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EPA WATCH A twice-monthly survey of environmental regulatory activities undertaken by the EPR, OSHA, the White House, the U.S. Congress and Fedaai; State and local agencies. VOL 1 Number 2 March 16 1992 EPA UNDERTAKES "RISK ASSESSMENT" ON DANGER OF SHOWERING The Environmental Protection Agency (EPA) has launched a risk assessment on the health risks of taking showers. Coming at a time when the EPA is under sharp attack for wasting taxpayers' money (see next article), the initiative on showers is certain to add to the agency's growing list of public embarrassments. On February 25, the EPA's Science Advisory Board (SAB) Indoor Air Quality and Total Human Exposure Committee (IAQTHEC) held an all- day meeting in Arlington, Virginia. One of that meeting's sessions was entitled "Guidance to Estimating Exposure to Volatile Organic Compounds (VOCs) During Showers." A draft document presented at that session, which has been obtained by EPA WATCH, notes that "Exposure to containments volatilized from tap water is a significant issue, and the scope of interest within EPA is broad." The draft goes on to say that "we believe that the data on exposure from showering alone are of sufficient quality to support guidance. Such guidance would support an Agency- wide need -- a basis for consistent risk management decisions to reduce showering exposure." "Although the Agency has well- established methods for assessing exposures from ingesting tap water," the document continues, "the Agency does not have well-established methods for estimating exposures from inhalation of contaminants volatilized during other household uses (e.g. showering, laundering, washing dishes, and toilet flushing)." The Showering Pathway Citing the findings of a 1988 EPA Risk Assessment Forum on the same subject, the draft points out that "the Forum's Exposure Oversight Group undertook a more detailed review of the literature and concluded that, although the studies were limited in number and consisted primarily of theoretical calculations and monitoring of unoccupied shower chambers, these studies demonstrated the significance of the showering pathway." Even though the draft admits that the EPA's studies are based largely on "theoretical calculations and the monitoring of unoccupied shower chambers," it nonetheless concludes that its data on the dangers of showering support the need for more "guidance." Guidance is the key word. For the "showering pathway" down which the EPA proposes to stride is designed to lead to a regulatory agenda under which the EPA will have control over indoor air. In an effort to expand its regulatory power into the realm of indoor air, Administrator William Reilly's EPA has proposed studying the health effects of some 500 VOCs. One of those compounds in chloroform, a by-product of chlorine, which is used to purify water. Like all VOCs, chloroform, when heated, is emitted as a gas which is then inhaled by the person taking a shower. Thus, by performing "risk assessments" on gases created by heating water, the EPA, which has jurisdiction over water, is attempting to seize regulatory control over indoor air. Currently, indoor air is under the jurisdiction of the Occupational Safety and Health Administration (OSHA), which, as its name implies, monitors health risks in the workplace. Should the EPA succeed in wresting regulatory control over indoor air from OSHA, the EPA's writ would extend into every home in the United States. The search for "indoor pollutants," including those lurking in toilets, kitchen sinks, and shower chambers, could develop into a financial nightmare for homeowners. As the EPA expands its turf-building energies into American households, it is only a matter of time before homeowners will have to get an EPA- approved "air-quality test" before they can sell their homes. Costly Risk Assessments With the EPA pondering a "risk assessment" on the dangers of showering, it is well to remember that the agency's reputation for calculating health risks has been severely damaged by a series of costly fiascos: -- In the 1980s, the EPA forced scores of financially hard-pressed school districts across the nation to remove asbestos, only to discover that asbestos is relatively harmless when

