[Senate Hearing 105-173]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 105-173


 
                   ENFORCEMENT OF ENVIRONMENTAL LAWS

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             FIRST SESSION

                                   on

   THE RELATIONSHIP BETWEEN THE FEDERAL AND STATE GOVERNMENTS IN THE 
                   ENFORCEMENT OF ENVIRONMENTAL LAWS


                               __________

                             JUNE 10, 1997

                               __________

  Printed for the use of the Committee on Environment and Public Works





                      U.S. GOVERNMENT PRINING OFFICE
 43-045 CC                  WASHINGTON : 1997
_______________________________________________________________________
            For sale by the U.S. Government Printing Office
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                                 20402



               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED FIFTH CONGRESS

                 JOHN H. CHAFEE, Rhode Island, Chairman
JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
ROBERT SMITH, New Hampshire          DANIEL PATRICK MOYNIHAN, New York
DIRK KEMPTHORNE, Idaho               FRANK R. LAUTENBERG, New Jersey
JAMES M. INHOFE, Oklahoma            HARRY REID, Nevada
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
CHRISTOPHER S. BOND, Missouri        JOSEPH I. LIEBERMAN, Connecticut
TIM HUTCHINSON, Arkansas             BARBARA BOXER, California
WAYNE ALLARD, Colorado               RON WYDEN, Oregon
JEFF SESSIONS, Alabama
                     Jimmie Powell, Staff Director
               J. Thomas Sliter, Minority Staff Director

                                  (ii)




                            C O N T E N T S

                              ----------                              
                                                                   Page

                             JUNE 10, 1997
                           OPENING STATEMENTS

Baucus, Hon. Max, U.S. Senator from the State of Montana.........    12
Chafee, Hon. John H., U.S. Senator from the State of Rhode Island     1
Inhofe, James M., U.S. Senator from the State of Oklahoma........    14
    Letter, Superfund cleanup sites, Environmental Protection 
      Agency.....................................................    15
    Letter, Response to EPA's letter on Sand Springs and Vinita 
      sites, ARCO................................................    17
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................    22
    Articles from the Washington Post............................    23
Sessions, Hon. Jeff, U.S. Senator from the State of Alabama......    24
Thomas, Hon. Craig, U.S. Senator from the State of Wyoming.......    10
Warner, Hon. John W., U.S. Senator from the Commonwealth of 
  Virginia.......................................................    26

                               WITNESSES

Bangert, Patricia S., Director of Legal Policy, Office of the 
  Attorney General for the State of Colorado.....................    34
    Prepared statement...........................................   198
Coleman, Mark, Executive Director, Oklahoma Department of 
  Environmental Quality, on behalf of the Environment Council of 
  States.........................................................    29
    Prepared statement...........................................   188
Dunlop, Hon. Becky Norton, Secretary of Natural Resources, 
  Commonwealth of Virginia.......................................    32
    Prepared statement...........................................   190
    Supplemental testimony.......................................    42
Harmon, Robert E., chairman, Harmon Industries, Inc..............    52
    Prepared statement...........................................   204
Herman, Hon. Steven A., Assistant Administrator, Office of 
  Enforcement and Compliance Assurance, U.S. Environmental 
  Protection Agency..............................................     4
    Prepared statement...........................................   156
    Responses to additional questions from:
        Senator Allard...........................................   168
        Senator Baucus...........................................   174
        Senator Reid.............................................   163
Kuehn, Robert R., professor, Tulane Law School, New Orleans, LA..    53
    Prepared statement...........................................   207
Robins, Todd E., attorney, U.S. Public Interest Research Group...    55
    Prepared statement...........................................   218
Rubin, Hon. Joseph, Assistant Attorney General, State of 
  Connecticut....................................................    39
    Prepared statement...........................................   203
    Response to questions from Senator Warner....................    44
Schiffer, Hon. Lois J., Assistant Attorney General, Environmental 
  and Natural Resources Division, U.S. Department of Justice.....     2
    Court decision, United States vs. Smithfield Foods, Inc......    82
    Policy, Penalty Mitigation for Small Business, U.S. 
      Department of Justice......................................    79
    Prepared statement...........................................    61
    Reponses to additional questions from:
    Senator Allard...............................................    72
        Senator Baucus...........................................    74
        Senator Chafee...........................................    72
        Senator Reid.............................................    75
Tinsley, Hon. Nikki L., Acting Inspector General, U.S. 
  Environmental Protection Agency................................     7
    Prepared statement...........................................   186
Tulou, Christophe A.G., Secretary, Delaware Department of Natural 
  Resources and Environmental Control............................    36
    Prepared statement...........................................   201

                          ADDITIONAL MATERIAL

Articles:
    Clean Water, Political Hogwash, Washington Post..............    23
    Smithfield Foods Liable for Dumping Hog Wash, Washington Post    24
Court decision, United States vs. Smithfield Foods, Inc..........    82
Interim Policy on Penalty Mitigation for Small Business, 
  Department of Justice..........................................    79
Statements:
    Burr & Forman................................................   229
    Smithfield Foods, Inc........................................   233




                   ENFORCEMENT OF ENVIRONMENTAL LAWS

                              ----------                              


                         TUESDAY, JUNE 10, 1997

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:30 a.m. in room 
406, Senate Dirksen Building, Hon. John H. Chafee (chairman of 
the committee) presiding.
    Present: Senators Chafee, Warner, Inhofe, Thomas, Sessions, 
Baucus, and Lautenberg.

OPENING STATEMENT OF HON. JOHN H. CHAFEE, U.S. SENATOR FROM THE 
                     STATE OF RHODE ISLAND

    Senator Chafee. Good morning. As chairman of the 
Environment and Public Works Committee, I'd like to welcome 
everyone here to the committee's oversight hearing this morning 
on the relationship between the Federal and State governments 
in the enforcement of environmental laws.
    A little over 4 years ago, the committee held an oversight 
hearing to examine the respective roles different levels of 
government should play in the implementation and enforcement of 
environmental laws. That was the first hearing at which 
Administrator Carol Browner testified as administrator of the 
EPA.
    At that hearing, she emphasized the essential role States 
have to play in environmental enforcement. Since then, there 
have been other reports on the need for greater cooperation and 
communication between the States and EPA in implementation of 
the Nation's environmental laws.
    In 1995, a report from the GAO found that while the 
relationship between EPA and the States was then on the 
upswing, it still had plenty of room for improvement. That same 
year, that was the GAO report, 1995, that same year, the 
National Academy of Public Administration issued a report 
calling for a redefining of the division of labor between EPA 
and the States.
    Among other things, the Academy recommended that States 
which demonstrate superior environmental performance should be 
granted greater flexibility and autonomy in carrying out 
environmental programs. That recommendation, of course, leads 
to the question of how to assess the level of environmental for 
which a State is providing, in other words, how do you tell 
whether a State is doing a good job. It's more difficult than 
it seems.
    That's because there's growing recognition that the more 
traditional methods of assessing State enforcement, such as by 
counting up the number of enforcement actions that have been 
filed, or the number of penalties imposed, are not adequate. 
States that are trying to attain better results in 
administering environmental programs increasingly are 
experimenting with more carrots and fewer sticks.
    During this transition period, the challenge is to derive 
new methods by which to evaluate, in a better fashion, whether 
innovative approaches--those undertaken by EPA or by the 
States--are working to achieve better results. To the extent 
the EPA and States are working on new modes of measurement 
toward this end, they're to be commended.
    Now, there are several matters pending in which the EPA or 
the Department of Justice has overfiled against a particular 
company. So I'd like to say a word about pending actions. I 
would simply remind members who will hear the witnesses as the 
day goes on, that they should refrain from inquiring into 
details of any pending matters. The result of this hearing 
should not compromise the rights of parties to a pending 
matter, or to influence the outcome of any matter.
    I would note, the legitimate policy of EPA and the Justice 
Department not to comment on pending matters. Their silence, or 
that of any other parties, with respect to a pending matter 
should not be construed as anything other than the exercise of 
prudent discretion.
    We have three panels today. History shows that the first 
panel always gets lavish attention, the second panel gets a 
little less so, and the third panel is subject to a hurry-up 
because it's lunch time.
    Now, I don't want that to occur. So with an attempt at 
total fairness, I'm going to restrict this first panel to 35 
minutes and the other panels similar thereto. So everybody will 
get the same time.
    The witnesses in the first panel are Ms. Lois Schiffer, 
assistant attorney general, from the Department of Justice; 
Steve Herman, assistant administrator for Enforcement at EPA; 
and Nikki Tinsley, acting inspector general of EPA. We'll take 
them in that order. Each will have 5 minutes, and then we'll 
have a chance for a question. The lights will go on, you can 
gauge by the lights. This means you've got a minute to go, when 
the yellow goes on.
    We welcome you, Ms. Schiffer, and I've had the privilege of 
working with Ms. Schiffer for a good number of years. We're 
glad to have you here. Go to it.

STATEMENT OF HON. LOIS J. SCHIFFER, ASSISTANT ATTORNEY GENERAL, 
  ENVIRONMENTAL AND NATURAL RESOURCES DIVISION, DEPARTMENT OF 
                            JUSTICE

    Ms. Schiffer. Thank you, Senator Chafee, for the 
opportunity to provide this committee with information about 
the environmental enforcement activities of our division.
    As the Nation's Federal environmental law enforcement 
officers, we are the cops on the beat to protect the quality of 
our environment and the health of our communities. We carry out 
our important task working closely with our partners in the EPA 
and other Federal agencies, in the U.S. Attorneys' offices 
throughout the country, and with State Attorneys General and 
State environmental agencies. Today I will discuss the 
importance of a strong and effective enforcement program 
nationwide, and how we have worked to enhance cooperative 
efforts with the States.
    First, the importance of strong and effective enforcement: 
we handle cases referred to us from other Federal agencies 
including EPA, the FBI, the Coast Guard, and the Corps of 
Engineers. We bring criminal prosecutions and civil court 
enforcement actions to protect the environment, to remedy 
environmental harm, to punish wrongdoers, and to deter future 
violations. We support citizen suits as an important 
enforcement tool. Without vigorous enforcement, the health of 
our families, our community, our environment, and our economy, 
would all be compromised.
    Environmental enforcement protects the economy in several 
ways. First, clean air, water and land are essential 
ingredients for a healthy economy. Pollution decreases land 
value and imposes serious health care costs and harms 
industries, such as fishing, tourism and recreation. Second, 
companies that fail to comply with our environmental laws put 
law abiding businesses at a competitive disadvantage. A strong 
enforcement program with penalties that recapture economic 
benefit and more to deter the violator is essential to fair and 
honest competition.
    Environmental protection statutes promote and encourage 
voluntary environmental compliance, and vigorous enforcement 
drives such compliance. People comply with laws in part 
because, if they do not, they will get caught and sanctioned. 
As William Reilly, the Administrator of EPA between 1989 and 
1993, stated while at EPA, ``Enforcement of environmental laws 
is absolutely essential,'' and ``is at the very heart of the 
integrity and commitment of our regulatory programs.''
    Environmental violations have real victims. Polluting an 
underground drinking water supply can threaten thousands of 
people. An oil spill that damages an entire ecosystem such as 
the Exxon Valdez spill in Alaska, may undermine the economic 
foundation of surrounding communities. This division's job is 
to ensure that the laws Congress has enacted to prevent such 
harms are respected and obeyed, so that these harms do not 
occur. This is a law and order program in a critical area. The 
American public repeatedly has made clear that it wants and 
expects environmental protection and strong enforcement.
    Our environmental laws provide national minimum standards 
so that people all over the country have a level of 
environmental protection and health. These standards are 
particularly important to assure that States do not seek to 
attract industry by bidding for business through lower levels 
of environmental protection, and to protect all our citizens, 
because our Nation's air and water and contamination from our 
land can easily travel across State borders. State enforcement 
of environmental laws must be viewed in this context.
    Third, cooperation with States: what steps have we 
undertaken to promote cooperation with State and local 
authorities? I'll mention eight.
    First, several years ago, I appointed a counsel for State 
and local government affairs to act as a liaison and to assure 
better cooperation and communication with the States.
    Second, we file and handle cases jointly with States. For 
example, today we are commencing a joint trial with the State 
of Ohio against a company that, for more than a decade, has 
exceed air emissions limits on particulates in operation of its 
boiler.
    We work with Law Enforcement Coordinating Committees and 
task forces organized through a number of U.S. Attorneys' 
offices to use Federal, State, and local investigative and 
prosecutive resources most efficiently to fight environmental 
crime.
    Fourth, we have a policy that our civil enforcers notify a 
State in advance of filing a suit in that State, absent 
exceptional circumstances, and invite the State's participation 
or cooperation in the action.
    Fifth, we participate in a senior forum with State 
attorneys general, State environmental commissioners, tribal 
representatives, EPA's Steve Herman and me, to discuss 
environmental enforcement and compliance issues. Mark Coleman, 
on a panel later today, is a member of the forum. We meet 
regularly, and the meetings are productive.
    Sixth, we work with State officials to train State and 
local prosecutors, investigators, and technical personnel in 
the development of environmental crimes cases.
    Seventh, I meet often with State attorneys general, keep an 
open door and an open phone to their concerns and problems, and 
generally provide access and cooperation to discuss and address 
their concerns regarding cases, including enforcement.
    Finally, we have worked to improve and solidify our 
relationship with the 94 U.S. Attorneys' offices across the 
country, which in turn have ongoing coordination with State and 
local agencies.
    In conclusion, these steps help assure that we are using 
our enforcement resources in coordination with States to 
achieve effective environmental results. At the same time, we 
must assure that in those States where enforcement is not 
sufficiently vigorous--where the State does not obtain 
effective protection through injunctions, does not obtain 
penalties that recover economic benefit to assure a level 
playing field, and does not obtain penalties with a gravity 
component to assure deterrence--the Federal Government brings 
enforcement actions. A recent example is the Smithfield case in 
Virginia, which I'll talk about in the questions and answers, 
since I can see I'm out of time.
    Again, thank you for this opportunity to describe our 
program as the Nation's environmental enforcement officers and 
the ways we work with the States to carry out this important 
mission. I welcome the opportunity to answer your questions.
    Senator Chafee. Thank you, Ms. Schiffer. We'll finish the 
panel and then have questions for all the members of the panel.
    Mr. Herman, who is assistant administrator for enforcement 
at EPA. Glad to see you, Mr. Herman. Go to it.

 STATEMENT OF HON. STEVEN A. HERMAN, ASSISTANT ADMINISTRATOR, 
 OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE, ENVIRONMENTAL 
                       PROTECTION AGENCY

    Mr. Herman. Thank you, Mr. Chairman. It's an honor to be 
here this morning, and thank you for the opportunity to testify 
about how EPA is working to protect public health and the 
environment through a strong and vigorous enforcement and 
compliance program.
    I would like to make three points in my testimony this 
morning. First, the environmental laws this committee has 
approved and the Congress has enacted are not worth much 
without a strong Federal enforcement program in which both EPA 
and the States do their part.
    Second, our enforcement and compliance program is balanced 
and flexible. We have cut penalties that encourage 
environmental auditing and obtained better environmental 
results through settlements. Our compliance assistance services 
to industry have won praise from trade associations and a 
silver hammer award for their contribution to reinvention. 
These efforts co-exist with and are supported by a strong, 
aggressive and effective law enforcement program.
    Third, we can and should give States more flexibility in 
their management of Federal programs. But Federal environmental 
law also requires States to assume certain responsibilities for 
both enforcement and public accountability.
    Congress has authorized us to enforce environmental law. It 
is our responsibility to exercise that authority wisely but 
firmly, without fear or favor. As with any other law, the 
public, including responsible companies, expects that we will 
sanction those who violate the environmental laws we are all 
required to comply with.
    Enforcement accomplishes three critical goals. First, it 
protects public health and the environment by assuring a speedy 
return to compliance, the elimination or prevention of 
pollution, and cleanup of environmental damage. Last year, 
polluters spent almost $1.5 billion correcting violations, 
cleaning up hazardous waste sites, and taking steps to improve 
the environment and prevent future problems.
    Our settlements cut pollutant loading substantially, 
reducing nearly 200 million pounds of carbon monoxide, 16.6 
million pounds of lead, and 7.7 million pounds of asbestos.
    Second, it seeks to ensure fairness to the regulated 
community by ensuring that those who violate the law do not 
profit at the expense of those who comply. Penalties for 
serious non-compliance keep the playing field level. As the 
General Accounting Office pointed out in a 1996 report, which 
found that ``penalties play a key role in environmental 
enforcement by deterring violators and by ensuring that 
regulated entities are treated fairly and consistently, so that 
no one gains a competitive advantage by violating environmental 
law.''
    Finally, it is universally accepted that the threat of 
enforcement sanctions does deter violations and encourages 
responsible self-policing. Ninety-six percent of respondents to 
a 1995 Price Waterhouse survey identified fear of inspections 
as a primary motivator for environmental auditing. Perhaps more 
surprising, enforcement pressure was cited as one of the most 
important drivers of pollution prevention among both large and 
small businesses in a 1996 study, sponsored by EPA.
    A meaningful enforcement program, therefore, not only 
punishes, but also prevents harm. These are the reasons why we 
think it is essential for the Federal Government to maintain a 
vigorous and aggressive enforcement presence, and why we are 
committed to doing so.
    However, those who believe EPA's enforcement is solely 
preoccupied with counting of penalty dollars are fighting law 
year's war. We are proud of our innovations which fuse 
compliance assistance, auditing incentives and more traditional 
enforcement into a dynamic enforcement and compliance assurance 
program.
    Let me give you four examples. First, we have established 
national compliance service centers to provide plain English 
assistance to printers, auto service stations, agricultural 
businesses and metal finishers. These centers are managed in 
partnership with trade associations and have earned a silver 
hammer award from the Vice President's National Performance 
Review.
    Second, we have slashed and in most cases eliminated 
penalties for companies that audit and promptly disclose and 
correct violations. More than 150 companies and 400 facilities 
have disclosed violations already under this program. We've 
done this in the sunshine, without privileges for polluters, 
without indiscriminate amnesties, and without tying the hands 
of law enforcement officials.
    Third, it is our policy to reduce penalties for companies 
that agree to innovative environmental projects as part of 
their settlement for non-compliance. These efforts have yielded 
more than $100 million in environmental projects that benefit 
local communities in fiscal year 1995.
    And last but not least, we are working hard to tie all 
these efforts together by launching a national effort, and this 
addresses the point that you made, Mr. Chairman, that will 
culminate this fall to develop new measures of enforcement and 
compliance success. We are including the States, trade 
associations, industry and public interest groups in this 
effort. This is really a ``put-up'' or ``shut-up'' time for 
everybody to come forward with their ideas on the best ways to 
measure our success in this program, and for measuring 
compliance also.
    Let me just conclude with a couple of words about the State 
partnership, since my time has expired. We share responsibility 
for environmental enforcement under the law. While that 
partnership, the State-Federal partnership is challenging, we 
believe joint jurisdiction is fundamentally sound and serves 
the public well. States conduct the lion's share of 
inspections, and are essential to maintaining an enforcement 
presence.
    The Federal Government is needed where States lack 
authority, problems that transcend State boundaries or are 
particularly complex, and to discourage forum shopping by 
irresponsible companies, and to maintain level playing fields 
across the Nation.
    We have taken a more flexible approach to our national 
environmental performance partnership grants and our 
performance partnership agreements, which we are working 
through. Occasional conflicts should not obscure the fact that 
our day-to-day working relationships with States on almost all 
matters is generally very good.
    Federal law does establish certain responsibilities for 
States that manage Federal programs, just as they do for EPA. 
First, under Federal statutes and regulations, States must have 
the authority to enforce the requirements of any Federal 
programs it administers. This includes the ability to obtain--
--
    Senator Chafee. Now, Mr. Herman, in keeping with my stern 
injunction as we opened, we're going to have to wind up here.
    Mr. Herman. I will conclude, then, and incorporate the rest 
of my information into answers to questions.
    But I would say, though, Mr. Chairman, and I apologize for 
going over my time limit, is that in all partnerships, EPA and 
the States may have diverse views on issues. In fact, many 
States have diverse views. We need each other, we have to work 
together, and I think we are in fact trying to overcome these 
problems. Where there is a philosophical difference, figure out 
how we overcome that and do our job for the American public.
    We are continuing to do that and will continue to do that.
    Senator Chafee. Fine. Thank you very much.
    Ms. Nikki Tinsley, Acting Inspector General of the EPA. We 
welcome you here.

 STATEMENT OF HON. NIKKI L. TINSLEY, ACTING INSPECTOR GENERAL, 
                ENVIRONMENTAL PROTECTION AGENCY

    Ms. Tinsley. Thank you. Good morning, Mr. Chairman and 
members of the committee.
    I'm pleased to have the opportunity to discuss independent 
audits conducted by the Office of Inspector General dealing 
with issues related to environmental enforcement. EPA is 
working in partnership with States and sometimes local agencies 
to achieve environmental goals. I will discuss three aspects of 
a partnership that are essential if it is to work well.
    First, mutually agreed-upon enforcement approaches. Second, 
clear agreement on responsibilities. And third, complete and 
accurate reporting of environmental data. I'll discuss these 
areas in light of our recent audits in the air and hazardous 
waste programs.
    One generally accepted enforcement approach is that of 
escalating enforcement actions for repeat violations. A 
violator may initially be required to comply with an 
administrative order or be assessed a relatively small monetary 
penalty. If these actions don't bring about compliance, the 
violator could face civil or criminal judicial actions and 
progressively higher penalties.
    We found numerous instances where this progressive 
enforcement approach was not employed. For example, during a 2-
year period, a California glass manufacturing company was fined 
$1,000 18 times for excess particulate matter emissions. The 
fines were not increased, and the company did not move into 
compliance.
    The second enforcement approach is that penalties should be 
large enough to negate any economic benefits of noncompliance. 
EPA regions we reviewed generally included an economic benefit 
component in their penalty assessment. But States generally did 
not. When economic benefits are not consistently calculated and 
collected, violators gain an economic advantage over those who 
comply with the law.
    A third enforcement approach is that in order to be fair, 
penalties must be consistent relative to the seriousness of the 
violation. We found a great variance when we compared EPA and 
State penalties and when we compared penalties between States. 
For example, penalties assessed against hazardous waste 
violators in a sample of 13 States varied from an average of 
about $7,000 in Maryland to almost $60,000 in Texas.
    Inconsistencies in enforcement can result in varied levels 
of environmental protection that put public health and the 
environment at risk. The inconsistencies we identified were 
caused by factors such as limited State and local resources, 
State and local concerns that large penalties would result in 
industry relocating, and State and local preferences for 
different enforcement approaches.
    For a partnership between EPA and a State agency to be 
successful, there must be common agreement about the activities 
each will perform. Our audits showed that EPA and the States 
frequently did not agree on program requirements. To 
illustrate, I'll discuss our audit of EPA and the Pennsylvania 
Air Enforcement program.
    EPA expected Pennsylvania to report significant violators 
that it identified during inspections. In comparison to EPA, 
the State placed less emphasis on reporting violators. While 
Pennsylvania performed 2,000 inspections at major facilities in 
fiscal year 1995, it reported only 6 significant violators to 
EPA. We reviewed 270 of the inspections and identified 64 
additional facilities that should have been reported.
    Not reporting allowed the State to work with violators to 
achieve compliance without EPA involvement. Unfortunately, 
achieving compliance sometimes took years, during which the 
violators were emitting excessive pollution into the 
atmosphere. Because EPA was unaware of these violations, it was 
not able to exercise appropriate oversight.
    Accurate and complete enforcement data is vital so that we 
as a Nation can judge the extent that industry complies with 
environmental laws, and so that States and EPA can target areas 
for increased enforcement. We found major omissions and 
inaccuracies in both the air and hazardous waste enforcement 
data systems. The Pennsylvania example I just described 
illustrates a data emission problem, along with the problem of 
EPA and the State not agreeing on responsibilities.
    I've discussed three elements we believe are necessary for 
effective partnerships between EPA and the States. First, when 
voluntary compliance cannot be achieved, partners must agree on 
an enforcement approach that includes escalating penalties and 
considers economic benefit and the seriousness of the 
violations. Second, all partners must understand and accept 
their responsibilities. And third, data systems must contain 
complete, accurate and timely information on enforcement 
activities.
    That concludes my remarks, and I'd be happy to answer 
questions.
    Senator Chafee. Thank you very much, Ms. Tinsley.
    I must say, I'm sympathetic to the problems you face. It's 
not easy.
    First of all, we've got to consider that each State 
obviously supports the industries within its borders, and 
doesn't want to come down too hard on these industries. At the 
same time, if they do levy a fine, one of the problems that 
constantly comes up is, is the fine really fair and does it 
make up for the advantage that that company had over an out-of-
State competitor who was abiding with the rules the whole time, 
while enduring any extra costs that go with it.
    In other words, did the offender get a competitive 
advantage that produced profits.
    I don't understand the case you cited--that 18 times in a 
row the California company was only fined $1,000.
    One of the things you mentioned, Mr. Herman, was 
experimentation--maybe have the States be laboratories for the 
enforcement of environmental laws. How do you do that, when 
there's the chill of the Federal Government coming in and 
overfiling, coming in on top?
    Mr. Herman. I think, Senator, there's a couple of parts to 
it. I think it is very important for the States to have the 
opportunity to experiment, to try different approaches, to gear 
approaches to the situations in their own States. I think 
that's part of the framework that Congress in its wisdom has 
established.
    In doing that, however, there are certain minimum standards 
which are in the Federal statutes, and which have to be 
maintained to guarantee that citizens all over the country have 
a minimum level of protection. So any experimentation has to go 
on within certain boundaries.
    With regard to overfiling, in fact, we recognize that 
overfiling is something of an extraordinary action to take.
    Senator Chafee. How many times do you think you overfile a 
year?
    Mr. Herman. Last year, we had four overfiles.
    Senator Chafee. In other words, you came in on top of--a 
State court action was proceeding, and you came in on top of 
that in the Federal Court?
    Mr. Herman. That's correct. It's a little more interesting 
than that, actually. The State action is finished. My 
understanding is that in two of those four cases, we actually 
were invited in because the State was not able to get adequate 
relief from their statutes.
    But in the previous 2 years, there were 15 overfiles. 
Again----
    Senator Chafee. Per year?
    Mr. Herman. No, total. Prior to that, there was an ECOS 
study which ECOS commissioned among the States, which showed 
that the States basically were not overrun by overfiles. We 
used that enforcement tool only when the result that the State 
got was insufficient or was not taken in timely fashion, where 
statute of limitations was going to run out, or the relief they 
got was insufficient. Recently, you may have read about a 
fairly extraordinarily overfiling case, which I'll----
    Senator Chafee. Why don't you touch on that briefly.
    Mr. Herman. That was the Smithfield Ham case, in Virginia. 
There were thousands of violations--horrible discharges into 
the water. The State was willing to settle for a very modest 
amount. EPA overfiled. We were challenged in Federal Court. 
Last week, a Federal district judge in a 75-page opinion upheld 
us on all points. Now the only issue is the amount of the 
penalty. All of the overfiling cases really have been where 
there's been gross disparity in the relief that is sought.
    Senator Chafee. Let me just briefly ask a question of Ms. 
Schiffer. I was interested, Mr. Coleman, who's coming up in the 
next panel, is chairman of a council you have. Is he with the 
Attorney General in some State?
    Ms. Schiffer. He's head of the environment agency in the 
State of Oklahoma.
    Senator Chafee. OK. Well, he must be all right.
    [Laughter.]
    Senator Chafee. So, this group, this Environmental Council 
of States, is what--an organization of the enforcement people 
from the States?
    Ms. Schiffer. I want to separate out two different groups. 
Mr. Coleman has been chair of something called ECOS, which is 
the acronym for the Environmental Council of the States. Mr. 
Herman can probably better address the operation and Mr. 
Coleman's role in ECOS.
    We also have an informal group of people who are primarily 
enforcers, Federal and State. This group includes State 
attorneys general, and personnel from the Justice Department, 
and U.S. Attorneys' Offices.
    Senator Chafee. So you're a member of that group?
    Ms. Schiffer. I'm a member of that group.
    Senator Chafee. And they come to what, advise you on 
whether these overfilings are creating chaos?
    Ms. Schiffer. No. It's a group that's designed to just 
discuss issues that arise in enforcement. It's very informal 
and we discuss a range of issues on and off the record. It is 
an informal way to help us all be better enforcers.
    Of course, one of the issues that we do discuss is 
overfilings. And I'd like to underscore what Mr. Herman has 
said, about the fact that they are few in number, the 
Smithfield case that Mr. Herman mentioned being a very good 
example of an overfiling where a company was discharging----
    Senator Chafee. Well, I don't want to get into details of 
that.
    Senator Thomas.

 OPENING STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM THE 
                        STATE OF WYOMING

    Senator Thomas. Thank you, sir.
    It seemed to me part of your message was that the rules 
need to be enforced. I don't think anybody objects to that 
idea. The question is, how do we best work with the local and 
State governments. Now, frankly, I wouldn't have guessed that 
was the topic from your conversations. You talked about what 
you needed to do and so on.
    What do you think about moving more of the activities to 
the States on the premise that they are closer to it and can 
indeed do it better within the framework of the Federal 
legislation? I didn't think you talked much about that. Aren't 
we seeking to try and involve the State more? I got the 
impression you think things are great the way they are.
    Mr. Herman. I think on many fronts, Senator, we are trying 
to do more. There are several things that have to be looked at, 
which I think most of the States would agree with. What are the 
States' capabilities in different areas. Some States, there's a 
wide range of capability among the States, as everywhere. 
Different States have different strengths and different 
interests.
    Where States can handle more, they are in fact handling 
more. And we see it all the time. States do most of the 
enforcement in our area, so I'll address enforcement. The 
overwhelming number of enforcement actions are taken by States 
in the country. In our criminal enforcement programs, a great 
portion of our resources and time are spent building capacity 
among State officials. The response of State, local sheriffs 
and district attorneys has been overwhelming--they want to get 
the resources and the support we provide.
    Senator Thomas. One of the difficulties with hearings, 
generally, is that you are the first panel and then by the time 
the other witnesses come, you may be gone. I think one of the 
future witnesses will say the crisis of environmental 
enforcement is now. Do you agree with that?
    Mr. Herman. I don't know what that means.
    Senator Thomas. Well, it means that there's a crisis in 
environmental enforcement.
    Mr. Herman. I think it's critical that we have strong----
    Senator Thomas. No, that's not what it means. It means 
there's a crisis in getting the job done, I believe.
    Mr. Herman. I don't know if there's a crisis in getting the 
job done. I think some people question whether we should do it.
    Senator Thomas. No, this person will not question that, I 
am sure. I think he's saying it isn't being done properly.
    Ms. Schiffer. Senator Thomas, I believe that all of us feel 
that we are working very hard to assure that companies and 
people in America comply with our environmental laws, and that 
enforcement is a very important and effective tool to helping 
move that along.
    We are working cooperatively with States, but it really 
needs to be done in a combination with Federal and State 
enforcement in order to be effective. It is true that resources 
have been cut back with both some State agencies and all of us 
in the Federal Government are operating under some limited 
resources now. So that we don't always have complete resources 
to do the very most enforcement that we would like to.
    But I think in terms of a crisis of environmental 
enforcement, what we have is many companies who will at least 
in private tell you that it is important that we enforce so 
that the companies that are stepping up to the plate and doing 
a good job aren't at a competitive disadvantage vis-a-vis 
companies that are not taking care of their pollution control 
obligations.
    Senator Thomas. These are folks who will say something 
later, when you all don't have a chance to respond. This one, I 
paraphrase, says, I think there is no EPA-State partnership in 
some areas. EPA's perspective seems to be they own the ranch 
and we're the hired hands. How do you respond to that?
    Mr. Herman. My perspective is very different. We have 
reached out more toward the States than any other prior 
administration. We have brought the States into the planning of 
enforcement, trying to incorporate State and Federal priorities 
in all our regions.
    We are dealing with some philosophical problems that we 
have to work through. So though I think there are problems, I 
also am absolutely confident that we are working them through. 
We have had some serious problems, as you know, with regard to 
the question of State audit laws. We have been negotiating and 
talking to States, we've reached agreements with States like 
Texas, Utah, Michigan and others, in terms of how we proceed, 
even though there is some disagreement.
    We are doing the training of local people. We are trying to 
negotiate performance partnership agreements, specifically with 
regard to enforcement. Administrator Browner and Deputy 
Administrator Hanson are both former commissioners. They both 
welcome meeting with the commissioners and have had some very 
serious talks. I think we're going through some periods of 
major changes and looking at new ways of doing things.
    I think as we do them, you don't get instant agreement. 
These are very, very tough problems and they're tough issues in 
terms of balancing different interests and different 
approaches. There are people who see the light and know the 
absolute right way to go. I think it's much more complicated 
than that, and that's what we have to have patience to work 
through with each other.
    Senator Thomas. Thank you.
    Senator Chafee. Senator Baucus.

  OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE 
                        STATE OF MONTANA

    Senator Baucus. Thank you, Chairman.
    One of the questions that concerns me is letting States and 
companies know generally when and under what circumstances the 
Federal Government will overfile. That is, even though the 
State is proceeding at one level or another, that EPA, the 
Federal Government believes that the State enforcement action 
is inadequate.
    It seems to me it would be helpful if there's a general 
understanding as to how the Federal Government decides to step 
in, and under what circumstances and when, etc., so that 
everyone tends to know when that might or might not happen.
    So how do you decide when to step in? What are the rules 
and what are the guidelines? How well publicized are they, how 
well known are they? Are they agreed upon? Do they vary 
significantly so people don't know what the rules, standards, 
guidelines are? I'd like you to discuss that, please.
    Mr. Herman. I'll start. Good morning, Senator Baucus.
    There are guidelines. We have guidance called timely and 
appropriate guidance, which sets out sort of the reasonable 
amount of time within which an action should be brought and 
guidelines for penalties that should be given.
    Senator Baucus. And these are well known?
    Mr. Herman. They should be, yes. They've been out there for 
quite some time. And I think if you ask the State 
representatives that are going to testify after me, and I 
believe they were worked through with them in the late 1980's.
    But let me say two other things. One is, in every case as 
far as I know that we overfile, we talk to the State first. We 
try not to have a surprise. We try and tell them what exactly 
is our problem with what they're doing. And they will tell us 
why they think you shouldn't have a problem, or what the 
situation is, why what they're doing is fair.
    Second, or third, the problem of overfiling, I think it's a 
small blip when you look at the numbers of actions that are 
taken by both the Federal Government and all of the States. The 
percentage of overfiles is absolutely infinitesimal. Last year, 
there were four. In 1994 and 1995, there were 15.
    Prior to that, according to an ECOS survey, it was under 30 
for several years. It's just not a large universe.
    Now, we realize the seriousness of it. And as I said prior 
to your coming in, in some cases that I've mentioned, the 
States have actually asked us to come in, because they weren't 
able to get adequate relief under their laws.
    But both Ms. Schiffer and I are firm believers in giving 
the States advance notice, trying to talk to them about it. 
Certainly if there's time, engaging in some serious discussions 
about whether we have to do it, do they want to join us, do 
they want to change course.
    Senator Baucus. Ms. Schiffer.
    Ms. Schiffer. Thank you, Senator Baucus.
    I think the Smithfield case, which was ruled on last week 
by the district court in Virginia, is a very instructive 
example. There we had a company that was discharging wastewater 
from its meat packing operations into a tributary of the 
Chesapeake Bay over 5 years in complete violation of its permit 
limits. Its wastes included cyanide, excess nitrogen, and a 
variety of other extremely harmful things, including fecal 
coliform.
    We talked to the State of Virginia about enforcement. The 
State of Virginia really took no real enforcement action. Then 
we notified the State of Virginia that we were going to file an 
enforcement action against this extremely serious violator, and 
3 days later, without telling us, the State of Virginia filed a 
case in court asking for what were relatively modest penalties 
in the face of these enormous violations.
    In fact, the court ruled last week that the Government's 
case was justified, and that there were serious violations 
here. The penalty issue has been deferred. The court also ruled 
that Virginia's program, which it may consider an example of 
experimentation, did not have adequate opportunity for public 
participation and had an administrative penalty system where 
someone could be assessed a penalty only if they agreed to it. 
The administrative process couldn't impose a penalty on people.
    So the court said the State program was therefore not 
comparable to a Federal program, and actions taken by the State 
weren't going to get in the way of Federal action. That's an 
example of where we had what I think of as the three things. We 
needed serious injunctive relief here, so that the environment 
wouldn't be harmed any more. We needed a serious penalty that 
recovered economic benefit. That is what the company----
    Senator Chafee. I tell you what. We just can't explore each 
of these cases by themselves.
    Senator Baucus. I want her to give us just a one sentence 
summary of it, which she's doing right now.
    Senator Chafee. Well, let's hear that one sentence, not too 
many commas in it.
    [Laughter.]
    Ms. Schiffer. I'll try. The penalty needs to be high enough 
to deter, so that a company doesn't think it can come in and 
wait until it's caught by a Government authority and then pay 
what it would have had to pay in the first instance.
    Senator Chafee. That's a great sentence.
    Senator Baucus. Thank you, Chairman.
    [The prepared statement of Senator Baucus follows:]
 Prepared Statement of Hon. Max Baucus, U.S. Senator from the State of 
                                Montana
    Thank you, Mr. Chairman. I'll cut right to the chase.
    Twenty-five years ago, this committee made a profound decision. It 
established national standards for clean water, clean air, and other 
forms of environmental protection.
    And measured by the improvements we see in our air and water, this 
policy has been a huge success.
    But unless national environmental standards are backed up by a 
national enforcement policy, it's national in name only. Compliance can 
vary widely. And companies that play by the rules will be placed at a 
competitive disadvantage compared to companies in other states that 
break the law and get away with it.
    So I believe that it is critically important to maintain a strong 
Federal enforcement backstop.
    That said, we have to remember that our objective is not 
enforcement for it's own sake. Our objective is compliance to improve 
the environment.
    So I remain interested in further steps that we can take to help 
companies understand and comply with the law, especially small 
businesses that can't afford lawyers, consultants, and audits.
    I also am interested in trying to improve the balance between 
Federal and State compliance efforts, so that we focus our resources 
and use them as efficiently and effectively as possible.
    It looks like we have good, balanced panels of witnesses and I look 
forward to hearing from them.

    Senator Chafee. Senator Inhofe.

 OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM 
                     THE STATE OF OKLAHOMA

    Senator Inhofe. Thank you, Senator Chafee. I was just a 
couple of minutes late, so I didn't get a chance to do an 
opening statement. So I'd like to submit at the beginning of 
this meeting my written statement into the record.
    Senator Chafee. Let me just say, somewhere in here when I 
started, we're under somewhat of a time constraint. And as I 
mentioned, the first panel always gets a preferential amount of 
time, and so I want to make sure that each panel gets----
    Senator Inhofe. I'll stay within my time. But I'd like to 
have that statement in the record, and also the two letters 
that I referred to in my statement entered in the record 
entered at the appropriate place.
    Senator Chafee. Without objection, so ordered.
    [The prepared statement of Senator Inhofe follows:]
Prepared Statement of Hon. James M. Inhofe, U.S. Senator from the State 
                              of Oklahoma
    Mr. Chairman, thank you for calling today's hearing on the 
relationship between the Federal and State governments in the 
enforcement of environmental laws. This is a very important area and I 
am glad we are having this hearing today.
    As the chairman of the Clean Air and Wetlands Subcommittee, I will 
be looking at the enforcement of these programs very carefully in the 
months to come. I am particularly concerned about the enforcement of 
several of the Clean Air regulations particularly the new ``Credible 
Evidence Rule,'' the planned enforcement activities for the ``enhanced 
monitoring rule,'' and the manner in which the EPA has been threatening 
to cutoff highway funds to the States. But these are issues I prefer to 
address in separate Clean Air hearings or in the ISTEA reauthorization 
process.
    Today, I think it is important to address the overall enforcement 
program of the Federal Government. I have two main concerns that reach 
across all environmental laws.
    (1) The States are in the best position to enforce the 
environmental laws and regulations.
    The EPA should be limited to an oversight role for consistency only 
and for providing advice to the States. They should not be in the 
business of second guessing States or playing the big bully on the 
block. I realize that the majority of enforcement actions are taken by 
States, but we are now 25 years into our Nation's environmental 
programs and the States should take an even greater role. It is time 
for us to acknowledge that the States can and should take a greater 
role in environmental programs, and enforcement issues are an excellent 
example. The States can often accomplish activities in a more efficient 
manner.
    I would like to highlight one example. While this is not an 
enforcement case, it is a Superfund cleanup case that I mentioned at 
our last Superfund hearing. It shows that the States are better 
equipped to clean up sites faster and more efficiently than the Federal 
Government, which in turn provides for a cleaner environment.
    The example was two refinery waste sites in Oklahoma, Sand Springs 
and Vinita. Both are owned by the same company. The clean up at Vinita 
was directed by the State of Oklahoma, it cost almost one third as much 
as the Federal site per cubic yard of waste ($92 verses $262 per cubic 
yard) and only took 3 years verses 11 years at the Federal site in Sand 
Springs.
    After I used this example, the EPA responded with a letter to 
members of the Committee explaining how I was wrong. I would like to 
offer the EPA letter as well as a response by the company into the 
record. As you can see by these letters, the EPA missed my point. 
Comparing the cost of cubic yard to cubic yard for the same waste, the 
State site was faster and cheaper. My point then, as it is today, is 
that there are some activities the States do more efficiently which 
should be left to the States.
    (2) We should get away from enforcement action bean-counting.
    I would like to hear some suggestions today on how to get away from 
enforcement bean counting. Imposing large fines on someone for failure 
to file a form properly does not help anyone including the environment, 
except as another notch on the belt of the inspector. We need to change 
the climate on enforcement-bean counting. I'm sure some of you will say 
it is changing or it has changed; but I disagree. The well-publicized 
news reports last fall about the Department of Justice complaining that 
the EPA had not referred enough cases in 1996 is proof that it is the 
quantity of cases that counts, not the quality. While this may very 
well be a result of Congressional budget influences, we need to get 
away from this.
    If the Agency works out a program for the States to provide 
assistance to the regulated community to ensure compliance with the 
environmental laws, and quits measuring success by the number of cases 
filed, fines collected, or people jailed; then our environment will be 
protected and I will be the first to defend the Agency here in 
Congress.
    I am glad to see Mark Coleman from Oklahoma here today, I welcome 
his testimony and that of the other witnesses.
                                 ______
                                 
                      U.S. Environmental Protection Agency,
                                    Washington, DC, March 12, 1997.
Hon. James M. Inhofe,
U.S. Senate, Washington, DC.
    Dear Senator Inhofe: At the March 5, 1997 Senate Environment and 
Public Works Subcommittee on Superfund, Waste Control and Risk 
Assessment Oversight Hearing on S. 8, the Superfund Cleanup 
Acceleration Act of 1997, you raised a comparison of ARCO's cleanup 
costs and timeframes for two Oklahoma sites in your opening remarks. 
The Administrator promised we would follow up with you on this example.
    As outlined below, it is quite clear that these two sites are in no 
way comparable other than the fact they are both in Oklahoma and are 
currently owned by the same corporation. The Agency is very concerned 
that ``old horror stories'' and the way the program was operated prior 
to 1993 continue to dominate the Superfund debate. The Superfund 
program is fundamentally different today--a point the Administrator 
emphasized at the hearing. To that end, we are pleased that you have 
given us the opportunity to demonstrate that not all sites are the same 
and that States tend to undertake the cleanup only at lesser 
contaminated sites. We have also included an example of how our 
Superfund Administrative Improvements have impacted Oklahoma--which we 
hope you will factor into any discussions of Superfund Reauthorization.
         comparison of cleanups at sand springs and vinita, ok
Site Comparison
    While both of these sites are former Sinclair refineries, several 
differences exist that prevent a credible direct comparison of cleanup 
costs and timeframes between the two sites. The Sand Springs site was 
judged much more of a threat to public health and the environment and 
was listed on the NPL. The Vinita site was evaluated by EPA and 
referred to the State for action because it presented little health 
risk. Key differences include the following:
    Volume of Waste Cleaned Up--The Sand Springs cleanup addressed 
nearly three-and-one-half times the volume of waste at Vinita.
    Complexity of Wastes--After closing as a refinery, the Sand Springs 
site was used by several other industries, including a chemical 
recycler, resulting in a significant degree of contamination from 
chlorinated solvents and other chlorinated hydrocarbons at the site. As 
a result, 5000 cubic yards of Sand Springs waste had to be shipped 
offsite to a commercial hazardous waste incinerator. In contrast, the 
Vinita site contained refinery wastes only, which are much less 
expensive to remediate than chlorinated wastes.
    Proximity to Population--The Sand Springs site is located in a 
populated area, adjacent to businesses, near to residences, and 
adjacent to the Arkansas River, which is heavily used for recreational 
purposes. Approximately 300 people work on, or adjacent to, the site. 
There are four schools, a hospital, an orphanage, and numerous 
restaurants within a mile of the Sand Springs site. The Vinita site is 
in a relatively remote area, nearly two miles from the town of Vinita.
    Ground Water Use--Ground water is used within one-half mile of the 
Sand Springs site. There are no water wells within four miles of the 
Vinita site.
    Air Emissions Safeguards--Due to the proximity of population and 
the chemical composition of the wastes, there was a major concern with 
controlling air emissions at Sand Springs. For example, there was a 
documented incident which indicated the presence of hydrofluoric acid 
gases within the sludge pits. Prior to EPA involvement, earthwork 
activities by the city of Sand Springs to construct a storm water 
retention basin adjacent to the sludge pits caused a significant 
release of gases which required the hospitalization of workers and the 
evacuation of nearby businesses. Due to this potential for an off-site 
release of air contaminants, EPA took extra precautions to protect the 
health and welfare of surrounding businesses and residents, including 
the Sand Springs Home for Orphans. EPA required extreme care to be 
taken during excavation activities, including emission controls and 
extensive air monitoring. Although expensive and time consuming, these 
protective measures were necessary to ensure the safety of the 
community. The more remote Vinita site, without the complications posed 
by chemical plant wastes, did not require this degree of protection .
    Priority of Site--Due to the types of waste present, the proximity 
to population, and the sensitivity of ground water, the Sand Springs 
site ranked for NPL listing under the HRS, while the Vinita site fell 
far short.
    Protectiveness of Disposal Cell--The Sand Springs site used a RCRA-
caliber vault for disposal of the stabilized waste, whereas a simple 
clay-lined cell was used at Vinita.
    Design Costs--Due to uncertainties as to whether the stabilization 
process would work effectively on the Sand Springs wastes within 
allowable air emission levels, ARCO proceeded with design of an 
incineration system so that they would have a fall-back treatment 
technology ready in case the stabilization did not work. This added 
significantly to ARCO's design costs at Sand Springs but was not a 
factor at Vinita. Furthermore, ARCO was able to utilize its extensive 
(and costly) initial stabilization process studies from Sand Springs to 
shortcut the design process at Vinita.
    The following matrix compares some characteristics of the two 
sites:

                                                                        
                                                                        
------------------------------------------------------------------------
             Factor                     Vinita           Sand Springs   
------------------------------------------------------------------------
Size of site....................  177 acres.........  200               
Volume of waste.................  62,000 cu yds.....  213,000 cu yds    
Volume of Chlorinated             0.................  5,000 cu yds      
 Hydrocarbons.                                                          
Population within 4 miles.......  6,582.............  15,000            
Distance to nearest water well..  >4 miles..........  <\1/2\ miles      
HRS Score.......................  0.94 (prescore)...  28.86             
Drums of hazardous materials      0.................  400               
 removed.                                                               
------------------------------------------------------------------------

Sand Springs Touted as Ahead of Schedule and Under Budget
    The Sand Springs remediation (construction) actually began in 1992 
(not 1985) and took 4 years to complete. At an August 29, 1995 ribbon-
cutting to celebrate completion of construction, ARCO stated that the 
remedy had been completed 1 year ahead of the Consent Decree schedule 
and $10 million under budget.
Impact of Administrative Reforms
    In addition to the differences above, it must also be pointed out 
that the Sand Springs cleanup was conducted prior to the Superfund 
Administrative reforms. A much better example of how EPA is currently 
addressing the cleanup of abandoned refineries is the Fourth Street 
site in Oklahoma City. The Fourth Street site utilized on-site 
stabilization/solidification, neutralization, and off-site disposal as 
the remedy. The waste at the site was an acidic sludge containing high 
levels of lead. The remediation of approximately 43,000 cubic yards of 
sludge was completed on schedule, under budget, and with no lost time 
accidents, at a total cost of just under $5 million. The volume and 
type of waste addressed make Fourth Street a much more credible point 
of comparison to the Vinita site, even though Fourth Street is in a 
much more populated area.
    I hope that this clarifies the differences between the sites. If 
you have any additional comments or questions please contact Kevin 
Matthews (202-260-5188) in my office or Ed Curran (214-665-2172) at our 
Regional Office in Dallas.
            Sincerely,
                                        Robert W. Hickmott,
                                           Associate Administrator.
                               __________
                                                      ARCO,
                              Los Angeles, CA 90071, April 2, 1997.
Hon. James M. Inhofe,
U.S. Senate, Washington, DC.
    Dear Senator Inhofe: Several weeks ago, you were kind enough to 
forward to us a letter from EPA which responded to a comparison we had 
discussed with you earlier of costs at two ARCO managed Oklahoma 
remediation sites, Vinita and Sand Springs. The attached paper responds 
to the EPA assertions in that letter.
    As you will see, we feel that the substantial differences in per 
cubic yard remediation costs at the two sites--$92 at Vinita, $263 at 
Sand Springs--must be laid principally at the door of the CERCLA 
statute itself. Roughly two thirds of the difference in cost was caused 
by the procedural complexity and remedy selection decisions driven by 
the law. One third of the difference, or less, is accounted for by 
differences in site location and waste.
    What we draw from this experience is that CERCLA's fundamental 
design--the bones of the statute--are wrong. And as long as it remains 
as is, we can expect extravagant costs and lengthy delays of the sort 
we experienced at Sand Springs. Although EPA has recently made a strong 
effort to do as much as it can administratively to rationalize the 
process and choose more sensible remedies more quickly, it cannot alter 
the basic structure and commands of the statute.
    We would be happy to meet with you to discuss further our 
experience at the Oklahoma sites or with Superfund generally. Again, we 
appreciate your efforts in seeking reform of this well meant but badly 
crafted program.
            Very truly yours,
                                              Kenneth R. Dickerson,
                                                 Senior Vice President.
                                 ______
                                 
