Sludge Funds

In mid-May, the propaganda machine at the Bush administration's Environmental Protection Agency was like a diesel engine in overdrive, breaking with its nonpartisan past to help re-elect the president. After cutting deals with oil and diesel engine companies on new standards for diesel heavy equipment, the EPA was proclaiming, hyperbolically, that President Bush was taking bold steps that would usher in a veritable Age of Aquarius for clean air.

While spin-doctors were plying their craft, White House political surgeons were quietly carving up an EPA plan to clean up lethal emissions of electric power plants. By the time they were through, the plan resembled the hapless Trojans slashed apart by Brad Pitt's Achilles.

Progressive staffers at the EPA had been promoting a plan to create incentives for power companies to use energy more efficiently -- an idea that could reduce not only greenhouse gas emissions, but harmful pollutants as well. Behind closed doors, however, the White House axed the idea. What emerged was a plan that favored the oldest and dirtiest coal-fired electric plants.

Though the matter dealt with a seemingly esoteric and technical issue, the stakes were enormous. The White House gambit not only constituted a huge financial windfall for some of the biggest Bush campaign contributors, it also rewarded companies in a number of battleground states important in the November election, including Ohio, Michigan, West Virginia, Pennsylvania and Iowa.

This sorry episode is just the latest in a series of heavy-handed White House moves to tamper with EPA activities in order to help politically wired supporters from the coal fields.

The President had barely taken his oath of office when the pro-coal promotional effort began. In early 2001, President Bush cut the legs out from under then-EPA Administrator Christine Todd Whitman and disavowed the Kyoto Climate Accord.

Whitman was still reeling from that blow when Vice President Cheney's energy plan -- carved out in secret with the help of coal and power industry lobbyists -- ordered the EPA to rethink its enforcement strategy for dealing with existing coal-burning power plants. Despite Whitman's warning that Bush might pay a "terrible political price" for such a blatant sellout, the result was a slowdown in enforcing the Clean Air Act and new industry-friendly rules that would permit the dirtiest coal plants to continue polluting.

More recently (after Whitman fled the agency, declaring, like departing CIA Director George Tenet, that she needed to "spend more time with my family"), the White House ordered the EPA to pretend that poisonous mercury is not a toxic pollutant -- even while the Food and Drug Administration was warning pregnant women of the risks associated with eating mercury-contaminated fish. A proposed EPA rule was politically doctored by the White House to include language supplied by lawyers from coal-fired power companies.

These ham-fisted White House maneuvers all have one thing in common: they all distort administration policies to favor big coal and coal-burning electric companies -- the source of millions of dollars in campaign contributions to the Republican Party and to the Bush-Cheney re-election effort in particular.

This most recent gambit involves a Bush administration proposal to reduce smog- and soot-forming emissions from power plants during the next two decades. As the Commission for Environmental Cooperation (a quasi-independent watchdog group set up under NAFTA) recently noted, power plants are the biggest source of toxic air contaminants in America. Those emissions -- chiefly from coal-burning plants -- have been linked to tens of thousands of premature deaths every year.

The Bush plan is a dud in many respects. It sets weak targets and would permit the biggest polluters to continue spewing poisons well into the next two decades. It would also illegally attempt to substitute this weaker approach for a tougher Clean Air Act requirement to clean up the haze that ruins the views at national parks.

Not surprisingly, the plan also favors the biggest polluters in a seemingly technical respect, and that was the subject of this latest bit of White House interference.

The controversy involved the details of the cleanup strategy, known as the "cap-and-trade" approach. Under this method, the government sets an overall bulk pollution target, and then dishes out pollution "allowances" -- essentially the right to pollute up to a certain amount -- to power companies. If a company pollutes less than its "allowance," it can sell the extra pollution -- a "credit" -- to another company, which could then pollute more than its allowance.

This complicated bookkeeping procedure hinges in part on a key decision: How does the government decide who gets how many allowances?

In the past, the government has distributed allowances based on how much fuel a power company used. It's a system that rewards the biggest and dirtiest coal-burning polluters by giving them the right to continue polluting at higher levels. Think of it as a parent who rewards a delinquent child by giving it a bigger allowance than a better-behaved sibling.

In the recent proposal, EPA staffers drafted a plan that would take public comment on an alternative idea: a system that would dish out the credits based on how much energy is generated. [In the jargon of the bureaucracy, this is called the "output-based" approach, as opposed to the "input-based" strategy.]

The output-based alternative would encourage energy efficiency by rewarding plants with low energy use, including more efficient natural gas, oil or coal. This isn't exactly a radical concept: Automobile tailpipe pollution standards have been set on a similar basis for more than three decades.

This method would promote reductions in greenhouse gas emissions but could involve hundreds of millions of dollars in costs for the polluters. A spokesman for Ohio-based American Electric Power (AEP) conceded to the Wall Street Journal that such an approach could force them to actually buy pollution control equipment -- a shocking thought.

The idea set off alarms at a White House ever eager to defend campaign contributors like AEP board member Dick Brooks, a Bush fundraising "Pioneer" -- or those who "bundle" contributions of at least $100,000. The White House quietly deep-sixed the environmentally preferable alternative.

Of course, AEP wasn't the only company to benefit, and Ohio wasn't the only presidential battleground state with companies that got a break. Others include West Virginia, Michigan, Iowa, Tennessee, North Carolina, Pennsylvania, Wisconsin and Missouri.

But the money from coal companies pales in comparison to the cash coming in from coal-burning power companies and their lobbyists. The electric power industry has contributed more than $30 million in the last two election cycles, with about two-thirds of the money going to Republicans.

Southern Company, the leading coal-burning polluter in the Southeast, has at least half a dozen Pioneers or Rangers ($200,000 contributors) among the ranks of its employees and lobbyists, including Executive Vice President Dwight Evans. (And, yes, Southern would be a big winner under the Bush "input" strategy.)

Are those companies getting their money's worth? Clearly they think so. The coal mining industry has contributed more than $5 million in the 2002 and 2004 election cycles, with about 90 percent of the money going to Republicans. One noteworthy contributor: Bush Pioneer Irl Englehardt, CEO of the nation's biggest coal company, Missouri-based Peabody Energy. Another is West Virginia coal magnate James "Buck" Harless, who played a key role in tipping West Virginia to Bush in 2000.

At least 17 coal-burning power company lobbyists double as Bush Pioneers or Rangers, according to recent report by Public Citizen and the Environmental Integrity Project. This rapidly expanding list recalls the old adage that "money talks." And, as this latest EPA episode shows, Bush is listening.

Frank O'Donnell is the Executive Director of Clean Air Trust.

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