EPA WATCH Pne 2 left alone. -- In 1982, the residents of Times Beach, Missouri, a town of 2,400 people, were forcibly evacuated from their homes because of an EPA risk assessment that concluded the community was contaminated by dioxin. Years later, after the town's 800 families had endured the trauma of being dispossessed of their homes, the EPA admitted that the concentration levels of dioxin at Times Beach were not harmful. -- In 1990, the EPA's Science Advisory Board issued a draft report claiming that environmental tobacco smoke (ETS), or passive smoking, was a "Group A carcinogen." But within months, the board's own chairman, Dr. Morton Lippman, told reporters that the risk from ETS is "probably much less than you took to get here through Washington traffic." So embarrassing is the EPA's list of costly blunders that Administrator Reilly found it necessary to order an internal review of the problems associated with scientific analysis as carried out by his agency. The report, issued in January, found that the EPA lacks adequate safeguards to prevent policy considerations from influencing scientific findings. It added that the "EPA has not always ensured that contrasting, reputable Vol 1 Number 2 scientific views are well explored ... from the beginning to the end of the regulatory process." Yet within one month of admitting that its science reflects regulatory bias and lacks credibility in the greater scientific community, the EPA decided to investigate the health risks of taking showers. As the nation faces a projected $400 billion budget deficit this year, the Bush administration might ask itself whether the EPA, which already consumes 36 percent of the U.S. regulatory budget, shouldn't be held accountable for the uses to which it puts taxpayers' money. EPA REELING FROM CHARGES OF CONTRACT MISMANAGEMENT In a development that could jeopardize its proposed elevation to cabinet-level status, the Environmental Protection Agency (EPA) has been accused by its own Inspector General of contract mismanagement that has cost U.S. taxpayers of millions of dollars. The allegations are contained in a draft report released on February 28 by John C. Martin, the EPA's Inspector General. Mr. Martin's report focuses on the EPA's long- standing relationship with Computer Sciences Corporation (CSC) of El Segundo, California. "EPA's vulnerability to fraudulent, wasteful, abusive, and illegal practices from CSC contract operations has increased to unacceptable levels due to poor contract practices by EPA officials," Mr. Martin noted. "EPA's managers established a climate of disregard for sound contract management principles that encouraged prohibited contract activities, ineffective and inefficient use of Agency resources, and diminished EPA control over critical program support activities." CSC "assigned itself work and managed its own contract for EPA," the report said. So cozy were the ties between the agency and the contractor that spouses worked together at the same locations -- one for CSC, the other for the EPA -- as did parents and their children. Dingell Blasts EPA "This is the most absurd situation I have ever seen in government contracting," commented Congressman John Dingell, Democrat of Michigan, whose House Energy and Commerce investigations subcommittee has been looking into the matter. At a hearing before his subcommittee on March 4, Mr. Dingell said the EPA had "raised questionable government contracting to a new art form." "Under their golden handshake with CSC," Mr. Dingell went on, "the EPA allows CSC to set its own work requirements, draft its own contracts, execute those contracts, and review its own bills. In effect, CSC is contracting with itself, merely using the taxpayers' money." In testimony before the subcommittee, Inspector General Martin said that "Contract mismanagement at EPA has reached crisis proportion." To underscore his point, Mr. Martin outlined the results of his recent audit of the EPA's relationship with CSC: -- The EPA awarded a $357 million contract to CSC in September 1990, even though the California- based company's bid was $56 million higher than the lowest technically qualified bidder. The EPA justified the awarding of the contract to CSC by citing the firm's "extraordinary technical expertise." But shortly thereafter, the EPA granted a waiver for 16 percent of total contract staff who, it turns out, were unqualified to work on the contract. The waiver allowed them to do the work. -- The EPA has relied heavily on CSC for development, operation, and maintenance for a majority of its information and financial systems, leading to an over-dependence on contractor support and a loss of technical expertise within the EPA. "It is disturbing that EPA is in effect 2046323549