                               ATTACHMENT
         Comparison of Sand Springs and Vinita, Oklahoma Sites
    The principal point we wish to make is that the wastes treated at 
the Vinita and Sand Springs site were very similar, but the Sand 
Springs waste cost more than three times as much per cubic yard to 
remediate. Moreover, the Vinita project took 3 years to complete, the 
Sand Springs project 11 years. These two comparisons speak volumes 
about the CERCLA process. State remediation, in this instance, was far 
more efficient, faster, cheaper, and protected the public health and 
the environment. As we will outline below, the differences between the 
two sites are far less significant than their similarities. Indeed, the 
chief difference is that Sand Springs was listed on the National 
Priorities List, and Vinita wasn't.
    EPA's response to Senator Inhofe's March 5 hearing questions 
justifies the differences in remediation cost and duration at the two 
sites based upon a list of factors which at first blush seem a 
reasonable basis for differentiation. However, we differ in many 
respects with EPA's facts, characterizations, and conclusions:
    Waste volumes--Sand Springs waste volume was about twice Vinita's 
(not three and one half times). Apart from that discrepancy, the real 
point here is that greater waste volumes should--and usually do--make 
unit costs significantly cheaper, not more costly.
    Waste complexity--The Vinita and Sand Springs wastes were quite 
similar--refinery acid sludges--and the remedy eventually selected--
solidification--was also the same. Vinita waste cost $92 per cubic yard 
to remediate; Sand Springs cost $263 per cubic yard. The cost 
comparisons we have stated for cleaning up wastes at the two sites 
include only refinery waste.
    The chlorinated hydrocarbon wastes which EPA mentions were 
deposited in a totally separate and physically distinct area--the so 
called Glenn Wynn site. ARCO had placed no waste at the Glenn Wynn 
site. Regardless of the lack of physical or legal relationship, EPA 
combined the Sand Springs and Glenn Wynn sites and required ARCO to 
sign a consent decree agreeing to clean up both, this despite the 
existence of over 200 potentially responsible parties at the Glenn Wynn 
site, many of which were large, financially solvent firms. ARCO 
complied with the decree, cleaned up the Glenn Wynn waste, and was then 
forced to sue the responsible companies. ARCO collected its remediation 
costs, but lost $4 million in outside legal fees it was forced to 
expend in the collection effort (The U.S. Supreme Court has held that 
legal fees cannot be recovered in the absence of Congress amending 
CERCLA). Nor did ARCO recover compensation for the considerable inhouse 
management, legal, and executive time spent to recover the Glenn Wynn 
costs.
    While we didn't include an extended discussion of the Glenn Wynn 
issues in our earlier paper, this matter raises collateral issues 
(collateral, that is, to remediation cost and timing problems) pointing 
to very serious statutory defects in CERCLA. These are, first, EPA's 
unfettered discretion to define NPL sites and require clean ups which 
unfairly burden individual parties and, second, the prohibition on 
recovery of legal fees in contribution actions brought by private 
parties who have done more than their share of the clean up.
    Proximity to Population--It is true that the Vinita site is rural, 
and the Sand Springs site is located in an industrial district of the 
municipality, although both sites had people residing within one half 
mile of the site operations. We agree that particular care needs to be 
taken in clean ups where people, water or animals are close by. In 
fact, ARCO took scrupulous care to limit exposure to workers and 
releases to the surrounding environment in both clean ups, and happily 
adopted additional safeguards at Sand Springs because of the proximity 
to the community. The point the government seems to be making, though, 
is that the difference in the setting of the site accounted for the 
bulk of the difference in the remediation costs and timetables. We 
don't agree with that view, nor with the implication that the State of 
Oklahoma's program would inadequately protect its people and 
resources--for a Vinita or Sand Springs site.
    Ground Water--It's not clear what point the government is making 
here. Protection of ground water was not a principal or express 
determinant of the remedy selected at either Sand Springs or Vinita. 
Each remedy was chosen for source control--keeping people from direct 
contact with the waste. The remedy was the same at both sites 
(solidification and capped containment). An additional target of the 
remediation process at each location was to isolate the solidified 
waste from surface runoff and ground water, and to ensure that if water 
ever did reach the waste, nothing harmful would leach from it. However, 
there is no drinking water well anywhere near the Sand Springs site 
which could be affected by the waste (the well EPA describes as a half 
mile away is crossgradient and more than a mile distant from any 
waste). Moreover, the surface aquifer was contaminated by other 
industrial sources upgradient of the Sand Springs site.
    Sand Springs costs were boosted considerably by EPA's requirement 
that the solidified (non-hazardous, non-leachable) waste be contained 
in a RCRA vault, but this was, in our view, an inappropriate decision 
justified by reference to CERCLA's statutory framework (requiring the 
use of applicable, relevant and appropriate requirements--ARARs--from 
other environmental laws and regulatory regimes), and not by 
groundwater concerns. We discuss this issue in more detail below.
    Air Emissions Safeguards--As we noted above, ARCO willingly employs 
state of the art measures and safeguards to protect workers, nearby 
people and the environment. While the Sand Springs waste was somewhat 
more difficult to handle, and businesses were located immediately 
adjacent to the site, the protections employed in the Sand Springs and 
Vinita clean ups were quite similar, including air emissions controls, 
protective equipment, and monitors. In fact, the principal exposures in 
both projects were those presented to the remediation workers, who were 
excavating the acidic waste which emitted sulfur dioxide fumes before 
neutralization with lime. At both sites, perimeter air monitors were 
installed; and concentrations of sulfur dioxide seldom reached levels 
of concern at the property boundaries at either site.
    It is true that Sand Springs city workers laying a sewer across the 
site dug into a lens of refinery acidic waste, which liberated sulfur 
dioxide--not hydrofluoric acid gases. This incident undoubtedly helped 
to propel the Sand Springs site onto the Superfund list, but added 
little to the cost differential between the sites--since both had 
similar waste and required the same kind of safeguards. We estimate 
that, at very most, the combined factors of more acidic waste and 
closer proximity to people and businesses may have accounted for a 
third or less of the difference in costs between the two sites.
    Priority of Site--Whether a site qualifies under EPA's hazard 
ranking system for listing should be irrelevant to remediation timing 
and costs. Indeed, the fact that EPA regards a site as a priority 
should accelerate action and drive EPA to quickly find the most cost 
effective remedy that protects people and the environment--just the 
sort of thing that didn't happen here. In our experience it rarely ever 
happens in a CERCLA remediation setting.
    Protectiveness of Disposal Cell--EPA required ARCO to construct a 
RCRA vault at Sand Springs which cost substantially more than a clay 
lined and capped cell of the sort which was used at Vinita. This 
accounted for about one third of the difference in costs. RCRA 
facilities are designed to be used for the containment of hazardous 
wastes which present a danger to ground and surface waters, not inert, 
non-leachable, non-hazardous wastes of the sort produced by the 
remediation processes at Vinita and Sand Springs.
    While ARCO agreed to build the RCRA vault at Sand Springs, in our 
judgment it was excessive and neither cost effective nor legally 
warranted. EPA required the more costly containment option as a 
condition of dropping the incineration remedy which it had initially 
chosen. In fact, ARCO has cleaned up two other similar refinery waste 
(EPA-lead) NPL sites in different EPA regions for which capping--
without a RCRA vault--was the remedy to which EPA agreed. This 
illustrates one of the clear statutory problems with CERCLA--the 
preference for treatment and ARARs, combined with EPA's enormous 
discretionary power, often and unpredictably leads to remedies which 
are excessive and which a PRP simply accepts rather than risk the 
extreme consequences of a challenge. This is another statutory problem 
which cries out for legislative change.
    Design Costs--EPA is simply incorrect in asserting that ARCO itself 
chose to design an incineration remedy. ARCO advocated solidification 
as the remedy, which EPA refused to accept without extensive site 
specific testing. Accordingly, the incineration remedy was mandated by 
EPA in the Record of Decision and strongly objected to by ARCO. ARCO 
was forced to spend well in excess of $600,000 on the design of the 
incineration remedy before State and community opposition, test 
results, and other factors caused EPA to relent and approve the 
solidification alternative. Moreover, EPA is incorrect in asserting 
that Sand Springs studies reduced the cost of the Vinita remedy--in 
fact, Vinita was designed and finished before the Sand Springs 
solidification remedy was engineered. If anything, experience at the 
Vinita project lowered the Sand Springs cost.
    The real cost differences between the two sites lay in three areas. 
First, construction of the RCRA vault and associated logistical 
difficulties accounted for perhaps one third of the cost difference. 
The endless rounds of studies, engineering and design approvals, and 
extensive oversight required by the CERCLA process accounted for at 
least one third of the total difference in per ton costs. The remaining 
third, and the only legitimate increase, was caused by the urban 
setting of the Sand Springs site (most notably construction problems 
caused by lack of space) and its slightly different waste.
    In the end, we are left with the conclusion that the two projects 
were--or should have been--remarkably similar--the only real difference 
was that Sand Springs was a Superfund site, and Vinita was not. Wastes 
and remedies were, but for the ill-chosen RCRA vault, quite similar. 
Yet each remediated yard of Vinita waste cost less than a third of what 
it took at Sand Springs; and Vinita was completed in 3 years while Sand 
Springs took eleven. This sort of problem is endemic in CERCLA, and its 
source is the statute itself, not the people.
    EPA--including its site managers and hazardous waste program 
executives--are not the problem. In fact, after the initial skirmishes 
and disagreements with EPA during the first several years of the 
project, the Region VI team in charge of Sand Springs struggled 
constantly to bring rationality and speed to decisionmaking. They only 
partly succeeded. The difficulty lay--and still lies--in the commands 
and ambiguity of the law itself.
    It is a statute whose design guarantees vicious litigation, 
agonizingly slow decisions, and unbelievably expensive remedies. It 
prevents reuse of old industrial property and revitalization of cities. 
It doesn't clean up the worst problems first. EPA has made some 
progress with its administrative reforms, but cannot fix the core of 
this badly conceived statute. Congress must act.

    Senator Inhofe. Mr. Chairman, as the chairman of the Clean 
Air and Wetlands Subcommittee, I'm very interested in the 
enforcement. I would really like to mention a couple of things, 
one was brought out by Senator Thomas when he talks about the 
States being in a better position and how difficult it is in 
some of these hearings. Because we'll make a point, to you, and 
then you are out of here. The next group comes up and they 
repeat everything you say.
    I would only recall to the chairman's memory the statement 
that I made, that proved the point to me, anyway, that the 
States do a more effective job, and I used several examples. 
The example I used before your committee just a short while ago 
had to do with Superfund sites. I compared two sites in 
Oklahoma, one at Vinita, OK, and one at Sand Springs, OK, by 
the same company. And the one that was done by, directed by the 
State of Oklahoma cost one-third as much as the Federal site, 
per cubic yard of waste. In other words, it was $92 a cubic 
yard cost to clean up the site that was under the supervision 
of the State of Oklahoma, as opposed to $262 a cubic yard of 
the Federal Government-supervised cleanup. The State took 3 
years, the Federal Government took 11 years.
    I see example after example after example, and I'm sure 
that Administrator Browner is getting tired of me using all 
these examples.
    So anyway, later after that meeting, they refuted that, and 
I have letters that I will insert in the record here in the 
appropriate place that shows I was exactly on target.
    The other area of concern is having to do with what they 
call bean counting. You said, Mr. Herman, that that was last 
year's war. When was the war over?
    Mr. Herman. The what?
    Senator Inhofe. This is on measuring performance by the 
number of arrests or the number of prosecutions, the number of 
fines.
    Mr. Herman. I think this is an extremely important 
question. The traditional method for EPA to measure its success 
in enforcement was referrals of cases to the Justice 
Department, numbers of inspections, that type of thing. Which I 
will say in a minute, I do think have some value.
    We recognize, though, that that alone was not enough to 
show what the program was doing in terms of the environment or 
possibly even in deterring violations. We have taken several, 
and I think this probably came out in my confirmation hearing 4 
years ago, because I think Senator Chafee may have brought up 
the beans back then.
    But this is what we have done. One, we have started 
determining what are the environmental impacts----
    Senator Inhofe. Mr. Chairman, I see we're going to have a 
problem here if he's on No. 1 and we have several things we're 
going to be talking about. I just asked the question, when was 
the war over?
    Mr. Herman. I don't know if the war is over. What we are 
doing is, we are trying to solve the problem.
    Senator Inhofe. Let me get another question out, then. 
Because I don't want to go over my time, here. The Reason 
Foundation issued a study just last summer, well, first of all, 
I think the Justice Department actually made a request that you 
get into more cases, which might indicate there are fewer of 
them out. This was just last fall, as I understand it, that the 
Justice Department came out in a report that the EPA had not 
referred enough cases in 1996.
    But I look at that as proof that it's the quantity of 
cases, not the quality of cases.
    The four recommendations that came from the Reason 
Foundation were: No. 1, more precise language in laws and 
regulations; No. 2, restoring criminal intent as a necessary 
condition of criminal prosecution; No. 3, measuring enforcement 
success in terms of environmental improvement rather than 
numerical standards; and No. 4, respecting the bill of rights. 
They specifically talk about which elements of the bill of 
rights.
    Are you familiar with this report, and are you attempting 
to meet some of these recommendations?
    Mr. Herman. I have not seen this report. Although a 
gentleman from the Reason Foundation did testify at our hearing 
on developing new measures, which we held last month in San 
Francisco.
    Senator Inhofe. In writing, Mr. Chairman, I'd like to give 
him a copy of this report and ask that he respond to this.
    Senator Chafee. Is that a Region I report?
    Mr. Herman. The Reason Foundation, I believe, is in Region 
IX, San Francisco.
    Senator Inhofe. It's in California.
    Senator Chafee. OK, if you can respond to that, Mr. Herman.
    Senator Inhofe. Thank you.
    Senator Chafee. Is the question clear?
    Mr. Herman. You're going to give me the report and you want 
us to comment on the recommendations?
    Senator Inhofe. That's correct, these four questions which 
I just read into the record.
    [NOTE: EPA did not submit a response for the record.]
    Senator Chafee. Thank you. We'll have a chance, we'll have 
a wind up soon on this panel.
    Senator Lautenberg.

  OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, U.S. SENATOR 
                  FROM THE STATE OF NEW JERSEY

    Senator Lautenberg. Thanks, Mr. Chairman.
    Mr. Herman, I want to ask you, how many matters might have 
presented an opportunity for overfiling in the period during 
which the four overfilings took place? That was last year, was 
that the calendar year or fiscal year?
    Mr. Herman. That's correct, the fiscal year.
    Senator Lautenberg. It was the calendar year. How many 
matters, do we have any idea how many were filed?
    Mr. Herman. It's up in the, counting State actions and our 
actions, we're in the realm of 10,000 probably, or more. Those 
are administrative, judicial.
    Senator Lautenberg. So there were four times when the EPA 
intervened?
    Mr. Herman. That's correct.
    Senator Lautenberg. Has EPA threatened to remove delegation 
for various environmental programs from States that have strong 
privilege protection laws and in how many instances might that 
have occurred?
    Mr. Herman. There are four or five instances, Senator, 
where citizens have filed petitions specifically bringing State 
programs to our attention, in which the allegation has been 
made that the passage of the audit or the audit privilege 
immunity bill takes away from the State the necessary 
enforcement authority that they need.
    We have looked into those matters and in some cases we have 
determined that if the law were left as it were that the State 
wouldn't have the necessary authority required under Federal 
law. Now, what I'm talking about by necessarily Federal 
authority is the ability to get injunctive relief, the ability 
to get penalties, the ability to respond when there's an 
emergency, the ability to prosecute criminals.
    In several cases----
    Senator Lautenberg. That's sufficient, Mr. Herman. Our time 
is running short, and I appreciate the answer. I think that 
kind of clarifies what it is we're talking about.
    I for one want to say clearly for the record that I support 
cooperation and working with the State governments, with the 
environmental protection departments, whatever they call them, 
within the States. But by no means do I think that we ought to 
step aside, and when we see something that violates the intent 
to clean up the environment, which I believe is EPA's principal 
purpose, at times it is suggested that your mission is 
harassment and there's some sinister plot to nag and pester 
companies.
    But I would submit for the record an editorial done by the 
Washington Post this past Sunday and an article from the 
Washington Post talking about the Smithfield Foods violation. I 
look at this as an example so egregious that one can't ignore 
it. It says, there were 164 times they were late reporting 
violations, and violated clean water laws by as many as 5,330 
times by discharging pollutants containing such things as fecal 
coliform bacteria, cyanide, phosphorus into the Pagan River.
    Now, that feeds into the Chesapeake. That's our water. It's 
our body of water. It's where striped bass, rockfish, develop. 
That's one of the best spawning areas that we have.
    So it belongs to all of the citizens in this country. And 
for us to stand by, and these articles clearly identify a 
weakness and a willingness from the State of Virginia to 
cooperate with this polluter. Slap on the wrist and walk away 
from it.
    I would submit that you have no right to forget your 
assignment to protect the environment. You have to enforce the 
laws whether you choose to or not. If you've done it 4 out of 
20,000 times, I ask you, why so many times in that ratio--I 
mean, you're just harassing the devil out of those innocent 
people.
    I thank you, Mr. Chairman.
    [The news articles follow:]

                [From the Washington Post, June 8, 1997]

                     Clean Water, Political Hogwash
    Gov. George Allen's disdain for Federal water cleanup policy runs 
deep. Labeling the Environmental Protection Agency as an interloper, he 
talks the talk of enforcement by weakens any serious action against 
polluters. A Federal judge has so ruled in a case involving Virginia's 
largest port producer--also the fattest contributor to the governor's 
efforts to elect Republican legislators. Smithfield Foods has been 
found liable for repeatedly dumping illegal levels of hog waste into a 
Chesapeake Bay tributary over a five-year stretch--5,330 violations, 
many of which the governor's environmental regulators chose to overlook 
or underrate.
    Gov. Allen insists that Virginia, not the EPA, can best rule the 
State's waters. But in finding Smithfield liable, U.S. District Judge 
Rebecca Beach Smith in Norfolk dismissed the company's claim that 
Virginia is the appropriate enforcement authority. Judge Smith said 
that Federal authorities were entitled to seek fines because State law 
had fewer ``teeth.''
    That is the shortcoming of Virginia's law and policies. Inadequate 
sanctions and go-easy inspections did worsen water quality and endanger 
public health. Lois J. Schiffer, assistant attorney general for the 
environment and natural resources division of the Justice Department, 
notes the importance of States having uniform water-quality 
protections. Businesses should not find room to shop for States with 
weak standards.
    Judge Smith found Smithfield was late in reporting violations at 
least 164 times and repeatedly had violated clean-water laws by dumping 
pollutants into the Pagan River. At one point, State officials signed 
an agreement to exempt the company from some pollutant limits until 
Smithfield's plants could be hooked up to a regional sewage treatment 
plant. Even if that agreement legally exempted Smithfield--which Judge 
Smith said was not clear--it was reached without any opportunity for 
public comment.
    For three of the past 4 years, Virginia has ranked last among 10 
States in the region in collecting fines from water polluters. Gov. 
Allen commented last year: ``I guess what they would prefer, these 
people who are carping and whining, is we just shut down these 
businesses, run them out of the State and all the people who work for 
them lose their jobs.''
    Only a day after the latest ruling, Gov. Allen fired 29 senior 
managers and staff members of the State's environmental agency. His 
aides called it a ``realignment'' opening the way for employees to 
apply for newly created posts. But a diverse coalition, including the 
Virginia Chamber of Commerce, the Virginia Manufacturers Association, 
the Sierra Club and State's Municipal League, called ``unwarranted and 
poorly timed'' and a hindrance to efforts to protect Virginia's 
environment. Leave it to the States? Not to Virginia under Mr. Allen.
                                 ______
                                 

                [From the Washington Post, June 3, 1997]

             Smithfield Foods Liable For Dumping Hog Waste

                (By Ellen Nakashima and Spencer S. Hsu)

             federal judge sides with epa in virginia case
    RICHMOND, June 2--A Federal judge has found Smithfield Foods Inc. 
liable for dumping illegal levels of hog waste into a Chesapeake Bay 
tributary for 5 years in the 1990s, exposing the giant pork producer to 
up to $133 million in fines in one of the largest cases brought under 
the Federal Clean Water Act.
    In a case that has come to symbolize Virginia Gov. George Allen's 
permissive environmental policies, the U.S. Environmental Protection 
Agency sued Smithfield in December, arguing that the State was ``not 
doing the job'' despite a decade of violations by the company. In turn, 
Allen (R) has attacked the EPA for its criticism of State policies 
toward corporate polluters.
    U.S. District Judge Rebecca Beach Smith, in Norfolk, sided with the 
EPA. In a 75-page ruling released today, Smith found that Smithfield 
was late in reporting violations at least 164 times and violated clean-
water laws as many as 5,330 times by discharging pollutants containing 
such things as fecal coliform bacteria, cyanide and phosphorus into the 
Pagan River. Smith left for a later, penalty phase of the court 
proceeding a formal determination of the number of violations, each of 
which can carry up to a $25,000 penalty.
    ``It is the defendants, and not the public, who are discharging 
into the Pagan River,'' Smith wrote. ``It is defendants, and not the 
public, who should pay the price for the damage to the environment.''
    EPA Region III Administrator W. Michael McCabe, who led the 
criticism of the State's inaction, called the decision ``a complete, 
unqualified victory.''
    ``It's important to us that the citizens of Virginia have the same 
water quality protections as people in every other State in the 
country,'' Assistant U.S. Attorney General Lois J. Schiffer said.
    The judge dismissed Smithfield's claim that Virginia, not the EPA, 
is the proper policer of pollution in the State. In a separate action, 
Virginia's Department of Environmental Quality sued Smithfield in a 
State court in August for related violations, but for far less, 
estimated at up to $2 million.
    Environmentalists welcomed Judge Smith's ruling. It ``proves that 
Smithfield Foods is not an innocent corporation getting beat up by 
greedy widows and orphans,'' said Albert Pollard, spokesman for the 
Virginia chapter of the Sierra Club.
    Joseph H. Maroon, Virginia executive director of the Chesapeake Bay 
Foundation, praised the decision for ``once again showing that the 
Federal government as well as the State has an important role to play 
in the protection of Virginia's environment.''
    Smithfield attorney Anthony F. Troy said the company ``in all 
likelihood'' will appeal the ruling. Troy said Smithfield still 
believes it was in the right.
    ``There's a difference between discharging of a pollutant and 
pollution,'' he said. ``Even if you have discharged in exceedance of 
the [state water pollution] permit, have you polluted? Have you harmed 
the river? The evidence suggests, in fact, that the Pagan has been 
improving in quality over the years.''
    In her ruling, Smith criticized Virginia environmental laws as 
virtually toothless, noting that the State can impose civil fines only 
when a polluter consents. ``A penalty provision requiring the consent 
of the violator does not have the same `teeth' to encourage 
enforcement'' as the Federal law, the judge wrote.

    Senator Chafee. Thank you.
    Senator Sessions.

OPENING STATEMENT OF HON. JEFF SESSIONS, U.S. SENATOR FROM THE 
                        STATE OF ALABAMA

    Senator Sessions. Thank you, Mr. Chairman.
    I think cooperation is the way to go in all law 
enforcement. I was elected attorney general of Alabama in 1994. 
We formed an environmental crimes working group: EPA, the three 
U.S. attorneys, the Attorney General, Coast Guard, State 
District Attorneys, Alabama Department of Environmental 
Management. We met regularly to decide who best might handle 
the kind of case that came up, and we would discuss them and 
that sort of thing.
    I think that is a good model. I would like to ask you, in 
that line, it seems to me that the role of EPA might be 
developing somewhat like the FBI, which has a very limited 
number of agents within every State. The primary day to day 
work of law enforcement is done by the police and the sheriffs 
and the district attorneys.
    But when cases of special expertise are needed, cases of 
perhaps special national interest or only Federal laws are 
involved, then they are involved. How do you see that as a 
model for the EPA?
    Mr. Herman. Senator Sessions, I couldn't agree with you 
more. We serve, as you mentioned, we serve on task forces all 
over the country, with the Justice Department and with local 
attorneys general. In fact, in some States, we actually share 
the office. We are in the State attorneys generals offices or 
the local DA's office. They meet exactly as you said, 
discussing cases and deciding who has the best authorities or 
the best resources to carry out a specific task.
    We have 200 Federal agents, the EPA has 200 criminal 
agents. Almost all of them are out in the country. There is a 
very small headquarters----
    Senator Sessions. Not one in Alabama. I think there are 
only four per State, but there's not a lot of them.
    Mr. Herman. Some States have more than four. But I will 
look into that.
    But their primary job, while they do some primary 
investigating, there is an enormous amount of capacity building 
and partnering with their State and local officials. We have 
developed film, training films for sheriffs, one was 
volunteered to us by the actor, Harrison Ford. That's been very 
well received by police around the country.
    It's terrific, and this is the way to go.
    Senator Sessions. I think it is. But I would point out that 
even though you may not have overfiled but four times, there is 
a tremendous power in EPA when they threaten to overfile. If a 
settlement has been reached, or a good faith between a 
prosecutor and so forth, if the Environmental Protection Agency 
or the Department of Justice says, well, we don't care, we 
don't think that's sufficient, we're going to file a separate 
case, then a lot of hard work can be undermined. I think you 
should show respect, and I trust you will, in those cases.
    Let me ask something specifically. I have observed as a 
Federal prosecutor, primarily, great delays in getting chemical 
analyses done of sites in order to build a case for 
prosecution. I've seen that repeatedly. It seems to me one of 
the roles that EPA could do is have the kind of chemical 
experts that could promptly and efficiently go to a site, 
determine what chemicals have been dumped there, and get an 
analysis and be prepared to testify in a matter of months, 
instead of sometimes a year or more, is my recollection.
    Don't you think that's an appropriate role for PEA, to help 
the States and local prosecutors?
    Mr. Herman. Absolutely, Senator. We try to offer that 
service. And maybe we could get together with your staff and 
hear some of the experiences you've had, and if they still 
exist, try and correct it. I'd be glad to do that.
    Senator Chafee. Thank you. I must say, it's very helpful to 
have Senator Sessions here, because he's had a lot of 
experience in these matters from the Federal Government, U.S. 
Attorneys' Office. We're very glad to hear your thoughts. I 
think this testing thing is important.
    Senator Warner.

OPENING STATEMENT OF HON. JOHN W. WARNER, U.S. SENATOR FROM THE 
                    COMMONWEALTH OF VIRGINIA

    Senator Warner. First, Mr. Chairman, thank you for 
scheduling this hearing. My State has been the subject of some 
discussion this morning, and we're very fortunate to have Ms. 
Dunlop, who will come up and speak on behalf of my State. I'll 
reserve my comments for later today.
    Unfortunately, I'm chairing another hearing of the Senate 
this morning, as you are. So I won't be able to stay, as much 
as I'd like.
    First, Mr. Herman, I want to just talk generally about 
consent orders and ask you how important are they to getting 
people to comply with the laws.
    Mr. Herman. I think that a properly crafted consent order 
is very important.
    Senator Warner. The key words are ``properly crafted.'' The 
ability of your agency to stick by those consent orders, once 
they're given, is another matter. I'm currently involved in 
several cases involving constituents in my State, one in the 
furniture industry, another in the meat-packing industry.
    There seems to be a feeling in the community, not only in 
my State, but elsewhere, the only way you can get people to 
comply is to literally threaten them with financial penalties. 
Would you talk about that a little bit?
    Mr. Herman. Well, I think, Senator, as my written statement 
shows, our view is that you can get people to comply in various 
ways.
    Senator Warner. Enumerate those ways.
    Mr. Herman. Pardon.
    Senator Warner. Enumerate those ways.
    Mr. Herman. One is, we try and give information to people 
ahead of time, so that they know what to do. Another is, we ask 
people to come in and ask for help. A third, however, sometimes 
that doesn't work. We have had instances, and Ms. Tinsley gave 
the examples, where companies were given a chance. Somebody 
went to them from the State, they identified a problem and the 
company didn't fix it.
    I would say that, depending on what that violation was, 
that the next time around that company should be fined.
    We found a similar situation, which was identified by the 
inspector general, in Pennsylvania, where the State's policy at 
the time was basically just compliance, no penalties. 
Companies, when not faced with penalties, they basically said, 
well, we can wait. We don't have to fix this emission device. 
The illegal emissions kept pouring out of the factory.
    I think you have to look at the situation and then 
determine what is the appropriate response, which is what any 
law enforcement or regulatory authority has to do if they're 
carrying out their job in a responsible way.
    Senator Warner. The consent orders that were issued prior 
to the proposed new regulations on air quality, how are the 
industries that entered into good faith in those consent orders 
going to handle consent order given that now there's a proposal 
for difference in regulation?
    Ms. Schiffer. Senator Warner, what we clearly look at in 
case after case is, did the company have the opportunity to 
know what it was supposed to do to comply with the law. In the 
environmental area, as in every other area of the law, 
ignorance of the law is not a defense. We all learn that right 
at the very beginning of law school.
    So when we are dealing with environmental matters, we want 
to be sure that people have an opportunity to know what they're 
supposed to do and then when they have an opportunity to know 
what they're supposed to do, they need to do it.
    I know that sometimes companies say, ``we didn't have a 
chance to know, or somebody told us something differently.'' We 
look at those facts case by case. We can't obviously address 
the specific cases you have in mind. We don't know what they 
are.
    But in general, that's the approach we take when we're 
looking at what are the obligations of companies to comply with 
the law in this area.
    Senator Warner. Well, supposing a group of companies, say 
an industry had gotten together and negotiated a consent order 
or a letter of understanding, or the various types of things 
you have, under the old air regulation, and along come the new 
proposed air regulation. Of what value is that previous 
agreement, and they relied on it to invest considerable capital 
and go about the expansion and modernization of their plants. 
Now they're faced with potential of a new order which frankly 
is in conflict with their ability, given the various steps that 
they took under the previous order.
    Mr. Herman. Senator, without knowing the specifics, what I 
can say is that I do know in some instances, in situations like 
that, people have made investments or relied on a consent or 
whatever, or grandfathered in in certain ways, or there is a 
sliding schedule whereby you can phase into something, and 
there are situations----
    Senator Warner. You will give recognition, then, to the 
validity of those previous understandings?
    Mr. Herman. Pardon.
    Senator Warner. You will give some recognition, in the 
event that these new regulations----
    Mr. Herman. In certain cases, that has been done. Just like 
with penalties, you know, a company's ability to pay, for 
instance, is taken into account, going to your first question.
    Senator Warner. All right. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Chafee. Thank you.
    Now, we want to thank this panel. Does anybody have a quick 
question? All right--Ms. Schiffer, one more sentence.
    [Laughter.]
    Ms. Schiffer. Two very quick sentences.
    Senator Chafee. We've got two panels after this. I want to 
treat them fairly.
    Ms. Schiffer. I'll be quick.
    First, there's been some discussion of philosophical 
differences that the Federal Government may have with States. 
What we do find, though, is that when you work case-by-case 
with the State and get off the philosophy and look at the 
actual cases, we have a great deal of success getting along 
with the States. It doesn't mean we always see eye to eye, but 
it does mean we as a practical matter are doing a very good job 
of handling cases and enforcing our environmental laws 
together.
    Second, I just wanted to underscore and appreciate Senator 
Sessions' remarks about our law enforcement coordinating 
committees where we get everyone together in the States. They 
have been very successful vehicles for really making the best 
use of everybody's abilities and laws and resources. I'd like 
to thank you for acknowledging that that's such an effective 
way for us to enforce our environmental laws.
    Finally, in response to Senator Inhofe's statement that 
it's frustrating when you hear later panels, we don't have an 
opportunity to reply, it's a little frustrating for us, too. I 
would welcome the opportunity, if we could, as we hear what the 
later panels have to say, if we could submit some information 
for the record in response.
    Senator Chafee. I would stress what Senator Sessions said. 
The power of these overfilings, it isn't just the number of the 
overfilings, it's the threat of the overfilings that is a very 
powerful tool, I suspect.
    Thank you all very much.
    Now we'll have the next panel come up. Mr. Mark Coleman, 
who's previously been mentioned, and Ms. Becky Norton Dunlop of 
Virginia, Ms. Patricia Bangert from Colorado, Mr. Christophe 
Tulou from Delaware, and Mr. Joseph Rubin from Connecticut. If 
each of you would take your places, please.
    Senator Sessions. Mr. Chairman.
    Senator Chafee. Yes, Senator.
    Senator Sessions. If I may have a moment of personal 
privilege, I'd like to introduce Mr. Craig Canizel, the chief 
of the environmental section of the Alabama Attorney General's 
Office. He's served under a half dozen attorneys general, 
founded the environmental crimes section. He remains as head of 
that today. There's few people in this country who are more 
knowledgeable and experienced in environmental work.
    Craig, if you'd stand up, I'd like to welcome you. I'm 
delighted to see you here today.
    Senator Chafee. Well, thank you very much, Senator. We're 
delighted to see such a distinguished citizen of Alabama here.
    Senator Inhofe. Mr. Chairman.
    Senator Chafee. Senator Inhofe.
    Senator Inhofe. The same request. We're honored to have 
Mark Coleman here today, from Oklahoma. He is the chairman of 
the Compliance Committee of the Environmental Council of 
States. Mr. Chairman, I will have to leave for 20 minutes, 
until about a quarter after. So I'm hoping I won't miss your 
testimony during that time. And if I do have to leave, I'll be 
right back.
    Senator Warner. Mr. Chairman, if I might have the 
opportunity to recognize Secretary Dunlop.
    Senator Chafee. I must say, these witnesses were judicially 
selected.
    [Laughter.]
    Senator Warner. Well, I asked the chairman, and you very 
thoughtfully granted the participation in this important 
hearing by this very outstanding public servant. She has been 
in the current position from the very beginning of Governor 
Allen's administration. Prior thereto, she had her own 
distinguished career in the private sector, as well as other 
State and Federal offices.
    We also recognize in the audience her husband, George 
Dunlop, who has served the Senate for very many years in the 
capacity of staff director of the Senate Agriculture Committee.
    Senator Chafee. Thank you.
    Senator Lautenberg. Mr. Chairman, in Senator Lieberman's 
absence, he asked that I convey a welcome to Mr. Rubin, who is 
from Connecticut, and who's a law professor now at Tulane Law 
School. He wanted to say that he's sorry he couldn't be here, 
but he is an Armed Services Committee meeting. So he says 
hello.
    Senator Chafee. Well, in the spirit of equality, on behalf 
of Senator Allard, I'll welcome Ms. Patricia Bangert, from the 
State of Colorado. We're delighted you're here, and I know 
Senator Allard would want to extend a warm welcome if he could 
be here.
    Now if we'll proceed, Mr. Coleman, please. Each of you have 
5 minutes.

    STATEMENT OF MARK COLEMAN, EXECUTIVE DIRECTOR, OKLAHOMA 
   DEPARTMENT OF ENVIRONMENTAL QUALITY; CHAIRMAN, COMPLIANCE 
         COMMITTEE, THE ENVIRONMENTAL COUNCIL OF STATES

    Mr. Coleman. My name is Mark Coleman, I'm the executive 
director of the Oklahoma Department of Environmental Quality. 
I've been responsible for the environmental programs in 
Oklahoma since 1975.
    I'm the chairman of the Compliance Committee of the 
Environmental Council of States.
    Senator Lautenberg. I have to correct the record. Mr. Rubin 
has nothing to do with Tulane. He is from the Office of the 
Attorney General from the State of Connecticut. I was wondering 
why Lieberman was sending greetings to Tulane.
    Senator Chafee. All right.
    Mr. Coleman.
    Mr. Coleman. The Environmental Council of States is a 
national, non-partisan, non-profit association of State and 
territorial environmental commissioners. I appreciate the 
opportunity to testify before you today regarding the 
enforcement relationship between the States and the EPA.
    In keeping with Congressional intent, the vast majority of 
enforcement in America is done by State government. State 
governments bring 9 out of 10 of the Nation's enforcement 
actions each year. States have been delegated the Federal 
programs involving tens of thousands of permits, and have 
direct and continuous interface with both the regulated 
community and the public.
    EPA also has a clear role. That role is to assure that we 
do our jobs.
    I'm pleased to report that although there are many factors 
that place strain on the existing enforcement relationship, the 
States and EPA are still committed to strengthening the 
partnership. One of the most recent endeavors to improve the 
bond was the formation of the State EPA enforcement forum, 
which held its first meeting about 2 weeks ago. All 10 EPA 
regional administrators, a State representative from each 
region, and the primary EPA enforcement headquarters personnel 
are represented.
    EPA has largely delegated responsibility for national 
programs to the States, including the primary role of 
enforcement. There's general consensus on the basic allocation 
of enforcement responsibilities.
    However, when EPA brings a direct enforcement action, 
notice I said a direct enforcement action, not just an 
overfiling, any time EPA brings an action in a State wherein 
the State has jurisdiction, there is a major opportunity for 
disagreement.
    There's often concern that the principles setting forth the 
primary role of the State has been violated. This issue is 
perhaps the starting point at which the relationship breaks 
down. It's my belief that if EPA does not first give the States 
an opportunity to act, in all enforcement matters in which the 
State has jurisdiction, the fragile relationship will weaken.
    States believe that enforcement is a tool, not a goal. 
Compliance itself is a goal, but not a main goal. Our main goal 
is and should be reaching the environmental quality goals that 
you have set and that our own legislatures have set. No amount 
of enforcement and compliance activity measures will tell us 
anything about whether we have or have not met that goal.
    Let me give you an analogy. If I were to tell you that the 
number of detentions and expulsions in our Nation's high 
schools had doubled last year, would you then conclude that our 
Nation's students were better educated than before? I don't 
believe so.
    Similarly, no State would deny that enforcement is an 
important and a necessary tool. We all believe that. But I can 
also make the case to you that such an increase in enforcement 
actions would mean a terrible breakdown in communications 
between Government and the regulated communities had occurred. 
Such a breakdown would mean that there was little chance of 
improvement in environmental quality.
    There are also the issues of delegations of programs and 
direct accountability. First, program delegation in theory is 
not an issue. It's clear that EPA has delegated programs to the 
States. In delegating this responsibility, they have also 
delegated the primary enforcement responsibility. If and when 
EPA strays from this practice, then the question of whether or 
not the delegation is true comes up.
    State officials feel that once a program is delegated, EPA 
should be most concerned with overall program effectiveness, 
and not about the details of how States choose to handle an 
individual enforcement matter. It's not to say that EPA does 
not have a strong oversight role. They do. Oversight should be 
there to see to it and to assure that States have effective 
compliance and enforcement programs.
    That brings us to the second part of the equation, and 
that's accountability. Although EPA is delegated responsibility 
for administering national programs to the States in keeping 
with Federal law, EPA has the view that you, Congress, expect 
them to have an ever-increasing number of direct Federal 
enforcement actions.
    These direct enforcement actions are reportedly viewed by 
Congress and the public as a measuring stick of how well EPA is 
performing. On the one hand, the message is to give the States 
the first opportunity to act. But on the other hand, the 
message is to keep the enforcement numbers up. This perceived 
pressure for direct EPA enforcement may be the source of much 
of the conflict with the statutory principle of deferring to 
the States.
    Overfiling is also an important piece of the enforcement 
relationship. Although the instances of EPA overfiling are 
relatively few, the possibility of overfiling and the use of 
overfiling comes at great cost, as you have noted.
    The potential for overfiling leads to mutual wariness, and 
if not done with extreme care, it can rapidly damage the 
enforcement relationship. The success of EPA is not measured by 
the number of enforcement actions it takes, but by the 
effectiveness of its oversight role.
    The basic problem between the States and EPA as it relates 
to enforcement is that in recent times, the role assignments 
have become less clear. Changes in administration at both the 
State and Federal level and the natural maturation of programs 
have resulted in uncertainty and thus inconsistent action.
    In my view, the solution to these conflicts is to reaffirm 
the established roles. In doing so, we can focus the limited 
resources that we have toward these roles and accomplish the 
goal that we all share in protecting the environment.
    Federal enforcement personnel should lead in research and 
standard setting and oversight and technical support, and in 
national information collection. The States should perform 
their lead duties in direct program administration, including 
direct enforcement. Neither party should seek to pick off 
choice plums from the other's role.
    We're not so far from the goals of both levels of 
Government effectively working together. States already do well 
over 90 percent of the enforcement action within the country. 
Perhaps with your help, efforts to reduce frustration and 
unnecessary loss of resources and credibility due to public 
disagreements can be significantly reduced. We are working 
toward that end.
    Thank you for your efforts in this regard, and for inviting 
me to represent the views of the States.
    Senator Chafee. Thank you very much, Mr. Coleman.
    Ms. Dunlop, we welcome you.

    STATEMENT OF BECKY NORTON DUNLOP, SECRETARY OF NATURAL 
              RESOURCES, COMMONWEALTH OF VIRGINIA

    Ms. Dunlop. Thank you, sir. Mr. Chairman, I'm pleased to be 
here and have the opportunity to testify. Senator Warner, thank 
you for being here this morning. I would like to thank the 
other Senators for their interest in this matter.
    I also would like to ask, Mr. Chairman, that a full copy of 
my statement be inserted in the record.
    Senator Chafee. That will be true for you and each of the 
witnesses who wish.
    Ms. Dunlop. Thank you so much.
    Well, I'm here today because we're very proud in Virginia 
about what we have done to improve the quality and condition of 
the environment in our Commonwealth. There's no question in our 
mind that the role and the purpose and the goals of 
environmental policy are not how effective is your enforcement, 
or how effective is your compliance, but rather, are you 
improving the quality and condition of the air, the water, the 
soil, the flora and fauna, that make up our environment.
    That is our goal in Virginia in the environmental area.
    We find it really quite surprising that EPA still believes 
that their principal role has to be enforcement, and that the 
role of environmental policy for EPA seems to have little to do 
with improving our natural resources and our environment, but 
much more to do with enforcement outcomes: how much are you 
fining people, how much litigation is there, and how many 
permit restrictions have you imposed.
    In Virginia, we believe that the Virginia way is the best 
way. In the area of enforcement, that is compliance first. We 
made that very clear when Governor Allen took office and I 
became Secretary. About a year after we made clear that this 
was our State policy, the President of the United States, who 
was Bill Clinton, came to northern Virginia and announced he 
had a new policy. It was called, compliance first.
    The Virginia way is a science-based approach which uses all 
the resources of State agencies, other government agencies and 
entities of the private sector to help and assist companies and 
local governments and municipalities to reduce site and 
situation specific emissions which can harm the environment and 
have a harmful effect on people and other resources.
    Of course, in Virginia we also have in our ``kit bag,'' as 
we talk about this, the tool of enforcement. Enforcement is 
important when it is necessary.
    If there are willful polluters, if there are people who 
have 20 instances of continuing the same practice without 
making any attempt to improve it, we call them bad actors, in 
the Commonwealth of Virginia. We are vigorous in going after 
these bad actors to bring them into compliance, so that our 
goal can be realized, which is improving the quality and 
condition of our natural resources.
    Of course, the Department of Environmental Quality does not 
have the authority to take legal action, other than the consent 
orders that were discussed earlier. We, for civil actions in 
the courts, must refer cases to our attorney general, which we 
do. For criminal prosecutions, we refer the cases to the 
Commonwealth's attorney, who then works with the U.S. Attorney 
to decide who is best able to bring the action.
    I did find it interesting that the Environmental Protection 
Agency this morning talked about the possibility that there are 
20,000 cases where they could overfile, and yet in 1 year they 
chose only four. I think this very well points out that there 
is some selection process and perhaps some political nature to 
their decisions.
    We also believe in Virginia that we have taken a leading 
role in changing the way the improvements to the natural 
resources and environment can be managed. Pollution can be 
prevented and cleanup of polluted sites can be accomplished.
    We believe that this is very important. The way we have 
restructured our Department of Environmental Quality is 
organizing by functions rather than the separate media. So now, 
in each of our six regional offices, instead of having separate 
divisions of air, waste, and water, we have a permits division, 
where we have people with expertise in each of these media 
working together. Corporate citizens, small businesses and 
indeed, municipalities, can come and work with one team of 
people on permitting, compliance and enforcement that covers 
across the media.
    We also have decentralized the Department of Environmental 
Quality in Virginia. I noted, in going through some records, 
that this is something that Carol Browner did in Florida when 
she was Secretary of Environment. They're now doing it again in 
Florida, so I guess there were some intervening years when 
someone thought recentralizing was important.
    We have moved our primary activity out to the six regions 
of Virginia, so that the people in our regional offices can 
work closely, more effectively and more directly with the 
entities that they regulate and be sensitive to the needs and 
concerns of the people in the very communities where they live 
and work.
    We also have set up a new mechanism in Virginia to work 
more cooperatively with locally elected officials, again, the 
governments that are closest to the people. We've great success 
doing this with our tributary strategy in Virginia, where we're 
working to improve the water quality in the tributaries of the 
Chesapeake.
    Speaking of the tributaries of the Chesapeake, I do hope I 
have the opportunity to discuss briefly, in response perhaps to 
a question, the Smithfield case which seems to have attracted 
so much attention and comment this morning.
    The changes in the way Virginia has done business seems to 
have caused EPA to take actions to put themselves in conflict 
with the States. Their approach still is enforcement first.
    In every public appearance I make with Michael McCabe, the 
Region III director, his only point recognizing the quality and 
condition of Virginia's natural resources, is the amount of the 
fines that we have levied in Virginia. He makes no reference to 
the fact that we had four non-attainment areas for air quality 
ozone, and three of those have now reached attainment in the 
past 3 years and qualified for redesignation.
    He makes no reference to the fact that in northern 
Virginia, which is our one remaining non-attainment area, the 
Environmental Protection Agency has in fact approved our plan 
to improve the way we do tailpipe emissions in garages, and 
that the air quality in northern Virginia indeed is improving, 
and our policy is working very well.
    Senator Chafee. Ms. Dunlop, could you wind it up, please?
    Ms. Dunlop. Yes.
    We find that EPA has continued its top-down approach. There 
have been some improvements, but basically, EPA still views 
itself as in charge. This partnership with the States is 
something that they handed out with the left hand and then the 
next thing you hear, the Deputy Administrator of EPA is pulling 
back the partnership with the right hand.
    They have overseen failed programs such as Superfund and 
States like Virginia have had to come up with voluntary 
remediation programs to try to make sure we are cleaning up 
sites in the Commonwealth.
    Finally, I would say, Mr. Chairman and members of this 
committee, we believe that the issue really here before us is, 
is government to be a helpful servant or a fearful master. When 
George Washington finished his term as President, he warned the 
American people about this potential conflict in the future.
    I joined State government and I served in the Federal 
Government because I believe government should be a helpful 
servant in administering the laws of our land, not a fearful 
master. We appreciate the opportunity to be here to share with 
you our commitment in Virginia to being a helpful servant in 
improving the quality and condition of the natural resources 
and the environment in our State.
    Senator Chafee. Thank you very much, Ms. Dunlop.
    And now, Ms. Bangert.

  STATEMENT OF PATRICIA S. BANGERT, DIRECTOR OF LEGAL POLICY, 
    OFFICE OF THE ATTORNEY GENERAL FOR THE STATE OF COLORADO

    Ms. Bangert. Thank you, Mr. Chairman and members of the 
committee. My name is Trish Bangert. I'm the director of Legal 
Policy for the Attorney General's Office in the State of 
Colorado.
    I want to thank the committee very much for the opportunity 
to present our views on the EPA-State relationship. I also 
would like to submit my written remarks for the record.
    I want to address two topics in this oral testimony. The 
first is the reality of the EPA-State relationship. And second 
are some suggestions that might make that relationship work 
more smoothly.
    As to the reality of the relationship, don't be fooled by 
EPA hype. In some enforcement areas, the EPA-State partnership 
is a total fiction.
    Senator Chafee. Is a total fiction?
    Ms. Bangert. Is a total fiction, yes, sir. The reality is, 
and I think Senator Thomas alluded to this testimony earlier, 
very often EPA thinks they own the ranch and we're the hired 
ranch hands.
    For example, I don't see any compromise or cooperation in 
the area of self-audits.
    Another reality that I want to address here is the 
effectiveness of State enforcement efforts in the State-Federal 
enforcement scheme. EPA charges that some States, especially 
those with self-audit programs, are failing to protect the 
environment.
    The reality of the situation, however, is that those 
charges simply are not true. States like Colorado are working 
very hard to protect the environment. EPA's complaint in 
reality is that we aren't doing it in exactly the way they 
would do it.
    EPA loves its own image. In fact, it would like to go into 
the various States and create a mirror image of itself.
    Look at EPA's January 1997 audit policy update: ``U.S.-EPA 
Regional Administrator John H. Hankinson, Jr., in a letter 
dated September 26, 1996, applauded the State of Florida for 
adopting a policy modeled on EPA's.'' The reality is, however, 
that just because a new program differs from the EPA model, it 
doesn't mean that that program weakens enforcement in the 
State.
    One such new program is environmental audit. Twenty-two 
States, as you know, have passed some sort of legislation to 
encourage companies to audit their environmental compliance and 
correct violations found, either through a privilege or an 
immunity or both. Colorado is one of those States.
    Now, remember here, we're talking about violations that 
probably would not have been found by the companies, and 
certainly would not have been found by the enforcers absent the 
audit. We're talking about the positive environmental gain in 
many instances. Not only are companies becoming more aware and 
sensitive to environmental compliance, but problems are being 
corrected. In addition, companies and State regulators are 
working together in a cooperative as opposed to an adversarial 
fashion.
    What is EPA's response to these innovative State laws? Over 
the past 5 years, the agency has engaged in a systematic 
program to kill the self-audit movement. After trying 
unsuccessfully to persuade States not to pass the laws, the 
agency began a program of intimidation against companies and 
States utilizing self-audit laws.
    For example, in Colorado, several of the companies that 
have utilized the immunity provisions have received requests 
from EPA for information about disclosures. In addition, EPA 
has threatened to overfile in those cases.
    What does EPA's response mean to the audit programs? Well, 
we might as well throw them out the window. If a company comes 
forward with evidence of an environmental violation, it's 
providing a blueprint to EPA. In addition, it's impossible to 
measure the success of environmental audit programs when 
companies are discouraged from using them.
    EPA's response and practice nullifies State laws. Now, 
think about that for a moment. Not only has EPA spent a lot of 
public money to advance its own policy perspective, but without 
even having to do a public rulemaking or a formal hearing, EPA 
can dictate the content of laws to sovereign States.
    EPA's obsession with self-audit laws appears to stem in 
large measure from its obsession with numbers. EPA has always 
measured success in protecting the environment largely by the 
number of enforcement actions brought.
    In Colorado, we have one quick example in Colorado. We have 
a very good school in Colorado called the Colorado School of 
Mines. The School of Mines had some grounds on which there was 
a research institute. That research institute experimented with 
different mining ores. The result was a waste pile.
    A water-main break caused EPA to have to come in and remove 
that waste pile. In the removal, they laid down a lining. The 
pile was put on top the lining, the lining was put there to 
protect the ground, and that is to prevent water from going 
through the waste pile into the ground.
    EPA ordered the State to remove the pile. The State did 
that. After the pile was removed, the State started to build a 
softball field where the pile was formerly located.
    In the process of building that softball field, the workers 
breached the lining. Now, remember, this is the lining that was 
under the pile that's no longer there.
    Even though they breached a liner that lined nothing, EPA 
ordered the State to repair the lining and to pay civil 
penalties. In the end, the State paid thousands of dollars to 
repair a liner that lined nothing, and in civil penalties, 
thousands of dollars that could have been spent actually 
removing threats to the environment.
    Senator Chafee. Ms. Bangert, we're going to have your whole 
statement in the record. I wonder if you could move on to your 
suggestions here, because I think they'd be helpful to us.
    Ms. Bangert. I sure can, Senator, thank you.
    Three suggestions today. First, is that we recognize that 
EPA is very often caught in between its legislative mandates 
and a desire to work with the States. We would suggest that 
there be a short-term task force or a commission that might be 
created to review present laws with an eye toward identifying 
those provisions that prevent EPA from allowing States to put 
their own programs into effect.
    Second, we want to make sure that we identify methods of 
measuring success. As long as we stick with the number of 
enforcement actions models, we're not going to be able to have 
innovative approaches.
    Senator Chafee. Yes, that is a difficult one.
    Ms. Bangert. It is. So we'd recommend a study of this issue 
which might ultimately result in some sort of recommendations 
for changes.
    The final recommendation that we would have is, there does 
need to be greater certainty about overfiling. There may be 
guidelines to penalties, but as far as I know, there are no 
guidelines to when EPA actually overfiles.
    Senator Chafee. Good. That's very helpful.
    Thank you, Ms. Bangert, for those. As I say, your whole 
testimony will be in the record. We appreciate your thoughts on 
that.
    Mr. Tulou, from Delaware.

