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~ EPA WATCH A twice-monthly svrvsy of environmental regulatory activities undertaken by the EPA, OSHA, the White House, the U.S. Congress and Federa4 state, and local agencies. Vol 1 Number 3 March 31. 1992 EPA ADMITS ITS SCIENCE IS ON "SHAKY GROUND" Under pressure from a growing number of critics within the scientific community, the Environmental Protection Agency (EPA) has released a report admitting that many of its regulatory initiatives are on "shaky scientific ground." The report, "Safeguarding the Future: Credible Science, Credible Decisions," was distributed at a hearing of the House Committee on Science, Space, and Technology on March 19. It further acknowledged that EPA studies are frequently carried out "without the benefit of peer review or quality assurance." Concerned that the poor reputation of its science could jeopardize the agency's high funding level, EPA Administrator William Reilly appointed a special advisory panel of prominent scientists last year to assess the work of the EPA's Office of Research and Development. The panel affirmed that the EPA needs its own strong science base to provide the background required for effective environmental protection programs. But it found that "Currently, EPA science is of uneven quality, and the agency's policies and regulations are frequently perceived as lacking in strong scientific foundation." Devastating Findings Among the advisory committee's most devastating findings are the following: 1.) "EPA should be a source of unbiased scientific information. However, EPA has not always ensured that contrasting, reputable scientific views are well-explored and well-documented from the beginning to the end of the regulatory process. In addition, the Agency is perceived to have a conflict of interest because it needs science to support its legal activities. The legal process fosters the presentation of the extremes of scientific opinion. This runs contrary to the preferred process of developing a consensus within the scientific community." 2.) "EPA science is perceived by many people, both inside and outside the agency, to be adjusted to fit policy. Such 'adjustments' could be made consciously or unconsciously by the scientist or the decisionmaker." 3.) "While the public frequently expects immediate'yes or no' answers to questions about environmental risks, scientific uncertainties often make such answers elusive. EPA has not been successful in communicating to Congress and the public about the nature of the uncertainties in science and how these uncertainties are handled when decisions are made." 4.) "EPA program offices often conduct scoping studies or other preliminary assessments in the early stages of regulatory development. These studies are frequently carried out without the benefit of peer review or quality assurance. They sometimes escalate into regulatory proposals with no further science input, leaving EPA initiatives on shaky scientific ground and affecting the credibility of the Agency." 5.) "EPA often does not scientifically evaluate the impact of its regulations." 6.) "The interpretation and use of science is uneven and haphazard across programs and issues at EPA. Conflicting science policies between EPA programs create confusion and a lack of credibility for EPA decisions." 7.) "Scientists at all levels at EPA believe that the Agency does not use their science effectively." The EPA's mea culpa on the poor quality of its science comes on the heels of a series of well-publicized blunders on the part of the agency. In the 1980s, EPA "risk assessments" on the health dangers of radon, dioxin, hnd asbestos -- just to name a few -- proved to be grossly exaggerated. The resulting cost to taxpayers and to U.S. industry has amounted to billions of dollars. Currently, the EPA has over 9,000 regulations in effect, and the United States spends roughly $115 billion a year staying in compliance with those regulations. Yet many of those regulations are based on the same poor quality of science referred to in the advisory panel's report. However, if some were

EPA Watch Page 2 hoping that the release of the EPA report was signaling the beginning of a new age of seriousness on the part of the EPA, they are in for a rude awakening. As fate would have it, the release of the report coincides with the revelation that the EPA is undertaking a risk assessment on the danger of taking showers (See EPA WATCH: March 16, 1992). At a time when the agency is requesting additional funding for its much-criticized Office of Research and Development, the revelation that the EPA is spending the money aiready at its disposal to launch a risk assessment on the dangers of taking showers is certain to undermine further the agency's credibility. - NIH Not Consulted In fact, the EPA's concern about the health risks of an act which has been performed by tens of millions of Americans every day for decades is all the more remarkable in light of the fact that the EPA never consults the National Institutes of Health (NIH) when assessing the health effects of supposed pollutants. The EPA's refusal to consult the NIH is revealing because, as Dr. Bernadine Healy, director of the NIH, told columnist Warren Brookes last year, the National Institutes of Health are "much more likely to develop an unbiased view of the real risk and hazard than the agencies that are established to regulate them." By avoiding sources of scientific analysis whose findings might not conform to its preconceived regulatory agenda, the EPA has systematically shut itself off from much of the scientific community. The result has been an endless list of costly errors based on questionable risk assessments which have reflected more the bureaucratic proclivities of the EPA than they have served the interest of the environment. Press Not Alerted Moreover, the expert panel's devastating findings are in sharp contrast to what the EPA would have the greater public believe is really going on at the agency. In a "Notes to Correspondents" released on the same day the report was issued, Administrator Reilly admitted that the EPA needed to make "fundamental changes in the way the Agency does research and uses scientific information." Vol 1 Number. 