EPA WATCH PaFe 3 held hostage by contractors who have become the ones with the institutional memory," Mr. Martin noted. "But even more alarming is the situation where EPA does not now have enough knowledge of these complicated systems to adequately direct the contractor's work. This is why, as our audits showed time and time again, EPA relied on the contractor to develop its own scope of work in these very technical areas." -- EPA employees who had responsibilities for assigning and monitoring work under the CSC contract had not been trained in contract administration and were not held accountable for contractor oversight. -- The Inspector General's audit identified $13 million of questionable costs out of an estimated $50 million of first-year expenditures under the current CSC contract. -- Statements of work to be performed under the CSC contract were ill-defined, and the EPA did not perform independent reviews of CSC invoices for payment. What makes the Inspector General's criticism of the EPA's contract mismanagement all the more devastating is that such charges are not new. "This debacle did not occur overnight," Congressman Dingell said. "EPA managers have been warned about this growing cancer within the agency over the last five years by their own staff, by the Defense Contract Audit Agency, by the Inspector General, and by this subcommittee. The EPA's response was simply to let the cancer fester and grow. Not surprisingly, it is now out of control." The EPA has made little effort to refute the gravity of Mr. Martin's findings. Christian Holmes, acting EPA assistant administrator for resource management, admitted to the subcommittee that "many of the (Inspector General's) findings could be on the mark." He added that the agency "intends to tighten up controls and changer its attitude toward contracts." Reilly Assailed Subcommittee Chairman Dingell left little doubt as to who he believes is responsible for the EPA's contract mismanagement. "Let me assure you," he told the hearing, "something drastic has to and will happen at the EPA. If Mr. Reilly does not have the will or capability to take care of this, it will be done for him." Mr. Dingell added that Administrator Reilly had been invited to testify before the subcommittee "about how he plans to regain control of his agency." But, unfortunately, Mr. Reilly had a "more important prior commitment." "As we speak, he is staying at the Condado Beach Hotel in San Juan, Puerto Rico while attending the 'Wider Caribbean Environment and Development Conference.' Mr. Reilly's curious response to the subcommittee, as well as the mismanagement of EPA contractors, . . . demonstrates, among other things, that the EPA is simply not ready to become a cabinet-level agency," Chairman Dingell said. EPA's Cabinet-Level Status at Risk In questioning the EPA's readiness to become a cabinet-level agency, Mr. Dingell is merely underscoring what has become increasingly obvious over the past several weeks: The EPA's promotion to cabinet-level status is in real trouble. Even though the Senate passed "The Department of the Environment Act of 1991" (S. 533) last October, the House version of the bill (H.R. 67) is stalled and may be further undermined by the latest revelations of EPA mismanagement. House Government Operations Committee Chairman John Conyers, Democrat of Michigan, has been reluctant to push for immediate passage of an EPA elevation bill. Aware of the mounting criticism of Vol 1 Number 2 EPA's management practices, Mr. Conyers has asked the Government Accounting Office (GAO) to consider a study on the merits of centralizing the EPA's enforcement mechanism. And, in a move which does not bode well for the agency, Mr. Conyers has requested the EPA's Inspector General to report on the agency's ten most serious management problems. In light of the Inspector General's stinging indictment of EPA's contract mismanagement practices, Mr. Conyers' request could produce a report that would doom cabinet-level status. Indeed, as recognition grows among members of both parties in Congress that the EPA is in drastic need of reform, any moves that would grant the embattled agency increased prestige and funding is likely to encounter stiff opposition. Earlier this year, the Bush administration announced a 90-day regulatory moratorium, hoping to free the stagnating U.S. economy from stifling regulatory burdens. The move, however belated, was welcomed by the U.S. business community. Yet as the case of administrative management at the EPA shows, there are other examples of regulatory chaos that cry out for White House attention. EPA WATCH ZT,A Watch ~s a tWiee-mOnthlv put>lirati~~n of the :Anicriran i'olicy E'enter, " [lon•przilit, i.~u.biiG interrst mganiz,ttion, dc3icated to #tte prOtnotion of free enterprist:, przvate prr3prrtV, xnd inClividLlgif'beriy. tiuT_~ si~ ;ns ire ix:r year. Amerkari Pelirv 4'enter I4l-1U1_ T?arkc L.t~s)g Court ~t,antillv, Viq~inia 22tT21 ("U_ } ()68-9:68 Thomas rA. DeWccse. Presidcnt Liaine .A. Wct'us}ier, F_zecuti~T Director i3uLUter C'uben, 'F*rdiw 2046323550