    STATEMENT OF CHRISTOPHE A.G. TULOU, SECRETARY, DELAWARE 
   DEPARTMENT OF NATURAL RESOURCES AND ENVIRONMENTAL CONTROL

    Mr. Tulou. Thank you, Mr. Chairman and members of the 
committee.
    My name is Christophe Tulou and I have been the Secretary 
of the Delaware Department of Natural Resources and 
Environmental Control since March 1993.
    I appreciate the opportunity to join you today to discuss 
Delaware's enforcement relationship with the Federal 
Environmental Protection Agency. The amount and quality of 
discourse between EPA and the States is greater today than it 
has ever been. We are sharing perspectives on environmental 
goals for the country, providing suggestions on EPA's goals and 
objectives under the Government Performance and Results Act and 
helping develop performance measures to evaluate our success 
under the National Environmental Performance Partnership 
System.
    EPA and the States are not that far apart in terms of a 
shared vision for our Nation's environment. Enforcement and the 
related issue of regulatory flexibility are the areas of 
greatest disagreement between us. Our environmental management 
challenges are diverse and complex, and our Federal laws and 
regulations are often stiff and constraining. Finding room for 
common sense is tough.
    Delaware's enforcement relationship with EPA Region III, 
however, is quite good. Though the relationship continues to be 
positive, our development of a performance partnership 
agreement with Region III has created some friction regarding 
the role of enforcement and environmental management. We are 
proud that Delaware was the second State to adopt a performance 
partnership agreement.
    We wanted to take advantage of EPA's promise to work in 
partnership with Delaware to build the capacity necessary to 
meet our environmental priorities. We sought a relationship 
that recognized that States are at the forefront of 
environmental management, and that the fastest way to our 
mutual goals is through partnership, not paternalism.
    Working very closely with Region III and with the strong 
support of regional administrator Mike McCabe, we jointly 
developed a model partnership agreement. We agreed to move away 
from case-specific reviews of our activities toward a more 
holistic consideration of the State's environmental enforcement 
programs, encouraging innovation and creativity and achieving 
our environmental goals. To that end, the agreement focuses on 
outcomes more than activities or processes.
    Despite these assurances in our agreement, I fear that EPA 
will insist on greater reliance on enforcement specific 
activities, focusing on enforcement for enforcement's sake. We 
have argued since the beginning of the performance partnership 
agreement process that enforcement should be a part of all our 
environmental goals, not a standalone end unto itself.
    In short, we view enforcement as an important tool to 
achieve our environmental goals, not a goal in its own right. 
That disagreement continues.
    We also contend that compliance is a more relevant and 
important programmatic goal than enforcement. We should be 
striving through whatever means to get all our polluters in 
compliance. This distinction between compliance and enforcement 
is crucial in determining what States and EPA should be 
measuring and reporting.
    If enforcement is the goal, then we should continue to 
count beans, such as penalty dollars collected or enforcement 
actions taken. If compliance is the goal, then we should be 
measuring and reporting who is in and who is out of compliance. 
The traditional measures of dollars and enforcement actions are 
less important if compliance is the true goal.
    Measuring compliance is feasible and relevant. Last year, 
just over 70 percent of facilities in Delaware complied with 
hazardous waste regulations at the time of inspection. Within 
30 days of the inspection, the percentage rose to 85 percent. 
Within 180 days, 100 percent of facilities were in compliance.
    Overly aggressive and ill-timed enforcement is a dare. It 
inspires polluters to assume an adversarial relationship with 
their environment and regulatory agencies and to challenge 
enforcers to discover their misdeeds. Neither States nor EPA 
can afford that cat and mouse approach to environmental 
management. Neither can our environment.
    Nonetheless, enforcement is critical. In fact, in Delaware 
and other States, attempting to inject common sense into the 
regulatory process, this stick must be bigger than ever. Those 
polluters who choose not to participate in our compliance 
assistance efforts and those who continually violate 
environmental obligations should face the full force of public 
indignation and legal recourse. In this context, States and EPA 
can forge a powerful partnership that combines the benefits of 
compliance and deterrence.
    Making the philosophical point about compliance and 
enforcement, and arguing the failings of traditional 
enforcement measures is not enough. States have an obligation 
to work with EPA to identify clearly the appropriate role for 
enforcement and how best to measure our success in getting 
polluters into compliance and keeping them there.
    The State and EPA Region III have initiated a process to 
identify which measures of compliance and enforcement would be 
more useful and appropriate than those that are currently in 
use. I would mention that Becky Norton Dunlop and the folks 
from the Commonwealth of Virginia have been active participants 
in that process, and I think we'll be successful as a result of 
our partnership there.
    Our goal is to make recommendations for inclusion in the 
Region III EPA headquarters enforcement memorandum of 
understanding, which will be finalized July 1. I understand 
similar efforts are underway in other EPA regions. As Steve 
Herman and Mark Coleman have indicated, there is a relationship 
between the Office of Enforcement Compliance Assurance and the 
States to develop a better relationship.
    EPA should and I hope will continue to be a crucial 
enforcement partner. We will continue to rely on EPA to assist 
with our bad actors, help with transboundary pollution 
problems, set protective national standards, and assure that 
all States live up to their end of the environmental protection 
bargain.
    We will also continue to work with EPA through performance 
partnership agreements and other means to build the capacity we 
need to meet Federal and State environmental goals. We need EPA 
just as EPA needs the States. That is what partnership is all 
about.
    Thank you again, Mr. Chairman.
    Senator Chafee. Thank you very much, Mr. Tulou.
    Mr. Rubin from Connecticut.

  STATEMENT OF HON. JOSEPH RUBIN, ASSISTANT ATTORNEY GENERAL, 
                      STATE OF CONNECTICUT

    Mr. Rubin. Thank you, Mr. Chairman, members of the 
committee.
    As the head of the Environment Department of Connecticut 
Attorney General Dick Blumenthal's office for the past 7 years, 
I've participated closely in many aspects of the State-Federal 
environmental enforcement relationship. Overall, I've found 
that relationship to be cooperative and productive.
    I would like to focus my remarks on two particular aspects 
of that relationship, which I think provide good examples of 
the relationship at work. The first is a model State-Federal 
working group on water enforcement, and the second is a current 
EPA review of some of Connecticut's State enforcement programs.
    To begin with the model working group, almost 3 years ago, 
we began monthly meetings, including the Connecticut DEP water 
enforcement staff, our attorney general's office, and EPA 
enforcement and legal staff. This group is composed completely 
of working level staff. It has no bureaucratic structure. It 
doesn't operate under any guidance documents. It doesn't have 
any protocols. It doesn't have any memoranda of understanding. 
It's simply a group that instead of making pronouncements or 
fighting about turf sits down and works together on 
enforcement.
    In fact, I think its lack of bureaucratic structure is 
critical to the group's success. What it means is that at each 
meeting we can discuss current and potential enforcement cases 
that have come from anywhere, from inspections, from citizen 
complaints. Together, the group can come to an informal 
consensus about whether a particular problem merits a 
significant enforcement response or not, and if it does, 
together the group can determine which approach will be most 
efficient and effective.
    In reaching this determination, we consider who has the 
best legal tools, who has the available staff, who has the 
discovery tools, whose laws would be effective, who has the 
technical resources. It's important to say, this isn't an all 
or nothing decision. Often, for instance, we'll determine that 
EPA will use its discovery tools and then perhaps a State 
enforcement action will result. Or perhaps the governments will 
work together. In rare cases, we'll decide that a case is 
important enough that it should be prosecuted jointly by State 
and Federal authorities.
    This group accomplishes several very important goals. It 
maximizes the effectiveness of overall enforcement efforts. It 
eliminates unknowing duplication of effort, so everybody can 
best use all of their resources. It reduces inter-agency 
competitiveness, and replaces it with cooperation. In effect, 
by providing each government with the peer review of the other 
government, it provides a real stimulation for everyone to do 
high quality work. In sum, I submit, it gives all taxpayers 
more bang for their environmental buck.
    A second example, and one which is somewhat more 
controversial, is the current ongoing series of reviews, or 
audits, of State environmental enforcement efforts, which has 
been produced by EPA Region I. Region I just completed a draft 
review of Connecticut DEP's enforcement programs about 6 months 
ago. They expect to complete their final report this month, any 
day now.
    I submit that this periodic review process represents an 
excellent compromise and an excellent approach to oversight. 
Rather than reviewing every case as it happens and creating an 
impression on the part of the State that EPA is trying to 
direct everything the State does, instead EPA has initiated a 
peer review process on a periodic basis. I think that 
necessarily has positive results.
    In the first place, any peer review process is likely to 
produce positive results, because some outside review always 
helps to identify strengths and weaknesses. In addition, at 
least in Connecticut's case, our DEP has already taken 
significant steps in response to the draft report to improve 
areas where problems were identified. I think among the results 
we're going to see from that are better documentation and 
therefore more consistency and more fairness in enforcement 
actions and some redirection and increase in staff in certain 
areas where a particular need was identified.
    The report has also very appropriately identified 
situations where the DEP effort was strong. Now, of course, no 
peer review is painless. And maybe in some cases, EPA failed to 
recognize some of DEP's efforts in the first draft. But 
overall, the review process has been very effective and 
beneficial.
    These two examples are certainly not comprehensive. But I 
think they do provide a fair snapshot of successes in the 
State-Federal enforcement relationship. In my experience, they 
are exemplary of the success in that relationship between 
Region I and Connecticut.
    I would urge this committee to continue to encourage the 
unfettered and unencumbered growth of these cooperative 
efforts. I think a national presence is important. We have one 
environment. We need to maintain national standards. I think 
through cooperative efforts such as those that I have 
described, we are making real progress in that direction.
    Thank you.
    Senator Chafee. Thank you very much. It sounds like 
Connecticut's got a very common sense approach to this.
    Senator Warner has to leave, and on my time I'll permit him 
to ask one question.
    Senator Warner. Mr. Chairman, I very much appreciate that. 
I just want to see what the reaction of the various State 
officers are to this question of the effectiveness of the 
consent order as a tool to implement what I believe the goals 
should be under our environmental laws, that is compliance, 
rather than just the financial penalties.
    I wonder if you could, just each of the State officers give 
us your personal and professional opinion as to the use of this 
tool in discharging your responsibilities to your respective 
States. Why don't we start off with Colorado.
    Ms. Bangert. I think the compliance order certainly can be 
an effective tool. But I think that history has shown that 
command-and-control is in large part inadequate by itself to 
achieve environmental improvement, and that we need other 
compliance mechanisms, such as self-audit.
    Senator Warner. Delaware.
    Mr. Tulou. We use them quite a bit, and they generally are 
very effective. What we try to caution people is that that is 
not something to be expected under all circumstances. For bad 
actors who have violated previous consent agreements, another 
option would be appropriate.
    Senator Warner. Connecticut.
    Mr. Rubin. Senator, I agree that consent orders are 
effective in many situations. But they have a major weakness. 
If we rely only or usually on consent orders without penalties 
then it's not clear what incentive industry has to comply 
before we get to them this time with this problem. If there is 
no deterrence in addition to a consent order, you run a risk 
that you're never going to get broad industry-wide compliance.
    Nevertheless, they are valuable in many circumstances.
    Senator Warner. And Virginia.
    Ms. Dunlop. Senator Warner, the fact of the matter is, we 
think consent orders are very valuable. We don't use consent 
orders to the exclusion of fines, as you know. We don't use 
consent orders to the exclusion of the environmental audit 
program. We think these are all tools that need to be 
considered.
    But consent orders have an important value. One, we sit 
down, our Department of Environmental Quality professionals sit 
down with parties and agree on what the mechanism needs to be 
put in place to fix the environmental problem. The money that 
needs to be invested to solve, upgrade, improve the way things 
are run, so that the outcome is an improvement in environmental 
quality.
    Oftentimes in Virginia, the consent orders that are 
negotiated are accompanied by fines. Sometimes those fines then 
can be suspended if the company or the municipality in many 
instances meet the consent order agreements.
    The bottom line, of course, is that for the major entities, 
EPA also has the opportunity to review the consent orders.
    Senator Warner. That's my second--a part----
    Senator Chafee. Well, now, Senator, we----
    Senator Warner. Just a second, Mr. Chairman, otherwise, the 
question dangles.
    What value are these tools if in fact the EPA then can 
somewhat circumvent your ability to follow through with a 
course of action laid down by the State and assess 
unilaterally, so to speak, their own penalties? Because that's 
the issue.
    In other words, it comes down to this question of 
sovereignty, Mr. Chairman, the ability of these State officers, 
to enforce the national laws and the State laws and at the same 
time, how can industry put any reliance? Suppose a man or a 
company went out, a woman, a CEO of a company, and bought $10 
million worth of air equipment to meet the clean air standards. 
Then they're putting it in the plant and all of a sudden EPA 
comes around and decides, oh, no, that's not going to work out.
    Do you want to have Virginia lead off and have each State--
--
    Senator Chafee. No, we can't do that.
    Senator Warner. Well, you asked----
    Senator Chafee. Senator, you asked for some time. You can 
ask for the question in writing. But we've got to move along 
here. You asked on my time, you've used my time up totally.
    Senator Warner. I would ask them to put it in writing, 
then.
    Senator Chafee. That's fine.
    [Information to be supplied follows:]
  Supplemental Testimony of Becky Norton Dunlop, Secretary of Natural 
                  Resources, Commonwealth of Virginia
    This question arises because of an opinion issued by the U.S. 
District Court E.D. Va. (Hon. Rebecca Beach Smith), on May 20, 1997. 
The Court granted the United States' Motion for Partial Summary 
Judgment in its case against Smithfield Foods. The opinion states that:

        Because the Court concludes that Virginia law is not comparable 
        to Section 309(g) [of the Federal Clean Water Act], and thus 
        does not bar the United States from pursuing an independent 
        penalty action against the defendants, the court need not 
        address whether the Commonwealth is diligently prosecuting an 
        administrative action against the defendants.

    I will not comment on the legal merits of the Court's opinion, but 
only on its practical effects. Under this interpretation of the law, 
the EPA will be prohibited from overfiling only if a State enforcement 
scheme essentially mirrors the provisions of the Federal Clean Water 
Act. Thus, a State has two choices: (1) adopt the enforcement scheme 
contained in the Federal law, or (2) obtain EPA approval of each and 
every administrative resolution of enforcement cases. In my view, this 
offends State sovereignty, and makes a mockery of State delegation of 
EPA programs.
    As to the regulated community, the effect is also clear. If the 
State clean water law differs from the Federal one, even in relatively 
minor ways, then companies or local governments must independently 
obtain the concurrence of both the State and the Federal authorities 
for any proposed resolution of a violation.
    Note that in the Smithfield case, the Court did not reach the 
question of whether Virginia was doing a diligent job of enforcing the 
law. A State that is doing a first-rate job can still find itself 
undermined by EPA overfilings.
    The EPA has testified that it has decided to overfile in only a 
handful of the thousands of cases in which it could do so. Based on our 
experience in Virginia, the EPA decisions seem arbitrary, and perhaps 
politically motivated.
    A chronology of events in the Smithfield case is attached. As you 
will see, the Commonwealth has been attending to violations of 
Smithfield's water discharge permit for a number of years, under a 
number of Governors. The consent orders in question were negotiated 
under democratic Governors Baliles and Wilder. EPA had no objection to 
them at the time. During the Allen administration these consent orders 
were reviewed, and found to be sound solutions to the problems at 
Smithfield. We have honored and enforced these consent orders, so that 
very soon Smithfield's discharges to the Pagan River will be reduced--
not just to the level required by Federal and State law, but to zero. 
At the same time, Virginia has aggressively pursued any discharges or 
other violations that are outside the bounds of the consent orders. And 
yet, it is only during the Allen administration that the EPA has seen 
fit to object to the consent orders with its own lawsuit. Whether or 
not it is lawful, such behavior is damaging, irresponsible, and 
suspect.
                                 ______
                                 

  Chronology of Multiple Enforcement Actions Against Smithfield Foods,  
                           Inc. and Subsidies                           
Governor Godwin:                                                        
                                                                        
February 1977..........................  State Water Control Board      
                                          Directive issued to Smithfield
                                          Packing for permit limit      
                                          violations.                   
December 1977..........................  Consent Order approved by State
                                          Water Control Board for ITT   
                                          Gwaltney, Inc. for permit     
                                          limit violations.             
Governor Dalton:                                                        
                                                                        
February 1978..........................  Smithfield Packing referred to 
                                          Attorney General for          
                                          litigation with a request to  
                                          seek civil penalties for      
                                          continued permit limit        
                                          violations.                   
May 1978...............................  Civil settlement of Smithfield 
                                          action previously referred to 
                                          Attorney General, including   
                                          payment of a $100.00 civil    
                                          penalty and payment of        
                                          $25,000.00 to the oil spill   
                                          emergency fund.               
Governor Robb:                                                          
September 1983.........................  Smithfield Packing referred to 
                                          Attorney General for          
                                          violations of Total Kjeldahl  
                                          Nitrogen (TKN) limits in      
                                          permit.                       
January 1984...........................  Isle of Wight Circuit Court    
                                          orders injunctive relief      
                                          against Smithfield for TKN    
                                          violations.                   
June 1984..............................  Gwaltney of Smithfield referred
                                          to Attorney General for       
                                          violations of TKN limits in   
                                          permit.                       
December 1984..........................  Isle of Wight Circuit Court    
                                          fines Smithfield $40,000.00   
                                          for violation of January 1984 
                                          court order.                  
June 1985..............................  Gwaltney of Smithfield, Inc. is
                                          fined $1,285,322.00 in a      
                                          citizen's suit brought by the 
                                          Chesapeake Bay Foundation.    
Governor Baliles:                                                       
                                                                        
May 1986...............................  Consent Order with Smithfield  
                                          Foods granting interim TKN    
                                          limits while they do          
                                          monitoring and modeling to    
                                          determine if permit limits may
                                          be relaxed.                   
January 1988...........................  Consent Order Amendment        
                                          requiring modeling to be done 
                                          based on previous sampling to 
                                          recommend waste load          
                                          allocations for the Pagan     
                                          River.                        
Governor Wilder:                                                        
                                                                        
March 1990.............................  Consent Order requiring        
                                          Smithfield Foods to study     
                                          phosphorous removal and       
                                          evaluate connection to Hampton
                                          Roads Sanitation District     
                                          (HRSD).                       
November 1990..........................  Consent Order Amendment        
                                          requiring Smithfield to       
                                          participate in an HRSD        
                                          feasibility study.            
May 1991...............................  Consent Order Amendment which  
                                          required Smithfield to tie    
                                          their discharge to HRSD once  
                                          the line was constructed and  
                                          made available to Smithfield, 
                                          and to drop their legal       
                                          challenge to the phosphorous  
                                          standard.                     
Governor Allen:                                                         
                                                                        
May 1994...............................  Owners of three (3) permitted  
                                          wastewater treatment          
                                          facilities contact the Board  
                                          of Professional and           
                                          Occupational Regulation (BPOR)
                                          to claim that their signatures
                                          had been forged on Discharge  
                                          Monitoring Reports by Terry   
                                          Rettig, their contract        
                                          wastewater treatment operator.
                                          BPOR forwards copies of the   
                                          complaints to DEQ.            
October 1994...........................  Following careful              
                                          investigation, DEQ concludes  
                                          that Rettig submitted false   
                                          data on behalf of eight (8)   
                                          different facilities,         
                                          including Smithfield Foods.   
November 1994..........................  Consent Order Amendment which  
                                          granted Smithfield interim    
                                          relief from new limits for    
                                          ammonia, cyanide and          
                                          Carbonaceous Biological Oxygen
                                          Demand (CBOD) until the       
                                          connection to HRSD was        
                                          accomplished.                 
                                         DEQ notifies the Commonwealth's
                                          Attorney of Surry County that 
                                          the County may have been      
                                          defrauded by Rettig.          
                                         Federal Bureau of Investigation
                                          (FBI) notifies DEQ that they  
                                          have been contacted by the    
                                          Surry County Commonwealth's   
                                          Attorney and have taken over  
                                          investigation of the Rettig   
                                          matter.                       
December 1994..........................  DEQ turns over documents from  
                                          its investigation of Rettig to
                                          the FBI. In accordance with   
                                          long standing policy and at   
                                          the request of the U.S.       
                                          Department of Justice (DOJ),  
                                          further civil enforcement     
                                          action is suspended pending   
                                          investigation and resolution  
                                          of the criminal case.         
September 1995.........................  FBI requests the assistance of 
                                          DEQ in reviewing and          
                                          evaluating files regarding    
                                          Rettig's activities at all    
                                          eight (8) facilities.         
October 1995...........................  DOJ obtains subpoenas for      
                                          multiple permittees, including
                                          Smithfield Foods, who had     
                                          dealings with Terry Rettig.   
February 1996..........................  DOJ releases DEQ to continue to
                                          pursue civil enforcement      
                                          action against Smithfield     
                                          Foods. DEQ resumes preparation
                                          of the civil enforcement case.
April 1996.............................  DEQ's Tidewater Regional Office
                                          (TRO) notifies Smithfield     
                                          Foods of the pending DEQ      
                                          enforcement action, which     
                                          includes the potential        
                                          referral of Smithfield to the 
                                          Attorney General.             
                                         HRSD notifies Smithfield that  
                                          hookup will be available in   
                                          June 1996. (Smithfield must   
                                          connect to comply with its    
                                          1991 Order.) DEQ is informed  
                                          that Smithfield may refuse to 
                                          connect to HRSD.              
                                         DEQ Central Office of          
                                          Enforcement suggests that the 
                                          referral to the Attorney      
                                          General be temporarily        
                                          deferred in order to determine
                                          which specific violations of  
                                          the permit are unrelated to   
                                          the prior orders and to       
                                          determine whether Smithfield  
                                          will violate the May 1991     
                                          order by refusing to connect  
                                          to HRSD in June.              
June 1996..............................  Smithfield connects its        
                                          discharge to the HRSD line as 
                                          required by the May 1991      
                                          order. TRO, Central Office and
                                          the Attorney General continue 
                                          to develop the enforcement    
                                          case.                         
August 1996............................  DEQ discovers that EPA has     
                                          referred Smithfield to DOJ for
                                          civil enforcement action      
                                          without notifying Virginia.   
                                         Virginia files suit against    
                                          Smithfield Foods for multiple 
                                          violations of Virginia's State
                                          Water Control Law.            
December 1996..........................  The United States files suit   
                                          against Smithfield Foods for  
                                          multiple violations of the    
                                          Clean Water Act, including    
                                          alleged phosphorous           
                                          ``violations'' which are      
                                          appropriate only under the    
                                          interim limits provided in the
                                          State Water Control Board     
                                          Orders.                       
June 1997..............................  Smithfield activates the second
                                          hookup and begins diverting   
                                          waste to HRSD, as required by 
                                          the Commonwealth's 1991       
                                          Consent Order. When this      
                                          hookup reaches full capacity, 
                                          Smithfield's discharge to the 
                                          Pagan river should be reduced 
                                          to zero.                      
                                                                        

                                 ______
                                 
  Response by Joseph Rubin to Senator Warner's Request for Additional 
                              Information
    Senator Warner has asked me to address his concern that EPA 
enforcement actions following State consent decrees could undercut the 
States' sovereign authority and industry's reasonable reliance upon 
settlements with the States. My practical response to this concern is 
that I have never seen this problem arise. In my experience, EPA has 
not overfiled or taken separate additional enforcement action after a 
State has taken appropriate action. In addition, in my experience, when 
a business has a good faith concern as to whether a settlement with a 
State will also satisfy EPA's concerns, the business can obtain an 
answer from EPA. In fact, I have recently heard Mr. Herman, who is in 
charge of EPA enforcement, State affirmatively that it is EPA's policy 
to answer such questions.
    Of course, our Federal system, with dual sovereigns, is always in 
some degree of dynamic tension. That tension is inherent in our chosen 
system of government. I have seen no practical problems, however, where 
EPA's enforcement efforts have undercut appropriate State enforcement 
activities. In sum, I see no major problems with present practices 
regarding the interplay of the State and Federal enforcement systems. 
As I explained in my testimony, I do see excellent examples of a strong 
cooperative working relationship between EPA Region 1 and the State of 
Connecticut.

    Senator Chafee. Senator Baucus is next.
    Senator Baucus. Very quickly, Mr. Chairman. I assume that 
all of you agree there are appropriate circumstances when 
overfiling is appropriate? Does anybody disagree with that 
statement?
    Or I'll State it differently. Is there anyone who believes 
that overfiling is never appropriate?
    [No response.]
    Senator Baucus. There is no one who believes that 
overfiling is never appropriate. So you all agree that there 
are cases when overfiling is appropriate?
    Mr. Coleman. There are also cases where direct Federal 
action is appropriate.
    Senator Baucus. Correct. I'm just now addressing 
overfiling.
    Ms. Dunlop. We agree in Virginia that there are not only 
cases where it possibly is appropriate, but that the law 
provides that. We do think, however, that when EPA talks about 
partnerships, that it would be appropriate for them to consult 
with the State before they take that step.
    Senator Baucus. Absolutely. I don't think anybody has any 
quarrel there.
    No further questions, Mr. Chairman. But I would just hope 
that frankly some of these outfits, and you've talked about 
some commissions, some studies, Ms. Bangert, do help work with 
EPA and establish guidelines when overfiling would occur, I 
suppose, or not occur, so there's a little better 
understanding.
    Senator Chafee. I must say, Mr. Rubin's testimony indicated 
there is some cooperation which seems helpful. I think Mr. 
Coleman's involved with that himself.
    Mr. Coleman. Yes, sir.
    Senator Chafee. Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman. I'm sorry, I had 
to leave for just a few minutes there, and I don't want to ask 
any questions that have already been asked. But just let me 
address, to our Oklahoman, Mr. Coleman, a couple of things. You 
were here when the previous panel was here, weren't you, Mr. 
Coleman?
    Mr. Coleman. Yes, sir.
    Senator Inhofe. I made the comment, and it was responded by 
the different representatives of the EPA that that was last 
year's war, they're referring to the policy of measuring 
performance by the amount of fines and cases. Do you think that 
was last year's war?
    Mr. Coleman. No, sir.
    Senator Inhofe. You feel that's still going on? There's 
some evidence there in Oklahoma, of course, you represent, you 
chair a national board in this.
    Mr. Coleman. That's correct. That issue remains an issue.
    Senator Inhofe. Let me ask you another question. I'm going 
to be, I'm the chairman of the subcommittee of this committee 
called the Clean Air, Property Rights, Wetlands and Nuclear 
Safety.
    As you know, Administrator Browner came out with her 
changes in the national ambient air quality standards 
recommendation, and if that should become a reality, I've often 
said in the five committee meetings we've had that I would 
consider that to be an unfunded mandate. The response we get 
is, well, it's not an unfunded mandate, because we wouldn't be 
emanated, we would merely be saying to the States, you have to 
come up with a program that is going to bring your State into 
attainment.
    Now, how do you view that from an enforcement position? 
Would you consider that to be an unfunded mandate? Share with 
us what your thoughts would be in terms of Oklahoma. Should 
these rules that she's suggesting become a reality, I believe 
it's July 19?
    Mr. Coleman. We have worked very hard, as you're aware, in 
Oklahoma, to come state-wide into compliance with the clean air 
standards. The new Federal Clean Air Act is a very encompassing 
law. It's an Act that I hope at some time that you all take up 
the opportunity to look at in some detail.
    But if the standards were changed and we were to fall into 
non-attainment, the actions that we would have to take would be 
such that we would be dipping very deeply into the common, 
everyday activities, of everybody in our State. We've done 
everything we know how to do already.
    Senator Inhofe. Let me ask you this. Would you be able, 
from an enforcement perspective, let's take the particulate 
matter, if that were to drop down to PM2.5, is the 
science there and your ability there to offer some type of 
enforcement?
    Mr. Coleman. At this point, we don't know enough about the 
sources of the particulates to figure out where we would take 
actions. That is something as far as we're concerned that's 
very, very nebulous in terms of the science that exists to 
determine what type of enforcement actions we'd need to take.
    Senator Inhofe. Mr. Coleman, I see we're getting real close 
to running out of time here, but in Oklahoma, I've heard a lot 
of things about your compliance assistance program. Could you 
real quickly explain to the committee how it works? Because 
it's gotten some national attention.
    Mr. Coleman. Yes, sir, thank you. About 5 years ago we 
introduced what we call a customer assistance program. We were 
the first State to use that term and develop that program. I 
believe virtually every State, and I know every EPA region and 
obviously headquarters now also uses that term, where there's 
some attempt to reach out to those that we regulate and try to 
help them come into compliance.
    Not that we didn't do that in some limited way before. But 
certainly, particularly as the new Clean Air Act comes into 
play, and as we realize the far-reaching impacts of the 
regulatory net, particularly as it relates to small business, 
the only way we can help those people to ever have a chance of 
attainment is for them to know what they need to do. Our 
customer assistance program is designed to tell people what it 
is they need to do.
    Senator Inhofe. Yes, it's working very well. Thank you very 
much.
    Senator Chafee. Thank you, Senator.
    Regrettably, I have to go. The majority leader has asked me 
to come over to a meeting. Senator Baucus is kind enough to----
    Senator Inhofe. I don't mind staying for a little while 
here.
    Senator Chafee. Senator Baucus will preside, and I want to 
express my regrets to the third panel. If I can get back, I 
certainly will.
    But meanwhile, Senator Lautenberg has a chance for 
questions. I want to thank everybody on this panel and express, 
as I say, express my regrets to the next panel. Senator Baucus, 
thank you very much.
    Senator Baucus [assuming the chair]. Senator Lautenberg.
    Senator Lautenberg. Thank you very much, Mr. Chairman.
    Mr. Coleman, in response to Senator Baucus' question 
before, about when if at all the Federal actions are necessary, 
you said that they indeed are at times. I read your statement 
here, State officials feel that once a program is delegated, 
EPA must, should be most concerned with the overall program 
effectiveness, and not about the details how a State handles 
each individual enforcement.
    So there is a role for Federal action, if the State doesn't 
enforce the environmental obligation as we understand it.
    Mr. Coleman. Yes, sir.
    Senator Lautenberg. One of the things I think we fail to 
recognize here, at least fail to discuss at times, is the fact 
that when there's an assault on the environment, whether it 
comes from Colorado, where my son lives and makes his living, 
or any other place, the fact is that if you dump into a river 
that feeds any of the neighboring State's activities, possibly 
drinking water or fishing and so forth, that you ought not to 
have the right to spoil my environment just because I'm one of 
the eastern-most States in the country and the prevailing winds 
are west and the air pollution carries very well through the 
air.
    So if we can agree on that, and I sense that the mission of 
some of the witnesses is to paint EPA as a sinister force 
trying to embrace all the powers that are relegated to the 
States, and their whole mission is to sneak around and punish.
    As far as I'm concerned, I can tell you, I want them out 
there enforcing the law. I want them to clean the environment 
for my grandchildren. Because if there's one thing that I want 
to leave my grandchildren, it's a clean environment. I want my 
grandson to be able to go fishing and know that there are still 
fish in the streams, fish in the streams or fish in the ocean.
    Ms. Dunlop, you suggested in your comments most directly 
that there might be something of a political nature in the few 
cases that had Federal intervention as an overfiling. What I 
sensed is you wanted them out on one hand and you wanted them 
in on the other.
    So they're damned if they don't file more cases, because 
you said, well, these four maybe had a political reason for 
EPA's involvement. Then you complained in your earlier remarks 
about too much involvement by the Federal Government. Do you 
want more or less? I'm not exactly sure what you're talking 
about.
    Ms. Dunlop. First of all, my comments were pointed at Mr. 
Herman's remarks, where he talked about what a great record 
they have of only overfiling in four instances when they had 
20,000 opportunities.
    Senator Lautenberg. I didn't say he was boasting. He was 
reporting. I asked him how many cases there were.
    Ms. Dunlop. Yes, he was reporting. I will tell you, 
Senator, that in the instance that the previous panel spent 
considerable time on this morning discussing, in Virginia, the 
Smithfield case, we do think there was something political 
about that. I'd be happy to share with you some of the details 
of that case, without getting into the----
    Senator Lautenberg. I'm going to help refresh everybody's 
memory. This is a report, this is written in a newspaper, so it 
could very well be wrong. It says that Smithfield was late in 
reporting a violation at least 164 times, violated clean water 
laws as many as 5,330 times, the pollutants they dumped in 
there were fecal coliform bacteria, cyanide and phosphorus. I 
wouldn't like that in my cocktail, I'll tell you that.
    The judge later left for a penalty phase to the court 
proceeding a formal determination of the number of violations, 
each of which can carry $25,000 penalty.
    It's the defendants, the judge wrote, and not the public, 
who are discharging into the Pagan River.
    Did the judge, by the way, in this case, issue a wrong 
opinion, in your judgment?
    Ms. Dunlop. No, we think the judge will have another 
opportunity in August to take a look at the Virginia case and 
perhaps have some different comments.
    Senator Lautenberg. So there is an inference that the judge 
didn't exactly come down, in your view, with the right 
decision, if the suggestion is that she'll have a chance to 
review it later on. Does that suggest it will correct some of 
the impressions?
    Ms. Dunlop. There's no question, Senator, that the EPA does 
have a right to overfile and the facts of this cases were well 
noted by the judge. There are----
    Senator Lautenberg. Are you satisfied with the action that 
the environmental department in Virginia took with Smithfield?
    Ms. Dunlop. Yes. I think the Department of Environmental 
Quality has taken the proper action. As you probably know, 
having studied this case, the consent order was agreed to by 
appointees of former Governor Robb and former Governor Baliles, 
it was negotiated by former Governor Doug Wilder's 
administration in 1991 and approved by a sitting Democrat 
attorney general, the lieutenant Governor of the Commonwealth 
at the time was a Democrat and had no comment on it.
    This was in 1991.
    Senator Lautenberg. So what you're pointing out is that 
this was largely political.
    Ms. Dunlop. No, what I'm----
    Senator Lautenberg. I asked you if you were satisfied not 
with the performance of Democrats or Republicans, I asked you 
if you were satisfied with the performance of the State of 
Virginia in curbing this dumping, this pollution.
    Ms. Dunlop. Yes, but what I'm telling you, Senator, in 
1991, the offices of all these Democrat appointees in Virginia, 
elected Democrat officials, agreed upon a consent order with 
Smithfield to clean up the river. The Environmental Protection 
Agency over----
    Senator Lautenberg. I didn't suggest it was Republican. Why 
do you persist in identifying them as Democrats? I don't care 
who it was, Democrats or Republicans, they have no right to 
cooperate or conspire with a company to dump into that river.
    Ms. Dunlop. They did not conspire with the company. They 
came to an agreement on the cleanup. The consent order was 
reviewed by the Environmental Protection Agency, as all major 
consent orders are, in 1991. There was no action by the 
Environmental Protection Agency on this case until 1996.
    Senator Lautenberg. Right. They depended on the company and 
on those in Virginia who were responsible for administering the 
law, for enforcement, to clean up their act.
    Ms. Dunlop. That was happening, sir. The consent order was 
being complied with just as it was written. The terms of the 
consent order were that the DEQ in Virginia and the attorney 
general would file a civil action and require payment in fines 
and other terms once the hookup was completed to take care of 
all those actions that occurred from 1991 on. I think that's 
what will be brought out in the subsequent court case.
    Senator Lautenberg. For 3 of the past 4 years, Virginia has 
ranked last in the 10 States in the region in collecting fines 
from water polluters.
    Thank you very much.
    Ms. Dunlop. Thank you.
    Senator Baucus. I just have a general question of all of 
you. We live in a very complex country. I'm sorry, Senator, did 
you have a question?
    Senator Inhofe. Just a couple.
    Senator Baucus. I apologize.
    Senator Inhofe. It's funny how you can get two different 
inferences hearing the same person talk. I think Ms. Dunlop, 
when I heard your references to Democrat and Republican, I got 
the impression you were showing it was not partisan, as opposed 
to being partisan.
    Ms. Dunlop. Yes, sir, Senator. That was my intention. We in 
the Allen administration who are Republicans reviewed the 
consent order that had been negotiated by previous Democrat 
office holders, and agreed that it was the right track to take 
and the river was being cleaned up. We had no input from EPA 
indicating, in 1994 when we took office, that they disagreed 
with this consent order. We did not hear from EPA until they 
announced publicly that they were filing suit, which was after 
we announced that we were filing suit.
    Senator Inhofe. Well, that's exactly the message I got. I 
have to make one comment, if I could, Mr. Chairman, about the 
reference made to the Gestapo tactics. I can assure you that 
there are Gestapo tactics by the EPA. I think of the story I've 
told so many times, I have about 20 of them that Administrator 
Browner gets tired of hearing.
    One was the guy that owned the lumber company in Oklahoma 
who had disposed of his crankcase oil legally 10 years ago to a 
licensed contractor, licensed by the Federal Government and the 
County of Tulsa and the city of Tulsa and the State of 
Oklahoma. Only to come back and receive a letter from the EPA 
saying that they're going to invoke fines of $5,000 a day 
because some of that was traced to a Superfund site.
    Now, recognizing that they can't go through with that, it's 
the idea, the tactic, the fear that is instilled in these 
people who are out there and are the law-abiding taxpayers, who 
are paying for all this fun we're having up here. Just a 
thought, Mr. Chairman.
    Senator Baucus. I'd like to ask you as a panel whether you 
don't think that still, by and large, this system works pretty 
well. We have a very complex, very large country. It's not 50 
countries, it's 50 States in one country--a federalist system. 
It's very complicated. Each State is different. Each region is 
different. Each company is different.
    This is not an easy matter. I think most people who serve 
in the State capacity or Federal capacity are trying to do a 
good job, as each person sees it. Of course, there's a little 
bit of localism, people tend to see the world from their 
perspective.
    I'd like to ask you generally if you think the system, for 
all of its warts, still works pretty well. Are the bad actors 
disciplined? Most people aren't bad actors. They may slip here 
and there, but by and large, most people, most companies, most 
independent operators, probably do a pretty good job.
    Do any of you agree with my assessment? If you disagree, 
where would you like the laws to be significantly changed? I'm 
not talking about working around the edges. I'm talking about a 
major change in the law.
    Mr. Tulou. Mr. Chairman, I'd just like to say that I 
generally agree with you. I think what we're dealing with here 
is less a statutory issue than it is a cultural issue. I think 
the environmental movement is phasing into a quiet revolution. 
We've gone through 20 or 25 years of command and control where 
we had to do a lot of aggressive activity in order to get 
peoples' attention.
    I think the educational process has gone a logical course. 
I think we at the States and EPA are in the process now of 
trying to figure out how to go from here. I think we need to 
shift some gears. I think we need to think in terms of broader 
environmental goals, shoot for those environmental goals, worry 
a little less about the bureaucratic and programmatic 
objectives that we might have, and rely a little bit more on 
the understanding of their responsibility that our industrial 
constituents have and work in partnership better to try to find 
the best way to get to compliance.
    Senator Baucus. But I sense that you all are trying to do 
that.
    Mr. Tulou. We are. I think we're struggling right now 
because I think there are pockets in State government and EPA 
where that mind shift is not taking place. I think that's a 
source of a lot of the problem.
    Senator Baucus. It's important to point out some of the 
problems. But I think it's much more important to look for some 
of the solutions here. I think you're focusing on that.
    A few years ago, I think it was 1994, I asked Administrator 
Browner what grade she would give to the Federal-State 
relationship. She gave it then, in 1994, a B. I'd like to ask 
you what grade you'd give it, at least with respect to 
enforcement. Any of you.
    Ms. Bangert. On behalf of Colorado----
    Senator Baucus. Now, remember, this works both ways. We're 
talking about the relationship, we're not talking about EPA. 
We're talking about the relationship.
    Ms. Bangert. I think the relationship in Colorado right 
now, and this can change, sometimes from month to month, 
sometimes from year to year.
    Senator Baucus. Just generally during the last year or so.
    Ms. Bangert. I'd say a C.
    Senator Baucus. Anybody else? Mr. Rubin?
    Mr. Rubin. Senator, I'd say it's been an A in Connecticut.
    Mr. Tulou. B plus.
    Mr. Coleman. I'd say it depends on what part of the agency 
you're talking about. If you're talking about the upper levels, 
like the assistant administrator for enforcement, Mr. Herman, 
he's certainly a man, and his immediate staff are people that 
are highly committed. They believe in what they're doing and I 
think they're trying to effect a change. There's a need for a 
change.
    Our programs have matured. Our programs are not like they 
were when the acts were first passed. Our most recent act is 
the Clean Air Act.
    Senator Baucus. Just roughly, today. The Clean Air Act 
passed a long time ago. I'm talking about now.
    Mr. Coleman. In terms of which act needs to be attacked 
first----
    Senator Baucus. No, generally, the enforcement 
relationship, Federal-State relationship with respect to 
enforcement, just generally.
    Mr. Coleman. Generally, it's probably still a B. It's 
probably an A with the top, it's probably a C with some of the 
rest.
    Senator Baucus. Ms. Dunlop.
    Ms. Dunlop. I guess I came through public schools when 
grades were tougher. I would say a C. By and large, our 
technical people have an excellent working relationship with 
EPA. But I think average is what we're looking at now. I think 
States are----
    Senator Baucus. Well, what needs to be done to improve it 
without blaming somebody?
    Ms. Dunlop. I don't know that--well, let me just say this. 
First of all, the Environmental Protection Agency needs to 
focus the same and perhaps more resources on the Federal 
Government facilities in States which in many instances are the 
cause of most of our serious pollution problems, at least in 
the Commonwealth of Virginia. And they need to be more 
cooperative with the other Federal agencies.
    For instance, on this Smithfield case, Senator, we held up 
our filing at the request of the Department of Justice.
    Senator Baucus. What must States do to improve cooperation? 
What must Virginia do to improve the cooperation?
    Ms. Dunlop. I think we need to continue to have these 
exchanges of information. The Connecticut experience I think is 
one that can be more greatly utilized in Virginia.
    Senator Baucus. That's good.
    Thank you very much, all of you. We appreciate your help.
    We'll now move to our third panel, which consists of Mr. 
Todd Robins, environmental attorney at U.S. Public Interest 
Research Group; Professor Robert Kuehn, law professor at 
Tulane; and Mr. Robert Harmon, chairman of the board of Harmon 
Industries, Blue Springs, MO.
    Mr. Harmon, why don't you proceed.

    STATEMENT OF ROBERT E. HARMON, CHAIRMAN OF THE BOARD OF 
 DIRECTORS, HARMON INDUSTRIES, INC.; ACCOMPANIED BY: TERRY J. 
SATTERLEE, ESQ., LAW FIRM OF LATHROP & GAGE L.C., KANSAS CITY, 
                               MO

    Mr. Harmon. Mr. Chairman and members of the committee, my 
name is Robert E. Harmon. I'm chairman of the board of Harmon 
Industries, Inc.
    I appreciate the opportunity to appear before the committee 
this morning to discuss important issues of Federal-State 
relations in enforcement of the environmental laws. I am 
accompanied today by Harmon's attorney, Ms. Terry J. Satterlee, 
of Lathrop & Gage of Kansas City.
    With your permission, I would like to read a brief 
statement explaining the reasons for Harmon's interest in this 
important issue.
    Harmon Industries is a leading supplier of railroad signal 
and train control and related equipment for use in the railroad 
industry. The company is headquartered in Blue Springs, MO, and 
has assembly and manufacturing facilities across the country. 
My father founded the company, which is now Harmon Industries, 
in 1946. Today, Harmon employs more than 1,500 workers 
throughout the United States had sales of more than $175 
million in 1996. The company stock is publicly traded on the 
NASDAQ national market system.
    I believe that Harmon's case well illustrates the way in 
which conscientious, regulated industries who are seeking in 
good faith to comply with their obligations under the 
environmental laws can be whipsawed by the EPA's claimed 
``overfiling'' authority. If the EPA has this authority, 
regulated industries cannot negotiate binding agreements with 
authorized State agencies since the EPA may later disagree with 
and completely override the State's resolution.
    One of Harmon's facilities is located in Grain Valley, MO, 
which is a rural, agricultural area outside of Kansas City. The 
Green Valley plant assembles circuit boards for use in railroad 
control and safety equipment.
    As was common practice in our industry, prior to 1987, 
Harmon employees used small amounts of organic solvents to 
remove soldering flux from the circuit boards they were 
assembling. The solvents were kept at the employees' work 
benches in small jars. Residues were collected in a 3 to 5 
gallon pail and, unfortunately dumped by Harmon maintenance 
employees approximately once every 1 to 3 weeks on the ground 
outside the back door of the Grain Valley plant. This practice 
probably began in the late 1970's.
    Harmon's management was unaware that the employees were 
disposing of used solvents until the practice was discovered 
during a routine internal safety inspection in November 1987.
    In December 1987, while its investigation was ongoing, 
Harmon changed its assembly process to a State-of-the-art 
technology using non-hazardous cleaning material rather than 
organic solvents to remove soldering flux from the equipment 
being assembled. As a result of these changes, Harmon ceased 
generating hazardous waste at the Grain Valley facility. These 
changes had an initial cost of $800,000, and Harmon incurs an 
ongoing cost of $125,000 a year as a result.
    Since 1988, the MDNR reported the status of the ongoing 
investigation to the EPA during quarterly program meetings, and 
promptly provided the EPA with copies of significant 
correspondence, plans and other documents concerning the MDNR's 
dealing with Harmon. In the end, Harmon's environmental 
consultants concluded that the contamination at the Grain 
Valley plant was limited and posed no threat to human health 
and the environment.
    In a State court consent decree, negotiated between Harmon 
and MDNR, MDNR imposed regulatory sanctions on Harmon, but 
agreed not to seek monetary penalties against Harmon based on 
its voluntary self-reporting and its prompt action to 
investigate and remedy any contamination.
    Senator Baucus. Mr. Harmon, your 5 minutes have expired. 
How much farther do you have to go?
    Mr. Harmon. I'm very close.
    Senator Baucus. That's in the eye of the beholder. How 
about, can you wrap up in 1 minute?
    Mr. Harmon. The decree specifically provides that Harmon's 
compliance with the consent decree constitutes full 
satisfaction and release from all claims arising from 
allegations contained in the plaintiff's petition. The consent 
decree provides in paragraph 23(a) that it will terminate when, 
among other things, the MDNR issues a post closure part (b) 
permit. This condition was satisfied on July 31, 1996.
    Even though MDNR has been authorized by EPA to run the RCRA 
program in Missouri, and despite Harmon's extensive dealings 
and settlement with MDNR, after the entry of the State court 
decree, the EPA continued to pursue a separate Federal 
administrative action, seeking over $2.7 million in RCRA 
penalties. The EPA sought these penalties for exactly the same 
conduct that Harmon was the subject of Harmon's State court 
decree with the MDNR.
    I will stop at that. I have a few more paragraphs.
    Senator Baucus. Thank you.
    Professor.

