(A)
PROl
U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Office of Counsel Legal Review
Response to Congressional
Inquiry Concerning EPA's
Preparation and Provision of
Information Regarding
California Waiver Decision
Report No. 09-P-0043
November 26, 2008
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
,. :. ° WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
November 26, 2008
The Honorable James M. Inhofe
Ranking Member
Committee on Environment and Public Works
United States Senate
Washington, D.C. 20510
Dear Senator Inhofe,
Pursuant to your request of March 5, 2008, the Office of Inspector General Office
of Counsel (OIG-OC) has reviewed allegations that "Talking Points" related to the
California waiver petition were improperly disclosed to former EPA Administrator
William Reilly on October 18, 2007, "to use in his lobbying efforts" in order to influence
the Administration. Specifically, you suggested that the preparation and subsequent
release of the "Talking Points" was an improper use of Agency funds and a potential
violation of law, including the Anti-Lobbying Act. The results of our review are
discussed below.
I. Summary of Conclusion
We found that the preparation and subsequent release of information to former
Administrator Reilly do not constitute a violation of law, regulation, or policy. The
"Talking Points" specifically referred to in your inquiry was one of four pages drafted in
response to a mid October request for information by Mr. Reilly to EPA senior staff
member Margo Oge. However, we conclude that Ms. Oge did not provide the "Talking
Points" page to Mr. Reilly as part of the October 18 response to his request for
information about the California waiver. The "Talking Points" page was not provided to
Mr. Reilly until after it was released to the media during a congressional press conference
several months later in February 2008. As discussed below, the preparation by senior
staff member Christopher Grundler of the four-page document referred to as "Homework
Assignment" was consistent with the Office of Transportation and Air Quality's
(OTAQ's) unwritten stakeholder communication practice, as was the initial release of the
first three pages to Mr. Reilly. In light of the concerns raised as a result of OTAQ's
response to Mr. Reilly pursuant to its unwritten practice, we suggest that OTAQ consider
formalizing its practice.
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II. Background
A. Sequence of Events
Margo Oge, the Director of OTAQ1 since October 1994, received a telephone call
from Mr. Reilly sometime shortly before October 17, 2007. Mr. Reilly served as EPA
Administrator from February 1989 to January 1993.
Mr. Reilly's and Ms. Oge's recollection of the details of that conversation vary
slightly; however, they both recall that Mr. Reilly was looking for information to assist
him in preparing for a telephone call he planned to make to Administrator Stephen
Johnson concerning the then-pending California waiver decision.2 Both Mr. Reilly and
Ms. Oge recall that Mr. Reilly was seeking information including the nature and number
of the waiver decisions he had made when he was Administrator.
Ms. Oge recalled that, in addition to what she characterized as background
information about waiver decisions when Mr. Reilly was at the Agency, he also wanted
information that was "readily available" before he spoke to Administrator Johnson. Ms.
Oge believed that Mr. Reilly was not asking for inside information, or anything that was
confidential or could be considered deliberative, but that he wanted public information,
like what the press was reporting on the matter and what was being discussed in public
such as at the public hearing in Washington DC. The public hearing was conducted as
part of the Administrator's process in making a decision on an application to waive a
requirement of the Clean Air Act.3 Ms. Oge also recalled that Mr. Reilly wanted to know
what position California was taking with regard to the issue, and what opponents and
proponents were saying.
Mr. Reilly recalled that, in addition to asking for information about the number of
waivers he had granted, he also asked about how the waiver issue was being addressed by
1 OTAQ is one of four offices in EPA's Office of Air and Radiation (OAR). OAR develops national
programs, technical policies, and regulations for controlling air pollution and radiation exposure. OAR is
concerned with pollution prevention and energy efficiency, indoor and outdoor air quality, industrial air
pollution, pollution from vehicles and engines, radon, acid rain, stratospheric ozone depletion, climate
change, and radiation protection. OTAQ's mission is to reconcile the transportation sector with the
environment by advancing clean fuels and technology, and working to promote more livable communities.