EPA WATCH Paire 4 As the death toll mounts from the cholera epidemic in South America, attention is being focused on the chain of events that led to the tragedy. One of the key links in that chain is a controversial EPA risk assessment. Some 300,000 cases of cholera have been reported since January 1991, of which over 3,600 have been fatal. Most of the fatalities have occurred in Peru, where the epidemic appears to have broken out when a Chinese freighter dumped contaminated bilge water into the harbor at Lima. By eating infected fish and shellfish from the waters near the harbor, human beings appear to have passed the bacteria into the local water supply, enabling the killer disease to reach even greater numbers of people. International health officials believe that the failure of Peruvian authorities to chlorinate their nation's entire water supply allowed the bacteria to flourish. Chlorine is a disinfectant that is commonly used the world over to protect the water supply from dangerous bacteria. EPA Studies That Peruvian officials neglected to take such elementary precautions, despite their country's modern water- filtration technology, can be explained in part by Peru's adherence to an EPA risk assessment. According to an article by Christopher Anderson in the British magazine Nature (November 28, 1991), the decision by Peruvian officials not to chlorinate much of the country's drinking water was based on studies by the EPA showing that chlorine may create a slight cancer risk. It seems that chlorine can react with by-products of human decay in water to create several suspected carcinogens. "A class of these chlorine-based compounds, called Vol 1 Number 2 DEATH IN THE ANDES trihalomethanes (THMs)," Mr. Anderson writes, "are currently regulated by EPA, which requires that their concentration in major water systems be less than one part per billion (p.p.b.). EPA studies in the 1970s found that a 100 p.p.b. level poses a cancer risk of about 1 in 10,000." Since then, Mr. Anderson notes, the EPA has wrestled with the question of how to balance the cancer risk of chlorination with the microbial risk of no disinfection at all. Current U.S. regulations set a 100 p.p.b. limit for TI-iM chemicals, even though one study suggest that even that level may cause 700 extra cases of cancer each year in the United States. "Yet most epidemiologists," he points out, "agree that a relatively small risk of cancer is preferable to the possibility of a microbial epidemic." During the 1980s, Peruvian officials, citing the EPA studies of chlorine's cancer potential, decided to stop chlorinating many of Lima's wells. "This has now raised serious questions about both EPA's risk assessment and the way it has been communicated to the rest of the world," Mr. Anderson observes. The United States currently spends $100 billion a year complying with environmental regulations. Many of these regulations are based on the same kind of risk assessment that contributed to the tragedy in Peru. But a recent survey of the causes of cancer, published in Science magazine, concluded that "the perception that environmental pollution is a major cancer hazard is incorrect." And, as pointed out in a recent issue of Time, many experts now agree that pesticides and other environmental contaminants are responsible for no more than 1 percent of cancers and 5,000 deaths per year. Since even the smallest traces of chemicals, both natural and man- made, can be seen in the abstract as posing some danger to human beings, the process of balancing real and theoretical public health risks must move away from "the-sky-is-falling" hysteria that has characterized too much of the EPA's risk assessments. Reluctant to Take the Step "Given the uncertainties of risk assessment and the difficulties of balancing microbial and cancer risks, researchers ask whether EPA should have given more emphasis to the disaster potential of not disinfecting water supplies," he adds. Re-examining the Risk Although Peruvian officials cannot escape their share of the blame for the suffering their decisions have inflicted on the local population, there is little doubt that U.S. officials, particularly those at the EPA, should re-examine their analysis of chlorine's cancer risk in light of the South American epidemic. Unfortunately, the EPA seems reluctant to take that step. Although the agency did recently reverse an earlier decision and eased restrictions on the use of a class of pesticides known as EBDCs, the EPA is still grappling with the chlorination issue. As Mr. Anderson points out, in the absence of a viable alternative to chlorinization, the agency is reluctant to reduce the amount of permissible chlorine levels and risk a "Peru-like epidemic." The EPA promised to update its chlorination standards by the end of 1991, but the agency, citing the need for more research on chlorine's real- world risks, now says that no new regulations are to be expected before the middle of the decade.