STATEMENT OF ROBERT R. KUEHN, PROFESSOR, TULANE LAW SCHOOL, NEW 
                          ORLEANS, LA

    Mr. Kuehn. Good morning, Mr. Chairman and members of the 
committee. My name is Robert Kuehn, and I'm a professor at 
Tulane Law School in New Orleans. I teach classes in 
environmental enforcement, environmental advocacy and hazardous 
waste regulation.
    I'd like to discuss the results of some research I 
published last year of the appropriateness of devolving all or 
most enforcement of Federal environmental laws in the hope it 
might aid you in reviewing the Federal-State enforcement 
relationship. Part of my work focused on utilizing the non-
ideological public policy criteria of effectiveness, efficiency 
and equity to compare federally run enforcement programs with 
State-run programs.
    Focusing on effectiveness, as you've heard today, one 
problem in trying to compare Federal and State enforcement is, 
there is no consensus on how to define and measure effective 
enforcement, since it could be characterized by enforcement 
outputs, such as the number of enforcement actions or outcomes, 
for example, to increase compliance or lessen pollution.
    When they did look at some of the available effectiveness 
evidence, the General Accounting Office found that the track 
record of States in assessing penalties and recovering the 
economic benefits of non-compliance ``is even more 
disappointing than the record of EPA.'' Such data, however, is 
complicated by the fact that while EPA may impose larger 
penalties, its cases do tend to focus more on serious offenses. 
In addition, as numerous speakers today have noted, penalty 
amounts alone do not necessarily define effective enforcement.
    We do know, however, that historically, when the Federal 
Government has reduced enforcement and increased State 
responsibilities, States have also tended to reduce their 
regulatory activities. Therefore, reducing Federal enforcement 
could even decrease the effectiveness of States.
    Turning to efficiency, lack of data prevents a conclusion 
on the relative efficiency of Federal and State enforcement 
programs. It is clear, though, that Federal enforcement is 
actually a source of revenue for the Federal Government, taking 
in $3 to $25 for every dollar spent on enforcement.
    While the overlap that occurs because of the existence of 
both Federal and State enforcement programs, or from overfiling 
cases, would appear to be inefficient, this dual enforcement 
can have significant deterrent benefits that are otherwise not 
available alone. In fact, the mere threat of Federal 
enforcement clearly enhances the success of State programs, but 
makes it difficult to judge the efficiency or effectiveness of 
State programs in the absence of the threatened release of what 
has often been referred to as the EPA gorilla waiting in the 
closet.
    Finally, pragmatic devolution of enforcement requires that 
it be vested in a level of Government that can assure equitable 
treatment of businesses and citizens. As markets for goods and 
services have become increasingly national, a centralized 
enforcement program is in a unique position to provide 
consistent, nationwide enforcement.
    Only a significant Federal program can ensure that a 
company operating in a State with lax enforcement does not 
obtain a competitive advantage over a firm operating in a State 
with more rigorous enforcement Consistent Federal enforcement 
therefore maintains a level playing field and minimizes market 
imbalances that may result from an equal enforcement among the 
States.
    In addition, if the rationale for the national standards 
that are legislated by Congress is that each citizen has a 
right to the same level of environmental quality. Many citizens 
could lose this uniform level of protection if there were no 
Federal enforcement to ensure that all States provide 
fundamental environmental protection.
    In conclusion, although the data is limited, if we take a 
pragmatic approach to devolution of enforcement, there is still 
a need for Federal enforcement and little support for dramatic 
devolution of Federal enforcement. This is not to say that the 
Federal-State enforcement relationship could not be improved. I 
commend EPA and the States for their efforts in developing 
oversight reform proposals, such as the new enforcement 
performance measures, differential oversight and greater use of 
block grants.
    I hope the committee will encourage the States to gather 
additional data on effectiveness and efficiency, so that 
disputes over the proper mix of Federal and State enforcement 
can be resolved on sound public policy grounds. I also hope 
that you will encourage Federal and State officials to continue 
to cooperate on enforcement so that the public will receive 
what they want and need, a Government program, whether Federal, 
State or both, that effectively, efficiently and equitably 
enforces Federal environmental laws.
    Thank you.
    Senator Lautenberg [assuming the chair]. Thank you very 
much, Professor.
    Mr. Robins.

STATEMENT OF TODD E. ROBINS, ESQ., ENVIRONMENTAL ATTORNEY, U.S. 
                 PUBLIC INTEREST RESEARCH GROUP

    Mr. Robins. Thank you.
    Good morning, Mr. Chairman and members of the committee. My 
name is Todd Robins. I'm an environmental attorney with the 
U.S. Public Interest Research Group, the national lobbying 
office for the State PIRGs, which are non-partisan, non-profit 
watchdog organizations active in 30 States around the country 
with nearly a million citizens members.
    I also chair the enforcement work group of the clean water 
network, a national coalition of more than 900 groups.
    I would like to say at the outset that I believe many of 
today's speakers share the same goal, which is compliance with 
the law in the first instance, in order to achieve the 
objective of a cleaner environment. I am here today to 
demonstrate that the way we get there is not by voluntary 
approaches that rely on little more than industry's good 
intentions, but instead, by creating a constructive partnership 
between EPA, the States, and citizens that maintains a genuine, 
firm a predictable threat of serious consequences for those who 
choose to violate our pollution laws.
    Specifically, I'd like to make three points. The first is 
that the failure or unwillingness of States to enforce the law 
has encouraged widespread violations of our environmental laws 
and promoted an atmosphere in which it simply pays to pollute. 
The second is that despite important instances of Federal 
intervention, the EPA is not doing enough to ensure the 
integrity of the programs it oversees.
    Finally, the no-nonsense approach to Clean Water Act 
enforcement that we have seen in New Jersey since 1990, 
characterized by mandatory minimum penalties for serious 
violations, has been remarkably successful, and should serve as 
a national model for enforcement of the Clean Water Act and 
other Federal environmental statutes.
    Recently, representatives of polluting industries have made 
the claim that environmental compliance is the rule, not the 
exception. Our research, however, tells a very different story. 
In March of this year, U.S. PIRG released our dirty water 
scoundrels report, in which we found that nearly 20 percent of 
the largest water polluters in this country were listed by EPA 
in significant non-compliance with the Clean Water Act in at 
least one quarter from January 1995 through March 1996.
    What's more, these EPA numbers are probably just the tip of 
the iceberg. When we looked at industry's self-reported 
discharge data for the first quarter of 1996, we found that the 
number of large, industrial polluters that exceeded their 
pollutant limits by 50 percent or more was more than three 
times the number that EPA had listed in significant non-
compliance for that quarter.
    So not to rain on the parades of those who assert that 
compliance and environmental quality are not necessarily 
connected, but the latest statistics also show that 40 percent 
of our waters remain unsafe for fishing and swimming. We think 
that these findings, when taken together, as well as those of 
the EPA inspector general regarding air violations in 
Pennsylvania, demonstrate gross and unacceptable levels of 
noncompliance with our environmental laws.
    The question then is why are serious and chronic violations 
so widespread. The answer, to us, is obvious. Environmental 
laws are not being enforced effectively. This problem of 
inadequate State enforcement is not a new one. But in many 
States, it appears to be growing worse. A significant number of 
States around the country have explicitly reduced or even 
dismantled already weak and underfunded environmental 
enforcement programs, with the promise that voluntary, 
handholding compliance assistance efforts will achieve 
compliance more efficiently.
    Our research shows that that promise has been broken. We 
have compiled evidence from around the country showing that 
while numbers of inspections, enforcement actions and penalties 
have declined rapidly and dramatically in many States, rates of 
noncompliance have remained persistently high, and in some 
States, have worsened.
    While this evidence is presented comprehensively in my 
written statement, brevity requires that I share just a few 
brief examples of go easy State enforcement that may be of 
interest to members of the committee. For example, in Oklahoma, 
the State Department of Environmental Quality has collected a 
total of $1,000 for water pollution violations in the past 3 
years. Meanwhile, approximately 26 percent of the largest water 
polluters in Oklahoma were listed by EPA in significant 
noncompliance at least once during that same 3 year period.
    In Florida, penalties assessed by the State Department of 
Environmental Quality are down in some areas by 90 percent. Yet 
87 different facilities in Florida were listed by EPA in 
significant noncompliance with the Clean Water Act in 1995 and 
1996. What is worse is that a substantial number of those 
polluters were violating out-of-date permits. Forty-one percent 
of Florida's major industrial facilities are currently 
operating with expired permits, according to EPA.
    While these examples represent only a sampling, what they 
illustrate is alarming. Weak enforcement at the State level 
encourages noncompliance. Without a credible, predictable 
deterrent that makes it more expensive to break the law than to 
comply with it, polluters have little incentive to clean up 
their acts, and law abiding companies who take their 
environmental responsibilities seriously are disadvantaged.
    Given the eagerness of many States to turn their backs on 
enforcement, we believe that EPA must step up to the plate to 
ensure the integrity of the programs it oversees. While a non-
intrusive oversight role may be appropriate when State 
enforcement is functioning as it should, under current 
circumstances in some States, it is critical that EPA act to 
guarantee that minimum national standards are met.
    Some recent cases, including the Smithfield Foods case, 
indicate that Federal intervention can provide the bottom line 
in protecting public health and the environment, when States 
fail to fulfill their delegated responsibilities. However, EPA 
could be and should be doing more. Despite complaints about EPA 
overfiling by State officials, the EPA enforcement presence, if 
anything, has dwindled. Clean water inspections are down 31 
percent. Safe drinking water inspections are down 42 percent. 
Pesticide inspections are down 80 percent.
    Administrative enforcement actions for all statutes, are 
down 41 percent. Civil referrals from EPA to the Department of 
Justice are down 44 percent in clean water cases, 50 percent in 
clean air cases since 1994.
    To people in communities downstream----
    Senator Baucus [resuming the chair]. I'll have to ask you 
to wrap up, Mr. Robins.
    Mr. Robins. I just want to say that to people in 
communities downstream or downwind from unaccountable 
polluters, who are frustrated by unresponsive State agencies, 
EPA's waning commitment to step into the void is troubling. 
From our perspective, the New Jersey clean water enforcement 
act that has shown dramatic drops in violations as well as 
fewer enforcement actions, is a remarkable success story. 
Everybody wins.
    The industry wins by paying lower penalties and enjoying a 
level playing field. The State wins by producing better 
compliance more efficiently. And most importantly, the public 
wins by having a more accountable system as well as a cleaner 
environment.
    So building on this success story, U.S. PIRG and the Clean 
Water Network strongly supports Senator Lautenberg's and 
Senator Torricelli's Clean Water Enforcement Act, S. 645, as a 
tough, pragmatic and proven way to improve environmental 
enforcement.
    Senator Baucus. Thank you very much.
    Mr. Harmon, I don't know the specifics of your case, 
obviously, but you seem to be saying that even though things 
were worked out to some degree between your company and the 
appropriate authority in Missouri, that then the Feds came in.
    Mr. Harmon. That's right.
    Senator Baucus. Over the top. Do you think that's unfair? 
I'm just asking, generally, do you think the general 
proposition, there should never be overfiling by the Fed? The 
Fed should not step in? Or is it just wrong in this case. I'm 
just trying to get a sense of where you are.
    Mr. Harmon. I don't know that I'm in a position to make 
that judgment, from where I sit. But certainly in our case, 
where we voluntarily turned ourselves in for a situation that 
was not hazardous to anybody's health, and we volunteered to 
clean it up at our cost, and we had a court order, consent 
decree from the State, certainly I think the actions by the EPA 
were a little bit aggressive in that regard.
    Senator Baucus. When did EPA first become aware of your 
actions or the State.
    Mr. Harmon. It was about the same time that the Missouri 
Department of Natural Resources, I think they communicate with 
each other on a quarterly basis. So my assumption would be that 
as soon as we turned ourselves in to the Missouri Department of 
Natural Resources, they in a very timely manner informed the 
EPA of what was going on, and they kept them informed.
    Senator Baucus. Were you under any illusion, or were there 
any discussions as far as you're aware of between either EPA 
and the Missouri enforcement authority and yourself as to what 
EPA would or would not do or might or might not do? What did 
EPA say?
    Mr. Harmon. I think it was a surprise to them as well as 
us.
    Senator Baucus. A surprise to whom?
    Mr. Harmon. To the Missouri Department of Natural 
Resources, that there was an overfiling.
    Senator Baucus. Did anyone ask EPA whether there might be 
an overfiling, or what action EPA took?
    Mr. Harmon. I'm not aware. Counsel says that the EPA 
informed MDNR, but the MDNR did not inform us.
    Senator Baucus. I see.
    Mr. Harmon. We were operating in good faith, cleaning up 
the contamination and thinking that our consent decree was 
going to be adhered to. All of a sudden, we found that not to 
be the case.
    Senator Baucus. I don't want to prolong this, but did you 
or your counsel think about directly asking EPA that question, 
whether EPA might be interested in an enforcement action?
    Mr. Harmon. During the administrative law judge hearing, we 
asked him what we should have done differently. He said we 
should have communicated with the EPA, both of them together. 
Clearly, that was not our understanding in the very beginning. 
I don't think that's the way it should be done.
    In other words, it's our understanding that the authority 
rested in the Missouri Department of Natural Resources in this 
particular case.
    Senator Baucus. Again, I don't know the specifics of your 
case, so it's hard to comment on it.
    Mr. Harmon. The litigation is still ongoing. We're 10 years 
into this thing, and millions of dollars. And we've got it 
cleaned up. But we're still----
    Senator Baucus. Mr. Robins, I was curious to hear your 
testimony. You're saying not very much is being done. Why?
    Mr. Robins. Mr. Chairman, our research, U.S. PIRG has been 
conducting research into EPA's compliance.
    Senator Baucus. Is there a trend? Is there a fall-off?
    Mr. Robins. What we've been doing is tracking our 
compliance rates under the Clean Water Act for many years. What 
we're seeing consistently is persistently higher rates of 
noncompliance and violation levels. But at the same time, where 
we're seeing a change is in the commitment on the part of both 
States and EPA to enforce the law effectively.
    Senator Baucus. A reduction?
    Mr. Robins. A reduction. We're seeing several States just 
slashing environmental budgets, enforcement budgets, 
enforcement staff. We've seen it in the southeast, we've seen 
it in Rhode Island. In doing that, they've been doing it with a 
philosophy, we've heard it discussed several times today, a 
philosophy of compliance assistance, let's not enforce the law, 
let's focus on compliance, as if enforcement is a dirty word.
    Our feeling is that helping small businesses to understand 
and comply with complex environmental laws is absolutely a 
justifiable and important thing to be doing, but only with a 
bottom line, underlying deterrent that provides an incentive 
for companies to abide by the law and does not allow companies 
to reap economic benefits from pollution.
    Senator Baucus. Right. Now, in your judgment, long with the 
decline in enforcement, has there also been an increase in 
pollution levels or not? Or have you measured that?
    Mr. Robins. Well, it's an interesting question. People in 
the public and members of citizen groups are interested in that 
information. People in communities who are interested in 
knowing what's being dumped into their waters and spewed into 
their air would like to know that, we feel like we have the 
right to know.
    In some areas, there is improving access to information 
like the toxics release inventory. On the water side, which is 
where my area of expertise lies, unfortunately it's hard to 
tell what is the quality of our water and whether it's 
improving or not. We have statistics that show that 40 percent 
of our Nation's rivers, lakes and coastal areas remain unsafe 
for fishing and swimming.
    However, that data is based upon inventories conducted by 
the States every 2 years and submitted to EPA and to Congress. 
Unfortunately, States on average assess about 17 percent of 
their waterways when they do these surveys, even though the 
Clean Water Act enacted 25 years ago requires them to survey 
all of their waters.
    So honestly, water quality is anybody's guess. I think in 
some cases, the water is indeed getting dirtier.
    Senator Baucus. My time's expired.
    Senator Lautenberg.
    Senator Lautenberg. Yes, very briefly, Mr. Chairman. I 
wanted to ask Mr. Robins whether, if there were mandatory 
minimums that established a kind of universal level for 
penalties for those who violate the laws, do you think that 
might serve as a substitute for such things as overfilings or 
different approaches by the States? Might that clear up a lot 
of the problems? Would it be a total substitute?
    Mr. Robins. I think it's an absolutely important substitute 
that we advocate. I think the experience in New Jersey since 
1990 proves that out. In New Jersey in 1990, the State enacted 
the Clean Water Enforcement Act which requires the agency in 
New Jersey to impose mandatory minimum penalties for serious 
violations and instances of significant noncompliance.
    What we've seen, and the New Jersey Department of 
Environmental Protection has recently concluded, and we agree, 
is that the deterrent value and the certainty of that swift and 
regular response, when there are serious violations, has caused 
permit holders to take their permits more seriously. So what 
you're seeing is violations dropping by a significant amount, 
while the numbers of enforcement actions and penalties that the 
agency has to pursue is also dropping.
    So they're getting better results for the environment wish 
fewer resources, and it's important to note that there have 
been no instances of Clean Water Act overfiling by EPA in New 
Jersey as a result. The agency is doing what it's supposed to. 
Enforcement is working the way it's supposed to, and so what 
you have is EPA playing a much more constructive and peripheral 
oversight role, as opposed to feeling the need to step into the 
void of State inaction to protect bottom line standards.
    Senator Lautenberg. So it would be one of several tools? 
You wouldn't abolish the opportunity for overfiling if it was 
called upon?
    Mr. Robins. No, absolutely not. The fact of the matter is, 
our waters and our air do not respect political boundaries. And 
there are cases when national interest would require that EPA 
step in. There are also cases, and the States have acknowledged 
this, where there is a benefit, a strategic benefit to EPA from 
a farther distance coming in and taking a stronger action.
    Senator Lautenberg. I would just ask a curious question of 
Mr. Harmon. There's another Harmon company in the stereo and 
hi-fi--is that----
    Mr. Harmon. Not related.
    Senator Lautenberg. OK. I was curious, because I know 
they're in other locations.
    Mr. Harmon. We get a lot of their mail from time to time.
    Senator Lautenberg. Do you get any of their bills?
    Mr. Harmon. Probably.
    [Laughter.]
    Senator Lautenberg. Mr. Chairman, there are lots of 
questions that this panel and the others provoke, but 
unfortunately time flies, and I hope that we'll be able to, if 
necessary, submit questions and get written answers.
    Thank you very much.
    Senator Baucus. Yes, thank you, Senator. The hearing record 
will be open through Friday for additional questions and for 
witnesses to respond to points made by other witnesses.
    Hearing is adjourned.
    [Whereupon, at 12:15 p.m., the committee was adjourned, to 
reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]
  Prepared Statement of Lois J. Schiffer, Assistant Attorney General, 
               Environment and Natural Resources Division
                            i. introduction
    Mr. Chairman, I am pleased to have this opportunity to meet with 
you and the Members of this Committee to discuss how the Environment 
and Natural Resources Division--working closely with our partners at 
the U.S. Attorneys' Offices, the EPA, other Federal agencies, and the 
States--protects the quality of our environment and the health of our 
communities. We are the Nation's environmental cops on the beat. 
Through tough and fair enforcement, our job is to ensure that all 
citizens can breathe clean air, drink pure water, and enjoy clean lakes 
and streams; that law-abiding businesses have a level economic playing 
field on which to compete; and that environmental bad actors know they 
will be punished. I am pleased to report that our environmental 
enforcement efforts are strong and effective--due largely to 
cooperative relationships we have fostered with United States 
Attorneys, State attorneys general, State agencies, and local 
prosecutors and investigators throughout the country.
    I would like first to say a few general words about the Environment 
Division. I will then discuss some of our enforcement goals; how we 
have worked to enhance cooperative efforts with our partners in the 
States; recent initiatives to make our enforcement program more 
effective; and the results we have achieved.
A. The Environment and Natural Resources Division
    The Environment and Natural Resources Division is responsible for 
representing Federal agencies in environmental and natural resources 
litigation before Federal and State courts. We bring affirmative cases 
and defend challenges to agency actions. Together with our colleagues 
in the 94 U.S. Attorneys' Offices, we work closely with client agencies 
to enforce and defend the Nation's environmental and natural resources 
laws.
    The Division, once known as the Land and Natural Resources 
Division, was created in 1909. From the start, the Division represented 
Federal agencies in matters related to Federal lands, water issues, and 
Indian disputes. Over time, our responsibilities have grown to include 
defensive and affirmative litigation concerning the protection and use 
of the Nation's natural resources and public lands; wildlife 
protection; Indian rights and claims; cleanup of hazardous waste sites; 
acquisition of private property for public purposes; defense of 
environmental challenges to government activities; and civil and 
criminal environmental law enforcement.
    Our enforcement work has a long history. The Rivers and Harbors 
Act, for instance, dates back to 1899. Many of the statutes we enforce 
were adopted in the 1970's, and were adopted or amended on a bi-
partisan basis, often under Republican administrations. Our mission is 
to enforce these laws--and to represent the interests of the United 
States--fairly and effectively. To succeed, we work closely with a wide 
variety of individuals and groups, including our client agencies, the 
U.S. Attorneys' Offices, and local and State governments.
B. Sections in the Environment and Natural Resources Division
    The Environment and Natural Resources Division is divided into ten 
sections, each with its own expertise. Four sections have 
responsibility for affirmative environmental enforcement:
    1. The Environmental Enforcement Section conducts affirmative civil 
litigation to control and abate pollution. This Section is responsible 
for judicial enforcement of most of the pollution abatement statutes 
and rules that regulate discharges into the Nation's air and water and 
that govern pesticide operations, hazardous waste, and drinking water. 
Finally, the Section brings natural resource damage actions on behalf 
of Federal trustees (including the Departments of Agriculture, 
Commerce, Defense, Energy, and the Interior), and claims for 
contribution against private parties for contamination of public lands 
and the recovery of money spent to clean up certain oil spills on 
behalf of the Coast Guard.
    Let me tell you about just one of the Section's notable recent 
victories, in which we completed a landmark enforcement action against 
General Motors Corporation. We alleged that GM had installed ``defeat 
devices'' in more than 470,000 Cadillacs since 1990 in violation of the 
Clean Air Act. These defeat devices overwhelm the car's catalytic 
converter and emissions control system, causing carbon monoxide 
emissions of up to three times the legal limit. We estimate that the 
Cadillacs have been responsible for the illegal emission of 100,000 
tons of carbon monoxide, which can impair vision, learning ability, and 
work capacity. Carbon monoxide is especially threatening to people 
suffering from cardiovascular disease.
    Working with the EPA and the U.S. Attorney's Office, the Justice 
Department achieved a $45 million settlement with GM. GM will recall 
and repair 470,000 Cadillacs, pay a fine, and spend $7 million to 
offset the pollution caused by its violations. And recognizing 
California's unique status under Section 209 of the Clean Air Act, the 
Department of Justice and EPA closely coordinated the negotiation and 
implementation of the General Motors settlement with the California Air 
Resources Board.
    2. The Environmental Crimes Section plays two primary roles: First, 
its attorneys investigate and prosecute criminal violators of Federal 
environmental statutes. Second, the Section acts as a resource for U.S. 
Attorneys, the FBI and the EPA, and State and local investigators and 
prosecutors. The Section provides highly trained and experienced 
prosecutors to assist in resource-demanding trials; offers advice and 
expertise to Assistant U.S. Attorneys and agents in their cases; 
provides training and policy development to improve the environmental 
criminal enforcement program; and works with U.S. Attorneys' Offices on 
coordinating committees and on task forces with our State and local law 
enforcement counterparts.
    We bring environmental criminal cases for the same reasons the 
Department brings other criminal cases: to promote respect for the law, 
to achieve adequate deterrence, to provide just punishment, to ensure 
restitution for victims, and to remedy the harm caused by offenses. Our 
environmental crimes program is an essential part of our program to 
protect human health, the environment, and our natural resources. For 
example, in 1995 a Federal grand jury in Ohio returned criminal 
indictments against a barge company, M/G Transport Services, Inc., and 
some of its employees, including a former vice president and two tow 
boat captains, charging Oil Pollution Act and Clean Water Act 
violations for illegal pollution into the Ohio River, and of conspiracy 
to violate the Oil Pollution Act. Following trial, in December 1995, an 
Ohio jury returned guilty verdicts in the case. In the year following 
this indictment and the resulting convictions, the number of 
unidentified, or ``mystery,'' oil sheens on the Ohio River system 
reported to the National Response Center decreased significantly.
    The Department's criminal enforcement program has long benefited 
from close cooperation with and support of State and local authorities. 
For example, in 1994, Giacomo Catucci was convicted of the illegal 
disposal in Rhode Island of PCB's from an electrical transformer and 
failure to notify authorities of the release of that hazardous 
substance. The case, prosecuted by an Assistant U.S. Attorney, was 
investigated entirely by the Rhode Island Department of Environmental 
Management. The State continued its close support of the prosecution 
all the way through trial.
    3. The Environmental Defense Section defends legal challenges to 
Federal agencies' rulemakings, regulatory decisions, and permit actions 
under Federal statutes that protect the public against pollution. The 
Section's clients include the EPA, the Department of the Interior, the 
Army Corps of Engineers, and the Coast Guard. Since Federal agencies 
generally have the same obligations as private parties to comply with 
the environmental laws, the Section also represents agencies sued by 
States and citizens groups for violations of environmental laws. In 
addition, the Section has responsibility for affirmative enforcement of 
the wetlands laws.
    4. The Wildlife and Marine Resources Section is responsible for 
both civil and criminal cases arising under the Federal fish and 
wildlife conservation statutes. Litigation under these statutes can 
play out in any of three different contexts: defense of Federal 
agencies whose programs are challenged as inconsistent with Federal 
conservation statutes; civil enforcement, usually to enjoin persons 
from violating Federal conservation statutes; and criminal 
prosecutions.
    Each year, approximately $5 billion in illegal wildlife shipments 
is traded from country to country. The global illegal trade in wildlife 
is said to generate more profit than illegal arms sales. It constitutes 
a worldwide black market second in size only to the drug trade. The 
Wildlife Section, with local U.S. Attorneys' Offices, brings criminal 
prosecutions to stop international wildlife smuggling, interstate 
trafficking in protected species, and Federal wildlife violations such 
as eagle poisonings and migratory bird sales.
    Some of you may have read about Tony Silva, an internationally 
prominent writer and lecturer on the plight of endangered parrots in 
the wild. Last year, Mr. Silva pled guilty to a far-reaching conspiracy 
to smuggle into this country highly protected species of birds trapped 
in the wild in South America. The smuggling conspiracy lasted 5 years, 
and involved rare Hyacinth Macaws worth more than $1 million. These 
birds are so rare that they have the highest level of protection under 
the Convention on International Trade in Endangered Species (CITES). 
CITES, which regulates trade in species actually or potentially 
threatened with extinction, boasts 136 member Nations. Through 
international cooperation, the treaty furthers member States' goal of 
protecting endangered species and reflects an international consensus 
that trade in wild fauna and flora must be done legally, sustainably, 
and without further detriment to wild populations. As a result of our 
effort to stop Mr. Silva's smuggling conspiracy, a Federal court 
sentenced him to 82 months in prison. He is appealing the court's 
refusal to let him withdraw his guilty plea.
    Silva was charged as part of Operation Renegade, a U.S. Fish and 
Wildlife Service probe of the illegal international smuggling of 
protected exotic birds or their eggs from South America, Africa, 
Australia and New Zealand. The operation has resulted in convictions of 
37 people, over half of whom have been sentenced to prison terms, 
making it among the most successful wildlife law enforcement 
initiatives ever undertaken. In other recent cases, we have prosecuted 
smugglers who transported rare snakes and tortoises out of Madagascar 
by hiding them in airline passenger baggage; a black marketeer who 
tried to bring an entire tiger skeleton into the United States; and an 
individual who smuggled into the country hundreds of endangered 
tarantulas. In that case, the court received evidence that depletion of 
this species by international smuggling had impaired the search for a 
cure for Alzheimer's and Parkinson's diseases.
    5. The Division's other sections work on a broad range of issues 
that reflect the diversity of our clients and of the Federal 
environmental and natural resources laws:
     The General Litigation Section defends agencies sued under 
statutes that govern management of National Forests and other public 
lands, and under the National Environmental Policy Act (NEPA). The 
Section also litigates claims filed by Indian tribes against the 
government and defends against takings claims in the Court of Federal 
Claims.
     The Indian Resources Section litigates on behalf of Native 
Americans pursuant to the United States' trust responsibility.
     The Land Acquisition Section handles the acquisition of 
property by the process of eminent domain for congressionally 
authorized public purposes.
     The Appellate Section handles appeals in cases originating 
in the litigating sections, and assists the Solicitor General when the 
Division's cases reach the United States Supreme Court.
     The Policy, Legislation, and Special Litigation Section 
provides counsel to the Assistant Attorney General, has responsibility 
for correspondence and Freedom of Information Act matters, and serves 
as the Division's ethics advisor and Alternative Dispute Resolution 
coordinator. The section also coordinates the Division's legislative 
and international work.
     The Executive Office provides administrative support 
services for the Division.
C. The Division's Clients
    Civil cases, and many of the criminal cases, litigated by the 
Environment Division are referred by other Federal agencies--either 
when those agencies request the Division to file an action, or when 
they have been sued. The Division's principal clients include the EPA 
and the Departments of Agriculture, Commerce, Defense, Energy, the 
Interior, and Transportation. However, we have represented virtually 
every Federal agency and currently have more than 12,000 pending cases 
and matters.
        ii. environmental enforcement goals and accomplishments
A. Overall Goals
    With that introduction to the Division's varied work, let me turn 
to the Justice Department's goals for its environmental enforcement 
program. We bring criminal prosecutions and civil enforcement actions 
to protect the environment, to remedy environmental harm, to punish 
wrongdoers, and to deter future violations. Our law enforcement efforts 
protect our lakes and streams, our drinking water, the air we breathe, 
our food supply, the land our children and grandchildren will inherit 
from us, and even the ozone layer that protects us from harmful 
ultraviolet rays. Without vigorous enforcement of our environmental 
laws, the health of our families, our communities, our environment, and 
our economy would all be compromised.
    How does environmental enforcement protect the economy? First, 
clean air and clean water are essential ingredients for a healthy 
economy. Pollution decreases land values, can impose steep health care 
costs, and harms industries, such as fishing, tourism, and recreation, 
that depend on robust natural resources. Second, bad actors--be they 
international chlorofluorocarbon (CFC) smugglers or companies that do 
not install required pollution control equipment--put law-abiding 
businesses at a competitive disadvantage. For example, a national 
alliance of major chemical companies that have invested in CFC 
alternatives repeatedly has expressed strong support for the 
Department's efforts to stop the illegal import of this ozone-depleting 
refrigerant. One of this Division's jobs is to make sure that any 
company breaking the law is brought into compliance, that no competitor 
gets an unfair head start from illegal conduct, and that everyone is 
playing on a level economic field. A strong and effective compliance 
program is essential to even-handed application of the environmental 
laws and to fair and honest competition.
    Environmental protection statutes promote and encourage voluntary 
environmental compliance, but it is a vigorous enforcement program that 
drives such compliance. While many people comply with the law for the 
good of the community, there are many people who would not send their 
tax checks to the IRS next April if tax violations carried no penalty. 
They comply with the tax laws in part because they may get caught, and 
sanctioned, if they do not. So, too, we cannot expect voluntary 
compliance with environmental laws unless those laws are enforced, and 
enforced vigorously. As William K. Reilly, the Administrator of EPA 
between 1989 and 1993, stated during his tenure at EPA, the 
``enforcement of environmental laws is absolutely essential'' and ``is 
at the very heart of the integrity and the commitment of our regulatory 
programs.'' See Reilly, ``The Future of Environmental Law,'' 6 Yale J. 
on Reg. 351, 354 (1989).
    Environmental violations have real victims. Polluting an 
underground drinking water supply can threaten thousands of people. An 
oil spill that damages an entire ecosystem--such as the Exxon Valdez 
spill in Alaska--may undermine the economic foundation of surrounding 
communities. The risk of harm can sometimes span the globe, as it does 
when criminals illegally smuggle chemicals that damage the protective 
stratospheric ozone layer. The harm from environmental violations may 
extend far into the future, affecting the health of generations yet 
unborn. Damage to natural resources can be permanent, as where a 
species is lost, a precious wetland is destroyed, or a drinking water 
aquifer or fishery is polluted beyond repair. This Division's job is to 
ensure that the laws Congress has enacted to prevent such harms are 
respected and obeyed.
B. Working to Foster Cooperation With State and Local Authorities
    Cooperation with our colleagues in State and local law enforcement 
is critical to achieving our goals. As a former local prosecutor, 
Attorney General Reno is keenly aware of the importance of State and 
local law enforcement to the effective implementation of Federal law. 
This Division works in partnership with the States and the subdivisions 
because we share a common mission with State attorneys general, State 
environmental agencies, and local authorities. Cooperative enforcement 
often maximizes the chances of success, maximizes resources, and avoids 
duplication and misunderstandings.
            1. Goals of the Federal Relationship With State and Local 
                    Authorities
    Our Federal environmental laws seek to assure all people in our 
Nation a basic level of environmental protection. These laws are 
implemented through a working Federalism that is critical to successful 
environmental compliance. The Federal, State, and local governments all 
have important roles. States are primary implementers of our 
environmental laws, and may have more direct access to information 
concerning polluters and their impacts on the local environment. Local 
governments often are the most directly affected by environmental 
violations. The Federal Government has special expertise across the 
spectrum of environmental issues. We also have the depth to handle 
especially large cases, and the reach to address pollution that spills 
from one State into another. The national government has the unique 
perspective and responsibility to stop industry from pitting one State 
against another in a race to lower environmental protections for short-
term economic advantage at long term cost to our environment, public 
health, and the economy. Finally, this Division can help to ensure that 
protections for all people are enforced if a State cuts its 
environmental budget or personnel.
    Two elements are essential to an effective working federalism: 
strong State programs that include strong enforcement, and cooperation 
among Federal, State, and local government. In a moment, I would like 
to tell you about steps this Division has taken to strengthen its 
relationships with our colleagues in State and local government. But 
first, let me illustrate the good results that those cooperative 
efforts have brought.
            2. Recent Examples of Cooperative Federal-State-Local 
                    Relationship
    Our working relationship with States generally has been a very 
cooperative one. It unquestionably has resulted in better environmental 
protection. A few examples:
    a. Today, as we are speaking, the Environmental Enforcement Section 
and the State of Ohio are scheduled to commence trial of a Clean Air 
Act case against a lumber manufacturer in New Knoxville, Ohio. For more 
than a decade, Hoge Lumber Company has been operating a wood-fired 
boiler in violation of the State and Federal emissions limits for 
particulates, which can lead to respiratory complications. The Ohio EPA 
unsuccessfully sought time and time again to get Hoge to install 
additional control devices that would halt its unlawful emissions. Last 
year, the State joined our Federal action. Cooperating closely, we 
filed a joint trial brief, have coordinated on witnesses, and are 
proceeding at trial together.
    b. In United States v. Marine Shale Processors Inc., lawyers from 
my Division and the Louisiana Department of Environmental Quality 
(LDEQ) shared the counsel table at trial. The defendant accepted 
hazardous waste, claimed to recycle it into ``aggregate,'' and then 
sold it to the public. The company marketed incinerator ash for $1 a 
ton; ash that was high in heavy metals (including lead) was used on 
roads, in driveways, and under a house in the community. After an LDEQ 
inspection revealed numerous environmental violations, the State 
referred the matter to EPA for enforcement.
    As a result of our joint efforts with the State, a Federal court 
enjoined Marine Shale from selling its ash to the public. The company 
will have to pay a large civil penalty. Marine Shale is now shut down, 
and the Federal and State governments are working to ensure compliance 
with the environmental laws if and when the facility reopens.
    c. Just 2 weeks ago, the State of California and the United States 
lodged a joint consent decree resolving claims against Pacific Gas & 
Electric Company (``PG&E''). The consent decree requires PG&E to 
support environmental enhancement projects to protect estuaries near 
Morro Bay and involving the State's Mussel Watch Program. We alleged in 
the complaint that PG&E had violated the Clean Water Act and its 
discharge permits by submitting and failing to correct incomplete and 
inaccurate reports. The PG&E reports purported to show that the cooling 
water system at PG&E's Diablo Canyon nuclear power plant complied with 
the Clean Water Act by employing available technology to minimize 
adverse environmental impacts. Information PG&E left out suggested 
otherwise. For example, up to 90 percent of the larval fish in the 
cooling water system perish. The State took the lead in investigating 
the facts. At the State's invitation, State and Federal officials 
joined forces to prepare for litigation and settlement negotiations. 
Working together, we negotiated a precedent-setting settlement that 
protects the environment and demonstrates the importance of accurate 
self-reporting.
    d. In United States v. ARCO Pipe Line Co., we worked closely with 
the States of Indiana and Ohio to resolve claims arising when an oil 
pipeline ruptured and discharged approximately 30,000 gallons of diesel 
fuel into an agricultural field in Dekalb County, Indiana. The oil 
flowed through a drainage ditch into Fish Creek, a tributary of the St. 
Joseph's River and, among other injuries, severely harmed fish 
populations. One species, the white cat's paw pearly mussel, is so rare 
that Fish Creek is the only place in the world where it is known to 
exist. Approximately seven miles of the Creek were impacted by the 
spill. Under the decree, defendants ARCO Pipe Line Company and NORCO 
Pipeline, Inc., will spend $2.5 million to improve the water quality in 
Fish Creek, to bring back fish, mussel and wildlife populations to pre-
spill levels, to implement local education programs, and to protect the 
waterway from future harm.
    e. In a case developed with the Commonwealth of Virginia through 
the Tidewater Environmental Crimes Task Force, George Madariaga last 
year pleaded guilty to knowingly discharging spent sandblast abrasives 
into the Elizabeth River. Madariaga's employees at the Virginia Dry 
Dock Company, acting under his direction, regularly discharged 
sandblast abrasives by, among other things, shoving the materials 
directly into the water. The company did not stop its unlawful conduct 
even after the Virginia Department of Environmental Quality (DEQ) 
penalized it. As part of his plea agreement, Madariaga agreed 
personally to pay the balance of the State's civil penalty, which the 
company still had owed to the DEQ.
    As these examples illustrate, we have a good relationship with our 
partners in the States. Indeed, since the beginning of Fiscal Year 
1996, we have entered into 25 settlements in which States were co-
plaintiffs and in which we split penalties with the States. All told, 
States have collected almost $12 million from our joint enforcement 
actions during that period.
            3. Initiatives to Foster Cooperative Federal-State-Local 
                    Relationship
    Federal-state-local cooperation stems partly from steps this 
Administration has taken to foster better communications with State and 
local officials, closer intergovernmental cooperation, and more 
efficient efforts. Let me describe a few of our other initiatives:
    First, near the beginning of my tenure as Assistant Attorney 
General, I created a new position, the Counselor for State and Local 
Environmental Affairs. My Counselor works with State and local 
officials and attorneys in our Division to maximize environmental 
enforcement through cooperative efforts, and to act as liaison with our 
colleagues in the States and with State organizations.
    Second, we have established a policy that our Environmental 
Enforcement Section will notify the State in advance of filing a suit 
in that State, absent exceptional circumstances, and will invite the 
State's participation or cooperation in the action. This policy 
encourages cooperation and information exchange with the State, and 
ensures that the States do not learn about our actions from reading the 
newspaper. Just a few days ago, we received a letter from a State 
Attorney General's office thanking us for sending these notices.
    Third, we have developed particularly productive relationships with 
State and local law enforcement personnel through environmental crimes 
task forces and Law Enforcement Coordinating Committees (LECCs) across 
the country. The Environmental Crimes Section has worked closely with 
U.S. Attorneys' Offices to support these groups. For example, we have 
supported the Environmental Crime Task Force in the Eastern District of 
Missouri, which includes members from all Federal, State and local law 
enforcement agencies that have responsibility for the detection, 
investigation, and prosecution of environmental crimes in that 
jurisdiction. That task force has been very successful in coordinating 
and prosecuting environmental crimes. Because the State of Missouri has 
only misdemeanor penalties for violations of State environmental law, 
most cases are brought in Federal court. The Missouri Attorney General 
has designated two assistant attorneys general to handle cases in 
Federal court through the U.S. Attorney's Office. Similar task forces 
are thriving in many other States.
    Fourth, in 1994, then-Attorneys General Tom Udall of New Mexico and 
Deborah Poritz of New Jersey joined with a number of State 
environmental commissioners, tribal representatives, EPA Assistant 
Administrator Steve Herman, and me to establish a senior forum for the 
discussion of environmental enforcement and compliance issues. The 
forum first met in 1994, and has met as many as several times a year 
since then. We have been very pleased to join in this process, which 
facilitates coordination and discussion among policymakers in State and 
Federal Governments and allows us to share ideas as well as concerns. 
We participate in many other such cooperative efforts, and have met 
often with the National Association of Attorneys General and the 
Conference of Western Attorneys General. Indeed, when I leave this 
hearing, I will be heading to address a meeting of the National 
Association of Attorneys General.
    Fifth, for a number of years, Department attorneys--including those 
in this Division and in the United States Attorneys' Offices--have 
worked with State officials to train State and local prosecutors, 
investigators, and technical personnel in the development of 
environmental crimes cases. Much of that work occurs at the Federal Law 
Enforcement Training Center in Brunswick, Georgia. Department attorneys 
have helped to develop the basic curricula and regularly teach as 
faculty. Our attorneys also assist as faculty and otherwise for State 
and local training done by the National Association of Attorneys 
General, by the four regional State and local environmental enforcement 
organizations, and for a wide variety of other training efforts at the 
State and local level. Such instruction frequently is a weekly routine 
for our Crimes Section attorneys.
    Finally, we have worked vigorously to improve and solidify our 
relationship with the 94 United States Attorneys' Offices around the 
country. These relationships are vitally important to us, and are 
critical to the optimal functioning of both the Division and the U.S. 
Attorneys' Offices. We work jointly with Assistant U.S. Attorneys on 
many of our cases. In other instances, the U.S. Attorneys' Offices take 
full responsibility for cases and call upon us only for our special 
expertise. In January 1997, I sent a letter to all U.S. Attorneys 
reaffirming our practice and re-extending our invitation to participate 
in any pending or future civil environmental enforcement cases in their 
districts. I encouraged those who had not previously taken advantage of 
this invitation, to act as lead counsel, co-lead, or as local counsel. 
I have received a number of letters from district offices expressing 
appreciation for this outreach effort.
            4. Overfiling

                    a. Overfiling Myths and Reality

    I have heard concerns expressed about ``overfiling.'' Overfiling is 
both misunderstood as a concept and exaggerated as an occurrence. 
Overfiling happens where the Federal Government files an enforcement 
action after the State has brought an enforcement action for the same 
violations. There are reasons--good reasons--for us to bring these 
cases, which I will describe. And where there are misunderstandings or 
disagreements, we are committed to working to establish the best 
possible communications.
    But let me first point out that overfiling does not happen often. 
We bring such cases only after a careful review by EPA and this 
Division. In the past 12 months, the Justice Department filed only two 
complaints in an environmental matter where the State previously had 
brought an enforcement action for the same violations. In the first 
case, against Westinghouse, the Commonwealth of Pennsylvania previously 
had entered into consent agreements with Westinghouse, but agreed with 
our enforcement action, joined as a plaintiff-intervener, and was a 
party to our consent decree. The second was the case of United States 
v. Smithfield Foods, Inc. (E.D. Va.), which I will be discussing.
    Second, when we do overfile, often we do so at the invitation of 
the State. In 1995, the Environmental Council of the States (ECOS), 
released a report on overfiling within the prior 3 years. That report 
even included cases in which the Federal Government took administrative 
or civil enforcement action against a polluter for environmental 
violations broader in scope than those addressed by any prior State 
action. Even using that broad definition of overfiling, the ECOS report 
did not find widespread concern. More than half of the States that 
responded reported no overfiling within the previous 3 years. Further, 
the States reported that, in most cases of overfiling, the Federal 
Government had provided notice and engaged in extensive prior 
discussions with the States. Most States reported positive 
relationships with Federal regional enforcement staff. Thus, overfiling 
hardly is the bugaboo some might claim.
    We also must recognize the significant and appropriate role for 
Federal enforcement. Our cases often assist the States. Indeed, State 
enforcers tell us that the possibility of Federal enforcement enhances 
the negotiating posture of State environmental agencies as they seek to 
obtain compliance. The threat of Federal enforcement is a powerful 
deterrent to violators. For example, one State reported in the ECOS 
survey that, ``in more than one case, EPA's threat of overfiling has 
helped the [state] gain a favorable settlement.'' That threat, like 
most threats, is effective only because we can and will deliver as 
promised.
    Some people have suggested that any Federal enforcement in a 
delegated State constitutes overfiling. That is not accurate. As I have 
explained, Federal enforcement serves essential functions and often is 
invited or welcomed by the States.
    This Division also will vigorously defend against challenges by 
States that want to weaken environmental protections. We recently 
prevailed against challenges by Virginia and Missouri to EPA 
requirements for an effective Clean Air Act program in those States. 
Once again, it is our task to ensure that all people enjoy a basic 
level of environmental protection; that all businesses enjoy a level 
economic playing field; and that industry does not pit one State 
against another in a bidding war to attract industry by compromising 
environmental standards.

               b. United States v. Smithfield Foods, Inc.