OTAQ is responsible for carrying out laws to control air pollution from motor vehicles, engines, and their
fuels.
2 The California Air Resources Board in December 2005 requested a waiver of pre-emption for its
greenhouse-gas regulations for certain new motor vehicles beginning with Model Year 2009. California's
request was subject to the waiver criteria set forth in the Clean Air Act. (42 USC 7543(b)). EPA sent a
letter to California on December 19, 2007, setting forth its intent to deny the waiver in favor of a national
solution for vehicle greenhouse-gas emissions. On February 29, 2008, EPA Administrator Johnson signed a
Federal Register Notice Denying a Waiver of Clean Air Act Preemption for California's 2009 and
Subsequent Model Year Greenhouse Gas Emission Standards for New Motor Vehicles.
3 Section 209(b) of the Clean Air Act requires the Administrator, after notice and opportunity for public
hearing, to waive application of the prohibitions of section 209(a).
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the Agency. Specifically, he wanted to know what the outstanding questions were and
what he (Mr. Reilly) might be confronted with when he called the Administrator.
Mr. Reilly stated that calling Ms. Oge was consistent with his having previously, but
infrequently, reached out to her and others when he had questions relating to the
environment. Our review concluded that Mr. Reilly was not acting as a lobbyist
concerning the California waiver issue at the time of the waiver application and decision,
although he had lobbied a number of years ago on an unrelated issue concerning the
Presidio Trust.4
After speaking with Mr. Reilly, Ms. Oge turned to Christopher Grundler, OTAQ's
Deputy Director since 1995, to prepare a response. Both she and Mr. Grundler recall her
asking him to compile information for Mr. Reilly that was factually accurate and
available to the public, i.e., not deliberative information. Mr. Grundler recalled Ms. Oge
explaining that Mr. Reilly had requested information about Clean Air Act waivers,
including a summary of the arguments on both sides for the pending waiver request and
the number of these decisions he made when he was Administrator. Mr. Grundler
recalled that he and Ms. Oge discussed his compilation of general background
information on the Clean Air Act provisions regarding the waiver, as well as EPA's
internal process for reviewing waiver petitions and how many waiver decisions Mr.
Reilly had made as Administrator. Those were the only directions that Mr. Grundler
recalled. They both recalled discussing the assignment - Mr. Grundler specifically
recalled it being a telephone conversation - and it was the only one they had about Mr.
Grundler's task. Ms. Oge said that it was a short discussion, no more than 10 minutes if
she had to guess, and that it occurred during working hours. She did not ask Mr.
Grundler to work on the assignment at home. Mr. Grundler was aware that Mr. Reilly
was in favor of the Administrator granting the waiver.
Mr. Grundler, relying on publicly available information that he already knew, as
well as similar information that was readily available, compiled the document that he
eventually sent to Ms. Oge. He did not seek input from anyone when he began drafting
the response. Mr. Grundler recalled that he worked on the response after working hours
at home, as well as at work. Mr. Grundler drafted a four page document, the fourth page
of which was entitled "Talking Points." He sent the entire draft to Karl Simon, OTAQ's
Director of the Compliance and Strategies Division responsible for waiver reviews,
during the afternoon of October 17, 2007. Mr. Simon believed that Mr. Grundler had
sent him the document for fact-checking, and recalled confirming the number of waivers
that had been previously granted by having a staff attorney check the list of waivers and
by adding some language about California "act[ing] as a laboratory." He sent Mr.
Grundler his reply e-mail later the same day and they spoke shortly thereafter. In his
e-mail, Mr. Simon indicated that he did not know what the purpose of the "Talking
Points" page was, but neither he nor Mr. Grundler recalled discussing the "Talking
Points" page much when they spoke. Mr. Simon only recalled that Mr. Grundler
4 OIG conducted searches of legislative databases that include information for the 2007 time period at issue
and William K. Reilly was not identified as a registered lobbyist.
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indicated that the "Talking Points" were for Mr. Reilly. All told, Mr. Simon recalled
having spent only a few minutes on his review.
