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Government Documents on EPA-VW Settlement Highlight Need for Congressional Oversight

Readers of this blog are aware that CEI has long objected to a judicial settlement reached by the Environmental Protection Agency, the Justice Department, and Volkswagen in order to partially resolve Clean Air Act violations related to the automaker’s defeat device scandal. Our objection pertains to a stipulation in the consent decree requiring VW to spend $1.2 billion on an electric vehicle (EV) infrastructure program subject to plenary and pervasive federal oversight.

Industrial policy is a bad idea in general, but this is an especially awful example of the practice. President Obama promised to put 1 million EVs on the road in his 2011 State of the Union Address; to this end, he twice went to Congress asking for money. Each time, Congress demurred. With the VW settlement, the president found a revenue source to fund his political promises, without having to resort to Congress. This was part of the President’s “phone and pen” strategy of executive lawmaking. For background on the VW settlement, see:

Last week, the Justice Department issued guidance that would effectively end these sorts of policy-filled settlements, which had become alarmingly frequent during the Obama era. However, last week’s guidance does not influence the ongoing VW settlement. So a major problem remains.

On April 24th, we submitted a Freedom of Information Act request to the EPA. In part, our goal was to discern who in the federal government is overseeing this $1.2 billion industrial policy. Remember, Congress never delegated to the EPA any lawmaking authority to implement an EV infrastructure program. Nor did Congress appropriate any money to the agency for such a program. In light of the absence of a congressional delegation/appropriation, we wanted to get an idea of the resources that the agency was spending on this extra-legal and unconstitutional usurpation of Congress’s exclusive power of the purse.

Last week, we received the FOIA production from the EPA. From the various email threads, we can discern at least the following positions were in on the action:

  • 2 counsel from the Justice Department, Environment and Natural Resources Division;
  • 2 counsel from EPA Office of Enforcement and Compliance Assurance;
  • 5 EPA staffers from the Transportation & Climate Division within the Office of Transportation and Air Quality, which is a sub-office in the Office of Air & Radiation;
  • 1 staffer from EPA Office of Public Affairs

I should caution that this list might not be comprehensive. There was an internal email list (“VW_Settlement@EPA.Gov”), but we weren’t privy to the list’s participants.

With that caveat in mind, my first reaction is one of surprise. Indeed, I’m blown away by the fact that a preponderance of identified EPA employees work in the Office of Air & Radiation. This seems wildly inappropriate. It would be one thing if the only federal employees working on the project were from the Department of Justice, the Office of Enforcement and Compliance Assurance, or the Office of General Counsel. At least these organizational entities were party to the settlement. Were the agency resources given to the settlement limited to these offices, then perhaps the EPA could try to justify its spending on the settlement as a function of prosecutorial discretion. (To be sure, I think such an argument is B.S., but at least it’s an argument). Yet there can be no excuse if, as is apparently the case, the majority of EPA staffers working on the settlement are from the Office of Air and Radiation, which is a policy shop. From an organizational perspective, the agency is treating the VW settlement as federal policy.

Consider the opportunity cost. As I’ve demonstrated, the EPA wholesale fails to meet thousands of deadlines for actions assigned by Congress in the Clean Air Act. Guess which office is responsible for these deadlines? The Office of Air and Radiation—i.e., the same office that has at least five people working on the VW settlement! It is outrageous that the agency is diverting resources in the Office of Air and Radiation away from meeting its statutory deadlines and towards an illegal industrial policy for electric vehicles.

Congress needs to wake up and exercise some oversight. After all, Congress is one of the most aggrieved parties. It is Congress’s power that is diminished by settlements that circumvent its Article I power of the purse. It is well past time for a committee of jurisdiction to ask of the EPA: How much are you spending on the VW settlement?