    As I noted, this Division has filed only two civil judicial 
enforcement actions in the past 12 months for violations that 
previously were the subject of a State enforcement action. In one case, 
the State agreed with our action. The other case, brought against 
Smithfield Foods, Inc., is still pending. The following information is 
all based on the public record.
    The Smithfield case demonstrates the important role the Federal 
Government plays when a State has been unable to bring a recalcitrant 
company into full compliance with the law. Subsidiaries of Smithfield 
Foods, Inc., operate two wastewater treatment plants in Smithfield, 
Virginia. These plants treat wastewater generated during hog-
slaughtering and meat-processing operations, and collectively discharge 
approximately three million gallons of effluent per day into the Pagan 
River. The Pagan is part of the James River estuary, which connects to 
the Chesapeake Bay. The companies' discharges are subject to the terms 
and conditions of a water permit issued by the Virginia Department of 
Environmental Quality.
    From October 1991 through the present, Smithfield Foods, Inc. and 
its subsidiaries committed at least five thousand violations of its 
discharge permit. Over and over again, the companies violated effluent 
discharge limitations, including limitations on fecal coliform, 
phosphorous and nitrogen. The River has been closed to shellfish 
harvesting due to fecal coliform contamination, and the companies' 
discharges have contributed to that contamination. Similarly, the 
companies' excessive phosphorous and nitrogen discharges, which at 
times accounted for 80 percent of the phosphorous in the Pagan River, 
contributed to the nutrient loading that has decreased the health and 
productivity of Chesapeake Bay. The companies' violations were serious 
enough that the United States filed both a criminal and a civil case.
    On September 24, 1996, the United States charged the former head 
operator of the Smithfield companies' two wastewater treatment plants 
with 23 crimes. Eight of the charges--including illegal discharge of 
fecal coliform into the Pagan River, false statements, falsification of 
reports, and destroying records--were for offenses committed at the 
companies' plants. On October 22, 1996, the operator pleaded guilty, 
without a plea agreement, to all 23 counts. On January 16, 1997, he was 
sentenced to 30 months imprisonment. He is presently incarcerated.
    The Federal Government also filed a civil case, against the 
companies rather than the individual operator. That is the overfiling 
case. This Federal action was necessary because, despite the 
seriousness of Smithfield's violations, the Commonwealth was taking no 
action to assess penalties against the companies. Rather, in the face 
of threats by the Smithfield Companies to leave the Commonwealth of 
Virginia if a phosphorus limit was imposed on their facilities, the 
Commonwealth of Virginia entered into a series of agreements allowing 
the Smithfield Companies to discharge uncontrolled amounts of 
phosphorus into the Pagan River for 5 years in return for the 
Smithfield Companies' agreement to hook up to a publicly-funded sewer 
line when it was constructed and to dismiss the Companies' challenge to 
the phosphorus limit. In fact, in May 1996, the State Water Control 
Board specifically directed the Department of Environmental Quality to 
enforce the consent agreements but to take no penalty action. 
Recognizing that the State had not succeeded in halting Smithfield's 
violations of the law, EPA referred the matter to this Division for 
enforcement. Just last week, the district court ruled for the United 
States, finding the company liable for effluent limitation violations, 
and thereby resolving many of the issues in this case.
    When the case was referred to the Department of Justice on August 
27, 1996, EPA had notified Virginia of the referral. EPA regional 
officials held several conference calls with State officials, and 
invited the Commonwealth to join the Federal case. EPA provided the 
Commonwealth with information on Smithfield's violations. As the court 
later said, ``[t]he Commonwealth declined the EPA's invitation to join 
the Federal action. Although the Commonwealth never mentioned its plan 
to file its own enforcement action to EPA, on August 30, 1996, the 
Commonwealth filed an action against Smithfield.'' For the first, time, 
the Commonwealth sought penalties, although in amounts far lower than 
sought by EPA.
    Given our efforts to develop a cooperative relationship with the 
State, we were surprised by Virginia's unilateral action, which might 
have undercut our enforcement action. When we filed our complaint on 
December 16, 1996, the Smithfield companies argued that our action was 
barred by the Commonwealth's recent suit and/or consent orders. The 
court's recent decision rejected that defense. In a thorough, 75-page 
opinion, the district court held that Virginia's action did not bar 
ours, in part because Virginia law does not authorize the imposition of 
administrative penalties and because Virginia had failed to provide 
adequate procedures for public participation.
C. Environmental Crimes Bill
    One very important initiative of this Administration that will 
benefit State, local and tribal governments is the ``Environmental 
Crimes and Enforcement Act of 1997,'' which has been introduced in the 
House as H.R. 277, and which we hope soon will be introduced with 
bipartisan support in the Senate. This bill will enhance environmental 
criminal enforcement under a wide range of statutes. It was developed 
to reflect the needs of and is designed to support law enforcement 
officials throughout the country.
    The legislation strengthens Federal, State, local, and tribal 
partnerships by authorizing courts to order convicted criminals to 
reimburse States, localities, and tribes for their costs in assisting 
Federal environmental prosecutions. The bill also provides for 
increased punishments when police officers, firefighters, other State 
and local officials, or anyone else suffers death or serious injury as 
a result of an environmental crime, and extends the statute of 
limitations where a criminal has taken steps to cover up or to conceal 
an environmental crime. The bill adds an ``attempt'' provision to 
environmental statutes, similar to those found in more than 170 other 
Federal criminal statutes, so that we may prosecute the criminal even 
when we stop a crime in progress. This provision will remove a major 
obstacle to environmental investigations by allowing law enforcement 
personnel to use environmentally benign substitutes for hazardous 
materials in undercover operations. Finally, the bill will clarify the 
authority of the courts to provide for restitution in environmental 
crimes cases, and to issue orders to ensure that those charged with 
environmental crimes do not hide or dispose of assets needed to pay 
restitution.
D. Some Success Stories
    Now I would like to offer a few additional examples that show why 
our cases are important; how they address complex and resource-
intensive enforcement needs; how they have a real, direct impact 
improving the environment; and how they deter future violations.
            1. Multi-State, Multi-Facility Enforcement
    Many of our cases are extremely complex, involving multiple 
facilities in several States. We recently settled an enforcement action 
against Georgia-Pacific Corporation for Clean Air Act violations at 19 
wood product facilities in Alabama, Arkansas, Florida, Georgia, 
Mississippi, North Carolina, South Carolina and Virginia. Under the 
settlement, Georgia-Pacific will take steps that will remove 10 million 
pounds (5,000 tons) of volatile organic compounds (``VOCs'') from the 
atmosphere annually--an estimated 90 percent reduction at many 
facilities. VOCs, a precursor to ground-level ozone, can migrate in the 
atmosphere for hundreds of miles and are a particular problem in the 
southeast United States, where these facilities are located. The United 
States worked in close cooperation with each of the State environmental 
agencies in order to bring about this complex settlement.
            2. Comprehensive Injunctive Relief and Environmental 
                    Enhancement
    Many of our recent cases show the effectiveness of Federal 
enforcement in securing, in addition to penalties, comprehensive relief 
to protect and enhance the environment when it is harmed by unlawful 
pollution.
    a. In United States v. Jefferson County, Alabama, (N.D. Ala.), the 
United States sued Jefferson County, Alabama, and the Jefferson County 
Commission for annually discharging 2.2 billion gallons of raw and 
partially treated sewage into the Cahaba and Black Warrior Rivers. The 
Cahaba is the source of one fourth of the drinking water for the State, 
and the Black Warrior runs through downtown Birmingham. The case was 
settled by a consent decree that requires the County to cease its 
illegal discharges, rehabilitate its treatment plants and collection 
system, pay a $750,000 penalty, and spend $30 million for the 
acquisition of riparian lands to help restore water quality in the 
rivers.
    b. Last January, the Sherwin Williams Company and LTV Steel agreed 
to settle separate actions for serious violations of Federal public 
health and environmental protections in the southside of Chicago. We 
alleged that Sherwin Williams had failed properly to control emissions 
that impair breathing and had discharged high levels of organic 
solvents that created a risk of fire or explosion. We alleged that LTV 
Steel had, for years, emitted unlawful levels of coke oven gas. Those 
gases are highly toxic and can lead to heart attacks, asthma, and 
cancer. Under the consent decree, Sherwin Williams will clean up and 
restore an old and abandoned industrial site identified by the City for 
commercial redevelopment, restore wetlands and protect habitat near 
Indian Creek and Lake Calumet, install pollution abatement equipment, 
and pay a penalty. In the second settlement, LTV Steel will undertake 
environmental enhancements to reduce its air emissions below the 
Federal requirements and will pay a penalty.
    c. In another significant action, the United States sued the 
Tenneco Oil Company on behalf of the Sac and Fox Nation of Oklahoma to 
obtain a fresh water supply, as well as compensatory and punitive 
damages. Our complaint alleges that Tenneco's oil production on Sac and 
Fox lands had destroyed the Sac and Fox Nation's groundwater supply. We 
have reached a settlement in principle with Tenneco, under which the 
company will fund construction of water wells to supply water in tribal 
areas; purchase 120 acres of land to be placed in trust for the tribe; 
and make a cash payment for purposes including cleaning, restoration, 
and reforestation of a pecan grove.
            3. Environmental Crimes Have Real Victims
    Environmental crimes have real victims, as our recent prosecution 
of one particularly egregious case demonstrates. Last fall, the State 
of Mississippi requested EPA's assistance in the investigation of 
widespread pesticide misuse along the State's gulf coast. EPA set up a 
task force that included Federal agents, environmental and health 
agencies in Mississippi, Louisiana, and Alabama, and local health 
officials, as well as Justice Department attorneys. The investigation 
identified two Mississippi residents, Dock Eatman, Jr., and Paul Walls, 
Sr., who were operating unlicensed exterminating businesses and using 
the highly toxic pesticides methyl parathion and permethrin to treat 
homes, day care centers, motels, and restaurants. Methyl parathion and 
permethrin are restricted by EPA for agricultural use in uninhabited 
fields, and exposure to methyl parathion causes serious illnesses. To 
protect people from methyl parathion poisoning, homes and businesses 
contaminated by Eatman and Walls were evacuated or closed. By May 16, 
1997, EPA had relocated more than 1500 people from 399 homes along the 
Mississippi Gulf coast. The cost to evacuate and clean up contaminated 
homes and businesses is expected to exceed $70 million--of which $60 
million has come from the Superfund. We prosecuted Eatman and Walls 
under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). 
At trial, we showed that both defendants had been trained in the legal 
and safe use of restricted-use pesticides and had been warned 
repeatedly that their application of pesticides to homes and businesses 
was illegal. Numerous individuals whose homes had been treated by the 
defendants described illnesses they and their families suffered; some 
of the victims had been hospitalized. On March 13, 1997, a jury in 
Biloxi found Dock Eatman Jr., guilty on 21 counts of pesticide misuse. 
On May 2, 1997, a jury in Hattiesburg found Paul Walls, Sr., guilty on 
48 FIFRA counts. Sentencing is scheduled for July 7, 1997.
    As I mentioned, we recently have been targeting the illegal 
importation of ozone-depleting CFCs. CFCs are used primarily as 
refrigerants, solvents, and propellants. Unfortunately, once in the 
stratosphere, CFCs destroy the ozone layer that protects us from ultra-
violet radiation; that can cause increased skin cancer, retard growth 
in plants and animals, and even disrupt the human immune system. In 
January 1996, the United States imposed a ban on most CFC importation, 
although existing stockpiles can legally be used. After the phase-out 
began, a black-market in illegally imported CFCs developed in the 
United States. Our nationwide Federal offensive has resulted in 
significant jail terms and criminal fines for the smugglers. In the 
past 2 years, more than two million pounds of CFCs have been seized, 
with a street value of more than $18 million.
    In another case, we assisted the U.S. Attorney in prosecuting 
Consolidated Edison when an explosion in a Con Ed steam manhole in New 
York City released 200 pounds of asbestos into a crowded city 
neighborhood. Con Ed quickly learned of the explosion and the asbestos 
release. To protect the public, our environmental laws required Con Ed 
to report the release immediately. Con Ed did not report it for 4 days, 
during which time many people were exposed, while Con Ed falsely 
assured everyone, including its own employees working on repairs, that 
no asbestos had been released. The corporation and an assistant vice 
president were convicted.
            4. Protecting Children's Health
    Protecting children from environmental health risks is a high 
priority for the Clinton Administration. Some of this Division's 
largest and most successful enforcement cases have addressed the health 
and safety of children. As the President stated in his recent Executive 
Order concerning Protection of Children from Environmental Health Risks 
and Safety Risks, a growing body of scientific knowledge demonstrates 
that children may suffer disproportionately from environmental health 
risks. These risks arise because children's neurological, 
immunological, digestive and other bodily systems are still developing; 
they eat more food, drink more fluids, and breathe more air in 
proportion to their body weight than adults; and they are less able to 
protect themselves from environmental hazards. Executive Order 13045 
directs Federal agencies to improve research to protect children and to 
ensure that new safeguards consider special risks to children.
    In many of the Environment Division's Superfund cases involving 
mining wastes, such as Bunker Hill in Idaho, Sharon Steel in Utah, 
Leadville/Cal Gulch in Colorado, the ABEX Site in Portsmouth, Virginia, 
and NL Industries in Illinois, young children are subject to 
disproportionate exposure and risk. In these cases, lead and other 
heavy metals hazardous to young children had been left in mine waste 
and are easily accessible to children, who may live and play on the 
waste piles. As a result of these cases, the companies that benefited 
from the mining operations are required to assist in removing the toxic 
soils from the yards and playgrounds where the children live and play 
in the old mining towns of the Silver Valley of Idaho, Midvale, Utah, 
Leadville and Aspen, Colorado.
    Enforcement efforts under the Safe Drinking Water Act, Clean Air 
Act and other environmental statutes also protect children's health. 
After working in close cooperation with the State, we recently entered 
a consent decree in United States v. Rio Bravo Farms, which involved 
the Cuna del Valle (Cradle of the Valley) ``colonia'' in El Paso 
County, Texas, near the Rio Grande River. Colonias are rural 
settlements of generally substandard housing along the U.S.-Mexican 
border, which frequently lack basic infrastructure, such as potable 
water, sanitary waste disposal systems, electricity, and paved roads. 
The United States alleged that Rio Bravo's concentration of low income 
residents at the colonia created an imminent and substantial 
endangerment because the residents used shallow water wells to obtain 
water for household consumption, but the residents also had no choice 
but to dispose of fecal material at the colonia in a manner that could 
contaminate the well water with disease-causing bacteria and viruses 
found in human feces. Many colonia residents are new families with 
young children. Children, the elderly and others with weakened immune 
systems are particularly vulnerable to the enteric diseases that are 
caused by the consumption of water contaminated with bacteria and 
viruses associated with human feces. Under the consent decree, the 
defendants have constructed and will maintain a temporary water station 
at the Cuna del Valle colonia to provide potable water to residents 
until the El Paso County Lower Valley Water District Authority has 
extended water service lines through the colonia in late 1997, and 
residents are able to obtain potable water from the local public water 
authority. When this occurs, the defendants will pay any costs 
associated with connecting the residents to the water lines.
    We also bring criminal cases to punish and deter violations that 
harm children. The prosecution in United States v. William Recht Co. 
(M.D. Fla.) involved two 9-year-old boys who died after playing in a 
dumpster in which the defendants had illegally disposed of toluene 
wastes. Two Recht employees were convicted of two counts of illegal 
treatment, storage, and disposal of hazardous waste under RCRA and were 
sentenced to 27 months in prison. The corporation entered a guilty plea 
to the charge of violating RCRA by knowingly endangering the lives of 
others.
E. Alternative Dispute Resolution
    Although one of our primary responsibilities is to litigate cases 
to protect public health and the environment, we seek to avoid 
litigation where possible. In April 1995, Attorney General Reno issued 
an order on Alternative Dispute Resolution (ADR) to promote the use of 
ADR in appropriate cases. Pursuant to that order, the Environment 
Division issued a policy concerning criteria to be used in identifying 
cases appropriate for ADR and concerning ADR training for all 
attorneys. The Division ADR policy calls upon our attorneys to use ADR 
techniques in their cases whenever ADR may be an effective way to reach 
a consensual result that is beneficial to the United States.
    We have used ADR with particular success in multiple party 
Superfund litigation. In those cases, mediation on allocation issues, 
such as allocation of the costs incurred by the government for cleanup 
of a Superfund site among various parties that are jointly and 
severally liable for costs, avoids protracted litigation and may 
resolve those allocation issues without waiting for further litigation. 
Two good examples of this are United States v. Allied Signal, et al. 
(D. N.J.) and United States v. American Cyanamid et al., (S.D.W.VA.), 
both Superfund cost recovery cases. Mediation in those cases also 
resolved contribution litigation filed against the United States as a 
defendant.
    ADR also is useful in cases or disputes that involve more than one 
governmental body or sovereign (e.g., the Federal Government, a State 
government, and an Indian Tribe), such as water resource cases. ADR may 
provide an efficient and cost-effective solution to such disputes and 
may resolve the whole dispute--rather than just the portion presented 
in litigation. For example, mediation in Wisconsin v. Illinois, a 
Supreme Court original action, led to an agreement to resolve a 90-year 
water allocation dispute involving eight States and the United States, 
and will avoid years of litigation that could have cost the taxpayers 
millions of dollars.
    From our experience in the Environment Division, we are learning 
that ADR can help to resolve cases or to narrow issues, which in turn 
may lead to settlement. Where appropriate, we hope to foster and 
develop alternatives to the traditional adversarial techniques used to 
resolve civil legal disputes involving the United States.
                            iii. conclusions
    This Division's job is to protect our Nation's environment, to 
protect our people's health, and to ensure a level playing field 
through firm, but fair enforcement. I am proud to say that the 
attorneys in our Division--working in close cooperation with our 
colleagues in our client agencies, the U.S. Attorneys' Offices, and in 
State and local government--are doing a great job and getting visible 
results.
                                 ______
                                 
  Response of Lois Schiffer to Additional Question From Senator Chafee
    Question 1. Several members have expressed their concern with the 
reluctance of Federal agencies to recognize a State's interest in 
managing the restoration of principally State environmental assets. One 
case in point is the restoration of the Fox River, in Wisconsin. 
Wisconsin, as I understand it, has not only expressly sought lead 
responsibility but has actually initiated agreements for restoration.
    If the goal ultimately is clean up, why is it so difficult for the 
Federal resource agencies and the Justice Department to allow States to 
take a lead role?
    Answer. The United States is committed to ensuring the most 
effective cleanup and restoration of our Nation's waters. In doing so, 
the United States has developed close and constructive relations with 
State trustees at most sites that implicate both Federal and State 
interests. Even at sites where some of the natural resources at issue 
are the responsibility of Federal trustees, the United States often has 
agreed that the relevant State should carry primary responsibility and 
the lead role for damage assessment and restoration. Such decisions are 
made on a site-by-site basis. The United States, however, has a 
responsibility to restore and protect the resources of the American 
people.
    The restoration of the Fox River cannot be viewed simply as the 
restoration of one State's environmental asset. With each passing year, 
another 600 pounds of PCBs are flushed from the river into the Green 
Bay--Lake Michigan environment. The PCBs have contaminated the food 
chain in both the river and bay, and fish consumption advisories have 
been in place continuously for more than 20 years. Once the PCBs leave 
the river, they are for all practical purposes beyond any clean up or 
other remedial option. Only by addressing the contamination in the 
river can the United States protect significant resources under Federal 
management, such as: National Wildlife Refuge lands, nationally 
significant Great Lakes fish stocks (e.g., lake trout, yellow perch, 
walleye), lake trout in Lake Michigan stocked from Federal hatcheries, 
and migratory birds. Without Federal involvement, the interests of 
other States on Green Bay and Lake Michigan and the American people 
could be compromised.
    Although the State of Wisconsin has taken some important steps with 
regard to the Fox River, we have reluctantly concluded that those steps 
will not readily produce the river-wide restoration needed for the 
State, tribal, and Federal natural resources that have been damaged and 
that remain at risk. For many years, the Federal Government has 
deferred to the voluntary, consensus approach advocated by Wisconsin to 
address the Fox River. No meaningful cleanup plan has been developed, 
and no cleanup has taken place. Despite these many years and millions 
of Federal dollars spent studying the river, the January 1997 interim 
agreement between the State and several companies--the agreement 
mentioned in this question--neither secures, nor even contains a 
commitment to secure, a river-wide cleanup. Rather, it provides 
principally for the companies to furnish an unspecified mix of funding 
and work for demonstration projects. The companies apparently made even 
that limited agreement only after the United States increased its 
involvement.
    We will continue to participate in discussions and negotiations 
over the river because the United States is responsible for the 
affected, federally-managed resources. EPA's recent proposal to list 
this site on the National Priorities List likely will increase the 
Federal interest and concern for the river. Acknowledging that the goal 
of all sovereign parties is to ensure a comprehensive clean up of the 
Fox River and to restore injured Federal, tribal and State natural 
resources, the Federal and tribal trustees, EPA, and the State of 
Wisconsin have recently made substantial progress in defining a process 
by which these parties will work together cooperatively to achieve this 
ultimate goal.
                                 ______
                                 
 Responses of Lois Schiffer to Additional Questions From Senator Allard
    Question 1. Define what an overfiling is, both administratively and 
legally.
    Answer. There is no one definition of ``overfiling,'' but we use 
the term to refer to the situation in which the Federal Government 
brings a civil or administrative enforcement action after a State civil 
or administrative enforcement action against the same defendant for the 
same violations.

    Question 2. What are the guidelines for overfiling? Please forward 
to me those guidelines and indicate where they can be found.
    Answer. Generally, prior to initiation of litigation by the 
Environment and Natural Resources Division, proposed Justice Department 
cases are reviewed and referred by the appropriate regulatory agency, 
such as EPA, the U.S. Army Corps of Engineers, or the Department of the 
Interior, and are subject to each agency's own guidelines. Once a case 
is referred, this Division's practice generally is to look at three 
questions before deciding to file the lawsuit:
     First, is the earlier enforcement effort securing timely 
compliance with the law, including appropriate mitigation of any threat 
to human health or the environment? Successful enforcement must return 
a polluter to timely and continuous compliance with the law, and 
effective remediation of any wrongful pollution.
     Second, did the earlier enforcement effort recoup the 
economic benefit that the defendant gained by breaking the law? Bad 
actors should not profit from their illegal conduct, and law-abiding 
competitors should not be put at an economic disadvantage.
     Third, did the earlier enforcement effort secure a penalty 
large enough to deter the violator, and its competitors, from future 
violations? The penalty must persuade the violator and similarly 
situated parties that compliance with the law is in their best 
interests and that penalties for non-compliance are not just a cost of 
doing business. Absent special circumstances, the enforcement effort 
should recover a penalty significantly greater than the economic 
benefit that accrued from noncompliance. The penalty secured also must 
account for any recalcitrance shown by the violator and for any 
increase in risk posed to human health or the environment.
    To date, application of these criteria to cases referred from EPA 
and other agencies has resulted in only infrequent overfiling.

    Question 3. I'm aware that in Texas there was a Clean Air Act 
overfiling involving Hoechst-Celanese. In this instance the Texas Air 
Control Board advised Hoecht-Celanese (HCC) that they were exempt from 
the benzene National Emissions Standards for Hazardous Air Pollutants 
(NESHAP) rule and in December 1984 wrote a letter to the Hoecht-
Celanese to that effect and copied the Region VI Administrator of EPA 
of their ruling.
    On or about 1995 EPA filed a benzene CAA enforcement against 
Hoechst-Celanese.
    My questions are as follows;
    (A) Are the facts above accurate?
    Answer. The facts assumed by the question are incomplete. The 
United States has filed a Clean Air Act enforcement action against 
Hoechst Celanese Corporation (``HCC'') for violations of the fugitive 
benzene emissions NESHAP regulation at its Bishop, Texas plant. Texas 
has never brought an enforcement action for these violations, and 
therefore the United States case does not involve an overfiling. The 
United States' action has been stayed pending the outcome of another 
Federal benzene NESHAP case brought in South Carolina for violations at 
a different HCC plant. The district court in the South Carolina case 
upheld EPA's interpretation of the regulation, but held that no 
penalties could be assessed against HCC because it allegedly did not 
have fair notice of EPA's interpretation. EPA and HCC have both 
appealed to the U.S. Court of Appeals for the Fourth Circuit. See 
United States v. Hoechst Celanese Corp., 1996 WL 898377 (D.S.C.), 
appeal pending, Nos. 96-2003, 96-2051 (4th Cir.).
    It is true that the Texas Air Control Board (TACB) sent HCC a 
letter on December 7, 1984, concurring with the company's conclusion 
that its Bishop, Texas Plant was exempt from the requirements of the 
benzene NESHAP regulation, and that EPA was copied on that letter. 
However, as explained below, EPA did not learn until later that the 
TACB's interpretation of the regulation deviated from EPA's 
interpretation, because the TACB letter agreed with HCC's conclusion 
without stating the TACB interpretation of the regulation.

    (B) If the facts are accurate how could HCC know it was in 
violation of the CAA?
    Answer. Internal company documents, submitted with our summary 
judgment papers in the South Carolina action, show that HCC knew at 
that time how EPA interpreted the exemption. HCC also knew that the 
Bishop Plant would not be exempt under EPA's interpretation. For 
example, the company in September 1984 received a copy of a letter that 
EPA had sent to a different facility, explaining EPA's interpretation; 
that EPA letter was circulated widely within the company, and one 
employee at the Bishop Plant wrote ``Read it and weep'' at the top.
    HCC should have asked EPA if HCC had any doubt about the scope of 
the exemption it claimed. EPA has consistently applied its 
interpretation of the regulation to plants, such as the Bishop Plant, 
that recycle benzene. If HCC had written to EPA and asked for a 
determination of how the regulation applied to its facility, as other 
companies did, the company would have learned that it was indeed 
subject to the regulation. Instead, HCC did not seek such a 
determination from EPA for any of its plants, including facilities in 
States where TACB had no regulatory authority.

    (C) Why did it take so long for an overfiling to occur given that 
EPA had notice of the written opinion of the TACB in December, 1984?
    Answer. EPA did not file the enforcement action sooner because 
TACB's December 7, 1984 letter did not explain TACB's interpretation of 
the benzene NESHAP regulation. Therefore, EPA did not know that TACB 
was using an inappropriate method of calculating HCC's use of benzene 
and did not know that the State's interpretation was inconsistent with 
EPA's. Indeed, the TACB copied EPA shortly thereafter with a letter it 
sent to a member of the regulated community expressly informing the 
regulated party of EPA's interpretation of the same provision at issue 
here. Therefore, EPA had no reason to believe that TACB's letter to HCC 
was based on any different interpretation. EPA learned about the TACB's 
interpretation and the Bishop Plant's violations of the benzene NESHAP 
only after EPA commenced enforcement against HCC's South Carolina 
facility in 1989.

    (D) Is it the opinion of EPA that tardiness in reacting to State 
actions is beneficial to the State/Federal relationship?
    This was not an instance where EPA was immediately aware of the 
company's violations or HCC had put EPA on notice of the company's 
violations. Once HCC's unlawful conduct came to EPA's attention, the 
Agency took action. The Department of Justice believes that companies 
that violate the law should be penalized.

    (E) Why was it appropriate to overfile against Hoecht-Celanese, and 
please include the guidelines EPA used when the decision was made to 
overfile? Who made this decision?
    As noted above, this case was not an overfiling, because the State 
of Texas did not file an enforcement action against HCC. EPA referred 
the case to our Division, and I approved the filing of the complaint, 
based on the factors explained above, in the answer to Senator Allard's 
Question 2.

    Question 4. How many overfilings has the EPA taken against 
companies, municipalities, or other entities based upon activities that 
were approved by States under delegated authority previous to 1993?
    Answer. We defer to EPA to answer this question.

    Question 5. In reply to Mr. Herman's comment that, ``out of 20, 000 
cases EPA has only overfiled in four'' in fiscal year 1996, Patricia 
Bangert of the Colorado AG's office replied that in Colorado alone 
there have been 3 overfilings this year. Is that accurate, and if not 
why? If so please forward those cases to my office.
    Answer. We defer to EPA to answer this question.

    Question 6. Is it true that EPA wrote State legislatures urging 
them not to pass environmental self audit bills? If so please include a 
copy of one of those letters in your reply for the record.
    Answer. We defer to EPA to answer this question. The Attorney 
General has strongly opposed environmental audit privilege and immunity 
legislation as contrary to the public interest by providing secrecy for 
those who violate the law and impeding law enforcement. The Department 
of Justice supports EPA's December, 1995, audit policy, not laws that 
would create radically new privileges and immunities for polluters.

    Question 7. Can you explain what measures EPA uses to measure 
success of delegated environmental programs?
    Answer. We defer to EPA to answer this question.

    Question 8. Would the Administration support a commission to study 
measures of success of environmental laws?
    Answer. The Department of Justice supports development of 
additional measures of environmental results, and indeed is working 
with EPA to do just that. One EPA task force, on which the Department 
of Justice participates, is exploring new ways to look at measures of 
environmental compliance and performance, and to develop such measures. 
Part of the impetus for that group's work is the Government Performance 
and Results Act of 1993. The task force, which plans to have a proposal 
out by the fall, has already conducted a number of meetings around the 
country with industry and environmental groups, States, other Federal 
agencies, and other interested stakeholders. The Department of Justice 
understands that EPA would be happy to share the results of this work 
with the Committee.
                                 ______
                                 
      Response of Lois Schiffer to a Question From Senator Baucus
    Question. At the hearing, Virginia Secretary of Natural Resources 
Becky Norton-Dunlop testified about the ``unfair'' action taken by the 
Federal Government against Smithfield Foods. Within the limitations of 
the Department's pending matter policy, please describe why, in your 
view, the United States' Clean Water Act action against Smithfield 
Foods was an appropriate case in which to overfile.
    On May 30, 1997, the United States District Court for the Eastern 
District of Virginia held Smithfield Foods, Inc., and two subsidiaries 
liable for unlawful pollution and reporting violations at two 
wastewater treatment plants. See United States v. Smithfield Foods, 
Inc., No. 2:96cv1204 (E.D. Va.). The court held that the Smithfield 
companies had violated effluent limitations for phosphorus, ammonia-
nitrogen, TKN, fecal coliform, minimum pH, cyanide, oil and grease, 
CBOD, BOD, and total suspended solids. See slip op. at 34-35. The 
court's opinion is enclosed. This answer is based on matters in the 
public record and the court's opinion.
    The Smithfield companies' plants discharged about three million 
gallons of effluent each day to the Pagan River, part of the James 
River estuary, which connects to the Chesapeake Bay. Since 1970, the 
Pagan River has been closed to shellfish harvesting due to fecal 
coliform contamination, to which the Smithfield companies' discharges 
have contributed. Phosphorous and nitrogen discharges from the plants 
have contributed to nutrient loadings that have decreased the health 
and productivity of the Chesapeake Bay. The violations continued for at 
least 5 years.
    The United States brought its civil enforcement action because the 
Commonwealth for years took no action to require compliance and assess 
penalties against the Smithfield companies despite the seriousness of 
their violations. Rather, in the face of threats by the Smithfield 
companies to leave Virginia, the Commonwealth entered into a series of 
agreements allowing the companies to discharge uncontrolled amounts of 
phosphorus into the Pagan River for at least 5 years, in violation of 
the State-issued permit and Federal Clean Water Act requirements. In 
May 1996, the State Water Control Board specifically directed the State 
Department of Environmental Quality to enforce the consent agreements 
but to take no penalty action. As the district court held, the 
Commonwealth's consent orders did not expressly alter the companies' 
obligations to comply with the phosphorus discharge limitation in their 
discharge permit, and ``Smithfield indicated in a letter to the [State 
agency] that it did not believe the [State's order] specifically 
relieved it from compliance with the limitations in the Permit.'' See 
slip op. at 43.
    Because the Commonwealth had not halted the Smithfield companies' 
serious and repeated violations, nor assessed a penalty for those 
violations, EPA referred the matter to the Justice Department. EPA 
provided the Commonwealth with information on Smithfield's violations 
and invited the Commonwealth to join the Federal enforcement action. As 
the court's opinion states, ``[t]he Commonwealth declined the EPA's 
invitation to join the Federal action. Although the Commonwealth never 
mentioned its plan to file its own enforcement action to EPA, on August 
30, 1996, the Commonwealth filed an action against Smithfield.'' See 
slip op. at 21. The Commonwealth for the first time finally sought 
penalties, but in amounts far lower than sought by EPA. Federal 
enforcement was necessary and appropriate due to the Commonwealth's 
inability or unwillingness to halt the Smithfield companies' violations 
and to assess a penalty that would send the message to Smithfield that 
breaking the law is not cost-effective.
    I wish to correct one error in my written statement. The EPA 
referred this matter to the Department of Justice on July 27, 1996, not 
August 27, 1996. However, as the district court found, the EPA notified 
Virginia of the referral by August 27, several months before the United 
States filed its complaint.
                                 ______
                                 
  Responses of Lois Schiffer to Additional Questions From Senator Reid
    Question 1. As an Assistant Attorney General, what are your goals 
for environmental enforcement?
    Answer. As I said in my prepared testimony, our mission is to 
ensure--through firm, fair enforcement--that all Americans can breathe 
clean air, drink pure water, and enjoy clean lakes and streams; to 
provide law-abiding businesses a level economic playing field on which 
to compete; and to deter and punish bad actors who break the law. 
Vigorous enforcement of our environmental laws protects the health of 
our families, our communities, our environment, and our economy.
    Environmental statutes achieve results only if enforced. As William 
K. Reilly, the EPA Administrator between 1989 and 1993, stated, 
enforcement of environmental laws ``is at the very heart of the 
integrity and the commitment of our regulatory programs.'' See Reilly, 
``The Future of Environmental Law,'' 6 Yale J. on Reg. 351, 354 (1989). 
Our response to unlawful conduct must be firm.
    Working closely with our colleagues at the U.S. Attorneys' Offices, 
the EPA, other Federal agencies, the States, and local law enforcement 
agencies, our environmental enforcement efforts have achieved superb 
results. My written statement addresses several of our notable 
successes, and some of our efforts to improve our effectiveness.

    Question 2. You have often said that one goal of your enforcement 
program is to ensure that any fines assessed adequately secure (or 
recover) the economic benefit gained by a company that has violated 
this nation's environmental laws. What do you mean by this? Why is this 
important?
    Answer. Companies that break our environmental laws should not 
benefit from their unlawful conduct. The fine or penalty secured in an 
enforcement action must, at an absolute minimum, persuade the violator 
and similarly situated polluters that timely compliance would have been 
the better business choice. Law abiding companies also should not be 
placed at a competitive disadvantage because they complied while some 
bad actor did not. Recouping economic benefit, plus more, removes an 
incentive to break the law and insures a level economic playing field. 
Thus, an enforcement action should recover all economic benefits 
enjoyed by the polluter by failing to comply with the law on time, plus 
an additional sum so that the violating company is worse off because it 
broke the law than it would have been if it chose to comply.

    Question 3. What have you done to improve relationships between the 
Department and State and local Governments? What effect, if any, has 
having a career local prosecutor, Janet Reno, had on your efforts to 
improve coordination with State and local governments?
    Answer. Attorney General Reno has been a staunch supporter of 
improved intergovernmental coordination and cooperation, and I 
subscribe to that view. In fact, Mark Coleman, the Executive Director 
of the Oklahoma Department of Environmental Quality and Chairman of the 
Compliance Committee of the Environmental Council of the States, 
testified at the Committee's recent hearing that relations between top-
level State and Federal environmental enforcement officials merited an 
``A'' grade. This Division has taken a number of steps to strengthen 
ties between the Department of Justice and State and local governments. 
For example:
     We are notifying States before filing suit. As stated in 
my written testimony, we have established a policy that our 
Environmental Enforcement Section will notify a State in advance of 
filing a suit in that State, absent exceptional circumstances, and will 
invite the State's participation or cooperation in the action. This 
policy encourages coordination and information exchange with the State, 
and ensures that the States do not learn about our actions from reading 
the newspaper.
     We are bringing more cases jointly with States. In many of 
our cases, States are co-plaintiffs and work closely with our 
attorneys, through discovery, settlement discussions, briefing, or even 
sitting together at the trial counsel table.
     We are sharing penalties with States in appropriate cases. 
Since the beginning of Fiscal Year 1996, we have entered into 25 
settlements in which States were co-plaintiffs and in which we split 
penalties with the States. All told, States have collected almost $12 
million from our joint enforcement actions during that period.
     We have developed productive relationships with State and 
local law enforcement in criminal environmental enforcement. Our 
Environmental Crimes Section has worked closely with U.S. Attorneys' 
Offices to support environmental crimes task forces and Law Enforcement 
Coordinating Committees (LECCs) across the country. As Senator Sessions 
stated at the Committee's recent hearing, an environmental crimes 
working group in Alabama that included the State attorney general, 
State environmental agency, the U.S. attorneys, EPA, the Coast Guard, 
and others, was a ``good model'' for law-enforcement cooperation. 
Similarly, the United States Attorney's Office for the Eastern District 
of Missouri established an Environmental Crime Task Force, which 
includes members from all Federal, State and local law enforcement 
agencies that have responsibility for the detection, investigation, and 
prosecution of environmental crimes in that jurisdiction. The 
Environmental Crimes Section has worked closely with the Task Force. 
The Missouri Attorney General also has designated two assistant 
attorneys general to handle cases in Federal court through the U.S. 
Attorney's Office. Because the State of Missouri has only misdemeanor 
penalties for violations of State environmental law, most cases are 
brought under Federal statutes and in Federal court. The task force has 
been very successful in coordinating and prosecuting environmental 
crimes. Similar task forces are thriving in many other States.
    Even where LECCs and task forces do not yet exist, State and/or 
local government personnel are directly involved in most Federal 
environmental prosecutions. Often their contributions extend from the 
initial investigation through trial of the case.
    In addition, for a number of years, Department attorneys--including 
those in this Division and in United States Attorneys' Offices--have 
worked with State officials to train State and local prosecutors, 
investigators, and technical personnel in the development of 
environmental crimes cases. Much of that work has been done in 
conjunction with EPA's training program at the Federal Law Enforcement 
Training Center in Georgia. Department attorneys have helped develop 
the basic curricula and regularly teach there. Our attorneys also 
assist as faculty and otherwise for State and local training sponsored 
by the National Association of Attorneys General, by the four regional 
State and local environmental enforcement organizations, and for a wide 
variety of other training efforts at the State and local level. Such 
instruction frequently is a weekly routine for our Environmental Crimes 
Section attorneys.
     We meet regularly with State and local governments to 
discuss environmental enforcement and compliance. In 1994, then-
Attorneys General Tom Udall of New Mexico and Deborah Moritz of New 
Jersey joined with a number of State environmental commissioners, 
tribal representatives, EPA Assistant Administrator Steve Herman, and 
me to establish a senior forum for the discussion of environmental 
enforcement and compliance issues. The group has met as many as several 
times a year since then. We have been very pleased to join in this 
process, which facilitates coordination and idea-sharing among 
policymakers in State and Federal Governments. We participate in many 
other such cooperative efforts, and have met often with the National 
Association of Attorneys General and the Conference of Western 
Attorneys General. We have also met with other State and local entities 
such as the Environmental Council of the States and the International 
City/County Management Association.
     I have created a position in my office that reflects the 
special importance of our relationships with State and local 
governments. Near the beginning of my tenure as Assistant Attorney 
General, I created a new position, the Counselor for State and Local 
Environmental Affairs. My Counselor works with State and local 
officials and attorneys in our Division to maximize environmental 
enforcement through cooperative efforts, and to act as liaison with our 
colleagues in the States and with State organizations.
     We have worked with States to develop the environmental 
crimes bill. The ``Environmental Crimes and Enforcement Act of 1997,'' 
which has been introduced in the House as H.R. 277, and which we hope 
soon will be introduced with bipartisan support in the Senate, will 
enhance environmental criminal enforcement under a wide range of 
statutes. It was developed to reflect the needs of, and is designed to 
support, law enforcement officials throughout the country. The 
legislation strengthens Federal, State, local, and tribal partnerships 
by authorizing courts to order convicted criminals to reimburse States, 
localities, and tribes for their costs in assisting Federal 
environmental prosecutions. Among other things, the bill also provides 
for increased punishments when police officers, firefighters, other 
State and local officials, or anyone else suffers death or serious 
injury as a result of an environmental crime. The bill also will 
respond to the urgent need expressed by State, local, and tribal 
officials for additional Federal training on environmental criminal 
enforcement. It establishes a program dedicated to the training of law 
enforcement personnel investigating environmental crimes.

    Question 4. Can you tell us more about your approach to cases 
involving small businesses? How do they differ from your approach to 
more well-heeled polluters?
    Answer. We have taken some special steps regarding penalties for 
small businesses and to encourage such businesses to participate in 
Federal and State outreach and compliance assistance programs. Under 
the Department's ``Interim Policy on Penalty Mitigation for Small 
Businesses'' (July 19, 1995), a small business may qualify for extra 
mitigation of any proposed penalty if it learns of a violation for the 
first time through its voluntary participation in a government-
sponsored compliance assistance program and cures any violation as soon 
as possible. In such cases, I have directed that we consider 
compromising as much as 100 percent of the ``gravity'' component of any 
proposed penalty. The policy does not apply to violations for which 
extra mitigation would be inappropriate, such as criminal acts and 
actions that posed an imminent and substantial endangerment to public 
health or the environment, or to repeat violators. This policy 
supplements the Department's regular exercise of enforcement 
discretion, under which we may decide not to bring an enforcement 
action, or to seek less than the maximum penalties due to case specific 
circumstances that warrant leniency. The Department's policy, a copy of 
which is attached, encourages small businesses to participate in 
outreach assistance programs, discover and disclose violations, and 
cure them as soon as possible. We are also guided by EPA's settlement 
policies in our settlement negotiations, which recognize, among other 
things, ability-to-pay limitations.
    In all our civil cases, we regularly offer parties an opportunity 
to settle with us before we initiate litigation, and in all our cases, 
we seek to ensure that our settlement offers are appropriate under the 
circumstances. Where we believe a regulatory enforcement action for 
penalties would involve a ``small entity,'' as defined in the Small 
Business Regulatory Enforcement and Fairness Act, we generally refrain 
from demanding a specific settlement sum until we ask the small entity 
for financial or other information that may bear on an appropriate 
penalty or injunctive relief. After analyzing information provided, we 
make a best and final (absent new information) settlement offer. By 
presenting a ``best and final'' offer early, we try to relieve any need 
the small entity may perceive to litigate or negotiate unnecessarily.

    Question 5. What role do citizen suits play in environmental 
enforcement? Why is it important that we preserve a role for citizens 
in enforcing environmental laws?
    Answer. Citizen enforcement is an important supplement to Federal 
environmental enforcement, because the government has only limited 
resources with which to bring its own enforcement actions. The 
responsible exercise of citizen enforcement authorities provides a 
strong incentive for regulated entities to comply with the law. Citizen 
suits enable those most affected by pollution--those who live, work, or 
recreate in an area affected by pollution--to ensure compliance with 
environmental protection laws when Federal, State, and local 
governments have not acted effectively.

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Prepared Statement of Steven A. Herman, Assistant Administrator, Office 
   of Enforcement and Compliance Assurance, Environmental Protection 
                                 Agency
                            i. introduction
    Thank you, Mr. Chairman, for the opportunity to testify on the 
Environmental Protection Agency's (EPA) enforcement and compliance 
assurance program and EPA's enforcement relationship with the States. 
Today's hearing is very timely as these two issues have received a 
great deal of attention this past year. I believe that this attention 
is entirely appropriate, since effective environmental protection 
requires not only a strong Federal enforcement presence, but also a 
solid, dynamic EPA-state partnership that can adapt to new and changing 
environmental challenges facing this country at both the local and 
national levels.
    I would like to talk about the two fundamental principles that 
guide EPA's own enforcement approach and the agency's work with the 
States. These two principles are accountability and flexibility.
         ii. accountability to ensure environmental compliance
    Accountability is the central part of EPA's enforcement and 
compliance assurance program. By accountability, I mean that the public 
expects the regulated community to obey the law and fully comply with 
applicable regulations and also expects EPA to take tough, but fair 
action against those who fail to do so. We also know that regulated 
entities that comply with environmental requirements expect, and 
rightly so, EPA to hold noncomplying entities accountable for 
violations that may place the violators at a competitive advantage.
    EPA ensures accountability by maintaining a strong enforcement 
program that includes bringing criminal, civil, and administrative 
actions against violators. A strong enforcement program punishes 
wrongdoers, deters potential violators, brings actual violators into 
compliance, and can ensure that damage to the environment is rectified. 
In a March 1996 report, the General Accounting Office emphasized the 
important deterrent role of penalties:
    [P]enalties play a key role in environmental enforcement by 
deterring violators and by ensuring that regulated entities are treated 
fairly and consistently so that no one gains a competitive advantage by 
violating environmental regulations.
    Water Pollution: Many Violators Have not Received Appropriate 
Enforcement Action (GAO/RCED-96-23, March 1996). See also, 
Environmental Enforcement: Penalties May Not Recover Economic Benefits 
Gained by Violators (GAO/RCED-91-166, June 1991).
    The deterrent value of established enforcement methods has also 
been confirmed by a recent study undertaken by EPA's Pollution 
Prevention Policy Staff and co-sponsored by the U.S. Departments of 
Energy, Defense, and Commerce entitled Study of Industry Motivation for 
Pollution Prevention. The purpose of the study was to improve the 
understanding of Federal agencies about how environmental issues 
influence core business decisions. Based on information from more than 
1000 business people representing randomly-selected lithographic 
printing companies and larger manufacturing companies reporting on the 
Federal Toxics Release Inventory (TRI), the study showed that 
environmental enforcement actions were among the most important factors 
in getting both TRI respondents and printers to consider environmental 
issues in the performance of their duties.
    EPA has a firm commitment to a strong enforcement program. As shown 
in our 1996 Enforcement Accomplishments Report, we referred a record 
262 criminal enforcement actions to the Department of Justice (DOJ), as 
well as 295 civil cases--up 38 percent from 1995. We also assessed a 
record $76.6 million in criminal penalties and another $66.2 million in 
civil penalties--up 90 percent from 1995. Our combined criminal, civil 
judicial, and administrative penalties for 1996 were the highest in the 
history of the agency at more than $172 million. Significantly, EPA was 
able to measure for the first time the environmental results of these 
enforcement actions. This data includes types and amounts of pollutants 
reduced as a direct result of EPA's 2,500 enforcement actions taken in 
1996, the environmental benefits and impacts of those completed 
actions, and the types and amounts of actions taken by regulated 
entities.
    Indeed, the report shows that we are focusing our efforts on the 
most serious pollutants and health risks, making the polluter pay for 
noncompliance, and securing settlements that have a direct, positive 
impact on public health and the environment. For example, during 1996 
polluters spent almost $1.5 billion on correcting violations, cleaning 
up hazardous waste sites and/or taking additional steps to improve the 
environment or prevent future problems. Our settlements also resulted 
in significant aggregate reductions in the amount of pollutants 
discharged into the environment, including nearly 200 million pounds of 
carbon monoxide, 16.6 million pounds of lead, and 7.7 million pounds of 
asbestos. The report also punctures the myth that EPA pursues only so-
called ``paper'' violations that have no real public health or 
environmental impacts.
    Our commitment to strong enforcement is also reflected in the 
efforts of our criminal enforcement program. Our Office of Criminal 
Enforcement, Forensics, and Training (OCEFT) will soon have 200 
specially trained criminal investigators assigned to area offices in 36 
cities across the country to work directly with local enforcement 
agencies in communities at greater risk of environmental crimes. 
Recognizing the critical importance of cooperation with State and local 
law enforcement agencies, OCEFT special agents now participate in more 
than 90 environmental crimes task forces nationwide with Federal, State 
and local law enforcement agencies to share information, establish 
local priorities, and pursue criminal environmental violations. Since 
1992, EPA has participated in 644 joint criminal investigations with 
State and local law enforcement personnel. OCEFT also devotes 
significant resources to the training of law enforcement and regulatory 
personnel from States and cities across the country.
    We are building upon these successes through our National 
Performance Measurement Strategy. This strategy is developing an 
enhanced set of performance measures for our enforcement and compliance 
assurance program. The measures will be used to supplement our 
established output measures (i.e., number of civil and criminal cases 
referred and amount of penalties assessed) with additional outcome 
measures to better assess the status and trends of regulatory 
compliance and environmental improvements resulting from our 
enforcement and compliance assurance activities.
    So far, we have held two successful public meetings in Alexandria, 
Virginia and San Francisco, California, where we heard from State 
environmental agencies and State attorneys general, other Federal 
agencies, environmental groups and environmental justice advocates, 
regulated companies and industry associations, academic experts, and 
Congressional staff about their ideas for measuring the effectiveness 
of environmental enforcement and compliance assurance programs. We are 
following up on these two meetings with a series of more focussed 
discussions with different stakeholders. EPA will conclude these 
meetings in mid-September at a ``Capstone'' conference with a cross-
section of stakeholders to identify common understandings, areas of 
agreement, and unresolved issues. Finally, EPA will develop a report of 
findings and an implementation plan with a schedule by October 1997.
          iii. flexibility to promote environmental compliance
    Along with accountability, flexibility is the other principle at 
the foundation of our enforcement program. Flexibility is not only 
necessary to find new and innovative ways to achieve compliance--for 
there is often more than one way to comply--but is also necessary to 
make the most of limited government resources and target efforts more 
efficiently on the country's most urgent health risks and environmental 
problems.
    Flexibility is a key part of EPA's enforcement and compliance 
assistance program. In fact, the primary purpose of the reorganization 
of EPA's Office of Enforcement into the Office of Enforcement and 
Compliance Assurance (OECA) in 1994 was to institutionalize 
Administrator Browner's conviction that effective environmental 
protection must include a range of compliance assistance tools in 
addition to established enforcement methods. The reorganization was 
more than just moving boxes within an organizational chart; it was a 
vehicle for ensuring that we consider the best and most effective ways 
to achieve and maintain compliance. Consistent with this approach, and 
the Clinton Administration's high priority on reinventing environmental 
regulation, EPA has launched a number of compliance assistance programs 
and activities over the last few years, including our Compliance 
Assistance Centers, Environmental Leadership Pilot Program, Project XL, 
Common Sense Initiative, and Sector Notebooks. OECA is playing a key 
role in all of these efforts.
EPA's Compliance Assistance Centers
    In partnership with industry, academic institutions, environmental 
groups, other Federal agencies, and the States, EPA has established its 
national Compliance Assistance Centers. The purpose of the centers is 
to improve compliance by increasing awareness of the pertinent Federal 
regulatory requirements and providing information that will help to 
achieve compliance. The centers accomplish this by serving as the first 
place that businesses, trade associations, and other interested parties 
can go to get comprehensive, easy to understand compliance information.
    So far, Compliance Assistance Centers have been established for 
four industry sectors: printing, metal finishing, automotive services 
and repair, and agriculture. Although the centers have not been in 
existence for very long, they are already getting a lot of use. For 
example, the National Metal Finishing Resource Center, which began 
operating as a pilot in April 1996, has had more than 1,354 registered 
users to date. The Auto Service and Repair Center, opened in June 1996, 
has received a total of 130,000 hits to its home page. OECA is now 
working on four new centers that will assist municipalities, the 
transportation industry, small chemical manufacturers, and 
manufacturers of printed wiring boards.
The Environmental Leadership Program
    EPA has promoted a systematic approach to managing environmental 
issues and encourages environmental enhancement activities through the 
Environmental Leadership Program (ELP). For a facility to qualify for 
the initial phase of ELP, EPA looked at several criteria, including the 
facility's systems for monitoring and maintaining compliance with 
environmental laws, relationship with its employees, and involvement 
with the surrounding community. EPA also examined the company's 
investment in environmental enhancement activities, such as 
environmental restoration, product stewardship, or additional pollution 
prevention efforts.
    During the 1 year pilot phase, which ended in August 1996, ten 
private companies and public utilities and two Federal facilities 
tested the design of specific elements of the program. ELP pilot 
participants represented such industries as manufacturing, chemical, 
printing, pulp and paper, and solid/hazardous waste disposal.
    The anticipated benefits of a full scale ELP for facilities would 
include recognition as an environmental leader, reduced and/or modified 
discretionary inspections, and a limited correction period for 
instances of noncompliance as long as certain conditions are met. 
Potential benefits to the environment include increasing the number of 
activities that go beyond compliance with existing environmental 
requirements and encouraging the implementation of best practices 
related to self-monitoring and pollution prevention activities.
Project XL
    An acronym standing for ``excellence and leadership,'' Project XL 
allows facilities and communities to pilot environmental activities 
that produce greater environmental protection than what would be 
achieved from conventional compliance measures, and often at less cost. 
In return, EPA provides relief from certain regulatory requirements, as 
agreed between EPA, the State, and the project sponsor in consultation 
with other stakeholders. Thus, the XL program gives participants the 
flexibility to develop common sense, cost-effective strategies that 
will replace or modify specific regulatory requirements, on the 
condition that they produce greater benefits.
    There are three projects underway to date, and EPA-proposal teams 
are developing final project agreements for 11 more projects.
Common Sense Initiative
    The Common Sense Initiative (CSI) represents a new approach for 
creating policies and environmental management solutions that relate to 
whole industries. It is an experimental effort to increase the role of 
collaboration and consensus into the environmental protection process 
and to address environmental problems in a more holistic way. The goal 
is to encourage the development and creation of innovative solutions to 
today's environmental problems. Six industries are laboratories for 
testing CSI concepts: Automobile Manufacturing, Iron and Steel, Metal 
Finishing, Computers and Electronics, Printing, and Petroleum Refining.
Sector Notebooks
    Sector notebooks are designed to serve as a resource guide for 
learning about specific industries and their environmental issues. In 
October 1995, OECA released profiles of 18 selected industries. 
Included in each notebook profile is a description of the industrial 
processes used, pollution outputs, pollution prevention opportunities, 
applicable Federal statutes and regulations, past compliance history, 
and compliance assistance information. More than 50,000 printed and 
electronic copies have been requested and distributed so far to States, 
locals, individual facilities, Federal agencies, foreign governments, 
trade groups, and environmental organizations. Several other industries 
have asked EPA to produce notebooks for their industries so that 
regulators and compliance assistance providers can become more 
knowledgeable about their industry. EPA is now in the process of 
developing Notebooks for an additional eight sectors.
    In addition to these activities and programs, EPA has issued 
policies to promote environmental compliance in small businesses and 
communities and, as described in more detail below, issued its self-
disclosure policy in 1996 to give businesses a real incentive to self-
audit, disclose, and correct violations.
    Taken as a whole, these activities and policies demonstrate the 
agency's strong commitment to a flexible, creative compliance 
assistance program. They are tremendous opportunities for the agency to 
improve its own operations, for the regulated community to improve its 
relationships with the public, the government, and the environment, and 
for the public to be assured that we are upholding our responsibilities 
for protecting public health and environment. Ultimately, this flexible 
regulatory approach enables the agency to be more proactive and 
strategic in response to compliance problems.
    However, it is important to emphasize that the key to the success 
of these compliance programs is having a strong enforcement program as 
a base. This base provides a real incentive for companies to 
participate in these compliance assistance programs, because it helps 
assure them that they will not be put at a disadvantage to those who 
ignore their environmental obligations. Further, it assures the public 
that special deals are not being cut and that the regulated community 
remains beholden to the law.
                     iv. the epa-state partnership
    As stated earlier, effective environmental regulation requires a 
strong EPA-state partnership. Most Federal environmental statutes 
recognize the importance of this partnership by giving to authorized or 
approved States the primary responsibility for implementing and 
enforcing Federal programs. This framework provides States the 
opportunity to craft new and innovative solutions to address local 
health risks and environmental problems. But these statutes also 
recognize the necessity and importance of the Federal Government's role 
and give EPA the authority and responsibility to establish baseline 
national standards for public health and the environment and ensure 
that these standards are implemented and enforced fairly and 
consistently in all the States.
    Therefore, EPA works to ensure that citizens in all our States are 
afforded a base level of protection, leaving individual States free to 
establish and implement more stringent, but not less stringent, 
environmental standards. In addition, EPA takes enforcement action in 
cooperation with the States or on its own, when necessary, to prevent 
the creation of pollution ``safe havens'' in lax States, and to 
maintain a level playing field by protecting companies in States that 
comply with environmental requirements from being placed at an economic 
disadvantage to those companies in other States that do not. EPA's 
approach to its State partners follows from these statutory principles 
as well as the principles of flexibility and accountability that guide 
its own regulatory programs.
Flexibility with the States
    EPA is pursuing its policy of flexibility with the States through 
the National Environmental Performance Partnership System (NEPPS). 
Established by the Administrator and State environmental program 
leaders in May 1995, the NEPPS provides a new process by which EPA and 
the States can work together to establish joint national and local 
environmental priorities and then integrate and focus resources to best 
address these priorities. These priorities will then be incorporated 
into our Performance Partnership Agreements (PPA) and Performance 
Partnership Grants (PPGs) with the States. OECA is working with the 
regions and the States to incorporate enforcement and compliance 
assurance priorities into these agreements. In addition, EPA and the 
Environmental Council of States (ECOS) have recently formed a work 
group to help facilitate these efforts and address major enforcement 
issues between EPA and States. The first meeting of this work group, 
chaired by Mark Coleman, Executive Director of the Oklahoma Department 
of Environmental Quality, and myself, was held on May 23 in Arlington, 
Virginia.
    As part of the NEPPS process, EPA and ECOS have been working to 
develop proposed core performance measures for State enforcement and 
compliance assurance programs. These measures would be used to monitor 
the performance of enforcement actions to deter noncompliance and the 
performance compliance assistance and incentive policies. The proposed 
measures utilize both output measures and outcome measures to track the 
performance of State enforcement and compliance assurance programs. EPA 
believes the proposed measures will ensure accountability to the pubic 
and allow EPA and the States to begin measuring the effectiveness of 
alternative approaches to compliance. EPA is continuing to work with 
ECOS to put these measures in place for the fiscal year 1998 cycle of 
PPAs.
    The next step in this NEPPS process is to reduce the reporting 
burden placed on States. To meet this goal, EPA and ECOS are developing 
a set of principles for data reporting. These principles will be used 
to evaluate the need for current and future reporting requirements and 
eliminate obsolete and unnecessary reporting requirements, while 
maintaining or strengthening the data reporting requirements necessary 
to evaluate compliance trends nationwide. EPA and ECOS are examining 
efforts underway in several Regions to reduce reporting and will ask 
them to examine some of the reporting requirements they suspect are not 
necessary.
The Necessity of Strong State Enforcement Programs
    Just as EPA is committed to maintaining a strong Federal 
enforcement program, we expect States to have strong enforcement 
programs. Strong State enforcement programs are essential to ensure 
environmental protection nationwide; further, pollution does not 
recognize State boundaries and many major companies are no longer 
regional, but national in scope and operation.
    As I said earlier, there has been a lot of attention focused 
recently on the EPA-state relationship. In particular, there has been 
some controversy surrounding the impact of State audit laws on 
authorized programs and EPA's national response to the Inspector 
General report in Pennsylvania. EPA's response to these issues is 
consistent with the general views I have just expressed. This means 
that while the agency is working with the States to promote compliance 
and increase the flexibility in the implementation of their authorized 
programs, EPA still expects States to hold violators in their 
jurisdictions accountable by maintaining and utilizing an adequate 
enforcement program.
Impact of State Audit Privilege and Immunity Laws on State Enforcement 
        Authority
    Regarding State audit laws, we recognize that States may find 
different ways to encourage companies to voluntarily discover, 
disclose, and correct environmental violations. But, at the same time, 
we are concerned that some of the approaches being taken actually can 
allow polluters to keep secret from the public critical information 
about potential threats to health and the environment, and can obstruct 
the ability of the States and the public to hold the regulated 
community accountable for violating environmental requirements.
    Let me be clear that we have two distinct issues regarding State 
audit laws--one of policy and one of law. On the policy level, we 
oppose all State audit privilege and immunity laws in any form. Both 
EPA and DOJ have repeatedly testified before Congress and State 
legislatures that audit privileges make it more difficult to enforce 
the nation's environmental laws by making it easier to shield evidence 
of wrongdoing. A privilege law invites defendants to claim many types 
of evidence relevant to a violation as privileged, including sampling 
data and information concerning the cause of and possible environmental 
contamination resulting from a violation. A privilege could, 
consequently, breed litigation and waste government resources as both 
parties struggle to determine what materials fell within the protected 
scope of the audit. Furthermore, a 1995 study by Price Waterhouse of 
369 businesses entitled The Voluntary Environmental Audit Survey of 
U.S. Business indicated that a privilege is not needed to encourage 
voluntary compliance.
    Ultimately, an audit privilege invites secrecy and breeds distrust 
with the community thereby undermining the kind of openness that builds 
trust between regulators, the regulated community, and the public 
necessary for the regulated community to be able to effectively police 
itself. We also oppose blanket immunities as a matter of policy, 
because, among other things, they can eliminate the important deterrent 
effect of penalties and result in disparate treatment of companies in 
States with different immunity laws.
    The second issue we have with these audit laws is legal. Under 
Federal law, EPA has to ensure that the States retain certain minimum 
enforcement authorities required by Federal law for program approval, 
delegation, and authorization. More specifically, EPA must assure that 
a State audit immunity law does not deprive a State of its authority to 
obtain injunctive relief and civil and criminal penalties for any 
violation of program requirements. In determining whether these 
requirements are met, EPA is particularly concerned with whether a 
State has the authority to: (1) obtain immediate and complete 
injunctive relief; (2) recover civil penalties for significant economic 
benefit, repeat violations and violations of judicial or administrative 
orders, serious harm, and activities that may present an imminent and 
substantial endangerment; and (3) obtain criminal fines and sanctions 
for willful and knowing violations of Federal law.
    Under Federal law, a State must also have the ability to get 
information needed to identify noncompliance or criminal conduct and 
ensure correction of violations. Further, it appears that a State 
privilege law that restricts the public's legal right to information 
regarding a facility's compliance with environmental requirements or 
sanctions ``whistleblowers'' for divulging information about a 
company's noncompliance runs afoul of minimum Federal requirements. 
Thus EPA must evaluate State audit laws in light of these Federal 
requirements.
    Federal law also authorizes citizens to petition the agency to 
review or withdraw State programs on the grounds that States lack the 
enforcement authority necessary to carry out Federal programs. 
Recently, citizen groups in the States of Idaho, Michigan, Texas, 
Colorado, and Ohio have filed these types of petitions. EPA and its 
regional offices are working with the States and these citizen groups 
to resolve the agency's legal concerns with particular provisions of 
State audit laws. EPA has also established a task force of senior 
representatives from EPA headquarters and regional offices and the DOJ 
to ensure national consistency in EPA's response to these matters. So 
far, EPA has worked cooperatively with several States, including Utah, 
New Jersey, and Texas to make sure that their audit laws do not present 
an obstacle to program approval.
EPA's Self-Disclosure Policy--Encouraging Audits Without Secrecy and 
        Blanket Immunities
    Although EPA has clearly and consistently opposed State audit 
privilege and broad immunity laws, the agency wants to encourage 
companies to self-monitor, self-disclose, and correct violations. 
Therefore, in 1995, EPA issued its own Incentives for Self-Policing: 
Discovery, Disclosure, and Correction and Prevention of Violations (60 
Federal Register 66706). This policy was a result of an intensive, 18 
month public process designed to find the best way to encourage 
companies to police themselves while preserving fair and effective 
enforcement and the public's right-to-know. The policy reflects 
thorough review and thoughtful suggestions from DOJ, State attorneys 
general and local prosecutors, State environmental agencies, the 
regulated community, and public interest organizations.
    The policy encourages companies to police themselves by eliminating 
punitive, gravity-based penalties for violations that are discovered 
through an environmental audit. EPA will also not recommend criminal 
prosecution for those companies that disclose violations discovered 
through an audit, so long as the violations do not suggest high-level 
corporate involvement or a prevalent management practice to conceal or 
condone violations. The policy carefully balances these incentives with 
conditions and exceptions to protect public health and the environment 
and the community's right to know. In addition to prompt disclosure and 
correction, the policy requires that companies prevent recurrence of 
the violation and remedy any environmental damage. Repeat violations or 
those that present an imminent or substantial threat to public health 
or the environment or result in serious harm are excluded from the 
policy. As a condition of penalty mitigation, EPA may require that a 
description of a company's due diligence efforts be made publicly 
available.
    Many companies have begun to avail themselves of the benefits 
provided by EPA's policy. Thus far, more than 120 companies have 
disclosed and corrected violations at more than 400 facilities under 
the policy. EPA has settled matters with nearly half of these 
companies, waiving penalties in most cases. In addition, several 
States, including Florida, California, and Pennsylvania, have fashioned 
State audit policies patterned on EPA's policy, thus reducing confusion 
in the regulated community in those States about the effect of 
voluntary audits.
Concerns With Federal Overfiling
    There has been some concern expressed by some States that EPA is 
preparing to ``overfile'' against companies in States that have 
objectionable audit laws. Federal overfiling is the initiation of a 
Federal enforcement action, either administrative or civil, following a 
State enforcement action. Federal overfiling is in addition to, not in 
replacement of, a State enforcement action for the same violation at 
the same facility. Let me be clear that EPA has not and will not 
arbitrarily target companies in States with audit privilege and 
immunity laws. However, EPA will continue to exercise its normal 
Federal oversight responsibility and retain the right to bring 
independent enforcement actions in specific circumstances against 
regulated entities that violate environmental requirements in States 
where the agency believes that the State has failed to take timely and 
appropriate enforcement action.
    Rather than overfile, the agency prefers to work with the States to 
determine who should take the necessary enforcement action. In the rare 
instance that the agency does overfile in a State, it does so to 
protect the public health or the environment or to maintain a level 
economic playing field for the regulated community within and among the 
States, and we make sure to provide a State notice prior to filing our 
own enforcement action.
    Statistics show that overfiling is in fact a rare event. As 
reported by a state-by-state survey conducted by ECOS, the agency 
overfiled on about 30 cases or 0.3 percent of all Federal enforcement 
action during fiscal years 1992 through 1994. During fiscal years 1994 
and 1995, the agency overfiled on a total of 18 cases or about 0.1 
percent of State enforcement cases. From October 1995 through September 
1996, there was a total of four overfiling cases. It is important to 
note that none of these cases were filed as a result of the impact of 
State audit laws on the adequacy of the particular State enforcement 
actions.
EPA's National Response to the Inspector General Report in Pennsylvania
    Enforcement accountability involves not only retaining the legal 
authority and capacity to take enforcement action but also having the 
commitment to take enforcement action when appropriate. I was therefore 
very concerned by the findings of a report issued by EPA's Inspector 
General (IG) in February 1997. At the request of EPA's Region III 
office, the IG reviewed the Pennsylvania Department of Environmental 
Protection's (PDEP) program under the Clean Air Act (CAA). The region 
called for the audit, because it was concerned that the State was not 
reporting significant violators to the region, despite ongoing 
discussions between the region and the State. This was not only 
hampering the region's oversight responsibility, but was also a 
violation of the terms of EPA's CAA grant to the State. Therefore, the 
purpose of the audit was to get an independent determination from the 
IG about whether the PDEP was in fact identifying significant violators 
of the CAA in accordance with Federal policy, and reporting these 
violators to EPA. The report found, among other things, that the PDEP 
had failed to report significant violators to EPA or take appropriate 
enforcement action in every case to bring violating facilities into 
compliance.
    In response to this report, Region III is assessing the current 
compliance data of the unreported significant violators identified by 
the IG and working closely with Pennsylvania to initiate appropriate 
enforcement responses as necessary. The Region is also conducting a 
multimedia evaluation of the State's environmental enforcement program 
and is posing the matters raised in the IG report as threshold issues 
that must be addressed before PPA discussions can proceed. In addition, 
I asked my staff to perform an initial review of our data bases to 
determine if the problems in Pennsylvania regarding the reporting of 
significant violators exist elsewhere. This initial screening strongly 
suggested the potential for problems in other States.
    Therefore, the Regions and, independently, the IG are working to 
determine the level of reporting and enforcement activity in other 
States under the CAA as well as other programs. The review will explore 
the full range of potential verification approaches, including 
oversight inspections, State file/data audits, statistical sampling of 
the regulated community, and concentrated multi-statute reviews of 
State environmental compliance and enforcement programs. Each region 
has also contacted their respective States to discuss the problem 
revealed by the IG report and will work closely with them to ensure 
that the problem is not widespread.
    I want to emphasize that EPA's review will be thorough and fair; we 
are not jumping to any conclusions in our review process. Where our 
review shows that States are meeting their obligations, we will let 
them know. Where we believe that problems exist, we will work with 
those States to identify the reasons and correct them. Timely and 
accurate information reporting by the States is critical for EPA and 
State enforcement and cooperation. The agency depends substantially on 
information from the States to maintain our data bases, take 
independent enforcement action as necessary, and develop national 
enforcement policies and strategies. In return, EPA provides technical 
and legal support to States in their enforcement actions and often 
takes joint enforcement actions with States for large, complex, and 
multi-state cases.
                             v. conclusion
    Since joining EPA, I have emphasized that we will not run an 
``either/or'' enforcement program. Only a combination of approaches 
involving tough enforcement actions to ensure compliance, and 
innovative programs to promote compliance, will be effective to protect 
public health and the environment. Therefore, we will continue to build 
upon our balanced enforcement and compliance assurance program adhering 
to the principle that strong enforcement is the central and 
indispensable element of our efforts to ensure and promote compliance.
    We will take this same approach in our relationship with our State 
partners and continue to work with them and others to find new ways to 
promote compliance and innovation, improve coordination, and lower 
costs. But, at the same time, we will work to ensure that States are 
maintaining and utilizing rigorous, effective enforcement programs.
    Thank you again for the opportunity to testify before your 
committee. I would be happy to answer any questions you may have.