Mr. Grundler then e-mailed the revised document, which he labeled "Homework
Assignment," to Ms. Oge in the early evening of October 17. He estimated that, in total,
he spent about an hour or two working on the document. Ms. Oge recalled skimming
through the document the following day, October 18, 2007. She was satisfied that the
first three pages of the document responded to Mr. Reilly's request and contained
publicly available information. She decided not to send the "Talking Points" page to
Mr. Reilly because she did not believe it contained information that was substantively
different from that found in the first three pages, and because she thought the language
was "too flowery." Ms. Oge's Chief of Staff recalled sending the first three pages of the
document to Mr. Reilly via Federal Express. No record or copy of what was sent was
maintained as it was not the Office's practice to do so, but the Federal Express receipt
was provided to OIG.
The electronic file containing all four pages of the "Homework Assignment" draft
document was provided to Senator Barbara Boxer in response to a December 20, 2007
document request for Agency materials concerning the denial of the California waiver
request. The file was in an October 17, 2007 e-mail from Mr. Grundler to Ms. Oge. On
February 26, 2008, Senator Boxer held a press conference during which she displayed a
poster-sized copy of the "Talking Points" page and characterized it as having been
prepared by senior staff5 for the Administrator. After learning about this characterization,
Ms. Oge reached out to Mr. Reilly so he could clarify for Senator Boxer that the
document Senator Boxer had disclosed was not prepared for Ms. Oge, but was prepared
in response to Mr. Reilly's request for information in October 2007. Because Ms. Oge
had not originally sent Mr. Reilly the last page of the "Homework Assignment"
document, captioned "Talking Points," she had the entire document, including the
"Talking Points" page, sent to him so he would know what Senator Boxer had referenced.
Although Mr. Reilly recalls receiving the four-page document at some point, he
could not recall whether he had initially received the first three pages of the document
and then later received the entire four pages or initially received all four pages. He
recalled discussing the "Talking Points" page with Senator Boxer or her staff and the
press, telling them that the document was prepared for him, but that he did not rely on it
for his conversation with Administrator Johnson. Mr. Reilly had used some of the
background information, like the number of waivers he had granted, in his conversation
with Administrator Johnson, but it is clear that he did not rely on the "Talking Points"
page in his conversations with Administrator Johnson because he did not have that page
until the following February. Mr. Reilly stated that he spoke to Administrator Johnson
before and after the waiver decision was made.
5 Senator Boxer was referring to Margo Oge and Christopher Grundler, who are members of the Senior
Executive Service (SES). Mr. Simon, who was not mentioned by Senator Boxer, is also considered senior
staff and is in the SES.
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B. OTAQ's Unwritten Practice Regarding Information Requests
According to Ms. Oge, Mr. Grundler, and Mr. Simon, OTAQ's practice has been
to share information as freely as possible with any stakeholder provided that the
information is not privileged.6 They indicated that OTAQ regularly engages in
collaborative processes with stakeholders, and that it is very common to share non-
deliberative material, if it is publicly releasable; this is how they develop consensus on
rulemakings. All three considered sharing the background information with Mr. Reilly as
consistent with their practice. This practice is not a written policy or procedure, but has
been accepted as a best practice.7 In fact, Mr. Grundler stated that, if an automotive
executive had asked for similar written material, he would have provided it. When asked,
each denied receiving any benefit for performing the limited work they did regarding the
request and there is no evidence to suggest otherwise.
C. The "Homework Assignment" Document
The "Homework Assignment" document that Mr. Grundler prepared consisted of
four pages. The first two pages were cut-and-pasted from various sources, including
earlier California waiver briefings for the Administrator,8 existing legal precedents,
earlier waiver decisions, public comments by automakers and California, and public
statements that were part of the California waiver docket. These pages are entitled
"Legal Arguments," and discuss seven bullet points. The third page is a short discussion
of a separate point concerning the President's 20-in-10 targets that likewise contains
publicly available information.9 The fourth page was drafted by Mr. Grundler, who was
trying to capture what he thought Mr. Reilly might want to say to the Administrator
6 Ms. Oge explained that a stakeholder is, from her perspective, anybody who is interested in what her
organization is doing and affected by the work of her office. OTAQ serves the public, which includes
everyone from an interested individual to a State group, environmental group, or industry. Her perspective
is corroborated by a 2002 EPA report which concluded that "Stakeholders may include other state/local
government agencies, the regulated community, citizen organizations, environmental groups, and
individual members of the public." United States Environmental Protection Agency, "Innovating for Better
Environmental Results: A Strategy to Guide the Next Generation of Innovation at EPA," 2002, available at
http://www.epa.gov/innovation/pdf/strategv.pdf and cited in the report referenced in footnote 7, below, p. 3.
