.ly/2ai7FY6

As anyone who has monitored the workings of Congress knows, these endorsements were not coincidental.  The connection: Koch Industries.

Koch’s interest in fighting emission limits was well documented in 2014 by Rolling Stone magazine. http://rol.st/2au3dU0  Fracking, refining, oil and gas transmission and paper mill pollution — Koch owns Georgia-Pacific — are among its concerns.

Public health groups led by the American Lung Association http://bit.ly/2ai8r7x  branded Olson’s bill “The Smoggy Skies Act” because it would not only subject the breathing public to smoggy air for a longer time, but permanently weaken the underlying Clean Air Act. http://bit.ly/2ae4xsK

Despite these objections, the House of Representatives passed the bill on June 8, 2016 in largely a party-line vote. There were some defections on both sides of the aisle. http://bit.ly/2aeEt0g

The bill’s champion, throughout the committee and floor process, was its chief sponsor, Rep. Olson of Texas. His carefully scripted statements were replete with such hackneyed focus-group buzzwords as “common sense,” “work together,” “bipartisan” and “reform.” http://bit.ly/2asUEw1


The Congressman

Olson is a pleasant-looking fellow who, though born in an Army medical center in Washington state, has lived most of his life in Texas. He became a decorated naval aviator. In other words, this guy was a real hero. https://olson.house.gov/about/biography  (A quick note about bias: we generally are very biased in favor of folks from Texas, and also biased in favor of those who have served in the military. And Rep. Olson’s military record is very impressive.)  Olson eventually became a naval liaison officer to the U.S. Senate.

Olson later became an aide to then-Senator Phil Gramm of Texas.  In 2002, Gramm was succeeded by John Cornyn, and Olson became Cornyn’s chief of staff.  Olson returned to Texas in 2007 and was elected to Congress the next year. It is not hard to image a U.S. Senate seat in Rep. Olson’s future. For some lobby groups, that would make him a much more valuable commodity than the typical fourth-term Congressman.

The govtrack service rated Rep. Olson the “most conservative” member of Congress based on bills introduced in 2015, though among the “lowest 10%” of all members in “joining bipartisan bills.” http://bit.ly/2auFyTI

The League of Conservation Voters gave him its lowest “0” rating in 2015 http://bit.ly/2aI0Nkj By contrast, Rep. Olson earned a 94% positive rating this year from the National Association of Manufacturers, including his support for HR 4775. http://bit.ly/2af0izM


The District

In his opening statement championing the ozone legislation, Rep. Olson referred to the “folks back home,” so perhaps we should take a moment to look at his home, the 22nd district of Texas.  The district covers covers a largely suburban south-central portion of the Greater Houston metropolitan area. http://bit.ly/2aI1DgY

It is the wealthiest congressional district in Texas and tends to vote heavily Republican. Prior representatives from the district (its boundaries have changed somewhat over time) included Ron Paul and former House Majority Leader Tom DeLay.  DeLay was a vocal opponent of the Clean Air Act — at one point, introducing legislation to repeal the 1990 amendments to the law in their entirety. http://bit.ly/29XsOXF

Koch Industries is one of many businesses with offices or facilities in the district. http://bit.ly/2au124E


The Lobbyist

The oil and gas industry has been a consistent supporter of Rep. Olson. Indeed, in his 2014 re-election, it was by far the biggest corporate contributor to his campaign, contributing nearly a quarter of a million dollars. http://bit.ly/2a9puWJ  The Texas-based Energy Future Holdings Corp. was the second-largest corporate contributor overall.

It’s noteworthy that so much corporate money rolled in, given that Olson won re-election without breaking a sweat — winning two-thirds of the vote.  http://bit.ly/2a9pwy4  The pattern is continuing this year, as Olson is expected to win again without real trouble against an under-funded opponent.

So it does raise a question: Why do oil, gas, electric power and other businesses contribute so much money to a lawmaker who really doesn’t seem to need it?  Most people know intuitively — and academic research has demonstrated it http://bit.ly/2au29RU  — that campaign contributions translate directly into enhanced access and influence with a member of Congress and key staff members.

You can’t “buy” such a person, but it certainly appears money can, in effect, rent some of their time and attention.

In the process, Congress — surrounded by literally thousands of lobbyists — http://bit.ly/2aha3e7 — has taken on the appearance of a giant influence-renting airbnb.  In the case of ozone, some might call it a Dirty-airbnb. (This is, of course, a metaphor and does not in any way mean to disparage the airbnb brand itself.)