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   Prepared Statement of Nikki L. Tinsley, Acting Inspector General, 
                    Environmental Protection Agency
    Good morning, Mr. Chairman and members of the committee. I am 
pleased to have the opportunity to discuss recent audits conducted by 
the Office of Inspector General dealing with issues related to 
environmental enforcement activities.
    Our work has shown that EPA is pursuing an enforcement program 
through compliance assistance to the regulated community, backed up by 
the more traditional enforcement mechanisms including administrative, 
civil and criminal remedies. EPA is working in partnership with State 
and sometimes local agencies to achieve environmental goals. This 
morning I would like to discuss three aspects of a partnership that are 
essential if it is to work well and achieve its objectives: (1) 
mutually agreed upon enforcement approaches; (2) clear agreement on 
each partner's responsibilities; and (3) complete and accurate 
reporting of enforcement data. I will discuss these three areas in 
light of audits we have recently conducted in the Air and Hazardous 
Waste Programs.
Enforcement Approaches
    Compliance assistance is a key component of an effective 
enforcement and compliance assurance program. Compliance assistance 
includes outreach, response to requests for assistance and on-site 
assistance. By providing clear and consistent descriptions of 
regulatory requirements, compliance assistance helps the regulated 
community understand its obligations. For instance, Texas and Louisiana 
held workshops and distributed brochures that described which air 
emissions rules applied to dry cleaning businesses. Compliance 
assistance can also help regulated industries find cost-effective ways 
to comply through the use of pollution prevention and other innovative 
technologies. When voluntary compliance is not achieved, EPA and the 
States have the authority to use more traditional enforcement actions 
to encourage compliance.
    One generally agreed upon enforcement concept is that of escalating 
enforcement actions for repeat violations. For instance, a violator may 
initially be required to comply with an administrative order or be 
assessed a relatively small monetary penalty. If these actions do not 
bring about compliance, the enforcement actions may be escalated to 
civil or criminal judicial actions and progressively higher monetary 
penalties. We found numerous instances where this progressive 
enforcement approach was not employed. For example, in California, a 
glass manufacturing company paid a penalty of $1,000 for emitting 
excessive particulate matter from its furnace. This company was cited 
18 times for the same violation within a 2-year period, and each time 
the penalty was $1,000. During this time, the company also received 
nine notices of violation for failure to report its excess emissions, 
and was fined an average of $645 for each violation. The fact that the 
company remained out of compliance for 2 years indicates the 
enforcement actions (which were not progressively more stringent) were 
unsuccessful in bringing the company quickly into compliance.
    Another enforcement concept is that penalties should be large 
enough to negate any economic benefits of noncompliance. For the most 
part, EPA regions included an economic benefit component in their 
penalty assessments, but the States we reviewed generally did not. For 
example, five of the nine hazardous waste cases we reviewed in 
Louisiana should have included in the penalty calculations the economic 
benefits received by the firms for noncompliance, but none were 
collected. In one case the calculated economic benefit was $45,000. 
When economic benefits are not consistently calculated and collected, 
complying industries are treated unfairly due to the lack of a ``level 
playing field,'' and varied levels of environmental protection could 
put public health and the environment at varying levels of risk.
    A third enforcement concept is that compliance with rules and 
regulations should be enforced consistently across the country, 
including the assessment of penalties. Our audits, however, found a 
great variance when we compared EPA and State penalties, and when we 
compared penalties between States. In both the Air and Hazardous Waste 
Programs we found that penalties assessed by States were much less than 
those assessed by EPA. For example, we reviewed 54 randomly selected 
local air enforcement cases in California and found, with the exception 
of a $1 million penalty, the average assessed penalty was about $1,000. 
By contrast the penalties assessed by EPA averaged $31,000. Penalties 
assessed against hazardous waste violators in a sample of 13 States 
varied from an average of about $7,000 in Maryland to almost $60,000 in 
Texas.
    These inconsistencies were caused partly by such factors as limited 
resources, including a lack of administrative or legal support. Another 
reason for varying enforcement actions is because Federal, State, and 
local agencies have preferences for different enforcement approaches. 
Representatives of State and local agencies we interviewed were 
concerned that larger penalties would result in negative impacts on 
their economies, such as the possibility of industry relocations.
Partnership Responsibilities
    In order for a partnership between EPA and a State enforcement 
agency to work, there must be common agreement about the activities 
each will perform. However, Office of Inspector General audits showed 
that EPA and the States frequently did not come to agreement on program 
requirements, and commitments made were not fulfilled. To illustrate 
the problems that can occur in this area, I would like to refer to an 
audit we did of EPA and the Pennsylvania Air Enforcement program. EPA 
expected the State of Pennsylvania to report all significant violators 
so that EPA could carry out its oversight role and take necessary 
enforcement actions. In comparison to EPA, the State placed less 
emphasis on reporting violators. While Pennsylvania performed 2,000 
inspections at major facilities in fiscal year 1995, it only reported 
six significant violators to EPA. We reviewed 270 of the inspections 
and identified 64 additional facilities that should have been reported. 
Pennsylvania did not believe these violators warranted being reported, 
and this allowed the State to work with violators to achieve compliance 
without EPA involvement. Unfortunately it took Pennsylvania a long time 
to resolve some of these violations--sometimes years--during which time 
facilities were emitting excessive pollution into the atmosphere in 
violation of their permits. Because EPA was unaware of these 
violations, it was unable to exercise appropriate oversight. This 
example shows the importance of EPA and the States having a meeting of 
the minds on expectations.
    This is especially critical in our view because EPA is now awarding 
new Performance Partnership Grants in lieu of the old categorical 
grants. These grants necessitate a new cooperative relationship where 
EPA and States share the same environmental and program goals. No 
partnership can be successful without such sharing.
Collecting and Reporting Enforcement Data
    Accurate and complete data on environmental enforcement is vital to 
provide a baseline so that we as a Nation can judge the extent that 
industry complies with environmental laws, and to provide the 
information that States and EPA need to target areas for increased 
enforcement. We found major omissions and inaccuracies in enforcement 
data systems of both the Air and Hazardous Waste Programs. In the Air 
Program, enforcement actions were often underreported and inaccurately 
characterized. In the San Francisco area, for instance, half of the 
notices of violation were not entered into the data system; while in 
Texas and Louisiana not all enforcement cases were reported, and almost 
half of those that were reported were not properly identified as 
significant violators.
    By way of contrast, a data information system must guard against 
requiring unnecessary reporting. In the Hazardous Waste Program, we 
found that EPA's instructions and forms were long and complex, using a 
programming language that was difficult to learn and use. As a result 
many users of the system had problems obtaining usable data and used 
their own versions instead. EPA is now working with its State partners 
through the Waste Information Needs initiative to reduce reporting 
requirements for States and industry, while ensuring accurate data is 
available for tracking national results in areas such as waste 
minimization.
Conclusion
    I have discussed three elements we believe are necessary for 
effective partnerships between EPA and the States.
     First, partners must agree upon an overall enforcement 
approach. That approach should include assisting the regulated 
community to comply with environmental laws and regulations; and must 
include consistent employment of fines and penalties when voluntary 
compliance cannot be achieved.
     Second, all partners must have a clear understanding and 
acceptance of their responsibilities. This requires a meeting of the 
minds on what the partners are going to be held accountable for, 
agreement on measures of success, and good faith efforts to achieve 
environmental goals.
     Third, data collection and systems must be improved to 
provide complete, accurate and timely data on enforcement activities. 
However, systems should not burden the regulated community with 
unnecessary reporting requirements.
    This concludes my prepared remarks. I will be happy to answer 
questions.
                                 ______
                                 
   Prepared Statement of Mark Coleman, Executive Director, Oklahoma 
                  Department of Environmental Quality
    My name is Mark Coleman. I am the Executive Director of the 
Oklahoma Department of Environmental Quality and the Chairman of the 
Compliance Committee of the Environmental Council of the States. The 
Environmental Council of the States (ECOS) is the national, non-
partisan, non-profit association of State and territorial environmental 
commissioners. I appreciate this opportunity to testify before you 
today regarding the enforcement relationship between the States and the 
Environmental Protection Agency (EPA).
    In keeping with congressional intent, the vast majority of 
environmental enforcement in America is done by State government. State 
governments bring 9 out of 10 of the nation's enforcement actions each 
year. States have been delegated the Federal programs, involving tens 
of thousands of permits, and have direct and continuous interface with 
both the regulated community and public. EPA has a clear role to assure 
that we do our jobs.
    I am pleased to report that although there are many factors that 
place strain on the existing enforcement relationship, the States and 
EPA are still committed to strengthening this partnership. One of the 
most recent endeavors to improve this bond was the formation of the 
State/EPA Enforcement Forum, which held its first meeting May 23, about 
2 weeks ago. All ten EPA regional administrators, a State 
representative from each region, and primary EPA enforcement personnel 
will be working to resolve enforcement issues that compromise the 
current State/EPA enforcement relationship.
    The State/EPA relationship regarding enforcement has been in 
development for over two decades. After extensive negotiations, that 
relationship was institutionalized in 1986 in the Policy Framework for 
State/EPA Enforcement Agreements. That document, as amended, remains 
the foundation for current State/EPA roles in enforcement matters.
    The Policy Framework provides a blueprint where States assume 
primary day-to-day enforcement responsibility. The document was 
intended to ensure that clear oversight criteria were set, procedures 
for advance consultations and notification established, and there was 
adequate State reporting to ensure effective oversight.
    EPA has largely delegated responsibility for national programs to 
the States, including the primary role in enforcement. There is general 
consensus on the basic allocation of enforcement responsibilities. 
However, when EPA brings a direct enforcement action in a State, there 
is often concern that the principle setting forth the primary role of 
the State has been violated. The Policy Framework, and subsequent 
addendum (the latest being 1993), lists four types of cases when EPA 
may consider taking direct enforcement action as follows:
    1. State or local agency request EPA action
    2. State or local enforcement response is not timely and 
appropriate
    3. National precedents (legal or program)
    4. Violation of EPA order or consent decree
    To complement the four situations when EPA may consider enforcement 
action, there are procedures and protocol that have been set up to 
assist matters. The Policy Framework states, ``A policy of `no 
surprises' must be the centerpiece of any effort to ensure the 
productive use of limited Federal and State resources and an effective 
partnership in achieving compliance.'' It is clear that the Policy 
Framework mandates that if EPA is to initiate enforcement in a State, 
certain protocols must be met to promote the spirit of cooperation, 
trust, and stability in the working relationship between States and 
EPA.
    This last issue is perhaps the starting point at which the 
relationship breaks down. It is my belief that if EPA does not first 
give the States an opportunity to act in enforcement matters, and if 
they follow a loose standard when applying the four above mentioned 
criteria, the already fragile relationship will continue to weaken.
    The States believe that enforcement is a tool, not a goal. 
Compliance itself is a goal, but is not our main goal. Our main goal 
is, and should be, reaching the environmental quality goals that 
Congress and our legislatures have set. No amount of enforcement and 
compliance activity measures will tell us anything about whether we 
have met, or will meet, that goal.
    Let me give an analogy. If I were to tell you that the number of 
detentions and expulsions in our nation's high schools had doubled last 
year, would you then conclude that our nations students were better 
educated than before? No State would deny that enforcement is an 
important and necessary tool. But I can also make the case that such an 
increase in enforcement actions would mean a terrible breakdown in 
communications between government and the regulated communities had 
occurred. Such a breakdown would mean little chance of improvements in 
environmental quality.
    It is not only the occurrence of EPA enforcement action in States 
that creates friction but also how EPA chooses to involve the States 
once action is planned in a particular State. Since States have primary 
responsibility for enforcement in most EPA programs the national 
enforcement strategy cannot be implemented without active State 
participation. If EPA begins to aggressively pursue national or 
Regional initiatives without adequately involving the States, there is 
serious potential for damaging the EPA/State relationship.
    Whether EPA consistently follows or even remembers these criteria 
when deciding the types of cases it will pursue and the mechanisms of 
involving States once it has begun are additional opportunities for 
instances of friction, each of which are very significant to State 
programs. There is also the issue of delegation of programs and direct 
accountability. The first, program delegation, in theory is not an 
issue. It is clear that EPA has delegated programs to States. In 
delegating this responsibility they have also delegated the primary 
enforcement responsibility. If EPA strays from this practice, then 
possibly true delegation has not yet occurred. State officials feel 
that once a program is delegated, EPA should be most concerned with 
overall program effectiveness and not about the details of how a State 
handled each individual enforcement matter.
    This is not to say that EPA does not have a strong oversight role. 
These oversight practices should be there to assure that States have 
effective compliance and enforcement programs. In 1983, a special 
State-Federal Roles Task Force defined the roles and responsibilities 
of EPA and the States for environmental protection in light of 
increasing delegations of authority to the States as follows:

                                                                        
------------------------------------------------------------------------
                   Role                               Function          
------------------------------------------------------------------------
STATE LEAD, EPA supporting................  Direct program              
                                             administration             
                                            Enforcement                 
EPA LEAD, State supporting................  Research                    
                                            Standard setting            
                                            Oversight                   
                                            Technical support           
                                            National information        
                                             collection                 
------------------------------------------------------------------------

    This brings us to the second part of the equation, accountability. 
Although EPA has delegated responsibility for administering national 
environmental programs to the States in keeping with Federal law, EPA 
has the view that Congress expects an ever-increasing number of direct 
Federal enforcement actions and assessment of Federal mandates. These 
direct enforcement actions are reportedly viewed, by Congress and the 
public, as the success measuring stick of how well EPA is performing. 
EPA may be receiving conflicting messages of the roles and duties they 
are to perform to help the States succeed in program management. On one 
hand, the message is to give the States the first opportunity to act, 
but on the other hand, the message is to keep Enforcement numbers up. 
This perceived pressure for direct EPA enforcement may be the source of 
much of the conflict with the statutory principle of deferring to the 
States.
    Overfiling, the term used to describe when EPA pursues lead 
enforcement action in a State, is also an important piece of the 
enforcement relationship. Although the instances of EPA overfiling are 
relatively few, the possibility of overfiling and the use of overfiling 
comes at a great cost. The potential for overfiling leads to mutual 
wariness and if not done with extreme care it can rapidly damage the 
enforcement relationship. EPA overfiling sometimes means that 
communications between EPA and the States have failed. If EPA has clear 
communication of what is expected, including notice of EPA's 
expectations and the intent of overfiling if these expectations are not 
met, then EPA overfiling should rarely occur. The success of EPA is not 
measured by the number of enforcement actions it takes, but the 
effectiveness of its oversight role.
    The basic problem between the States and EPA as it relates to 
enforcement, is that in recent times role assignments have become less 
clear. Changes in administration at both State and Federal levels, 
expectations from outside focus, and the natural maturation of programs 
has resulted in uncertainty (thus inconsistent action) or lack of 
awareness of the established basic principals. If all the involved 
parties do not realize and support the roles each has in enforcement, 
regional offices and States are left in the position of determining for 
themselves the nature and extent of their relationship, this is done 
with little success.
    In my view the solution to these conflicts is to reaffirm the 
established roles. In doing so we can focus limited resources towards 
these roles and accomplish the goal we all share in protecting the 
environment. Federal enforcement personnel should be leading the drive 
in research, standard setting, oversight, technical support and 
national information collection. The States should perform their lead 
duties in direct program administration and enforcement. Neither party 
should seek to pick off choice plums from the other's role. When these 
roles are used in guiding the State/EPA relationship in enforcement, it 
can be expected that the presence of existing tension and frustration 
will decrease and future conflicts can be avoided.
    We are not so far from the goal of both levels of government 
effectively working together. States already do take well over 90 
percent of enforcement action within the country. Perhaps with your 
help the efforts to reduce frustration and unnecessary loss of 
resources and credibility due to public disagreements can be 
significantly reduced. Thank you for your efforts in this regard and 
for inviting me to represent the views of the States.
                                 ______
                                 
    Prepared Statement of Becky Norton Dunlop, Secretary of Natural 
                  Resources, Commonwealth of Virginia
                              introduction
    I appreciate the opportunity to present Virginia's views on State-
Federal relations in the context of environmental enforcement. There is 
more to policy than enforcement, however, and I caution that 
enforcement is only one tool in the kit bag of environmental policy. 
The truth is that enforcement action means ``failure'' not success. It 
is certainly not the best tool to improve the quality and condition of 
the resources which make up our environment. In fact, it is the tool of 
last resort.
    Virginia's legislature and Virginia's Governor have, in many 
important ways, established that policies which focus on compliance 
with environmental laws are better for the natural resources than 
policies which focus on enforcement. Virginia has demonstrated 
leadership in putting the proper emphasis on the purpose, goals and 
objectives of environmental policy, which, of course, is to improve the 
quality and condition of the air, water, soil, flora and fauna 
resources which make up the environment.
    Having said that, it is important for the committee to have an 
understanding of the entire issue of enforcement, and not simply a 
current ``cross section'' of what is happening. Allow me to provide a 
brief historical background of where the environmental compliance and 
enforcement debate has been, and where it is going, in addition to 
articulating Virginia's pro-active views on getting results.
    history of enforcement and virginia/states action in the 1990's
     The 1970's saw the first, serious enactment of 
comprehensive, media-specific environmental laws, whose basis was a 
facility-based permit system.

         The inception of environmental enforcement took place 
        in the mid-1970's, when then-EPA Administrator William D. 
        Ruckelshaus took the first enforcement steps in dealing with 
        the permitting issues under the then newly-enacted Clean Water 
        Act. Historical records show that EPA's first enforcement steps 
        were difficult to engage, because the Federal Government had 
        never before taken Federal action to meet discharge and 
        emission limits.
         The 1970's were punctuated with the passage of other 
        permit-driven statutes, such as the Clean Air Act (in 1970 and 
        amended in 1977) and the 1976 Resource Conservation and 
        Recovery Act and the 1972 Clean Water Act.
         Because of this company-by-company permit system, 
        enforcement by the EPA was also company-by-company, and in the 
        many cases where government entities were the polluters, on a 
        government jurisdiction by government jurisdiction, basis.

     The 1980-1990 decade witnessed enactment and 
implementation of far more punitive measures, in response to serious 
pollution incidents.

         In 1980, Congress passed the Federal Superfund 
        statute (Comprehensive Environmental Response, Compensation and 
        Liability Act), which provides for strict, joint and several, 
        and retroactive liability. This turned much of the 
        environmental profession into a lawyers' business instead of an 
        environmental science and resource management business.
         In 1990, Congress passed the Oil Pollution Act, which 
        also provides strong regulation in the oil and gas sector.
     Once it was understood that these punitive enforcement 
measures were not particularly effective, environmental policymakers 
turned up the heat.

         In 1986, EPA issued its first environmental audit 
        policy, which sought to encourage companies to perform 
        environmental audits, but which left the companies at 
        significant enforcement jeopardy. In 1991, the Justice 
        Department's Environment Division issued its Audit Policy. 
        These strict enforcement-driven rules continue to exist today, 
        even as amended by EPA.
         In 1991, EPA issued its first policy on 
        ``Supplemental Environmental Projects'' by which violators 
        could mitigate part of the civil penalties levied on violations 
        in exchange for a same or greater investment in environmental 
        improvements at or near the same facility. Again, the regulated 
        community has been left at significant enforcement jeopardy.
         In 1990, Congress passed the Pollution Prevention 
        Act, by which it directed EPA to begin establishing measures to 
        prevent pollution, in addition to focusing on ``end of pipe'' 
        permits and enforcement actions.
         In the 1986 Superfund Reauthorization (the Superfund 
        Amendments and Reauthorization Act, ``SARA'' of 1986), Title 
        III was added (known as the Emergency Planning and Community 
        Right-to-Know Act (EPCRA), which instituted the annual Toxics 
        Release Inventory (TRI) publication. The publication and 
        dissemination of the annual TRI, published since 1987, has 
        brought the ``sunshine'' of public disclosure of emissions, and 
        has resulted in considerable reduction in emissions. This is 
        quite a success story for voluntary compliance strategies, and 
        has happened in spite of EPA's preference for non-voluntary 
        enforcement-litigation strategies.

     In the 1990's, Virginia and other States took a more 
comprehensive, pro-active role in obtaining environmental solutions.
     Virginia and other States ``staffed up'' with their own 
environmental expertise, and subsequently took their own actions to 
pro-actively lead the environmental results agenda:

        --recognizing the inherent deficiencies in the cumbersome, 
        permit-by-permit and litigation approach to regulatory 
        enforcement, Virginia and other States formulated their own, 
        outcome-driven compliance measures to improve the quality and 
        condition of the environment, including:

                 implementation of a ``Compliance First, 
                Enforcement Second'' approach to expeditiously gain 
                compliance and avoid the hemorrhage of non-compliance 
                while conducting cumbersome litigation;
                 as done in Florida by Carol Browner and other 
                States, Virginia ``regionalized'' its compliance and 
                enforcement system, by which it created a broader, more 
                comprehensive team (permitting, technical, and 
                compliance/enforcement staff) to respond to 
                environmental complaints faster;
                 Virginia was the first State to institute a 
                new paradigm for implementation of environmental 
                policy. Previously in Virginia, and in almost all other 
                States, environmental protection and natural resource 
                agencies had been organized on what is called a 
                ``media-specific'' basis. That is, each environmental 
                department had an Air Division, a Water Division, and a 
                Waste Division, etc. Each of these divisions employed 
                all the tools of permitting, compliance, and 
                enforcement. The Virginia paradigm has reorganized and 
                streamlined environmental policy management by 
                substituting the previous media-based divisions for 
                Divisions of Permitting, Compliance, and Enforcement, 
                each with the capability to deal with the media of air, 
                water, and waste. This new paradigm has empowered 
                regional and local DEQ officials to expedite 
                improvements in environmental quality.
                 Virginia took a new, varied approach, not 
                relying simply on the slow, often litigious permit-by-
                permit and administrative enforcement penalty system:

                         instead, we focused on environmental 
                        remedies and behavior modification to gain 
                        expeditious compliance;
                         developed a bifurcated approach:

                                --cooperatively working with entities 
                                who want to get into compliance;
                                --take formal, punitive action against 
                                recalcitrant actors. (E.g., the U.S. 
                                Government/Avtex, the U.S. Army (Vint 
                                Hill Farms, Warrenton Army Training 
                                Center), U.S. Navy/Little Creek, NASA/
                                Wallops Island, Rhinehart/tire pile, 
                                multiple private sector landfill 
                                operators, Smithfield Foods, State 
                                government (VDOT, Dept. of Mental 
                                Health, Dept. of Corrections, State 
                                universities--UVa, Va. Tech, James 
                                Madison U.)
                                --work with Commonwealth's Attorneys 
                                and the U.S. Attorneys to bring the 
                                full force of law against criminal 
                                polluters.

                         targeted ``worst polluters'' and 
                        long-overlooked government facilities, which 
                        are the most egregious and persistent polluters 
                        in Virginia.
                         used compliance incentives by which 
                        to encourage, and not discourage, broad groups 
                        of entities to pro-actively ``think ahead'' 
                        about their environmental responsibilities. 
                        Among these are:

                                --development of specific plans of 
                                work with specific timelines to improve 
                                emissions performance rather than 
                                imposing fines on cash-strapped 
                                municipalities--i.e., non-profit, 
                                taxpayer-funded entities, to take that 
                                necessary action to retrofit their 
                                municipal water/wastewater treatment 
                                and waste systems (since 1994, Va. has 
                                issued orders to over 110 
                                municipalities, by which they will fix 
                                their water systems, at a cost to them 
                                of approx. $1-2 billion);
                                --encourage environmental audits by 
                                which companies and municipalities take 
                                the initiative to pro-actively deal 
                                with their environmental problems and 
                                avoid being the subject of expensive 
                                governmental enforcement action, fines 
                                and litigation;
                                --work with and encourage--i.e., not 
                                discourage--environmental 
                                entrepreneurs, who wish to run a 
                                business for profit while 
                                simultaneously and expeditiously 
                                repairing an environmental malady 
                                (e.g., Virginia's Voluntary Remediation 
                                Program, by which some 40 companies are 
                                voluntarily moving to cleanup 
                                contaminated properties; also quickly 
                                encouraging Va. Power to join the Army 
                                Corps of Engineers to clean up the 
                                Tidewater Community College site, thus 
                                avoiding the legal nightmare of EPA 
                                naming the College as a NPL Superfund 
                                site, thus forcing gargantuan cleanup 
                                costs on the State government)
                                --use of specialized grant and tax 
                                funds as economic incentives for unique 
                                environmental problems--e.g., the 
                                Virginia Waste Tire Fund and 
                                reimbursement allocation for tire pile 
                                cleanups, which has prevented a major 
                                environmental crisis for Virginia. 
                                Virginia's Revolving Loan fund to help 
                                small communities deal with long-
                                standing air, water, and waste problems 
                                (e.g., the 1996 Tangier Island 
                                settlement, ending a 10-year nightmare 
                                of environmental litigation and delay 
                                in cleanup)

                 We are now involved with the States in EPA 
                Region III and ECOS to develop and refine new measures 
                of compliance and enforcement success, rather than 
                simply relying on numerical action outputs, originated 
                in the 1970's, that do not measure real environmental 
                results. Frankly, it is an absurdity and demonstrated 
                failure to measure improvements in environmental 
                quality by the number and amount of fines imposed or 
                litigations entered into. We believe that a true 
                environmental compliance and enforcement system will:

                         measure concrete, physical, and 
                        measurable improvements in the quality of the 
                        resources themselves.
                         utilize the comprehensive range of 
                        environmental tools, from Small Business 
                        Assistance, Compliance Assistance and use of 
                        specialized funds, in preference to punitive 
                        litigation;
                         by these measures, Virginia has done 
                        quite well, including but certainly not limited 
                        to:

                                --real, measurable improvements in 
                                Virginia's air, water and land (EPA 
                                announced this year (including 
                                Thursday, June 5) that two of the 3 
                                Clean Air Act Non-Attainment Areas 
                                (Hampton Roads, Richmond area) will be 
                                removed from their non-attainment 
                                status, due the technical results from 
                                many measures that have been taken.

        --By taking this approach, Virginia has moved to resolve its 
        most serious, known environmental problems, and, in so doing, 
        has resolved a list of long-standing environmental violations 
        that date to the mid-1980's.

    These are environmental results that count, consistent with the 
Federal Government Performance and Results Act--not simply the typical 
``bean counting'' exercises (how much in fines, number of lawsuits or 
orders issued) that continue to characterize traditional enforcement. 
We believe the compliance-first approach is one that focuses on real 
solutions, not simply, rhetorical assertions about complex, technical 
problems.

    Virginia's leadership in streamlining permitting, appropriate use 
of consent orders, and our compliance assistance initiatives have 
encouraged new investment in Virginia that has created the wealth and 
technological innovations for a continuing and ever-increasing 
improvement in environmental quality for the people of the 
Commonwealth.
    In light of this history, what is an objective view of EPA and how 
does it work with States like Virginia?
     A range of disinterested but knowledgeable parties, 
ranging from former EPA Administrator Bill Ruckelshaus to EPA's current 
Inspector General and Congress' General Accounting Office are making 
the same statement that many States are making: EPA has some serious 
problems that need to be fixed. To quote from GAO's June, 1996 report 
on the Government Performance and Results Act:

     The Environmental Protection Agency (EPA) was established 
in 1970 under a Presidential reorganization plan in response to public 
concerns over unhealthy air, polluted rivers, unsafe drinking water, 
and haphazard waste disposal. Congress gave EPA responsibility for 
implementing Federal environmental laws. From the start, however, EPA 
lacked an overarching legislative mission, and its environmental 
responsibilities have yet to be integrated with one another. As a 
result, EPA could not ensure that it was directing its efforts toward 
the environmental problems that were of greatest concern to citizens or 
posed the greatest risk to the health of the population or the 
environment itself.

     It was with almost universal approval that Carol Browner 
testified before this committee in March, 1993, on her objectives, 
including her affinity for State environmental programs and providing 
flexibility to such States and their programs. I agree with the 
following insightful remarks she made then, because they were based on 
her experience in both Florida as well as in Washington:

          This [EPA's relationship with State, tribal and local 
        governments] is an issue of particular interest to me, 
        obviously, because of my past experience in a State 
        environmental agency. I have a real affinity for State 
        environmental agencies and what they bring to the table. In 
        Florida, we launched a fairly intensive program to delegate a 
        number of our powers to regional, county and city organizations 
        because we felt they brought to the table a real understanding 
        of the issues at hand and a set of resources to do the job that 
        the public demanded.
          I think that one of the most important pieces of this 
        Administration will be to forge stronger relationships with 
        State and local government and to build on what has already 
        been done. I feel very strongly that we cannot reach 
        environmental objectives until we acknowledge the value of and 
        support of the building of strong State and local capacity to 
        manage environmental programs.

    In response to Senator Baucus' question regarding EPA allowing 
States to manage environmental programs, Ms. Browner stated:

          Well, it's a change in how we think about our relationship 
        with the State agencies. We at EPA are going to have to think a 
        little bit differently about the State agencies. We're going to 
        have to recognize the strengths that they bring to the table, 
        and we're going to have to allow them to do the job the way 
        they see fit.
          I would just say that the other piece of this is that there 
        are places where--and we look forward to working with this 
        committee during reauthorization--where we would like to see 
        greater flexibility in some of the statutes under which we 
        delegate, to make sure we're not put in an awkward position of 
        always being responsible for making sure on a permit-by-permit 
        basis that in fact what Congress intended is being done.

    Again in response to Senator Baucus' question, ``But where can EPA 
be more flexible?'', Ms. Browner stated:

          I do think that we can also change how we relate to the 
        States. It's not all going to take statutory changes. Part of 
        it is just recognizing within EPA that we need to behave in a 
        different way.

    Again in response to Senator Baucus, Ms. Browner stated:

          Well, we have several processes going on right now in terms 
        of dialogs taking place between EPA and local governments, 
        between State and tribal governments. We need to increase these 
        dialogs. And, quite frankly, we probably need to swallow hard. 
        I know when I looked at delegating my powers in Florida to 
        regional governments, it was just a question of sort of saying, 
        ``OK, we're going to do it, and we're going to trust them.'' 
        That's a hard thing. It's not within our nature, but we have to 
        do it.
          I think there is a growing recognition within the agency at 
        all levels that if we are going to accomplish our mission, it 
        will only be through the cooperation of State, tribal and local 
        governments, that they bring such a large number of resources 
        to the table to help us do our job, and that we have to 
        maximize the use of those resources so that we can be moving on 
        to the next challenge.  . . .
          [I] recognize that we at EPA have a tremendous 
        responsibility to improve that relationship and that we have to 
        reach out to the States in a way that we never have before.

    With Ms. Browner's mission statement for EPA as context, we ask 
anew: What is the relationship between EPA and Virginia?
    Answer: Though much of the staff-level relationship is good, 
however, a number of unilateral, surprise EPA actions leave Virginia 
perplexed:

          Which EPA are we supposed to deal with? Is it Ms. Browner's 
        cooperative, collegial approach, or is it that approach 
        punctuated by repeated, rhetoric-laden surprises by which 
        Virginia has been treated? Examples:

    Example: EPA's Belief in Civil Penalties as a Measure of 
Enforcement Success.

          EPA maintains a steadfast belief, by and through their 
        annual enforcement accomplishments, that one of the key 
        barometers to the success of environmental enforcement is civil 
        penalties extracted from violators. If this is so, consider the 
        following:
          Blue Plains. The District of Columbia's Blue Plains 
        wastewater treatment plant is one of the largest plants on the 
        Potomac River, and has had a long-standing, chronic compliance 
        problem which has polluted Virginia waters. So when the 
        Attorney General of Virginia sought to join in a Federal 
        lawsuit over the plant, the United States Department of Justice 
        and EPA successfully kept the Commonwealth out of the suit. 
        Then, when the U.S. got a consent decree requiring--yet again--
        that Blue Plains get into compliance (a judgment that it had 
        received in previous litigation), the U.S. sought and received 
        no civil penalties for the dramatic Clean Water Act violations 
        that had impacted the Potomac River and Virginia Waters.
          Lorton. On the heels of this, Virginia sued the U.S. and the 
        District of Columbia for the chronic compliance problems at the 
        Lorton, Virginia wastewater treatment plant that was polluting 
        Virginia waters. When the Commonwealth obtained a consent 
        decree calling for $175,000 in civil penalties (some of which 
        would be waived pending significant environmental plant 
        construction), EPA Region III wrote to Virginia stating that 
        Virginia's civil penalty was not high enough.
          Virginia is perplexed: Which EPA are we supposed to deal 
        with? The one that claims collegiality and joint efforts, or 
        the one that cuts Virginia out of litigation, seeks no civil 
        penalties for repeated violations, and then separately 
        criticizes Virginia for its civil penalties being too small.

    Example: EPA's Posture on Government Facility Pollution and 
Responsibility.

          Virginia enforcement against government facilities. Virginia 
        has taken the lead to enforce environmental laws among its own 
        State government, as well as local and Federal Government. It 
        has enforced against entities varying from the Virginia Dept. 
        of Transportation to the University of Virginia, as well as the 
        municipalities mentioned before, at extraordinary cost for 
        environmental retrofitting and construction. It also must 
        enforce against the largest polluter in the Commonwealth, the 
        Federal Government, and has done so against Army, Navy, and 
        NASA facilities, in order to require them to do the same thing 
        as private entities.
          EPA Non-Enforcement at Avtex Fibers. EPA claims to take this 
        same posture, but there is a serious question about this. Why 
        is it that the Commonwealth has to sue the Department of 
        Defense, Air Force and NASA to recover Virginia's cleanup costs 
        at a toxic waste disaster that they knowingly bailed out and 
        exacerbated, while EPA refuses to enforce against them? In 
        November, 1988, the U.S., by and through the National Security 
        Council, bailed out Avtex Fibers--then recognized as the 
        largest polluter in the State--with $43 million, in order to 
        continue providing specialized rayon for Air Force missiles and 
        the NASA space shuttle. The NSC meeting included an EPA warning 
        that the plant had major environmental problems, and that 
        taking such bailout action would bring on Superfund liability. 
        Notwithstanding this warning, the U.S. bailed the company out 
        and--according to Air Force memos--pushed production ``all the 
        while knowing an environmental disaster was brewing''. When 
        Avtex closed and abandoned the facility 1 year later, the U.S. 
        abandoned the facility as well. Since then, EPA has not taken 
        any enforcement action against the Federal Government, and has 
        been slowly cleaning it up using money from the Commonwealth, 
        the Superfund, and one private responsible party. The 
        environmental property damage to this 440 acre site is 
        gargantuan, including a 65-mile health advisory warning people 
        not to fish in that part of the Shenandoah River. Though 
        Virginia was not responsible for this toxic waste disaster, it 
        is having to pay 10 percent of all of EPA's cleanup costs and 
        100 percent of EPA's future operation and maintenance costs, at 
        an expected exponential figure. EPA's posture? They won't 
        enforce against a sister agency, due to the Federal 
        Government's ``Unitary Executive Theory'', thus leaving the 
        Commonwealth of Virginia having to pay for the Federal 
        Government's knowing environmental damage.
          Virginia is perplexed: Which EPA is it supposed to believe? 
        The one who claims enforcement against the worst polluters is a 
        priority, or the one that sits idly by as the Commonwealth has 
        to sue the Federal Government to make it pay back Virginia for 
        the environmental catastrophe it created?

    Example: EPA Violation of EPA-Virginia Enforcement Agreement, and 
Inflammatory EPA Rhetoric

          Smithfield Foods. The formal, 1975 enforcement agreement 
        between EPA and the Commonwealth of Virginia states that, 
        pursuant to delegation, Virginia has primacy in all NPDES 
        environmental enforcement. That agreement has characterized the 
        relationship since 1975.
          So why did EPA surprise Virginia by secretly taking 
        enforcement action against a private party, Smithfield Foods, 
        when it has known and acquiesced in the results-driven actions 
        Virginia has taken against that party since 1991? And, why did 
        EPA take this action after Virginia complied with a request 
        from EPA, Justice and the FBI not to take civil action, so as 
        not to jeopardize a criminal investigation? And, when EPA did 
        so, why did EPA make false, rhetorical statements about 
        Virginia?
          Virginia is perplexed. Which EPA are we to believe? The 
        collegial one Ms. Browner suggested, or the hostile one 
        Virginia deals with at Region III that breaks a 22 year 
        agreement?

    Example: EPA's Posture on Environmental Audits

          Like many other States, Virginia enacted an environmental 
        audit and related limited civil immunity statute. Any immunity 
        was predicated on it being consistent with Federal law. In a 
        survey of all States' environmental audit statutes, EPA's 
        Director of Congressional Relations for Virginia was quoted as 
        saying that EPA was familiar with Virginia's environmental 
        audit statute and that, even though it had criticized it 
        before, the EPA team reviewing these State audit statutes did 
        not intend to contact Virginia again. Surprisingly, the EPA 
        Regional Administrator wrote a letter shortly thereafter 
        regarding the Smithfield case, and cited as a criticism of 
        Virginia the same Virginia statute that EPA had just tacitly 
        approved.
          Virginia is perplexed. Which EPA are we to believe? The EPA 
        Headquarters Team that has reviewed and acquiesced in 
        Virginia's statute, or the EPA Regional Administrator who takes 
        a contrary view?

    Example: EPA's Posture on Tributyltin (TBT)

          In 1988, Congress mandated EPA to conduct a study of 
        tributyltin, a chemical defoliant agent by which shipyards 
        clean the hull of ships, for purposes of arriving at a national 
        regulatory standard in water. EPA has never done that study. If 
        that is the case, then why is EPA publicly criticizing Virginia 
        and holding up EPA's approval of a major permit over TBT?
          Virginia is perplexed. Which EPA are we to believe? The one 
        that is required to promulgate a national standard with which 
        all States are to comply, or the one that fails to comply with 
        such Congressional mandate and then criticizes a State for 
        acting on the EPA created vacuum.