3 . .' However, Mr. Reilly , ; conspicuously avoided any reference to the critical findings of the expert panel. The panel's scathing indictment of the quality of the EPA's science was on page 36 of the EPA publication; the press was not alcrted to the bombshell hidden deep in the report. This obfuscation was taken one step further when on March 26, one week after the release of the advisory panel's report, Mr. Reilly informed the Senate Appropriations Committee that "Increasingly, our decisions are grounded in sound science, as we target our resources to the areas of highest risk, even while we remain sensitive to the economy." Such statements have enabled Mr. Reilly to have relatively smooth sailing in Congress in his bid for increased funding for his agency. Indeed, there is little indication that Congress has yet to grasp the seriousness of the problem at the EPA. At the hearing, most members of the House Science, Space, and Technology Committee were sympathetic to the EPA's argument that additional funding, as opposed to a radical reordering of priorities, would enable the EPA to improve the quality of its work. DINGELL CONTINUES ASSAULT ON EPA CONTRACTING PRACTICES Citing what he called "shoddy EPA contract and program management," Congressman John Dingell, Democrat of Michigan, has expanded his investigation into the Environmental Protection Agency's dealings with private contractors. Mr. Dingell's latest barrage against the EPA came at a hearing before the House Subcommittee on Oversight and Investigations on March 19. The hearing came just two weeks after the same panel had grilled EPA officials for the agency's cozy ties with one of its management contractors, the Computer Sciences Corporation (CSC) (See EPA WATCH: March 16, 1992). This time the subcommittee's attention was focused on the billing practices and performance of CH2M Hill Inc. of Engelwood, Colorado, one of the EPA's largest Superfund contractors. Created to finance the cleanup of the nation's worst toxic waste sites, the Superfund has be-come one of the most important areas of EPA activity. "The objective of the W Superfund program," Chairman Dingell said, "has been to assure the cleanup of these sites in an efficient and timely manner, not to line the pockets of greedy contractors." However, audits by the Government Accounting Office (GAO) and by the EPA's own Inspector General uncovered evidence that U.S. taxpayers have been billed for charges that were clearly "unallowable and unreasonable."

DPA Watch Page 3 •r , a The Good Life "For example," Mr. Dingell noted, "Hill charged the taxpayers for rentsil of baby cribs, parking tickets, CPR classes, magicians, a rent-a- clown for a picnic, over $15,000 for an office bash at 'His Lordship' (restaurant), thousands of dollars of chocolates with CH2M Hill's logo for *-lients, a $10,000 catered lobbying cruise on the Potomac River, and $3,200 for (the rock band) 'Johnny Limbo and the Lugnuts.'" Pointing out that Hill employees "appear to have been too preoccupied with the good life at taxpayers' expense to perform their Superfund obligations satisfactorily," the Michigan Democrat said CH2M Hill was engaged "in what appears to be a double-billing scheme when it generously distributed to its key employees profits which were generated, in part, from EPA's contracts, and then turned around and billed the government for this bonus by putting it back into its overhead charge." Growing Ties CH2M Hill has provided consulting engineering services to the EPA for many years. Those services include such activities as documenting conditions at hazardous waste sites, defining hazardous waste problems, and evaluating alternative cleanup methods. In 1988 and 1989, the EPA's ties with CH2M Hill increased dramatically. During these two years, the number of contracts more than doubled, and the maximum potential contract value increased by approximately 275 percent. As of February 1992, the EPA had obligated $427 million on open CH2M Hill contracts with a maximum potential value of $1.4 billion. Virtually all of this work is in the Superfund program. As the relationship between the EPA and CH2M Hill expanded, the audit workload for the EPA's IG and the GAO grew accordingly. Those audits reveal a pattern of behavior on the part of the EPA and CH2M Hill which allowed the Colorado company to bill the EPA for a host of expenses that are clearly not allowed under the Federal Acquisition Regulations (FAR). Most of these abuses involved so- called indirect costs, or those contractor costs which cannot be directly related to a particular contract. Patrick Martin, the EPA's Inspector General, told the subcommittee that CH2M Hill's indirect cost pools for 1987-1989 "included costs of $16.4 million for employee bonuses which we believe are ineligible; $1.4 million for travel and entertainment costs in excess of the Federal Travel Regulations and ineligible costs such as first-class air fare and travel for employee spouses; $429,000 for deferred state income taxes, an entirely unallowable item; and $587,100 in relocation costs in excess of amounts actually incurred by employees." Lack of EPA Oversight Inspector General Martin, whose comprehensive audit led to the disclosure of irregularities in the EPA's relations with CSC, sharply criticized CH2M's "serious weakness in internal controls" which led to the company's "poor contract performance." He likewise cited "the lack of effective administration by EPA" as a major contributing factor in the debacle. Speaking on behalf of the GAO, J. Dexter Peach underscored "the lack of adequate oversight and follow-up by EPA." "Although EPA has been aware of deficiencies in CH2M Hill's procedures -- in some cases as far back as 1984 --," he went on, "it has not seen to it that corrective actions were taken " Mr. Peach added that "EPA's management performance in this area has simply not been acceptable." Vol 1 Number 3 Underscoring the necessity of administrative improvements on the part of the EPA, Mr. Peach said that "without these efforts, no assurances can be given that the federal government will continue to be billed for unallowable costs associated with the Superfund program." Put into the unenviable position of having to defend his agency's contract mismanagement for the second time in two weeks, Christian Holmes of the EPA's office of administration and resources management assured the subcommittee that "CH2M Hill had agreed to reimburse the EPA for excessive costs and to account properly for travel in the future." Dingell Plans More Investigations Unfortunately for Mr. Holmes, he could be making many more appearances before Mr. Dingell's panel in the weeks and ,months to come. Congressman Dingell has announced that his subcommittee will continue its investigations into improprieties involving "a number of other EPA contractors."