Indeed, few issues have triggered as much lobbying activity as ozone, and few issues have prompted as much opposition from large oil companies.  Indeed, President Obama shelved an EPA attempt to update national health standards in 2011 after the oil industry threatened that tougher standards could harm his re-election prospects. http://nyti.ms/2au2jIX

Once re-elected, the President did permit EPA to move forward with a relatively unambitious new ozone air quality standard. EPA argued that its new standard — a mere 7% improvement from the previous one — would “improve public health protection, particularly for at-risk groups including children, older adults, people of all ages who have lung diseases such as asthma, and people who are active outdoors, especially outdoor workers.” http://bit.ly/2avcLkZ

While filing the seemingly obligatory anti-EPA lawsuits http://bit.ly/2awFupm
— that will take years to grind through the courts — the oil and other industries turned their focus to Congress in an effort to thwart the new standards.  And they spared little when it came to rhetoric:

  • An “economic gut punch,” charged ExxonMobil  http://exxonmobil.co/2aeq46I
  • A “barrier to opportunity for hardworking American families and business,” asserted the Koch-funded Americans for Prosperity, which singled out Rep. Olson “for sponsoring this legislation [HR 4775]” http://bit.ly/2ai7FY6
  • “Endless regulatory overreach,” charged the U.S. Chamber of Commerce. http://uscham.com/2ah3aJS

So adamant — and persistent! — is the industry’s opposition that anti-ozone rhetoric even made its way into a recent EPA rule making regarding monitoring for a different air pollutant  http://bit.ly/29idi41 .

In comments to the agency, the “counsel” for the “NAAQS Implementation Coalition” — a name strikingly similar to the official title of HR 4775 (The “Ozone Standards Implementation Act of 2016”) — argued EPA should delay any monitoring of the new ozone standard — thus blocking its application — while continuing to monitor the earlier and weaker standard. http://bit.ly/29idi41

The “Coalition” described itself as “trade associations, companies and other entities” that might have to install emission controls to meet tougher clean air standards.

It turns out that the “Coalition” is not registered as an official lobby, though its “Counsel” — former well-regarded top congressional aide Joseph Stanko, now a partner with the Hunton & Williams law firm — is a registered lobbyist for Koch Industries as well as for Phillips 66, Southern Company Services, Energy Future Holdings, CSX Corporation, and the Electric Reliability Coordinating Council.  The last is a group of power companies, reportedly including Southern, Energy Future Holdings and Duke — run from a separate lobbying firm, Bracewell, LLP.  (Formerly Bracewell Giuliani.)

All of these companies have opposed tougher ozone standards or are members of trade associations that have.

Hunton & Williams is a major law and lobbying firm with a four decades-long history of representing industry clients opposed to tougher clean air controls. It boasts that Stanko has been named a “top lobbyist” and rated among the “best in the business hired guns” by The Hill newspaper. http://bit.ly/2aJZL7i

Specifically regarding ozone, Stanko was a reported to be key player in pressuring President Obama to deep six the ozone standards in 2011. http://bit.ly/2aq04oI .

As the EPA began to consider the issue again after the presidential election, Stanko again became a prominent critic. He testified before Congress as some law makers began building a case against tougher ozone standards.  http://bit.ly/2au3WpT

In addition to representing industry clients, Stanko is also a member of the influential U.S. Chamber of Commerce Energy, Clean Air and Natural Resources Committee.  The Chamber has consistently lobbied against tougher ozone standards and is also suing EPA to stop them. http://uscham.com/2aeqpXq .

In other words, Stanko appears to be in the eye of a corporate cyclone bearing down on the ozone standards.

Indeed, last fall when the White House was reviewing the EPA ozone decision before its announcement, Stanko made no fewer than four visits to the White House to make his clients’ case against tougher smog standards:

  • On Sept. 8, 2015, he attended a White House meeting requested by his group, the “NAAQS Implementation Coalition,” including other oil and chemical company lobbyists. http://bit.ly/2aK09mk
  • On Sept. 15, he was present at a similar White House meeting with lobbyists from oil, electric power and the U.S. Chamber of Commerce. http://bit.ly/2aq0jQz
  • On Sept. 25, Stanko joined other oil lobbyists at another White House meeting on the smog standards. http://bit.ly/2aK1Ccb
  • On Sept. 28, he went to the White House yet again with other electric power industry lobbyists http://bit.ly/2avfefp

As industry’s anti-ozone control campaign continued into 2016, it appeared as if Stanko’s law firm wanted lobbying reinforcements. Literally a week before Olson’s legislation (HR 4775) was about to be taken up by the whole House of Representatives Hunton & Williams, announced the hiring of new partners — including “super attorney Charles H. Knauss” http://bit.ly/2avfRFK

Five days later, Knauss officially registered to lobby Congress for ExxonMobil. Among the key issues: H.R. 4775. http://bit.ly/2ah5TTg

***

The Money

Unlike the White House, Congress does not make a public record of lobbyist meetings. The only public trail —aside from lobbyist registrations and quarterly reports — is the record of campaign contributions, which members of Congress must give the Federal Election Commission every three months.