    Example: EPA's Plan for State Delegated Program Flexibility

          EPA announced in 1995 that it intended to promulgate a plan 
        by which it would provide considerably more flexibility to 
        States by which to run delegated environmental programs. 
        However, shortly after the 1996 election, the Deputy 
        Administrator of EPA withdrew this plan.
          Virginia is perplexed. Considering Ms. Browner's testimony 
        before this very Senate committee, which EPA are we supposed to 
        believe? Her firmly stated belief in State environmental 
        programs and EPA flexibility, or EPA's recent move to shut off 
        such flexibility.

    Example: EPA's Non-Responsiveness Regarding Challenge to Virginia's 
Water Program Delegation 

          In November, 1993, a public interest group, the Chesapeake 
        Bay Foundation, filed a formal petition with EPA Region III by 
        which it sought for EPA to withdraw its 1975 delegation of the 
        NPDES program to the Commonwealth of Virginia. Notwithstanding 
        multiple requests since 1994, EPA Region III has never made a 
        decision, even though it has historically ranked Virginia as 
        one of its better States dealing with the water program.
          Virginia is perplexed. Considering Ms. Browner's testimony, 
        which EPA are we to believe? The collegiality and State 
        flexibility that Ms. Browner articulated, or the non-
        responsiveness of Region III?

    Example: EPA Overfiling After State Achieves Environmental 
Resolution

    Conclusion: As was stated at a recent meeting of the Environmental 
Council of the States, ``states are not branch offices of EPA''.
    These facts remain clear:
     Virginia is achieving real environmental results, and is 
not relying on 1970's barometers to measure 1990's accomplishments;
     Virginia is in the forefront of developing useful, 
environmentally-sound methods by which to expeditiously achieve 
environmental compliance, notwithstanding 1970's era-EPA criticism;
     Virginia remains perplexed. Why has Ms. Browner's 
cooperative, collegial approach somehow gotten lost in EPA between her 
office and Region III?
    Finally, one more note regarding State-Federal relations. On May 
30, the U.S. District Court for the Eastern District of Virginia ruled, 
in U.S. v. Smithfield Foods, that Virginia's statutory water 
enforcement program is not afforded any deference from EPA, since it is 
not comparable to the Clean Water Act's program. This was because, the 
Court reasoned, Virginia's water law does not have the same 
administrative civil penalty tools as the Clean Water Act. If this is 
upheld, then any State whose State water laws do not contain the same 
tools as the Clean Water Act should know that EPA can overfile them, 
regardless of what environmental progress the State is making. This 
effectively means that there can and will be serious questions by every 
State's permittees regarding whether they even need to deal with the 
State, since EPA can simply ignore such State action. If this is the 
result that EPA sought, then we must truly ask which EPA any State 
deals with: the one which believes that ``We're going to have to 
recognize the strengths that they (the States) bring to the table, and 
we're going to have to allow them to do the job the way they see fit'', 
or the one which wants to turn back the clock, to return to the 1970's, 
monolithic ``Big Brother'' approach to environmental enforcement? Ms. 
Browner said that the change would be hard, but that EPA would ``have 
to do it''. Despite these sentiments, they have not done it yet, and it 
isn't clear from their actions that they ever intended to.
                   helpful servant or fearful master
    The issue about EPA and State relations in regard to enforcement of 
environmental laws is simply this: Is government to be a helpful 
servant or a fearful master? This question is at the very core of the 
reforms and improvements now taking place in environmental quality 
policy in the States all across this land.
    States, not only Virginia, but in virtually all States, including 
those whose top environmental officials have long been associated with 
the ``Enforcement First'' approach are moving in the same direction as 
Virginia. Indeed, Florida under Administrator Browner's leadership, 
began to initiate Compliance First policies when she was my counterpart 
there. States' environmental agencies, States' legislatures and States' 
Governors want the quality of the environment in which they and their 
people live and work to be improved.
    States want real and meaningful reform to help them put aside the 
one-size-fits-all, top down, Washington knows best, litigious approach 
of the past because the experience of the past 30 years demonstrates 
that compliance with national environmental quality goals and standards 
is the most effective focus of environmental policy. This is the 
helpful servant approach.
    The ``fearful master'' approach is simply wrongheaded and is proven 
to be counter productive in improving environmental quality. The 
``fearful master'' approach demonstrated by EPA for the past 30 years 
to be its preferred approach, has turned concern for the environment 
away from its beginnings as a profession of scientists, environmental 
engineers and resource managers into a profession of lawyers, 
litigators and one-size-fits-all regulators and political opportunists.
    In his Farewell Address, George Washington warned Americans to 
always be vigilant to assure that the new American Nation would never 
allow the government to become a fearful master. Virginia submits that 
now is the time for Congress to assess this State and Federal 
relationship as regards environmental policy. Will you determine George 
Washington was correct in thinking that the ``helpful servant'' 
approach we are now trying to implement in Virginia is far more 
effective and far more suitable for a free and prosperous people? I 
trust you will find this to be true.
                              introduction
    1. Virginia has demonstrated leadership in putting the proper 
emphasis on the purpose, goals and objectives of environmental policy--
which should be to improve the quality and condition of the air, water, 
soil, flora and fauna resources which make up the environment. Believe 
it or not, EPA seems to believe, or act as if they believe, that the 
principal purpose of environmental policy has little to do with 
improving natural resources and much to do with ``enforcement 
outcomes''--which is bureaucratese for the amount of fines, litigations 
and permit restrictions which can be imposed.
     Virginia Way, Compliance First. We call the Virginia Way 
our ``Compliance First'' approach. The Virginia Way is a science-based 
approach which uses every resource of State agencies, other government 
agencies and entities, and the private sector to HELP companies and 
municipalities reduce site-and-situation specific emissions which can 
have a harmful effect on the people, wildlife and the air and water 
resources.
     Enforcement when necessary. When Compliance First will not 
accomplish the purposes of environmental policy, as is in the case of 
willful polluters who have demonstrated themselves to be ``bad 
actors,'' Virginia is vigorous and aggressive in employing all the 
tools of enforcement at our disposal--including fines, litigation, 
cease-and-desist orders, and referral to the Commonwealth's Attorneys 
for criminal prosecution.
    2. Virginia has taken the lead in changing the way improvements in 
environmental quality are managed, pollution is prevented and clean-up 
of past pollution is accomplished.
     New Paradigm for implementation of environmental policy 
objectives. Virginia has re-organized and streamlined environmental 
policy management by substituting for the previous media-based 
organization of DEQ a new set of Divisions for Permitting, Compliance 
and Enforcement, each with the capability to deal with the media of 
air, water and waste.
     Decentralization. Virginia has moved its permit, 
compliance and enforcement process to six regions and Central office 
within the State, here decision can be made on site-and-situation 
specific priorities by people who live and work in the communities they 
serve.
     Cooperation and involvement with local elected officials. 
Virginia has established a system to work with local elected officials 
and governments to develop a cooperative approach to improving 
environmental quality. We have had great success with our new Tributary 
Strategy to improve water quality in the Chesapeake Bay drainage and 
elsewhere.
    3. These changes have caused EPA to put itself in conflict with the 
States.
     EPA's approach is Enforcement First. EPA, in practice (but 
pointedly not always in the rhetoric of Administrator Browner and 
President Clinton) has always been and continues to exercise an 
``Enforcement First'' approach to environmental policy.

          The principal tools in the environmental policy kit bag of 
        EPA are fines, litigation, cease-and-desist orders, ever-more-
        stringent permit provisions, and referral for criminal 
        prosecution. The States are constantly pressured by EPA to use 
        these ``enforcement outputs'' as the tools of preference in 
        carrying out environmental policy objectives. In fact, it seems 
        as if the whole mindset at EPA, and indeed perhaps with many in 
        Congress, is that these kinds of enforcement actions are, in 
        fact, the beginning and end of environmental policy. Because 
        this approach only works best as a matter of last resort, 
        Virginia and many other States, are shifting emphasis to a 
        compliance-based policy. With this enforcement first approach, 
        EPA puts itself into conflict with the States.

     EPA's approach is top-down, command and control. EPA is 
inherently disdainful of de-centralization and regionalism as employed 
by Virginia and other States. EPA constantly pressures the States to 
retain the EPA model of central planning, central control, central 
decision making, and centralized one-size-fits-all standards 
environmental quality. The States' increasing emphasis on regional and 
site-and-situation specific approaches has put EPA into conflict with 
the States. Indeed, EPA seems entirely disdainful of the concepts of 
Federalism, demonstrated by their frequent complaints and agitations 
about laws and statutes enacted with bi-partisan support by the 
Virginia General Assembly. With this, EPA puts itself into conflict 
with the States.
     Federal Government Polluters get the kid glove treatment. 
EPA refuses to focus its attention on resolving the principal pollution 
problems we have in Virginia (and in other States)--which are at 
Federal facilities. For example, the worst pollution sites in Virginia 
are sites in which Federal agencies are the responsible parties. When 
dodging the Federal responsibilities, EPA puts itself into conflict 
with the States.
     Superfund Failure. EPA refuses to modify its failed and 
counter-productive Superfund Approach. With this, EPA puts itself into 
conflict with the States.
     Political Posturing. EPA's Region III in Philadelphia (in 
obvious connivance with the EPA Administrator) engages partisan 
political posturing that has nothing to do with improving the quality 
and condition of the environment. [Cite examples]. With this EPA puts 
itself into conflict with the States.
    Virginia's relations with EPA can be quite good on the technical 
level, and my Agency people appreciate it very much when we can work 
together in helpful cooperation. Helpful cooperation to improve the 
quality and condition of the environment is the Virginia Way.
    4. Helpful Servant or Fearful Master? The issue about EPA and State 
relations in regard to enforcement of environmental laws is simply 
this: Is government to be a helpful servant or a fearful master? This 
question is at the very core of the reforms and improvements now taking 
place in environmental quality policy in the: States all across this 
land.
     States--not only Virginia--but in virtually all States, 
including those whose top environmental officials have long been 
associated with the ``Enforcement First'' approach--are moving in the 
same direction as Virginia. Indeed, Florida under Administrator 
Browner's leadership, began to initiate Compliance First policies when 
she was my counterpart there. States' environmental agencies, States 
legislatures and States governors want the quality of the environment 
in which they and their people live and work to be improved.
     States want real and meaningful reform to help them put 
aside the one-size-fits-all, top-down, Washington-knows best, litigious 
approach of the past because the experience of the past 30 years 
demonstrates that compliance with national environmental quality goals 
and standards is the most effective focus of environmental policy. This 
is the helpful servant approach.
     The ``fearful master'' approach is simply wrongheaded and 
is proven to be counterproductive in improving environmental quality. 
The ``fearful master'' approach demonstrated by EPA for the past 30 
years to be its preferred approach, has turned concern about the 
environmental away from its beginnings as a profession of scientists, 
environmental engineers and resource managers into a profession of 
lawyers, litigators and one-size-fits-all regulators and political 
opportunists.
     In his Farewell Address, George Washington warned 
Americans to always be vigilant to assure that the new American Nation 
would never allow the government to become a fearful master. Virginia 
submits that now is the time for Congress to assess this State-and-
Federal relationship situation as regards to environmental policy. Will 
you determine George Washington was correct in thinking that the 
``helpful servant'' approach we are now trying to implement in Virginia 
is far more effective and far more suitable for a free and prosperous 
people? I trust you will find this to be true.
                                 ______
                                 
 Prepared Statement of Patricia S. Bangert, Director of Legal Policy, 
              Attorney General's Office, State of Colorado
                              introduction
    My name is Trish Bangert. I am presently the Director of Legal 
Policy for the Attorney General's Office in the State of Colorado. 
Prior to that, I was in charge of the section of the office that 
handled the environmental and natural resources legal issues for the 
State. Before coming to Colorado, I worked in the Solicitor's Office at 
the Department of the Interior. I was at Interior for 11 years, so I 
know well the Federal agency perspective on environmental and natural 
resources issues. I also teach administrative law at the University of 
Denver. I want to thank the Committee for the opportunity to present 
our views on EPA-State relations, especially EPA's much-publicized 
partnership program.
    In summary, I think that there is no EPA-State partnership in some 
areas of environmental enforcement. EPA's perspective appears to be 
that they own the ranch and that we, the States, are the hired ranch 
hands. For example, there is no compromise that I can see in the area 
of self-audit. EPA's policy is simply to dictate changes to State laws.
    In addition, I would like to respond specifically to the charges 
made by the EPA that some States, especially those with self-audit 
programs, are failing to protect the environment. In summary, my 
response is that those charges are hogwash.
    States like Colorado are working hard to protect and improve our 
environment. Although I do not have specific statistics, I understand 
that the number of enforcement actions brought by the State has 
remained relatively steady over the past several years. More 
importantly, Colorado is working more effectively and efficiently to 
improve the environment. For example, there is general agreement that a 
``command and control'' approach to environmental protection, by 
itself, does not work. The States, as the laboratories of democracy, 
are trying out new approaches that may bring greater protection at 
lesser cost. One new approach in Colorado and many other States is 
self-audit legislation. These statutes encourage companies to audit 
their own compliance with environmental laws and correct the violations 
found in those audits.
    For its part, EPA is resisting innovative State approaches. Rather, 
the agency is affirmatively doing everything it can to create mirror 
images of itself in the several States. For States that do not like 
that image, EPA has launched a holy war, composed of negative comments 
in the press, threats to revoke delegated programs and overfilings. The 
end result of this battle inevitably will be that the environment comes 
out the loser. Something has to change before this happens. We come 
here today to suggest several such changes.
    As detailed below, we are suggesting changes primarily in the areas 
of Congressional oversight of EPA activities, such as overfiling, the 
methods that are being utilized to measure success in the areas of 
environmental protection and improvement, and the legislative 
provisions applicable to the exercise of State authorities in the 
environmental area. We believe these changes are necessary to 
effectively and efficiently implement environmental protection and 
improvement. Further, they are necessary to prevent EPA from presenting 
roadblocks to new approaches that might represent positive 
environmental gains.
                   environmental self-audit programs
    Let me turn to a prime example of EPA recalcitrance in allowing 
States to experiment with programs that might well result in 
significant environmental gains--environmental self-audit legislation. 
Twenty-two States have passed some sort of legislation to encourage 
companies to audit their environmental compliance and to correct any 
problems found. In Colorado, we have a statute that gives a qualified 
privilege for self-audits and provides immunity from certain penalties 
if violations found in the audits are promptly corrected. Remember, we 
are talking about violations that probably would not have been 
discovered by the company, and certainly not by State enforcement 
officials absent the audit. We are talking about a positive 
environmental gain. Not only are companies becoming more aware and 
sensitive to environmental compliance through audits, but, problems are 
being corrected. In addition, companies and State regulators are 
working together in a cooperative, as opposed to an adversarial fashion 
to improve and protect the environment.
    What is EPA's response to these innovative State programs? The 
agency is trying as hard as it can to eliminate these laws. In fact, 
over the past 5 years, the agency has engaged in a systematic program 
to kill the self-audit movement. First, it wrote to State legislatures 
considering self-audit laws to urge them not to pass the bills. Second, 
once bills were passed, the agency enacted policies that clearly 
expressed its opposition to the new laws and threatened to overfile in 
cases in which the laws were used. Third, the agency began a program of 
intimidation against companies and States utilizing the self-audit 
laws. For example, in Colorado, several companies utilizing the 
immunity provisions of the act, including the Denver Water Board, 
received letters requesting information about violations voluntarily 
disclosed. Further, EPA has threatened to overfile in those cases. My 
understanding is that EPA, in fact, has overfiled against companies 
utilizing self-audit laws in other States. Finally, EPA has threatened 
to revoke the delegation of environmental programs, such as those under 
the Clean Air Act, the Clean Water Act and RCRA, in States with audit 
laws. I have been told that the EPA regional office in one State 
invited petitions from the public to revoke the State's delegated 
programs.
    It is a legitimate question to ask whether EPA's criticisms of 
audit laws have merit. At least in Colorado, we think not. EPA is 
concerned that States with audit privilege laws cannot enjoin 
violations that are harming the public or the environment. Our law 
retains fill injunctive authority. EPA is concerned that the laws might 
allow companies to hide violations. Our law allows a privilege only for 
information that would not otherwise have to be disclosed. And, the 
privilege does not apply to audits done to evade investigations or for 
fraudulent purposes. Further, under our law, a court can order any 
information released if there is a compelling need for that 
information. The EPA is concerned that the States will not be able to 
get penalties in certain situations. Under Colorado's law, immunity is 
offered only when violations are discovered in a voluntary self-audit, 
those violations are corrected, and the violations would not have been 
reported under a permit condition. Further, there is no immunity for 
willful criminal conduct or for repeat violators. In short, we believe 
that EPA's concerns are met by the provisions of our law. Regardless of 
that fact, EPA is looking at revoking our delegation under the Clean 
Water Act in response to a citizen petition. We are told that EPA will 
be sending us a letter shortly which details the ``flaws'' in our 
statute and asks that we justify our law.
    What does EPA's negative response mean to State self-audit 
programs? We might as well toss them out the window. If a company comes 
forward with information about a violation of the environmental laws, 
it is providing a blueprint to EPA to bring an action against it. In 
addition, it is impossible to measure the success of audit programs if 
companies are discouraged from participating in them by EPA's threats 
of overfiling. EPA's response, in practice, nullifies State laws. Think 
about that for a moment. Not only has EPA spent a great deal of public 
money to advance its policy perspective, but, without even having to do 
a public rulemaking, or a formal hearing, EPA can change the laws 
passed by State governments. Texas substantially amended its self-audit 
law recently to meet EPA concerns. My understanding is that the State 
gave up, in part, provisions granting immunity in the civil and 
criminal areas and gave up audit privilege in the context of criminal 
cases. This is not the system envisioned by our founders--an unelected, 
largely unaccountable body dictating the content of laws to a sovereign 
State.
              methods of measuring success and overfiling
    The EPA's obsession with self-audit laws appears to stem in large 
measure from its obsession with numbers. EPA has always measured 
success in protecting the environment in large measure by the number of 
enforcement actions brought and the size of penalties assessed. We 
applaud the fact that the agency has recently come out with new core 
performance measures for State enforcement and compliance assurance 
programs. Five of the eight measures, however, are still traditional 
enforcement ``beans,'' that is, the number and size of enforcement 
actions. The eighth measure is the frequency and impact of the use of 
audit laws. It is unclear whether this is a positive or negative value 
in the measurement of performance.
    Measuring success by the number of enforcement actions, as opposed 
to actual improvement in the environment, causes EPA to overfile when 
there is no danger to the public or the environment, but, when penalty 
amounts are not ``high'' enough. This misuse of overfiling authority 
has the inevitable result of discouraging the States from attempting 
innovative approaches to environmental problems.
    I am not suggesting that the number of enforcement actions brought 
is meaningless, but, let's look at one of the ``beans'' that EPA 
counted as a success in Colorado last year. We have a very good school 
in our State called the Colorado School of Mines. A research institute 
on the School of Mines property did experiments on mining ore. A 
substantial amount of waste ore was generated, and, a waste pile was 
created. A break in a water main necessitated the emergency removal of 
the waste pile by EPA to another site. In the removal, a liner was laid 
down and the pile was put on top. The EPA ordered the State to 
permanently remove and dispose of the pile. The State removed the pile 
to a waste disposal facility.
    The pile being gone, the State proceeded to build a softball field 
on the site upon which the pile was formerly located. In the process, 
workers breached the liner. Now, remember, the liner was constructed to 
prevent water running through the waste pile from getting into the 
ground. But, there was no pile when the softball field was under 
construction. In other words, there was nothing to line. Nevertheless, 
EPA issued a notice of violation against the State for breaching a 
liner that lined nothing. Even though it admitted that there the breach 
caused no danger to the public or the environment, EPA ordered the 
State to repair the liner and to pay a civil penalty. The State ended 
up paying thousands of dollars for nothing, thousands of dollars that 
could have been spent removing real threats to the environment. Yet, 
this is used as an example of EPA's enforcement success. Something is 
wrong with this picture.
                           federal facilities
    I cannot help but mention that EPA's fine sentiments about 
protecting the environment extend only to private parties, and, 
seemingly, not to the Federal Government. The Administration has 
recently released its Superfund Legislative Reform Principles. My 
understanding is that those principles were authored largely by EPA and 
released by that agency. Those principles contain several statements 
which evidence EPA's retreat on the issue of strong Superfund 
enforcement. Specifically, one of the statements is that the 
Administration opposes any changes to the present law on Federal 
facilities. This means that the Administration opposes reforms 
necessary to ensure that the Federal Government obeys the law to the 
same extent as private parties, reforms such as stronger sovereign 
immunity waivers.
    In addition, the principles abandon the Administration's support 
for strong provisions delegating the Superfund program to the States. 
There is general agreement that the States can often carry out cleanups 
in a more efficient and effective manner than EPA. We in Colorado 
fought for many years to apply our own laws at the Rocky Mountain 
Arsenal. Prior to our victory in our case against the Army, the United 
States contended that it could run the cleanup of this former nerve gas 
facility without any regard for State law, regardless of the 
environmental consequences or danger to our citizens. The EPA was 
largely silent in this battle. The EPA's principles ensure that they, 
and not the States, will be in control of Federal facility cleanups. 
Yet again, the agency stands in the way of true environmental gains.
                              suggestions
    We would offer several suggestions that might improve the EPA-State 
relationship. First, we recognize that EPA is often caught between its 
legislative mandates and a desire to work with the States. The 
environmental laws must be reviewed with an eye toward changing those 
provisions that prevent EPA from allowing States to experiment by 
putting their own environmental programs into place. For example, the 
courts have interpreted the present Superfund law as not providing the 
States substantial authority to implement clean-up programs. We believe 
that it was the intention of Congress to create a floor for 
environmental protection in the statutes, and, then, to allow the 
States to accomplish the goals set out in the statutes in their own 
fashion. Perhaps a short-term task force or a commission could be 
created to review the present laws and recommend changes, if necessary, 
to implement this intention.
    Second, there must be a review of the methods for measuring success 
in the environmental area. Until we have a legitimate and effective 
means of measuring success, and as long as we are wedded to the 
``number of enforcement actions'' model, we will be unable to try new 
approaches that may well mean greater gains for fewer costs. We would 
recommend a study of this issue, perhaps starting with EPA's new 
performance measures, that will result in recommendations for changes 
to the present measurement methods.
    Third, and specific to EPA, there needs to be greater Congressional 
oversight with regard to agency activities. For example, Congress, the 
States and the public should know the criteria for overfiling. At 
present, the authority to overfile is used as a weapon by EPA to extort 
changes in State laws and to manipulate the failure of audit laws. The 
agency should be required to set out clearly the criteria it will use 
for determining whether to overfile in particular cases. Perhaps it 
should be required to do so after a series of hearings or a formal 
rulemaking process.
    Fourth, as to specific substantive areas, there should be Federal 
legislation allowing States to experiment with self-audit legislation 
without EPA interference. We do not take a position at this time as to 
whether that legislation should include Federal privilege and immunity 
provisions. At a minimum, however, it should say that EPA cannot revoke 
the delegation of States that have audit laws just because of those 
laws, and, that EPA cannot overfile in situations in which the States 
have given immunity under their own audit laws.
    We would be happy to work with your staffs to implement these 
suggestions legislatively. Again, we appreciate the opportunity to 
submit these remarks to the Committee on this important issue.
                                 ______
                                 
   Prepared Statement of Christophe A.G. Tulou, Secretary, Delaware 
       Department of Natural Resources and Environmental Control
    Mr. Chairman and Members of the Committee, my name is Christophe 
Tulou, and I have been the Secretary of the Delaware Department of 
Natural Resources and Environmental Control (DNREC) since March 1993.
    I appreciate the invitation to join you today to discuss Delaware's 
enforcement relationship with the Federal Environmental Protection 
Agency (EPA).
    The amount and quality of discourse between EPA and the States is 
greater today than it has ever been. We are sharing perspectives on 
environmental goals for the country, providing suggestions on EPA's 
goals and objectives under the Government Performance and Results Act, 
and helping develop performance measures to evaluate our successes 
under the National Environmental Performance Partnership System 
(NEPPS). EPA and the States are not that far apart in terms of a shared 
vision for our nation's environment.
    Enforcement, and the related issue of regulatory flexibility, are 
the areas of greatest disagreement between us. Our environmental 
management challenges are diverse and complex, and our Federal laws and 
regulations are often stiff and constraining. Finding room for common 
sense is tough.
    EPA has delegated essentially all the major Federal regulatory 
programs (except Sec. 404 of the Clean Water Act dealing with wetlands) 
to Delaware based upon our demonstrated performance in environmental 
management. As part of our acceptance of full authority for these 
programs, the State Attorney General provided assurances regarding our 
capacity to enforce. According to EPA's estimates, States account for 
87 percent of environmental civil enforcement each year. This estimate 
excludes criminal enforcement activities. Though I do not have the 
figures, I strongly suspect that DNREC undertakes--along with our 
Attorney General's office--an even greater majority of enforcement 
actions in Delaware.
    Delaware's enforcement relationship with EPA Region III is very 
good. Though the relationship continues to be positive, our development 
of a Performance Partnership Agreement (PPA) with Region III has 
created some friction regarding the role of enforcement in 
environmental management.
    We are proud that Delaware was the second State to adopt a PPA. We 
wanted to take advantage of EPA's promise to work in partnership with 
Delaware to build the capacity necessary to meet OUR environmental 
priorities. We sought a relationship that recognized that States are at 
the forefront of environmental management, and that the fastest way to 
our mutual goals is through partnership, not paternalism.
    Working very closely with Region III (and with the strong support 
of Regional Administrator, Mike McCabe), we jointly developed a model 
Partnership Agreement. We agreed to move away from case-specific review 
of our activities towards a more holistic consideration of the State 
enforcement programs, encouraging innovation and creativity in 
achieving our environmental goals. To that end, the Agreement focuses 
on outcomes more than activities or processes. The outcomes we agreed 
to achieve are:
     correcting promptly violations that threaten Delaware's 
environment or the health of Delaware's citizens;
     achieving and maintaining widespread compliance with the 
environmental laws, both to protect human health and the environment, 
and to assure that those who violate the laws do not obtain an economic 
benefit from their unlawful activity; and
     preventing violations through use of applicable 
enforcement and compliance tools and targeted assistance.
    Despite these assurances in our Agreement, I fear that EPA will 
insist on greater reliance on enforcement-specific activities, focusing 
on enforcement for enforcement's sake.
    We have argued since the beginning of the PPA process that 
enforcement should be a part of all our environmental goals, not a 
stand-alone end unto itself. In short, we view enforcement as an 
important tool to achieve our environmental goals, not a goal in its 
own right. That disagreement continues.
    We also contend that compliance is a more relevant and important 
programmatic goal than enforcement. We should be striving--through 
whatever means--to get all our polluters in compliance. This 
distinction between compliance and enforcement is crucial in 
determining what States and EPA should be measuring and reporting. If 
enforcement is a goal, then we should continue to count beans such as 
penalty dollars collected or enforcement actions taken. If compliance 
is the goal, then we should be measuring and reporting who is in, and 
who is out, of compliance. The traditional measures of dollars and 
enforcement actions are less important if compliance is the true goal. 
Measuring compliance is feasible and relevant. Last year, just over 70 
percent of facilities in Delaware complied with hazardous waste 
regulations at the time of inspection. Within 30 days of the 
inspection, the percentage rose to 85 percent. Within 180 days, 100 
percent of facilities were in compliance.
    In Delaware, we work with violators to get them back into 
compliance as quickly as possible. Using compliance assistance as an 
option of first choice, we can usually achieve that goal much faster, 
cheaper, and with far greater goodwill than through aggressive 
enforcement. We also create allies for our environmental efforts. In 
fact, several of our companies are moving beyond mere compliance by 
adopting forward-looking environmental management strategies such as 
continuous improvement, pollution prevention, and enhanced product 
stewardship.
    Overly aggressive and ill-timed enforcement is a dare: it inspires 
polluters to assume an adversarial relationship with their environment 
and regulatory agencies, and to challenge enforcers to discover their 
misdeeds. Neither the States nor EPA can afford that cat-and-mouse 
approach to environmental management; neither can our environment.
    Nonetheless, enforcement is critical. In fact, in Delaware and 
other States attempting to inject common sense into their regulatory 
process. the stick must be bigger than ever. Those polluters who choose 
not to participate in our compliance assistance efforts, and those who 
continuously violate environmental obligations, should face the full 
force of public indignation and legal recourse. In this context, States 
and EPA can forge a powerful partnership that combines the benefits of 
compliance and deterrence.
    Making the philosophical point about compliance and enforcement, 
and arguing the failings of traditional enforcement measures is not 
enough. States have an obligation to work with EPA to identify clearly 
the appropriate role for enforcement and how best to measure our 
success in getting polluters into compliance and keeping them there. 
The States and EPA in Region III have initiated a process to identify 
which measures of compliance and enforcement would be more useful and 
appropriate than those that are currently in use. Our goal is to make 
recommendations for inclusion in the Region III--EPA Headquarters 
enforcement Memorandum of Understanding, which will be finalized in 
July. I understand similar efforts are underway in other EPA Regions. 
As Steve Herman and Mark Coleman have pointed out in their testimony, 
the Office of Enforcement and Compliance Assurance (OECA) at EPA is 
also working closely with ECOS to define a better State-EPA 
relationship.
    EPA should, and I hope will, continue to be a crucial enforcement 
partner. We will continue to rely on EPA to: assist with our ``bad 
actors''; help with transboundary pollution problems; set protective 
national standards; and to ensure that all States live up to their end 
of the environmental protection bargain. We will also continue to work 
with EPA through Performance Partnership Agreements and other means to 
build the capacity we need to meet Federal and State environmental 
goals. We need EPA, just as EPA needs the States. That is what 
partnership is all about.
    Thank you again, Mr. Chairman, for the opportunity to share my 
views with you today.
                                 ______
                                 
  Prepared Statement of Joseph Rubin, Connecticut Assistant Attorney 
                                General
    As the head of the Environment Department of Connecticut Attorney 
General Richard Blumenthal's office for the past 7 years, I have 
participated closely in many aspects of the State-EPA environmental 
enforcement relationship. Overall, I have found the relationship among 
the Connecticut Department of Environmental Protection (DEP), our 
office, EPA Region 1, and the United States Department of Justice to be 
cooperative and productive. I will focus my remarks on two aspects of 
this relationship which provide good examples of this relationship at 
work--a model State-Federal working group on water enforcement efforts, 
and a current EPA review of some of Connecticut's State enforcement 
programs.
    Almost 3 years ago, under the leadership of EPA Region 1 General 
Counsel Harley Laing and myself, with the full support of the 
Connecticut DEP, we began monthly meetings including DEP water 
enforcement staff, Region 1 water enforcement and legal staff and the 
Connecticut Attorney General's office. At some of our meetings, the EPA 
Criminal Division and the U.S. Attorney's Office are also represented. 
This group, composed entirely of working level staff, operates under an 
informal, non-bureaucratic structure, with no memoranda of agreement, 
no guidance documents, and no protocols. Instead of making 
pronouncements and fighting about turf, we actually work cooperatively. 
In fact, this lack of bureaucratic structure is a key to the group's 
success, because everyone is more willing to cooperate when we all 
understand that cooperation is voluntary, and continued success depends 
on everyone's continued voluntary cooperation.
    At each meeting, current and potential water enforcement cases 
which have come to the attention of any of the participants, whether 
from citizen complaints or routine inspections, are discussed and 
reviewed. Together, the group comes to an informal consensus as to 
whether a case merits serious enforcement action, and whether State, 
Federal, or joint action will be most efficient and effective. In 
reaching this determination, the group considers who has the best legal 
tools, discovery tools, available enforcement staff, technical 
resources, and legal staff to prosecute a particular case. This is not 
an all or nothing decision. Often, we agree, for example, that Federal 
discovery may be followed by a State judicial enforcement action, or 
that State and Federal technical staff will work together, or, on rare 
occasions, that a case should be prosecuted jointly by the State and 
Federal Governments.
    The group accomplishes several important goals--it maximizes the 
effectiveness of overall enforcement efforts by eliminating unknowing 
duplication of effort and by using everyone's limited resources most 
effectively. It greatly reduces inter-agency competitiveness and goes a 
long way towards replacing it with cooperation. By, in effect, 
providing ongoing ``peer review'' to all of us, the process also helps 
stimulate everyone to timely high quality work. In sum, it gives all 
taxpayers more bang for their environmental buck.
    Of course this group is not a panacea. Sometimes discussions 
illuminate the resource limitations of both State and Federal 
Governments which may limit us. Still, this group is a model of the 
best in State-Federal environmental enforcement cooperation.
    A second, and somewhat more controversial example of the State-
Federal relationship is the series of reviews or audits of State 
environmental enforcement efforts produced by EPA Region 1. Several 
years ago, EPA actively and assertively reviewed many State enforcement 
actions in federally funded programs on an ongoing basis. 
Understandably, the States sometimes resented what they saw as 
duplication of effort and ``second guessing'' by EPA of their 
enforcement strategies and decisions. Recently, Region 1 has moved away 
from such constant and intrusive monitoring to periodic overall reviews 
of States' enforcement efforts in federally funded programs. Region 1 
completed a draft review of Connecticut DEP's enforcement programs 
about 6 months ago, and expects to complete its final report this 
month.
    This periodic review process represents an excellent compromise 
between overly intrusive and resource-wasting oversight, and a complete 
lack of oversight of the use of Federal funds. The review process 
almost necessarily produces positive results. In the first place, any 
peer review process always helps to insure high and consistent quality. 
Programs which are peer-reviewed by outsiders will almost always be 
better than those that are not. In addition, at least in the case of 
Connecticut, our DEP has already taken many positive steps to improve 
in areas of concern identified by EPA in its draft report. These steps 
should result in improved documentation, and therefore, consistency, of 
enforcement actions and decisions. The report is also leading, within 
ever-present budget constraints, to improved enforcement staffing in 
the water pollution area. Further, the review has, very appropriately, 
identified many special strengths and accomplishments of our DEP and 
its staff. No peer review is painless, and EPA, in its original draft, 
may have failed to fully recognize the positive aspects of certain 
compliance assurance initiatives of DEP. Overall, however, the review 
process has been effective and beneficial.
    While these two examples--the joint water enforcement working group 
and the EPA review of State enforcement programs--are certainly not 
comprehensive, they do provide a fair snapshot of successes in the 
State-Federal enforcement relationship. In my experience, they are 
exemplary of the success of that relationship between Region 1 and 
Connecticut, and I urge this Committee to continue to encourage the 
unfettered and unencumbered growth of these cooperative efforts.
                                 ______
                                 
   Prepared Statement of Robert E. Harmon, Chairman of the Board of 
                   Directors, Harmon Industries, Inc.
    Chairman Chafee, members of the committee, good morning. My name is 
Robert E. Harmon. I am the Chairman of the Board of Directors of Harmon 
Industries, Inc. I appreciate the opportunity to appear before the 
Committee this morning to discuss important issues of Federal-State 
relations in enforcement of the environmental laws. I am accompanied 
today by Harmon's attorney, Ms. Terry J. Satterlee of Lathrop & Gage 
L.C. of Kansas City.
    With your permission, I would like to read to you a brief prepared 
statement explaining the reasons for Harmon's interest in these issues.
    Harmon Industries is the leading supplier of railroad signal, train 
control, and related equipment for use in the railroad industry. The 
company is headquartered in Blue Springs, Missouri, and has assembly 
and manufacturing facilities across the country. My father founded the 
company which is now Harmon Industries in 1946. Today, Harmon employs 
more than 1,500 workers in the United States, and had sales of more 
than $175 million in 1996; the company's stock is publicly traded on 
the NASDAQ national market system.
    I believe Harmon's case well illustrates the way in which 
conscientious regulated industries who are seeking in good faith to 
comply with their obligations under the environmental laws can be 
whipsawed by EPA's claimed ``overfiling'' authority. If EPA has this 
authority, regulated industries cannot negotiate binding agreements 
with authorized State agencies, since EPA may later disagree with and 
completely override the State resolution.
    One of Harmon's assembly facilities is located in Grain Valley, 
Missouri, which is a rural agricultural area outside Kansas City. The 
Grain Valley plant assembles circuit boards for use in railroad control 
and safety equipment.
    As was common in the industry at the time, prior to 1987 Harmon 
employees used small quantities of organic solvents to remove soldering 
flux from circuit boards they were assembling. The solvents were kept 
at the employees' work benches in small jars. Residues were collected 
in a 3 to 5 gallon pail, and dumped by Harmon maintenance employees 
approximately once every 1 to 3 weeks on the ground outside the back 
door of the Grain Valley plant. This practice probably began in the 
late 1970's.
    Harmon's management was unaware that employees were disposing of 
used solvents until it discovered the practice during a routine 
internal safety inspection in November 1987.
    Upon learning of this practice, we promptly took every action we 
could to stop, and remedy the effects of, this disposal practice. 
Harmon's management immediately ordered the disposal practice stopped, 
fired an employee who refused to comply and demoted or reassigned 
several others, and retained environmental consultants to investigate 
the extent of any resulting contamination. Harmon also voluntarily 
reported the discontinued disposal practice to the Missouri Department 
of Natural Resources (``MDNR''), the agency delegated the authority by 
EPA to implement and enforce the Federal RCRA hazardous waste program 
within the State of Missouri. It is undisputed that, prior to Harmon's 
voluntary notification to MDNR in June 1988, neither MDNR nor EPA was 
aware of the way in which Harmon's employees had been disposing of 
solvent residues, or of the contamination of the soil at the immediate 
disposal area at Harmon's Grain Valley plant.
    Harmon conducted an extensive scientific investigation of the Grain 
Valley plant property between late 1987 and February 1996, with MDNR's 
intensive oversight and approval. As of January 1994, this 
investigation had cost Harmon over $1.4 million, excluding attorney's 
fees and other indirect costs. MDNR issued Harmon a ``post-closure'' 
permit in July 1996. Harmon anticipates additional costs of 
approximately $500,000 during the 30-year post-closure period.
    Since June 1988, MDNR reported the status of the ongoing 
investigation to EPA during quarterly program meetings, and promptly 
provided EPA with copies of all significant correspondence, plans and 
other documents concerning MDNR's dealings with Harmon. To Harmon's 
knowledge, EPA has at no time sought to intervene in, or assume 
responsibility for, MDNR's enforcement of RCRA with respect to Harmon.
    Besides the costs of investigating and remedying the existing 
contamination problem, Harmon has instituted costly changes to its 
manufacturing process to insure that the past disposal problem does not 
recur. During December 1987, while its investigation was ongoing, 
Harmon changed its assembly process to a state-of-the-art technology 
using a nonhazardous cleaning material, rather than organic solvents, 
to remove soldering flux from equipment being assembled. As a result of 
these changes, Harmon ceased generating hazardous waste at the Grain 
Valley facility. These changes had an initial cost exceeding $800,000, 
and Harmon incurs ongoing costs of approximately $125,000 every year as 
a result.
    In the end, Harmon's environmental consultants concluded that the 
contamination at the Grain Valley plant was limited, and posed no 
significant threat to human health and the environment. Both MDNR and 
the EPA have accepted this conclusion. In a State-court consent decree 
negotiated between Harmon and MDNR, MDNR imposed regulatory sanctions 
on Harmon, but agreed not to seek monetary penalties against Harmon 
based on its voluntary self reporting and its prompt action to 
investigate and remedy any contamination. The decree specifically 
provides that ``Harmon's compliance with this Consent Decree 
constitutes full satisfaction and release from all claims arising from 
allegations contained in plaintiff's petition.'' The consent decree 
provides in para.23(a) that it will terminate when, among other things, 
``MDNR issues a post-closure Part B permit.'' This condition was 
satisfied on July 31, 1996.
    Even though MDNR has been authorized by EPA to run the RCRA program 
in Missouri, and despite Harmon's extensive dealings and settlement 
with MDNR, after entry of the State-court decree EPA continued to 
pursue a separate Federal action seeking over $2.7 million in RCRA 
penalties. EPA sought these penalties for exactly the same conduct 
which was the subject of Harmon's State-court consent decree with MDNR.
    During the administrative penalty proceedings, both the ALJ and the 
EPA's Environmental Appeals Board held, without extended discussion, 
that EPA had the authority to ``overfile'' in this way when it was 
dissatisfied with an authorized State agency's resolution of a RCRA 
case.
    We believe EPA's actions are contrary to the letter and spirit of 
the RCRA statute, and we accordingly filed suit in Federal court last 
Friday, June 6, to set aside the penalty. Because of the importance of 
the issues presented in Harmon's case to regulated industries across 
the country, Harmon's position was supported before the agency by two 
private parties as amicus curiae, and we anticipate support from 
industry groups in the court action.
    MDNR's enforcement of RCRA with respect to Harmon's solvent 
disposal has been rigorous, and EPA has never contended that MDNR's 
action were inconsistent with RCRA requirements or otherwise 
inappropriate. In connection with its extensive investigation of the 
site, Harmon submitted, revised as requested, and obtained MDNR 
approval for, two detailed site investigation plans, as well as a 
closure and post-closure plan. Harmon also submitted to MDNR two 
detailed reports describing the results of its consultant's 
investigations, in addition to the Phase I report Harmon submitted in 
June 1988. In connection with its investigation of the site, Harmon 
installed 29 groundwater monitoring wells, drilled 27 soil borings and 
69 soil probes, and took and analyzed a large number of soil and water 
samples over a 5-year period before MDNR was satisfied that the extent 
of contamination at the site had been adequately defined. Moreover, 
throughout its investigation Harmon's representatives were in frequent 
contact with MDNR.
    The practical consequences of EPA's decision in Harmon's case are 
significant. Congress made clear in RCRA that it intended State 
agencies to take the lead in enforcing RCRA's hazardous waste 
provisions, subject to the States' compliance with the program's broad, 
national goals. However, under the EPA's decision no regulated entity 
can enter a settlement agreement with an authorized State agency, 
without also formally making the Federal EPA a party to the agreement. 
The possibility always exists, even after conclusion of a final 
settlement agreement with the State, that EPA will choose to second-
guess the State's exercise of its enforcement discretion, and file a 
duplicative Federal enforcement action. Indeed, during the 
administrative hearing the ALJ suggested that Harmon should have dealt 
with both the State and EPA when it originally negotiated the consent 
decree. This duplicative, redundant regulation is hardly what Congress 
intended when it spoke of a ``Federal-State partnership.'' Any 
suggestion that the States may be too lenient on regulated entities, or 
may settle RCRA disputes based on ulterior motives, are simply 
unfounded. The States have every incentive to vigorously enforce 
environmental laws, and MDNR's actions in this case (which EPA has not 
challenged) show that the States take these responsibilities seriously. 
While it may be true that the States are more conscious of the 
consequences of their regulatory actions on the local economy and the 
competitiveness of local firms, I assume this is what Congress 
intended, consistent with Congress' overall initiative to introduce 
more cost-benefit analysis into this country's enforcement of its 
environmental laws. Of course, if any State is consistently 
disregarding its obligations to vigorously enforce the RCRA program, 
EPA retains the right to withdraw its authorization of the State 
program, and directly enforce RCRA's hazardous waste program in any 
such State.
    EPA's standard response to criticisms of its claimed overfiling 
authority has been to argue that it needs this authority to insure, at 
a minimum, that companies which violate RCRA's requirements disgorge 
any economic benefits they derived from their noncompliance. This 
argument does not apply here, however. The ALJ rejected EPA's argument 
that Harmon received between $600,000 and $975,000 in economic benefit 
through its solvent disposal practice; instead, EPA's own ALJ ruled 
that Harmon received an economic benefit of only $6,072 by failing to 
dispose of its small volume of solvent residues through an appropriate 
offsite disposal facility. MDNR's agreement not to seek to recoup 
economic benefit from Harmon hardly justifies a separate Federal 
enforcement action.
    The consequences of EPA's claimed ``overfiling'' authority are 
perhaps best illustrated in connection with the RCRA requirement that 
any hazardous waste disposal facility must have in place liability 
insurance to protect against accidental releases of pollutants. 
Harmon's insurance agent attempted to acquire this coverage, but could 
not find a policy which would cover defense costs, on-site occurrences, 
or pre-existing pollution, as the RCRA regulations require. After 
lengthy discussions, MDNR agreed in the State-court consent decree that 
Harmon need not comply with the insurance requirements, so long as it 
demonstrated to MDNR twice a year that it had made reasonable, good-
faith efforts to procure the necessary insurance.
    During the administrative proceedings, EPA presented no evidence to 
dispute Harmon's testimony that it was unable to obtain the liability 
insurance required by RCRA. Nevertheless, the ALJ rejected Harmon's 
reliance on the waiver of the liability insurance requirement in the 
State-court consent decree, since ``[Harmon's] consent decree is 
immaterial to EPA's enforcement action.'' According to the ALJ, EPA is 
free to determine that the State ``has not exercised its enforcement 
discretion properly,'' and therefore Harmon was not entitled to rely on 
the decree. On appeal, the EAB specifically refused to reduce or 
eliminate the penalty based on the liability insurance requirements, 
based on Harmon's reliance on the consent decree with the State of 
Missouri, which excused Harmon from the liability insurance 
requirement. The EAB reasoned that ``this exercise of enforcement 
discretion on the part of the State does not prevent the Region from 
taking its own enforcement action against Harmon.'' Thus, Harmon was 
penalized by EPA for violating a regulation which an authorized State 
agency had agreed would not apply to Harmon in a judicially approved 
consent decree.
    It is our view that RCRA was clearly written to allow the States to 
control the implementation of RCRA for so long as they are authorized 
by EPA. Harmon's experience illustrates that EPA thinks it can override 
an authorized State's implementation of RCRA at any time, for any 
reason or for no reason. Neither an authorized State nor a company 
being regulated can make any agreement free of fear that the Federal 
Government will step in and set the agreement aside, even after 
millions of dollars have been spent.
    Once again, thank you for the opportunity to appear before you to 
discuss these important issues. Both Ms. Satterlee and I would be happy 
to answer any questions you may have.
                                 ______
                                 