7 This practice was embraced in OTAQ's rulemaking process for the "Control of Emissions of Air Pollution
from Nonroad Diesel Engines and Fuel Rule" and was subsequently the focus of a report endorsing the
practice. See, Council for Excellence in Government, The Role of Collaboration in EPA Rulemaking:
Lessons from the Nonroad Diesel Engines & Fuel Rule (Nov. 15, 2005).
8 The portions of the Administrator's briefings that Mr. Grundler copied consisted of publicly available
information and were not privileged.
9 20-in-10 refers to the President's national goal to displace 20 percent of U.S. gasoline consumption within
10 years. Mr. Grundler included the information about the President's goal here because he thought it
might be helpful information given that the Greenhouse Gas rulemaking was in development at the same
time the waiver matter was being considered, and the President had directed that EPA use the "20-in-10"
program as a starting point for the rulemaking.
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during their telephone call. It is entitled "Talking Points." This is the page that Ms. Oge
and her Chief of Staff recalled removing from the document before sending it to Mr.
Reilly.
Ms. Oge, Mr. Grundler, and Mr. Simon all assert that none of the information in
the document was, to the best of their understanding, privileged; i.e., there was nothing in
it that was not available publicly or was "confidential." Attorneys from the Agency's
Office of General Counsel as well as OIG-OC agree.
III. Legal Discussion
OIG-OC's review disclosed no violations of federal law or regulation.
Specifically, we found that the Anti-Lobbying Act provisions are not applicable to these
events. We found that the activities did not violate the ethics regulations governing use
of government equipment, resources, and position. Furthermore, the preparation by
senior staff member Christopher Grundler of the four-page document referred to as
"Homework Assignment" was consistent with OTAQ's unwritten practice of sharing
information with stakeholders, as was the initial release of the first three pages to Mr.
Reilly.
A. Anti-Lobbying Act
In general the Anti-Lobbying Act prohibits federal executive branch employees
from using appropriated funds to influence members of Congress, a jurisdiction, or any
government official to favor or oppose certain matters such as any legislation, law, or
appropriation, particularly through grass-roots campaigning. As described in detail
above, EPA staff did not engage in any effort to influence a member of Congress or other
covered official to act with respect to any legislative activity.10 Instead, Ms. Oge
provided publicly available information in the first three pages of the "Homework
Assignment" document to Mr. Reilly so he could discuss a matter not covered by this
Act; i.e., the pending California waiver decision. As such, we found that the Anti-
Lobbying Act is inapplicable here. In fact, we found that the "Talking Points" page was
not provided to Mr. Reilly until it was publicly released by Senator Boxer; this was after
Administrator Johnson informed California Governor Arnold Schwarzenegger and the
media of his decision to deny the waiver application. In April 2008, Representative
Henry Waxman reached the same conclusion. As reported to the media by his
spokesperson, Representative Waxman's Committee found no evidence that the EPA
career staff lobbied members of Congress with respect to California's request.
B. Ethics Regulations
In addition to the Anti-Lobbying Act, you raised the question of improper use of
Agency equipment and resources. Two regulations address these concerns: use of
10 A decision regarding an application for a waiver under the Clean Air Act is considered a "final Agency
action" under Section 307(b)(l) of the Act.