And as Olson prepared to move forward with HR 4775, contributions started to flow to his re-election committee at key intervals, especially from the Hunton & Williams and Bracewell clients and allied groups.  In the several weeks leading up to the March 17, 2016, introduction of the legislation, checks arrived from the oil and chemical industries, including from ExxonMobil and the refinery lobby, the American Fuel and Petrochemical Manufacturers.

As the House Energy and Commerce Committee held an April 14 hearing on HR 4775 http://1.usa.gov/1qwrOOe , more money arrived — from Stanko’s client, Koch Industries, again from ExxonMobil and the refinery lobby — and even from Bracewell’s own PAC.

Still more campaign cash came in through the transom as Olson championed the legislation through the Energy and Commerce Committee: noteworthy contributions from Stanko clients Energy Future Holdings and Phillips 66 as well as from ExxonMobil and the American Petroleum Institute.

Finally, as Olson pressed his case in June on the floor of the House, still more money arrived at Olson’s campaign headquarters, including from Koch, American Petroleum Institute, the Chairman and CEO of Phillips 66, numerous other oil and power interests — and even from Hunton & Williams itself.

So were these companies buying — or renting — influence?  One can only make inferences. The lawyers might say it is only circumstantial evidence.  It is fair to point out, however, that these were not like donations to the Red Cross.

Has Olson — unlike mythical aviator Luke Skywalker — succumbed to the Dark Side?  Perhaps it is a matter of perspective.


Epilogue

Under Olson’s guidance, the House of Representatives passed HR 4775 on June 8, 2016 by a 234-177 vote. http://1.usa.gov/28CeqJO

The vote was generally along party lines, though 10 Republicans did oppose the bill, while seven Democrats voted in favor.  All seven Democrats had received campaign contributions from Hunton & Williams clients (Koch, ExxonMobil, and/or Southern Company.)

The White House has threatened to veto the bill http://bit.ly/2ax9AWJ so its status remains uncertain.

Portions of the bill were incorporated into spending legislation that the House approved July 14. http://bit.ly/29ZqD65 .  That legislation also faces a veto threat http://bit.ly/2aesfHG .

A Senate counterpart to Olson’s legislation (S. 2882) has been the subject of one hearing.

As for the money: During this two-year election cycle, through June 30th of this year, Koch’s political action committee had donated $1,240,900 to federal candidates or the PACs of like-minded lobbies — for example, to the American Fuels and Petrochemical Manufacturers and the American Forest and Paper Association. http://bit.ly/2aqYMtN (As noted below, both these associations gave generous donations to Rep. Olson.  A re-gifting? Or was it Koch increasing its influence?)

Of particular note: It gave $10,000 to House Majority Leader Kevin McCarthy on May 18, 2016 — the same day the House Energy and Commerce Committee approved HR 4775 and McCarthy boasted of his role in moving the legislation forward. http://bit.ly/2avhy68 . (McCarthy was a co-sponsor.)

During the same 18-month period, the ExxonMobil PAC contributed $1,210,250.  http://bit.ly/2ancsrl  Among the recipients: Colorado Democratic Senator Michael Bennet, a rare Democrat who has raised concerns about the ozone standard. According to Federal Election Commission records, ExxonMobil reports it has given Bennet $10,000 through June 30. (Bracewell’s PAC has given Bennet $2,000.)

Southern Company, during the same period, contributed $594,500.