EPA Watch Pate 4 Vol 1 Number 3 WHITE HOUSE, GORE AT ODDS OVER GLOBAL CLIMATE CHANGE REPORT As the debate heats up over American participation in the forthcoming Earth Summit in Brazil, the White House and one of its severest environmentalist critics are locked in a bitter feud over U.S. global warming policy. On March 24, the White House's Council on Environmental Quality (CEQ) released its "22nd Annual Report" which underscored the Bush administration's continued opposition to inclusion of any specific greenhouse gas emission reduction targets and timetables in the upcoming global climate treaty, scheduled to be signed in June at the United Nations Conference on Environment & Development (UNCED). "An exclusive focus on targets and timetables for carbon dioxide (C02) emissions is inadequate to address the complex dynamics of climate change," the report says. Emphasizing the administration's mistrust of an UNCED treaty that would go a long way toward mandating global emissions standards, the CEQ called instead for a country- specific approach to the problem. "Unlike emissions targets and timetables chosen arbitrarily by political leaders," the report goes on, "national climate action plans would be rooted in actual response measures." "Kick in the Knees" In a statement released the same day the White House report was issued, Senator Al Gore, Democrat of Tennessee and chairman of the U.S. Senate delegation to the Earth Summit, said the administration's position was a "kick in the knees to every other nation seriously committed to the success of the Earth Summit and to all Americans who want a stron& international agreement to preserve the global environment " The outspoken advocate of strict environmental regulations added that "negotiations on an historic, international agreement are threatened with failure and if it happens, George Bush will be held accountable." Senator Gore said that, at a minimum, the United States should agree to stabilize carbon dioxide emissions at 1990 levels by the year 2000, as other major industrialized nations have agreed to do and as the climate treaty proposes. "With nations from across the world agreeing to such specific limits, the United States increasingly is isolated as the obstacle to the climate change treaty and to the success of the Earth Summit which has this treaty as its centerpiece," the Tennessee Democrat added. "We do not have to choose between protecting the environment and rebuilding or strengthening our economy. If we protect the environment, we strengthen our economy," he commented. More Research Needed For the moment, the White House is sticking with its cautious approach to the globalization of environmental regulation as embodied in the proposed UNCED treaty. Increasingly aware of the scientific uncertainties surrounding global climate change, the administration is focusing its attention on accelerated research efforts. The administration's fiscal 1993 budget calls for $1.37 billion for the U.S. Global Change Research Program, a $262.6 million or 24 percent increase over FY 1992 levels. Ironically, the administration's go slow approach to the subject of global warming has been buttressed by findings from an unlikely source. The United Nations Environmental Program and World Meteorological Organization recently found that chloroflourocarbons (CFCs) are not a major global warming gas as some scientists had suspected. In fact, there are plenty of reputable botanists who believe the Earth will ultimately benefit from rising C02 levels because of the enhancement of plant growth. "From experiments in C02-rich glasshouses," notes Paul Samuel of Greentrack International, an environmental news service, "they can give you impressive numbers on how trees, shrubs, and crops will thrive, and so too the insects, birds, and animals (including humans) that live off the plants." Mr. Samuel concludes that "the idea that increasing C02 is associated with drought and spreading deserts is an environmental scare story." "Best Interest of this Country" The administration also is becoming cognizant of the enormous costs of the proposed UNCED treaty. According to the U.S. Department of Energy, taxes on carbon-based fuels such as coal, gasoline, natural gas, and other fossil fuels could cost American consumers an additional $95 billion a year. These costs ~ notwithstanding, the EPA, with p Administrator William Reilly in the wp, lead, continues to pressure the White Q~ House to sign on the Rio agenda. C~7 i1Z But Clayton Yeutter, the new C4 White House domestic policy chief, C)l made the administration's case with CJ7 characteristic succinctness when'he W1 recently told reporters "We have to make this judgement call on whether what is going to happen in Rio is in the best interest of this country." Mr. Yeutter is convinced that it is not.