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Government property and use of official time.11 With respect to the use of Government
property, an employee has a duty to protect and conserve such property and use it for
authorized purposes. Here, the use of government property was in the furtherance of an
authorized purpose. The "Homework Assignment," which was e-mailed on EPA's Lotus
Notes system and was crafted, at least in part, on an EPA computer, was created for a
stakeholder - Mr. Reilly - with an interest in EPA's California waiver decision. No
confidential or other unauthorized disclosure was made. We found that there was no
improper or inappropriate use of Government property.
In brief, the regulatory provisions concerning use of official time require
employees to use official time to perform official duties; this includes the requirement
that a supervisor direct subordinates to use official time to perform only official duties
and not other unrelated activities. Here, the use of official time by the senior staff to
respond to an information request from a stakeholder was within OTAQ's normal practice
and constituted official duties. Although the document produced by Mr. Grundler is
labeled "Homework Assignment," Ms. Oge stated that she did not request Mr. Grundler
to work at home.
C. Other Legal Concerns
You also inquired as to whether the senior staffs activities may have violated
other laws or regulations. To address this issue, we examined prohibitions against the use
of nonpublic information and basic obligations of public service, such as the ethical
requirement that federal employees avoid the appearance of a violation of law or ethical
standards. The regulation against the use of nonpublic information generally prohibits an
employee from improperly using or knowingly disclosing nonpublic information for his
or her own or another's benefit.12 Nonpublic information is defined, in part, as that which
"[h]as not actually been disseminated to the general public and is not authorized to be
made available to the public on request." We found that none of the released information
was nonpublic and that EPA senior staff did not receive a benefit for disclosing it.
Likewise, Mr. Reilly did not receive any prohibited benefit; rather, he received what was
available to the public upon request.
Lastly, the principles underlying public service require that employees act
impartially and avoid actions that create the appearance that they are violating the law or
ethical standards. In light of all the circumstances surrounding the response to Mr.
Reilly's request, we find that Ms. Oge did not violate the impartiality standard when she
provided the first three pages of the "Homework Assignment" to Mr. Reilly. She
provided publicly available information to a stakeholder, as she would do in response to
any other request for similar information. Mr. Grundler likewise did not violate the
11 See Prohibitions on the Use of Government property (5 CFR 2635.704) and Use of official time (5 CFR
2635.705(a-b)). In addition, 5 CFR 2635.702(a) is cited in the Use of official time regulation to
demonstrate that a supervisor's use of a subordinate's time for his or her personal benefit is prohibited.
See 5 CFR 2635.703.
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impartiality requirement because he prepared the entire "Homework Assignment"
document based on publicly available information and provided it to Ms. Oge, and
because he also would have prepared and provided similar documents to other
stakeholders if their request was legitimate. We further conclude that Mr. Grundler's
drafting of the "Talking Points" page did not create an appearance that he had violated the
law or ethical standards. We further conclude that a reasonable person with knowledge
of the relevant facts would not find that these circumstances created an appearance of a
violation of the standard. Here the relevant facts are that Mr. Grundler drafted the
"Talking Points" page to satisfy a legitimate request from his supervisor using
information that was publicly available; Mr. Grundler did not receive the request directly
from nor provide the response directly to Mr. Reilly. Mr. Grundler drafted the "Talking
Points" page in order to provide requested information to a stakeholder in the format he
thought the requestor (Mr. Reilly) would want, which he also stated that he would do for
any other stakeholder making a legitimate request. These facts support our conclusion
that Mr. Grundler's actions do not create an appearance of a violation of law or ethical
standards.
IV. Conclusion
As noted above, we found that the preparation and subsequent release of
information to former Administrator Reilly do not constitute a violation of law,
regulation, or policy. We also noted that, in light of the concerns raised as a result of
OTAQ's response to Mr. Reilly pursuant to its unwritten practice, OTAQ should consider
formalizing its practice.
The estimated cost of this report - calculated by multiplying the project's staff
days by the applicable daily full cost billing rates in effect at the time - is $52,858.
If you have any questions or need additional information, please do not
hesitate to contact my Associate Deputy Inspector General and Counsel, Mark Bialek,
at (202) 566-0861.
Sincerely,
Bill A. Roderick
Deputy Inspector General
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