**
Appendix

Rep. Pete Olson:  Contributions and Timeline for HR 4775

[Note: the list below focuses only on Rep. Olson during the time frame in question. Numerous other members of Congress have received contributions as well.  See, for example, from Koch PAC at http://bit.ly/1tmuEae ]


Flurry of pre-bill contributions:

Contributor Amount Date

ExxonMobil $2,500 2/15/2016
Spectra Energy $2,500 2/26/2016
Ford $2,500 2/29/2016
American Chemistry Council $5,000 3/1/2016
Lyondell Chemical $2,500 3/4/2016
Chevron $2,500 3/15/2016
Hess                                       $2,500 3/15/2016
American Fuels and
Petrochemical Manuf. $2,500 3/16/2016

Bill introduced 3/17/2016

**Fund-raising event for Olson: 3/18/2016

Bill hearing Hearing notice  4/7/2016 /Actual hearing  4/14/2016

**Fund-raising event for Olson: 4/20/2016

Contributor Amount Date

Koch Industries $2,500 4/13/2016
ExxonMobil $2,500 4/14/2016
American Fuels and
Petrochemical Manuf. $3,000 4/20/2016
BRACEPAC $2,500 4/21/2016
National Association of
Convenience Stores $2,500 4/21/2016
Chesapeake Energy $1,500 4/22/2016
Koch Industries $1,000 4/26/2016


Bill markups Subcommittee  5/11-12
Full committee  5/18/2016

Direct Energy PAC $1,000 5/2/2016
Victor Link
(oil/gas co. president) $2,500 5/8/2016
Karen Linck $2,500 5/8/2016
Halliburton PAC $2,500 5/10/2016
ExxonMobil PAC $2,500 5/11/2016
Phillips 66 PAC $2,500 5/13/2016
J. Ralph Ellis, Jr.
(oil/gas investor) $2,700 5/16/2016
Energy Transfer PAC $5,000 5/16/2016
American Petroleum Inst. $1,000 5/17/2016
Energy Future Holdings $2,500 5/18/2016
Revati Puranik (oil/gas
extraction equipment) $2,700 5/19/2016
DTE Energy PAC $1,000 5/23/2016
BNSF Rail PAC $2,500 5/23/2016
John B. Walker (oil CEO) $2,700 5/26/2016
Lisa Walker $2,700 5/26/2016
John Lipinski (oil eco) $1,000 5/29/2016

Bill floor 6/8/2016

American Petroleum
Institute PAC $1,000 6/6/2016
Edison Electric Inst. PAC $1,000 6/6/2016
Marathon Petroleum PAC $5,000 6/6/2016
ConocoPhillips PAC $1,000 6/6/2016
AGL PAC
(Southern Co. subsidiary) $5,000 6/6/2016
Gregory Garland/
(Phillips 66 Chm/CEO) $2,700 6/6/2016
Tenaska PAC $500 6/6/2016
National Assn of Chemical
Distributors PAC $3,000 6/6/2016
Arnold&Porter PAC
(lobbyist:Energy Future
Holdings, others) $550 6/8/2016
TXU Energy PAC $2,500 6/14/2016
Koch Industries PAC $1,500 6/15/2016
Sima Ajani (Shell Oil) $1,250 6/17/2016
Spectra Energy PAC $2,500 6/23/2016   
American Forest and
Paper Assn PAC $1,000 6/24/2016
Robert Tudor (energy
investment&banking) $2,700 6/25/2016
Jeff MacKinnon (lobbyist for
Southern Co, Energy Futures
Holdings and others) $500 6/27/2016
Valero PAC $2,500 6/28/2016
Rhod Shaw (lobbyist for
Duke Energy and
Southern Co. subsidiary) $1,000 6/29/2016
Eversource Energy PAC $500 6/30/2016
American Public Power         $750    6/30/2016
Hunton & Williams $1,000 6/30/2016

[Note: as of publication, the Federal Election Commission had not processed all the PAC contribution data for June.  Some of the dates noted above — for example, the contributions listed in late June — were the dates reported as received by Rep. Olson’s campaign committee.  The actual contributions in some cases could have been made up to several weeks earlier. Clean Air Watch would like to gratefully acknowledge the Center for Responsive Politics and its opensecrets.org money-tracking website.]

***

Hunton & Williams and Bracewell LLP common lobbying ties:  Electric Reliability Coordinating Council, Energy Future Holdings, Southern Company

Hunton & Williams’ other clients include: Koch Industries, ExxonMobil, Phillips66, CSX, First Energy Corp.

Bracewell’s other clients include: Ameren, Duke Energy, DTE Energy, LGE&KU Energy LLC,Arch Coal, Council of Industrial Boiler Owners, Salt River Project, Valero Energy, Tesoro Refining

***

Illustrative FEC filings from ExxonMobil, noting fundraising “event” for Rep. Olson during a key moment in the development of HR 4775.  (If only the other lobbies had been so informative!)









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