Prepared Statement of Robert R. Kuehn, Tulane Law School, New Orleans, 
                                   LA
                            i. introduction
    Mr. Chairman, Members of the Committee, my name is Robert Kuehn and 
I am a professor at Tulane Law School in New Orleans, Louisiana, where 
I teach classes in environmental enforcement, environmental advocacy, 
and solid and hazardous waste regulation. I appreciate the opportunity 
to testify before this Committee on the important, and always 
controversial, topic of the relationship of Federal and State 
governments in the implementation of Federal environmental laws.
    I would like to discuss today the results of some research that I 
published last year on the devolution of enforcement of Federal 
environmental laws from Federal agencies to the States (``The Limits of 
Devolving Enforcement of Federal Environmental Laws'', 70 Tulane Law 
Review 2373 (1996)).
    Before discussing the specifics of what I found, it is important to 
keep in mind that issues of federalism are not new to environmental 
policy debates. Until the 1970's, Congress had determined that the 
Federal Government should play a supporting role in the regulation of 
pollution by providing grants and technical assistance to the States. 
The 1970's then witnessed a rising national concern over the 
environment and a surge of legislation giving the Federal Government 
the primary, and in some areas exclusive, authority over the protection 
of public health and the environment. While President Reagan's ``New 
Federalism'' policies of the early 1980's reversed the trend of 
centralization and returned some powers to the States, the Federal 
Government continued to establish the standards of environmental 
protection and had the authority and resources to dictate, in large 
measure, the activities of the States, including their enforcement 
operations. Recent Federal legislation on pollution control, the 1990 
amendments to the Clean Air Act and the Pollution Prosecution Act of 
1990, signaled another expansion of Federal enforcement power.
    While the pendulum swing of federalism is not new, what is new 
about the most recent controversy is how widespread the sentiment is 
for devolving environmental enforcement powers from the Federal 
Government to the States and how dramatically some of the current 
proposals would reduce the Federal role. Not only are there calls for 
less oversight of State enforcement activities, but some now advocate 
that Federal environmental agencies be prohibited from taking any 
enforcement action in States with federally-approved environmental 
programs.
    Unfortunately, as with past efforts to decentralize environmental 
protection, there has been little serious discussion, much less 
agreement, regarding the criteria by which to judge the suitability of 
devolving enforcement.\1\
---------------------------------------------------------------------------
    \1\ See William F. Pedersen, Jr. Federal/State Relations in the 
Clean Air Act, the Clean Water, Act, and RCRA: Does the Pattern Make 
Sense?, 12 Environmental Law Rept.. (Environmental Law Inst.) 15,069, 
15,071 (Dec. 1982) (Congress has failed to confront with any degree of 
rigor the issue of which pollution control responsibilities properly 
belong to the States and which to the Federal Government).
---------------------------------------------------------------------------
    My research reviewed the original arguments for and against Federal 
enforcement of environmental laws to determine if these justifications 
for Federal enforcement are still supportable. As I set forth more 
fully below, I found that while some of the original arguments for 
Federal enforcement (such as lack of adequate State enforcement 
commitment and resources) may find less support today, there are still 
a number of compelling justifications for a meaningful Federal role in 
enforcement, even where States have been authorized to implement 
Federal programs.
    Believing that the issue of the proper mix of Federal and State 
enforcement of Federal environmental laws out to be based on pragmatic 
policy grounds, I also sought to develop and apply some non-ideological 
criteria for determining the appropriate level of Federal involvement 
in enforcement. Using the criteria of effectiveness, efficiency and 
equity, I compared federally-run enforcement programs with State-run 
programs. I was surprised to find how little empirical data was 
available on the suitability, under these three criteria, of Federal 
versus State enforcement. Based on the limited data that I could find, 
I concluded that public policy criteria did not support a dramatic 
reduction in Federal enforcement.
    I have set forth more fully below my analysis and conclusions.
                 ii. rationale for federal enforcement
    Some Federal enforcement of national pollution control laws is 
still justified on a number of grounds, even 20 years after the 
enactment of most Federal statutes. An obvious justification is that 
States are, and always will be, particularly ill equipped to address 
the interstate effects of pollution. As pollution knows no political 
boundaries, a pollution source's noncompliance could impose significant 
adverse impacts, or what has been termed ``spillover effects,'' on 
another jurisdiction.\2\ Where the local jurisdiction enjoys 
significant benefits from the source's activities yet bears little or 
none of the harm, that governmental entity may have little incentive to 
enforce pollution laws against the source. A Federal role in ensuring 
appropriate compliance by sources that may have impacts in other States 
is therefore essential, particularly since previous attempts to address 
interstate effects of pollution through regional compacts proved 
unsuccessful.\3\
---------------------------------------------------------------------------
    \2\ Richard B. Stewart, Pyramids of Sacrifice? Problems of 
Federalism in Mandating State Implementation of National Environmental 
Policy, 86 Yale Law Journal 1196, 1215-16 (1977).
    \3\ See Lewis G. Green, State Control of Interstate Air Pollution, 
33 Law & Contemporary Problems 315, 323-24 (1968).
---------------------------------------------------------------------------
    The growing importance of international environmental agreements 
further creates an indisputable and growing need for Federal 
enforcement. If a treaty provides for a right of the United States to 
enforce certain pollution standards against a source in another country 
or if the United States has entered into an international agreement to 
ensure enforcement of its own laws, individual States are in no 
position to uphold such obligations.\4\ Indeed, without a significant, 
continuing Federal presence in environmental enforcement, the ability 
of the United States to represent that its pollution standards will be 
enforced is debatable.
---------------------------------------------------------------------------
    \4\ See e.g., North American Agreement on Environmental Cooperation 
(Final Draft), Sept. 13, 1994, art. 5 (U.S. agrees, along with Canada 
and Mexico, to initiate proceedings to seek appropriate sanctions or 
remedies for violations of domestic environmental laws and 
regulations).
---------------------------------------------------------------------------
    It is realistic to expect that some State environmental agencies 
may not vigorously enforce environmental standards against other State 
agencies or the State's political subdivisions. State and local 
governments operate numerous sources of pollution, such as landfills 
and sewage treatment plants, and, through their ownership and operation 
of buildings and equipment, also generate wastes that are subject to 
regulation. In the 1980's, EPA launched a municipal treatment 
enforcement initiative to address widespread noncompliance by publicly-
owned sewage treatment facilities and the failure of State 
environmental agencies to enforce compliance.\5\ Because of concerns 
that EPA was lacking in its enforcement efforts against facilities 
owned or operated by the Federal Government, States argued for and 
received expanded rights to enforce State environmental statutes 
against Federal facilities.\6\ The same arguments that support the need 
for State enforcement against Federal facilities favor a Federal role 
in enforcing environmental laws against States and their political 
subdivisions.
---------------------------------------------------------------------------
    \5\ See Thomas Puts in Place Enforcement Strategy to Maximize POTW 
Compliance with '88 Deadline, 18 Environmental Rept. 1436, 1437 (1987).
    \6\ See e.g., Federal Facility Compliance Act, Public Law 102-386, 
Sec. 102(a),(b), 106 Stat. 1505-06 (1992).
---------------------------------------------------------------------------
    One of the most compelling justifications for Federal enforcement 
is the need to ensure equal enforcement among the States. Without 
Federal environmental laws, including Federal enforcement to ensure 
that national standards are implemented nationwide, States are likely 
to vary widely in the extent of their regulation of pollution. Some 
States would weaken their standards or lessen enforcement as a way to 
induce polluting industries to invest in their States. States that 
refused to weaken their standards would risk losing economic 
development activities to the less restrictive States.
    Although the theoretical basis of this ``race to the bottom'' 
rationale for Federal regulation has been questioned,\7\ State 
regulators report that the regulated community repeatedly argues, and 
even threatens, that relaxed standards are needed to attract new 
industry or keep companies from moving to other States.\8\ In addition, 
the growing popularity of State laws that prohibit agencies from 
promulgating regulations more stringent than the counterpart Federal 
rule ``provides some evidence that the concern about a `race to the 
bottom' in the absence of Federal minimum standards remains valid.''\9\ 
Today, States are engaged in what one Governor called ``cannibalism'' 
in their competition to attract new businesses, wooing them with tax 
breaks and other taxpayer-financed economic incentives.\10\ In the 
present climate of economic rivalry between States, one would be naive 
not to believe that, without the specter of Federal intervention, some 
States would purposefully reduce their enforcement efforts as an 
economic incentive.
---------------------------------------------------------------------------
    \7\ See Richard L. Revesz, Rehabilitating Interstate Competition: 
Rethinking the ``Race-to-the-Bottom'' Rationale for Federal 
Environmental Regulation, 67 New York University Law Review 1210, 1233-
44 (1992); but see Kirsten H. Engel, State Environmental Standard 
Setting: Is There a ``Race'' and is it ``to the Bottom''?, 48 Hastings 
Law Journal 271 (1977) (documenting the race to the bottom).
    \8\ See e.g., Adam Babich, Our Federalism, Our Hazardous Waste, and 
Our Good Fortune, 54 Maryland Law Review 1516, 1533 n.64 (1995) (State 
officials were responsive to arguments by members of the regulated 
community that environmental standards must be reduced); Vicki Arroyo 
Cochran, EPA Regional Offices: Unequal Protection Under the Law? 48-49 
& n.96 (April 1994) (unpublished manuscript, on file with author) 
(Indiana's top environmental official says that companies have 
threatened to either move to another State or shift resources to other 
facilities to escape rigorous enforcement).
    \9\ Jerome M. Organ, Limitations on State Agency Authority to Adopt 
Environmental Standards More Stringent than Federal Standards: Policy 
Considerations and Interpretive Problems, 54 Maryland Law Review 1373, 
1393 (1995).
    \10\ Taking Stock of Environmental Problems: Hearings Before the 
Senate Comm. On Environment and Public Works, 103d Cong., 1st Sess. 148 
(1993) (testimony of Thomas C. Jorling, Commissioner, New York Dept. of 
Environmental Conservation) (``Governor Cuomo considers the 
relationship between and among the States now as cannibalism in the 
competition for economic activity.'').
---------------------------------------------------------------------------
    Federal enforcement also helps avoid certain market imbalances. 
Companies that invest in environmental compliance are at a competitive 
disadvantage if their competitors can avoid those costs because the lax 
enforcement practices of another jurisdiction overlook some violations 
of environmental laws. Industries that had invested heavily in 
environmental compliance were placed at a competitive disadvantage when 
the regulated community perceived in the early 1980's that the EPA 
would not enforce environmental laws.\11\ Federal enforcement, when 
aggressively implemented, has the ability to ``level the playing 
field'' by initiating enforcement actions, or forcing reluctant State 
agencies to initiate enforcement actions, in States with weak 
enforcement practices.
---------------------------------------------------------------------------
    \11\ Rochelle L. Stanfield, Ruckelshaus Casts EPA as `Gorilla' in 
States' Enforcement Closet, National Journal, May 24, 1984, at 1034, 
1035.
---------------------------------------------------------------------------
    In some enforcement matters, the issue is uniquely Federal. For 
example, United States v. Marine Shale Processors\12\ involved the 
interpretation of EPA's cryptic regulations differentiating between 
recycling and waste treatment. Because EPA developed the regulation and 
had the greatest stake in ensuring that its rule was upheld by the 
court and properly applied nationwide, Federal enforcement was fitting.
---------------------------------------------------------------------------
    \12\ 81 F.3d 1361 (5th Cir. 1996).
---------------------------------------------------------------------------
    The centralization of environmental protection was often justified 
in the 1960's and 1970's by the States' lack of legal capacity, 
resources, and commitment to effectively enforce pollution control 
laws. The development of strong Federal programs, along with financial 
assistance to State environmental programs and nationwide standards for 
authorization of State programs, have helped stimulate the growth of 
competent State environmental programs.\13\ Ironically, the desire to 
avoid federally-run permitting programs in their States encouraged 
State legislators to provide the necessary laws and resources to obtain 
primacy. Once a State obtains authorization, the threatened return of 
the program to EPA has been used by State agencies to leverage 
additional funds from State legislators.\14\
---------------------------------------------------------------------------
    \13\ Congressional Research Service, for the Senate Comm. on 
Environment and Public Works, Federal-State Relations in Transition: 
Implications for Environmental Policy, 31 (1982).
    \14\ Rebecca Clay, A New Breed of Regulator, Environmental Forum, 
March/April 1995, at 32, 33-34 (Indiana Department of Environmental 
Management able to reverse budget cuts by arguing that reductions would 
mean that State would lose authorization and EPA would assume 
permitting and enforcement activities).
---------------------------------------------------------------------------
    Today, most State programs have the necessary resources and 
commitment to assume most Federal enforcement. Yet this enhanced 
capability is due, in large part, to Federal enforcement program 
technical and financial assistance to States, EPA's prodding of States 
to take enforcement actions, and the desire of States to avoid a 
Federal takeover of enforcement and other regulatory functions. One 
State environmental commissioner observed that the publicity and 
implications regarding the State's inability to handle its 
responsibilities that would result if EPA were to take over pollution 
compliance responsibilities is ``the greatest incentive for the State 
to do the job.''\15\
---------------------------------------------------------------------------
    \15\ Dan W. Lufkin, State Responsibility in Managing the 
Environment, in Office of Research and Development, U.S. EPA, Managing 
the Environment, 351 (1973).
---------------------------------------------------------------------------
    The availability of EPA as a backup to State enforcement efforts 
also enhances the State's effectiveness. State officials overwhelmingly 
agree that the threat of the EPA enforcement gorilla bringing its own 
enforcement action strengthens the State's position with polluters.\16\ 
Without a strong Federal enforcement program, State programs would 
undoubtedly suffer.
---------------------------------------------------------------------------
    \16\ Richard J. Tobin, Environmental Protection and the New 
Federalism: A Longitudinal Analysis of State Perceptions, Publius 93, 
105 (Winter 1992) (90 percent of State air and water quality directors 
agreed that the threat of EPA intervention strengthens the State's 
position). West Virginia's attorney general stated: `Threatening EPA 
lawsuits is how we get voluntary compliance.'' Lawrence Mosher, 
Reagan's Environmental Federalism--Are the States Up to the Challenge?, 
National Journal Jan. 30, 1982, at 184, 185.
---------------------------------------------------------------------------
    Even with the notable improvements in the commitment and ability of 
States to enforce environmental laws, in some cases the resources and 
political influence of the regulated entity may still overwhelm the 
State agency. When faced with potential penalties or remediation costs 
in the millions of dollars or with the potential closure of their 
businesses, many regulated entitles are able to dedicate legal and 
technical resources that may overpower the limited enforcement 
resources of State agencies. For example, a defendant spent $3 million 
in legal fees fighting a Clean Air Act enforcement action brought by 
EPA.\17\ In fiscal year 1994 alone, the United States Department of 
Justice dedicated more than 29,000 work hours (the equivalent of 15 
persons working full time for the entire year), and EPA used three 
employees full time and spent $2 million in litigation support, on a 
single enforcement action in Louisiana against Marine Shale Processors; 
the entire Louisiana Department of Environmental Quality legal staff 
only consists of 15 lawyers.\18\ Budget cuts threaten to reduce further 
the ability of States to handle enforcement matters, particularly cases 
with great resource demands.\19\
---------------------------------------------------------------------------
    \17\ Barry M. Hartman, The Litigation Explosion, in Environmental 
Law: ALI-ABA Course of Study Materials 567,569 (American Law Institute-
American Bar Association, Feb. 13-15, 1992). The defendant eventually 
settled the case for $350,000. Id.
    \18\ U.S. Dept. of Justice, Statistical Report-Fiscal Year 1994 86 
(1994); Telephone Interview with Terry Sykes, Office of Regional 
Counsel, Region 6, EPA (Nov. 29, 1995); Telephone Interview with Ann 
Coco, Office of Legal Affairs and Enforcement, Louisiana Department of 
Environmental Quality (Nov. 13, 1995).
    \19\ See Rex Springstein, Twenty Lose Jobs at DEQ--Total of 91 
People Left the State Agency Yesterday, Richmond Times-Dispatch, April 
29, 1995, at B1 (Governor cuts 91 jobs at Virginia Department of 
Environmental Quality; Reorganization plan calls for reducing staff 
involved in enforcement); Office of the Administrator, U.S. EPA, Report 
of the Task Force to Enhance State Capacity 5 (July 1993) (increased 
demands for expenditures and decreased State revenues draw into 
question ability of States to continue expansion of environmental 
management activities).
---------------------------------------------------------------------------
    Political connections may also affect the enforcement activities of 
State agencies. In Marine Shale Processors, the owner of the company 
spent $1 million of his own money to defeat the election campaigns of 
the Governor who had sought to shut the company down for violations of 
hazardous waste laws.\20\ In Virginia, the Governor accepted a $100,000 
campaign contribution from a company under investigation by the State 
environmental agency and facing millions of dollars in fines for 
illegally discharging wastes to a tributary of Chesapeake Bay.\21\ Even 
the most capable State environmental agency may find itself unduly 
influenced or overwhelmed by a well-heeled, politically influential 
polluter and, therefore, in need of Federal enforcement.
---------------------------------------------------------------------------
    \20\ Gwendolyn Thompkins, et al., Campaign Watch; A Look at the 
Day's Highlights and Happenings, Times-Picayune, Oct. 25, 1995, at A2; 
Tyler Bridges, Roemer Lashes Back Over Kent TV Ads, Times-Picayune, 
Oct. 11, 1995, at A11. The company's owner spent $500,000 in 1991 and 
another $500,000 in 1995 attacking former Governor Buddy Roemer; Roemer 
was defeated in both elections. Id.
    \21\ Peter Baker, Allen's Pac Took $100,000 From Company Under 
Probe, Washington Post, Oct. 25, 1995, at A1.
---------------------------------------------------------------------------
    A final rationale for Federal enforcement is that EPA must be 
involved in enforcement to ensure that the national pollution control 
standards it promulgates are enforceable and achievable. ``By splitting 
standard setting and enforcement between two governmental levels, the 
Nation would risk the promulgation and maintenance of unenforceable 
standards.''\22\
---------------------------------------------------------------------------
    \22\ Law of Environmental Protection Sec. 6.02[3] (Sheldon M. 
Novick et al. eds., 1990).
---------------------------------------------------------------------------
                  iii. rationale for state enforcement
    The primary philosophical justification for State enforcement of 
Federal environmental laws is the principle of federalism, which, as 
primarily expressed in the Tenth Amendment, recognizes the limited, 
enumerated powers of the Federal Government and the residual powers of 
the States. In particular, States have pervasive police powers which 
they were exercising to control pollution long before the Federal 
Government entered the field. In enacting Federal environmental 
statutes, Congress respected this historical involvement by 
acknowledging the primary responsibilities and rights of States in the 
protection of public health and the environment, including their 
primary responsibility for enforcement.\23\
---------------------------------------------------------------------------
    \23\ See Frank P. Grad, Treatise on Environmental Law Sec. 2.03 
(1992).
---------------------------------------------------------------------------
    Although efforts by EPA to punish States that failed to enforce 
Federal environmental statutes were struck down by the courts, there is 
little support for the contention that the Constitution compels 
Congress to grant States the exclusive authority to enforce Federal 
environmental laws.\24\ Nevertheless, to those who believe that the 
Federal Government has become too pervasive or too powerful, devolution 
is justified as redressing an imbalance that has developed in the 
decisionmaking power between the Federal Government and the States.\25\ 
Hence, the history of pollution control, respect for principles of 
federalism, and the structure of most Federal environmental statutes 
dictate that the States play a dominant role in enforcement.
---------------------------------------------------------------------------
    \24\ See Brown v. EPA, 530 F.2d 215 (4th Cir. 1975), vacated and 
remanded per curium, 431 U.S. 99 (1977) (case remanded because EPA 
agrees, after losing in court of appeals, to modify regulations 
requiring States to enforce Federal transportation control plans); 
Edward L. Strohbehn, Jr., The Bases for Federal/State Relationships in 
Environmental Law, 12 Eenvironmental Law Rept. (Environmental Law 
Inst.) 15,074, 15,075 (1982).
    \25\ Evan J. Ringquist, Environmental Protection at the State Level 
45 (1993).
---------------------------------------------------------------------------
    A more practical justification for State enforcement is the claim 
that decentralized enforcement is more flexible and responsive than 
enforcement by a centralized agency such as EPA. The provisions in 
Federal statutes allowing a State to attain authorization to enforce 
the Federal program reflect the belief that the level of government 
closest to the environmental problem should be the primary enforcer, 
provided it has the capability and will to enforce.\26\ But, as 
outlined above, the capability and will of States to enforce present a 
problem in most States at one time or another. Thus, to say that States 
should enforce where they have the capability and will does not 
eliminate the need for Federal enforcement but rather highlights the 
concerns that justify Federal enforcement.
---------------------------------------------------------------------------
    \26\ National Academy of Public Administration, Setting Priorities, 
Getting Results 72 (1995); Environmental Law Institute, Report of the 
Colloquium on Federal-State Relations in Environmental Enforcement 7 
(1991).
---------------------------------------------------------------------------
    By being closer to the problem, State enforcement agencies, in 
theory, can obtain better information on the nature of the compliance 
problem. States have more interaction with the regulated community and 
are better able to monitor their compliance.\27\ It is not surprising, 
therefore, that 90 percent of environmental inspections are performed 
by State environmental agencies.\28\ EPA simply does not have the 
resources or physical proximity to monitor and inspect sources in 50 
States, and it may be at a particular disadvantage in trying to respond 
to a situation that requires rapid governmental action.
---------------------------------------------------------------------------
    \27\ David R. Hodas, Enforcement of Environmental Law in a 
Triangular Federal System: Can Three Not Be a Crowd When Enforcement 
Authority is Shared by the United States, the States, and their 
Citizens?, 54 Maryland Law Review 1552, 1571 (1995).
    \28\ Office of Enforcement, U.S. EPA, Enforcement in the 1990's 
Project: Recommendations of the Analytical Workgroups 2-15 (1991).
---------------------------------------------------------------------------
    State enforcement officials also may be more responsive to local 
needs and conditions than Federal officials who do not reside in the 
area.\29\ This could result in more enforcement, if enforcement 
policies and procedures provide for citizen input and if officials are 
sensitive to citizen concerns. Conversely, it could give the regulated 
community greater access to the agency's personnel and more influence 
over enforcement decisions. At least with the enforcement of hazardous 
waste site cleanups by State agencies, citizens want expanded Federal 
involvement because they view States as ``more readily subject to 
political pressure from industry.''\30\
---------------------------------------------------------------------------
    \29\ See Ringquist, supra note 25, at 44.
    \30\ David J. Markell, The Federal Superfund Program: Proposals for 
Strengthening the Federal/State Relationship, 18 William and Mary 
Journal of Environmental Law 1, 33 n.86 (1993) (results of informal 
survey).
---------------------------------------------------------------------------
    A greater awareness of local conditions may facilitate more 
flexible, tailored enforcement programs that take into account local 
geographic, economic and social conditions and focus on the area's most 
severe enforcement problems. Thus, rather than all States spending the 
same proportion of resources on a problem regardless of the local 
conditions, State officials can focus enforcement programs toward areas 
that will result in the greatest amount of compliance and environmental 
protection for the same level of enforcement resources. On the other 
hand, awareness of local conditions, particularly local economic 
conditions and the economic and political power of the violator, may 
make State regulators less inclined to take necessary enforcement 
actions. For example, Maryland's failure to take enforcement action 
against a steel manufacturer for extensive, longstanding violations was 
attributed to ``the cozy relationship large companies develop with 
State regulators.''\31\ In addition, while the ability to weigh the 
local costs and benefits may be beneficial to the immediate area, it 
may result in an uneven playing field if a local pollution source is 
allowed to avoid compliance costs that are imposed by other States.
---------------------------------------------------------------------------
    \31\ Robert V. Percival, Environmental Regulation--Law, Science, 
and Policy 1014 (1992).
---------------------------------------------------------------------------
    Rare is the proponent of devolution who does not refer to Justice 
Brandeis' observation that one of the benefits of federalism is that it 
allows States to serve as laboratories of democracy for novel social 
and economic experiments. Indeed, many Federal environmental statutes 
are based on programs that were first developed at the State level. 
However, it is also true that EPA has played a major role in numerous 
advances in enforcement, such as multimedia, industry sector, and 
environmental justice enforcement initiatives.\32\ Even where State 
experimentation does result in an innovative solution, the Federal 
Government is uniquely situated to take that successful experiment out 
of the State lab and see that it is implemented across the country. In 
fact, because ``innovative policies'' tend to be adopted primarily by a 
few States with more liberal or progressive State governments,\33\ the 
inability of EPA to diffuse inventions to all States may exacerbate 
differences in environmental protection between States if laggard 
States fail to adopt the new policies.
---------------------------------------------------------------------------
    \32\ See Office of Enforcement and Compliance Assurance, U.S. EPA, 
Enforcement and Compliance Assurance Accomplishments Report, fiscal 
year 1994 2-4 to 2-12 (1994).
    \33\ Richard P. Nathan, The Role of the States in American 
Federalism, in State of the States 15, 27 (Carl E. Van Horn ed., 1989).
---------------------------------------------------------------------------
    One of the most compelling original justifications for Federal 
enforcement has been diminished by the dramatic growth in the size and 
capability of State environmental agencies. Because of this growth, 
some believe that Federal enforcement and oversight of State programs 
may at times undermine the efforts of competent State enforcement 
agencies by making the State appear less able to handle the State's 
problems, by discouraging violators from resolving their disputes with 
the State for fear that EPA may still take enforcement action, or by 
diverting State resources to the demands of Federal oversight or to 
EPA-targeted priorities that may not reflect the true needs of the 
State.\34\
---------------------------------------------------------------------------
    \34\ See Novick, supra note 22, at Sec. 6.02[3]; Hubert H. Humphrey 
III & Leroy C. Paddock, The Federal and State Roles in Environmental 
Enforcement: A Proposal for a More Effective and More Efficient 
Relationship, 14 Harvard Environmental Law Review 7, 13 (1990). On the 
other hand, ``EPA's independent authority to file enforcement actions 
has no doubt resulted in stronger enforcement actions in some cases 
enforced at the State level,'' id. at 40-41, and may make ``bad'' 
States better enforcers, Novick, supra note 26, at Sec. 6.02[3].
---------------------------------------------------------------------------
    Not all States, however, are equally able or willing to enforce 
Federal laws. Not surprisingly, the most eloquent proponents of a 
reduced Federal role in enforcement generally are from States with 
strong State programs. But a Federal enforcement presence that may seem 
burdensome in strong States appears absolutely essential in a State 
where relaxed environmental enforcement is seen as a way to induce 
economic development.\35\ Therefore, although the concern that States 
lack the resources and commitment to aggressively enforce environmental 
laws may be less justified than in the past, without a significant EPA 
role in enforcement, compliance and environmental quality would suffer 
in many States.\36\
---------------------------------------------------------------------------
    \35\ See, e.g., Bob Anderson, DEQ Penalties Down for Fiscal 1996, 
Baton Rouge Advocate, Jan. 4, 1997, at 1B; Kelly King Alexander, A 
Toxic Job: The State's Top Environmental Watchdog Turns Over the 
Controversial Portfolio to His Deputy, Greater Baton Rouge Business 
Report, Nov. 2, 1993, at 22 (enforcement actions and penalty 
assessments decrease under new governor; agency accused of protecting 
economic interests of industry at expense of environment).
    \36\ See Ringquist, supra note 25, at 151; Mosher, supra note 16, 
at 186.
---------------------------------------------------------------------------
    Finally, the Federal Government cannot handle all, or even most, 
enforcement. In 1994, States brought approximately 80 percent of all 
enforcement actions.\37\ Regulatory programs are covering an expanded 
number of increasingly small sources, making it even less likely that 
EPA could handle most enforcement, thereby increasing the benefits of 
having most enforcement done by the government entity closest to the 
problem. This need for State enforcement of Federal programs, however, 
does not argue for no Federal role, or even for a reduced Federal role. 
It does, however, dictate that the Federal Government not unduly 
interfere with the primary job of enforcement performed by the States.
---------------------------------------------------------------------------
    \37\ Office of Enforcement and Compliance Assurance, U.S. EPA, 
supra note 32, at 2-2 (EPA brought a record 2,246 enforcement actions; 
States took 11,334 actions).
---------------------------------------------------------------------------
    Thus, while some of the original arguments for Federal enforcement 
may find less support today, there are still compelling justifications 
for a significant Federal role in enforcement.
     iv. criteria for defining the limits of devolving enforcement
    While there are many justifications for Federal enforcement of 
environmental laws and perhaps an equal number of arguments in favor of 
State enforcement, a consensus on the criteria for determining the 
appropriate level of government to enforce environmental laws is 
lacking. Most arguments for further or complete devolution of 
enforcement to the States are ideologically based. Federalism, it is 
contended, mandates that without a compelling justification for Federal 
involvement, the policing of pollution is best left to the States.
    Yet federalism claims may mask a hidden agenda of deregulation--an 
often unspoken benefit of more decentralized enforcement is not just 
that it allegedly will work better or be more responsive to local 
concerns, but it is also likely to be less effective and result in less 
regulation if States are unwilling or unable to aggressively enforce 
the law. President Reagan's New federalism was not just an attempt to 
transfer power back to the States; it also aimed to eliminate the 
perceived regulatory excesses of pollution control regulations.\38\ 
Devolution wasn't just an end; it was also a means to deregulate.
---------------------------------------------------------------------------
    \38\ See J. Clarence Davies, Environmental Institutions and the 
Reagan Administration, in Environmental Policy in the 1980's: Reagan's 
New Agenda 143, 151 (Norman J. Vig & Michael E. Kraft eds., 1984).
---------------------------------------------------------------------------
    Likewise, some current proponents of devolution mix their calls for 
a transfer of power to the States with tales of regulatory excess and a 
sermon on the virtues of less government regulation. Even without such 
obvious deregulatory goals, the hidden agenda behind earlier attempts 
to devolve enforcement taints the present proponents of devolution and 
requires proponents to justify a shift in enforcement authority on 
public policy, not just ideological, grounds.
    It is also the case that the public cares less about ideology when 
it comes to questions about the division of authority between the 
Federal and State governments and more about what works and what it 
costs. When asked whether Federal or State government should have more 
responsibility for achieving environmental protection, Americans 
preferred the Federal Government over State government by a 50 percent 
to 38 percent margin.\39\ According to one survey, 60 percent of the 
public opposes reducing the compliance powers of EPA, while 70 percent 
feel the Federal Government has not gone far enough to protect the 
environment.\40\ These polls support the observation that ``[t]here is 
no guarantee that Washington can do any better, but in the face of 
State and local failure the American public tends to turn to the 
national government. In fact, the public looks to the national 
government to solve any major problem, regardless of how successful the 
other levels of government have been.''\41\
---------------------------------------------------------------------------
    \39\ Albert R. Hunt, Federalism Debate Is as Much About Power as 
About Principle, Wall Street Journal, Jan. 19, 1995, at A19.
    \40\ Margaret Kriz, The Green Card, National Journal 2262, 2265 
(Sept. 16, 1995); Clean Air Trust, Americans Want Tougher Stance on 
Pollution (October 1995) (on file with author).
    \41\ J. Clarence Davies III & Barbara S. Davies, The Politics of 
Pollution 220 (1975).
---------------------------------------------------------------------------
    Therefore, if we should respect the desires of the public and base 
the limits of devolution on who gets the job done rather than on 
ideology, then what we need are pragmatic grounds for any further 
devolution of enforcement authority. Sound public policy criteria and 
demonstrated results, not abstract political doctrines of federalism 
versus nationalism or unspoken agendas of deregulation, should 
determine the level of government that is most appropriate to enforce 
environmental laws.
    Surely the first criteria for any pragmatic devolution ought to be 
the relative effectiveness of Federal and State enforcement. There is 
great concern that the present amount of governmental enforcement is 
inadequate. Polls show that an overwhelming percentage of the public 
wants stricter enforcement of existing environmental laws,\42\ and 
rightly so, given that violations of Federal environmental laws are 
widespread.\43\ Two-thirds of corporate counsel admitted in 1993 that 
their businesses operated in violation of environmental laws during the 
past year.\44\ Half of all corporate environmental managers believe 
that the Federal Government's enforcement is inadequate, citing the 
need for more enforcement to ensure that all companies are treated 
equally.\45\
---------------------------------------------------------------------------
    \42\ See Dana A. Rasmussen, Enforcement in the U.S. Environmental 
Protection Agency: Balancing the Carrots and the Sticks, 22 
Environmental Law 333, 338 (1991) (71 percent of public support more 
aggressive enforcement of antipollution laws).
    \43\ Robert R. Kuehn, Remedying the Unequal Enforcement of 
Environmental Laws, 9 St. John's Legal Comment. 625 625 & n.2 (1994).
    \44\ Marianne Lavelle, Environment Vise: Law, Compliance, National 
Law Journal, Aug. 30, 1993, at S1, S1.
    \45\ Government Has Too Many Rules, Too Little Enforcement, Not 
Enough Prevention, Environmental Managers Report in BNA Survey, 
[Special Report] 22 Environmental Report (BNA) 2386, 2386 (1992).
---------------------------------------------------------------------------
    The difficulty lies, not in gaining agreement on the need for more 
effective enforcement, but in defining and measuring enforcement 
effectiveness. While EPA often focuses its resources on high visibility 
cases that advance the goal of general deterrence, States have 
traditionally taken a less confrontational approach, often preferring 
to work informally with the violator to bring it back into 
compliance.\46\ Thus, attempts to evaluate the effectiveness of an 
enforcement program through the number of enforcement actions or the 
size of the penalties assessed may overlook other important measures of 
compliance. Even if there were agreement on some ``objective'' measure 
of enforcement success, because EPA often takes the lead in larger, 
more difficult cases, numbers alone are not likely to reflect the 
relative success of the two levels of enforcement. Thus, there is no 
agreement on how to define a successful program.
---------------------------------------------------------------------------
    \46\ See Office of Enforcement, U.S. EPA, supra note 28, at 2-13.
---------------------------------------------------------------------------
    Ideally, measures of effectiveness could be compared for State-run 
programs, federally-run programs, and programs with State 
implementation and Federal oversight. However, there is no published 
empirical study comparing the effectiveness of Federal and State 
environmental enforcement, leading one commentator to observe that 
although it is often claimed that States have advantages over Federal 
enforcement, ``[i]t is unclear whether these State advantages are real 
or primarily received as articles of faith.''\47\
---------------------------------------------------------------------------
    \47\ Novick, supra note 22, at Sec. 6.02[2].
---------------------------------------------------------------------------
    Although a systematic study is lacking, a number of observations 
have been made about the success of various State and Federal 
enforcement programs. When Iowa returned responsibility for its 
municipal water monitoring to EPA in the early 1980's, EPA managed to 
conduct only about 15 percent of the number of inspections formerly 
performed by the State.\48\ An EPA official observed that if only a 
small number of delegated States were to return their programs to EPA, 
because of resource constraints ``there would be less enforcement, not 
more.''\49\
---------------------------------------------------------------------------
    \48\ Martha Derthick, American Federalism: Madison's Middle Ground 
in the 1980s, Pub. Admin. Rev. 66, 70 (Jan./Feb. 1987).
    \49\ Hodas, supra note 27, at 1586 (quoting letter by Richard D. 
Morgehstern, Acting Administrator, Office of Policy, Planning and 
Evaluation, U.S. EPA).
---------------------------------------------------------------------------
    Critics of the Superfund program point to the lengthy time for EPA 
cleanups and the small number of completed cleanups, as compared to 
sites addressed by State programs, as evidence of the lack of 
effectiveness of Federal enforcement programs.\50\ However, this 
observation overlooks the fact that EPA, by law, focuses on emergency 
cleanups and the most hazardous sites. It also fails to acknowledge 
that the mere threat of becoming a Federal Superfund site has 
encouraged responsible parties to cooperate with State cleanup efforts. 
Undoubtedly, the influence of EPA's independent enforcement authority 
on the success of State enforcement programs makes it difficult to 
predict the results if EPA were to cease enforcement activity.
---------------------------------------------------------------------------
    \50\ See State Cleanup Systems More Effective than Federal 
Superfund Program; Report Says, [Current Development] 26 Environmental 
Report (BNA) 982 (1995).
---------------------------------------------------------------------------
    Problematic as EPA enforcement has been, State enforcement has not 
necessarily been any more successful. The General Accounting Office 
found that the track record of States in carrying out enforcement of 
Federal laws, particularly in assessing penalties and in ensuring that 
any penalty assessed at least recovers the economic benefit of 
noncompliance, ``is even more disappointing'' than the record of 
EPA.\51\ Government studies repeatedly document the failure of States 
to take necessary enforcement actions for violations of water 
pollution, drinking water and hazardous waste regulations.\52\
---------------------------------------------------------------------------
    \51\ Management Deficiencies in Environmental Enforcement: 
``Forceless Enforcement'': Hearing Before the Senate Comm. on 
Governmental Affairs, 102d Cong., 1st Sess. 5 (1991) (testimony of 
Richard Hembra, General Accounting Office).
    \52\ See, e.g., Resources, Community, and Economic Development 
Division, U.S. General Accounting Office, EPA and the States: 
Environmental Challenges Require a Better Working Relationship 16-19 
(1995); Water Pollution Prevention and Control Act of 1991: Hearing on 
S. 1081 Before the Subcomm. on Environmental Protection of the Senate 
Comm. on Environment and Public Works, 102d Cong., 1st Sess. 687 (1991) 
(statement of John Martin, Inspector General, EPA).
---------------------------------------------------------------------------
    Historically, withdrawal of Federal enforcement has not resulted in 
more State environmental enforcement. When the Reagan Administration 
greatly reduced Federal enforcement and increased State 
responsibilities, States also reduced their environmental regulatory 
activities, especially their enforcement of laws and regulations.\53\ 
Indeed, if the withdrawal of Federal authority as a backstop to State 
enforcement efforts is coupled with reductions in Federal grants for 
State enforcement efforts, as is expected over the next few years 
because of the budgetary problems of the Federal Government, then State 
enforcement may become dramatically less effective than at present.
---------------------------------------------------------------------------
    \53\ Martin H. Belsky, Environmental Policy Law in the 1980's: 
Shifting Back the Burden of Proof, 12 Ecology Law Quarterly 1, 63 
(1984).
---------------------------------------------------------------------------
    Therefore, although a lack of data hinders the ability to judge the 
relative effectiveness of the two enforcement programs, there is no 
compelling case on effectiveness grounds for eliminating or drastically 
reducing the Federal role.
    Efficiency is the second criterion by which to judge the limits of 
pragmatic devolution. An efficient enforcement program would maximize 
enforcement effectiveness for a given expenditure, generate the lowest 
enforcement costs for a given level of compliance, or provide marginal 
benefits of increased enforcement at least equal to the marginal costs 
of additional enforcement.\54\ Once again, lack of data prevents a 
conclusion on the relative efficiency of Federal and State enforcement 
programs.
---------------------------------------------------------------------------
    \54\ See Congressional Budget Office, Environmental Federalism: 
Allocating Responsibilities for Environmental Protection 21-22 (1988).
---------------------------------------------------------------------------
    It is clear, though, that EPA's enforcement expenditures are a 
small part of the overall Federal budget. Indeed, EPA's expenditures 
are only 0.4 percent of the Federal budget, and enforcement makes up 
only a modest part of EPA's total operating budget.\55\ Moreover, while 
EPA's responsibilities have increased significantly, the buying power 
of EPA's budget in 1992 was only 55 percent of what it was in 1978.\56\
---------------------------------------------------------------------------
    \55\ Ringquist, supra note 25, at 20. EPA's $230 million in 
enforcement-related costs were less than 10 percent of the agency's 
$2.689 billion fiscal year 1994 operating budget. Telephone Interview 
with Terry Ouverson, Office of the Comptroller, EPA (Nov. 27, 1995).
    \56\ Ringquist, supra note 25, at 19-20.
---------------------------------------------------------------------------
    Federal enforcement is efficient, at least when measured in terms 
of enforcement dollars spent and relief received, and is even a source 
of revenue for the government. In 1991, for every dollar spent, civil 
judicial environmental enforcement actions returned $25 to the U.S. 
Treasury; criminal enforcement actions returned $3.\57\ In fiscal year 
1994, the U.S. Department of Justice's Environmental Enforcement and 
Environmental Crimes Sections collected more than $80 million in 
penalties and fines alone, all on a total budget, including all 
Superfund cases, of $50 million.\58\ EPA's enforcement programs also 
return more in benefits than they spend on enforcement. In 1994, EPA 
recovered $151 million in civil penalties and criminal fines and more 
than $740 million in non-Superfund injunctive relief and supplemental 
environmental projects at a cost of less than $230 million.\59\ These 
efficiencies, coupled with the high nationwide rates of noncompliance, 
make it hard to justify drastic cuts in Federal enforcement budgets 
that would have the resulting indirect effect of devolving an even 
greater proportion of enforcement responsibilities to the States.
---------------------------------------------------------------------------
    \57\ Council on Environmental Quality, Environmental Quality: 22nd 
Annual Report 83 (1992)
    \58\ U.S. Dept. of Justice, supra note 18, at 30, 33, 44. When 
injunctive relief, supplemental environmental projects and Superfund 
cleanup activities are included, the Enforcement Section returned $34 
for every dollar budgeted; Environmental Crimes returned $7. Id. at 44.
    \59\ Office of Enforcement and Compliance Assurance, U.S. EPA, 
supra note 32, at 2-2; Office of the Comptroller, U.S. EPA, Budget 
Analysis Resource System: FY94 Actual by Media, Approp. (Nov. 1995) (on 
file with author).
---------------------------------------------------------------------------
    In spite of these impressive statistics, it is generally assumed 
that States run their enforcement programs more efficiently than EPA, 
presumably because State salaries are less than Federal salaries and, 
by being closer to the source of the problem, travel and other costs 
are lower.\60\ One of the few available comparisons resulted when EPA 
was forced to resume implementation of Idaho's air quality program for 
15 months beginning in July 1991. One EPA official estimated that it 
cost the Federal Government at least double what it cost the State to 
run the program; another commentator claims that EPA reportedly spent 
almost five times as much to maintain the Idaho program that year as 
the State would have spent to do the same job.\61\
---------------------------------------------------------------------------
    \60\ See Novick, supra note 22, at Sec. 6.02[2]; Congressional 
Research Service, supra note 13, at 76.
    \61\ See Derthick, supra note 48, at 70; Stanfield, Ruckelshaus 
Casts EPA as Gorilla, supra note 11, at 1038.
---------------------------------------------------------------------------
    Even this natural experiment suffers from problems that make 
comparisons difficult. Because EPA could not hire employees for what 
the agency viewed as a temporary program, EPA was forced to hire more 
expensive private contractors to implement the program.\62\ Moreover, 
while this example suggests that it might cost EPA more to run an 
enforcement program (or at least a new program) than it would cost the 
State to continue with its existing program, the Idaho example tells us 
nothing about the effectiveness of either the State or EPA-run 
enforcement program. Therefore, while it might cost more, a federally-
run enforcement program might result in greater compliance.
---------------------------------------------------------------------------
    \62\ Stanfield, Ruckelshaus Casts EPA as Gorilla, supra note 11, at 
1038.
---------------------------------------------------------------------------
    Other issues further cloud any accurate assessment of efficiencies. 
A certain amount of overlap and duplication of effort exists between 
Federal and State environmental enforcement programs, as is true in 
other areas of dual enforcement, such as drug-related crimes, civil 
rights, and workplace safety. The most controversial form of 
duplication, independent enforcement action by EPA in an authorized 
State, is EPA's most effective means to oversee State enforcement 
programs and provides significant deterrence value.\63\ While overlap 
increases compliance, if one level of government could implement all 
enforcement and attain results comparable to what are now being 
achieved by dual enforcement, then costs could be saved. But this is a 
very big ``if,'' the general agreement that, were the Federal 
Government to decrease its environmental enforcement activities, many 
State programs would be weaker, deterrence would suffer, and 
noncompliance would increase.
---------------------------------------------------------------------------
    \63\ See William H. Rogers, Jr., 4 Environmental Law 
Sec. 7.23(B)(3)(1992); Novick, supra note 22, at Sec. 8.02[6].
---------------------------------------------------------------------------
    It is also repeatedly suggested that there are certain 
inefficiencies with nationwide enforcement programs because they focus 
resources on issues that may not be problems in particular 
localities.\64\ While this is likely true in some circumstances, 
national enforcement serves other important goals such as providing 
equitable treatment of the regulated community and helping ensure equal 
environmental protection for all citizens. Federal officials could 
address any such inefficiencies by tailoring enforcement efforts to 
address local problems and providing greater decisionmaking discretion 
to State enforcement officials rather than by abolishing Federal 
enforcement programs.
---------------------------------------------------------------------------
    \64\ See, e.g., Stewart, supra note 2, at 1219-20.
---------------------------------------------------------------------------
    Moreover, just as EPA cannot accomplish all enforcement, it is 
unreasonable to assume that States can assume all enforcement 
responsibilities, particularly if there are reductions in Federal 
grants to State enforcement programs. In fact, cuts in Federal grants 
could have the unintended effect of increasing the need for Federal 
enforcement as States may become increasingly reluctant to assume 
Federal responsibilities that appear to be yet another unfunded mandate 
and may decide to return pollution control programs to EPA.\65\
---------------------------------------------------------------------------
    \65\ See Strohbehn, supra note 24, at 15,079-80.
---------------------------------------------------------------------------
    Finally, pragmatic devolution requires that officials vest 
enforcement responsibilities in a level of government that can ensure 
equitable treatment of citizens and businesses. The desire to ensure 
that the benefits and costs of environmental protection are evenly 
distributed was a compelling reason for the establishment of Federal 
environmental programs. However, national pollution standards do little 
to ensure equal protection if these requirements are not uniformly 
enforced throughout the country.
    Federal enforcement plays a major role in seeking to ensure fair 
and equitable treatment of the regulated community. As markets for 
goods and services have become increasingly national and international, 
centralized enforcement programs are in a unique position to provide 
consistent enforcement policies and practices.\66\ If a company 
violates a Federal pollution control standard in Louisiana, then it 
should expect roughly the same enforcement response as a similarly 
situated company in California or New York. Only a significant Federal 
enforcement program, as argued above in Part II, can maintain this 
level playing field and minimize the market imbalances that might 
result from unequal enforcement among the States.
---------------------------------------------------------------------------
    \66\ See Margaret E. Kriz, Ahead of the Feds, National Journal 
2989, 2990 (Dec. 9, 1989).
---------------------------------------------------------------------------
    Citizens likewise are entitled to an equitable level of 
environmental protection. ``The justification for uniform [national] 
standards is that each citizen has an inherent right to the same level 
of environmental quality (or the same level of environmental 
risk).''\67\ This expectation of environmental protection has become so 
pervasive that it is now viewed by persons of every political party 
``to be an inalienable right that they rank alongside liberty and the 
pursuit of happiness.''\68\ If we believe that businesses should expect 
similar treatment for violations of the same Federal standard, then 
should not a citizen of Louisiana expect that he or she will receive 
the same Federal protection from environmental hazards, and a 
comparable enforcement response for violations of Federal standards, as 
a person residing in California or New York?
---------------------------------------------------------------------------
    \67\ Ringquist, supra note 25, at 68.
    \68\ Margaret Kriz, The Green Card, supra note 40, at 2264.
---------------------------------------------------------------------------
    Balanced against this right of citizens to equal protection is the 
desire of States to implement their own enforcement programs. However, 
important as it may be to respect federalism and State autonomy, 
national environmental standards mean nothing if citizens cannot expect 
equal enforcement of those standards regardless of where they live. 
Thus, if States alone were allowed to enforce Federal standards or if 
they were free to ignore noncompliance with environmental regulations 
or tradeoff enforcement of environmental laws for promises of economic 
development, then many citizens could lose the uniform levels of 
environmental protection legislated by Congress. If, as reflected in 
the legislation of national standards, there is agreement that citizens 
are entitled to a fundamental level of environmental protection, then 
some government entity must be in a position to ensure on a State-by-
State basis that the equal protection of citizens is being safeguarded. 
Even State environmental officials recognize the role of the Federal 
Government in ensuring that all States provide fundamental public 
health and environmental protection.\69\
---------------------------------------------------------------------------
    \69\ See U.S. EPA, National Environmental Performance Partnership 
System 1 (May 17, 1995) (on file with author).
---------------------------------------------------------------------------
    Only Federal enforcement can ensure that citizens, like businesses, 
are equally treated and equally protected. Although the need to ensure 
equal protection of citizens may not justify that the Federal 
Government perform all or even most enforcement, it does justify a 
substantial Federal presence to act where and when needed. As long as 
we recognize the right of citizens to equal protection from 
environmental hazards through the promulgation of uniform national 
standards, then some Federal enforcement is necessary to ensure that 
States respect and protect those rights.
                             v. conclusion
    Based on my analysis, I do not believe that devolution of all 
enforcement of Federal environmental laws to the States is supportable. 
The initial justifications for Federal enforcement, though they have 
changed over the past two decades, are still largely valid. In 
addition, although the available data is limited, the public policy 
criteria of effectiveness, efficiency and equity do not support a 
dramatic reduction in Federal enforcement. Unfortunately, this lack of 
data also hinders informed choices about the proper mix of Federal and 
State enforcement and makes it difficult to define the appropriate 
limits of devolving Federal enforcement.
    It is apparent from the information that is available that because 
of resource limitations and respect for principles of federalism, the 
Federal Government alone cannot and should not administer all, or even 
most, enforcement. On the other hand, because pollution has economic 
and public health impacts that transcend State boundaries, States 
cannot execute all enforcement. States also lack the will and resources 
to address all violations. Environmental enforcement problems are just 
too large and too complex for any one level of government to handle.
    To argue that there should not be a dramatic reduction in Federal 
enforcement is not to suggest that the Federal-State enforcement 
relationship could not be improved. Reforms are needed that will make 
enforcement programs work better by minimizing unnecessary duplication 
and conflicts between Federal and State programs. EPA and the States 
are considering a number of new oversight reform proposals, such as the 
development of new enforcement performance measures, ``differential 
oversight,'' and increased use of block grants. Provided that issues of 
enforcement devolution are resolved on sound public policy, not 
ideological, grounds, these proposal have the potential to improve both 
enforcement and Federal-State relations.
    Therefore, I urge you to encourage EPA and the States to both: (1) 
gather additional data on the effectiveness and efficiency of Federal 
and State enforcement so that this important issue can be resolved on 
pragmatic grounds; and (2) continue efforts to coordinate and cooperate 
on enforcement so that Federal and State governments can provide the 
public with what they want and need--effective, efficient and equitable 
enforcement of Federal environmental laws.
    Thank you for allowing me to testify before the Committee, and I 
hope that my remarks are useful to you in addressing this important 
issue. I will be happy to answer any questions you may have.
                                 ______
                                 
  Prepared Statement of Todd Robins, Environmental Enforcement, U.S. 
                     Public Interest Research Group
                            i. introduction
    Good morning, Chairman Chafee, Senator Baucus and distinguished 
members of the Environment and Public Works Committee. My name is Todd 
Robins; I am an environmental attorney with the U.S. Public Interest 
Research Group. U.S. PIRG is the national lobbying office for the State 
PIRG organizations active in more than 30 States around the country. 
The State PIRGs are non-profit, non-partisan environmental and consumer 
watchdog groups with nearly one million citizen members nationwide. I 
also chair the Clean Water Network's Enforcement Work Group, and in 
that capacity, work with citizen litigators, citizens suit plaintiffs, 
and grassroots groups fighting illegal pollution in their communities 
around the country. The Clean Water Network is a national coalition of 
over 900 groups, including environmental organizations, labor unions, 
and commercial and recreational fishers, all dedicated to strengthening 
the Clean Water Act and its implementation in the States. All of these 
groups have endorsed a Clean Water enforcement platform which calls for 
mandatory minimum penalties for serious violations, simplified and 
strengthened citizen suit authority, and increased citizen right to 
know about polluted waterways. Finally, I am a member of the Steering 
Committee of the Network Against Corporate Secrecy, a network of 
environmentalists and community groups around the country working 
together to fight corporate secrecy laws and protect the public's right 
to know.
    Fair and effective enforcement of our environmental laws is an 
issue of substantial importance to the PIRGs and its members. We have 
brought more than 80 successful citizen enforcement suits, recovering 
over $46 million in payments for violations. Most importantly, New 
Jersey PIRG helped to write and pass the country's strongest Clean 
Water enforcement law in 1990--a law that has been remarkably 
successful, and a law about which I plan to speak in some detail today.
    I am here today to provide the Committee, from the perspective of 
the public interest, an analysis of the environmental enforcement 
crisis that exists in many States around the country, and to offer a 
vision of a more effective Federal-State partnership and how it could 
function to address this crisis. I would like to say at the outset what 
may otherwise get obscured by this discussion--namely that the public, 
the agencies represented here today, and law abiding companies 
disadvantaged by scofflaw competitors, I believe, share the same goal: 
which is compliance in the first place, achieved efficiently. The 
purpose of my testimony today is to demonstrate that the way we get 
there is not by voluntary, hand-holding approaches, but by creating a 
constructive partnership between the States, EPA, and citizens that 
maintains a genuine, firm and predictable threat of serious 
consequences for those who choose to violate pollution laws.
    Specifically, I would like to make three points. The first is that 
the failure or unwillingness of States to enforce the law, in 
conjunction with corporate secrecy, immunity, and deregulatory policies 
in some States, has encouraged widespread violations of our 
environmental laws and promoted an atmosphere for scofflaws in which it 
simply pays to pollute. The second point is that, despite several 
important examples of Federal enforcement intervention in the face of 
inadequate State action, the U.S. Environmental Protection Agency (EPA) 
is not doing enough to assure compliance with the laws it oversees, but 
instead has also measurably reduced its commitment to effective Federal 
environmental enforcement in recent years. Third, and finally, the 
firm, but fair, no-nonsense approach to Clean Water Act enforcement 
that we have seen in New Jersey since 1990--characterized by mandatory 
minimum penalties for serious violations, stronger citizen suit 
provisions, better monitoring and reporting, and adequate resources--
should serve as a national model for enforcement of the Clean Water Act 
and other Federal environmental statutes. Key aspects of the New Jersey 
law are embodied in Federal legislation introduced this year by 
Senators Lautenberg and Torricelli (S. 645).
      ii. serious violations of environmental laws are widespread
    Recently, representatives of polluting industries have asserted 
that ``the vast majority of the regulated community has demonstrated 
its strong commitment to operating within the regulatory structure'' 
and that environmental ``compliance is the rule, not the 
exception.''\1\ However, the data EPA has compiled on Clean Water Act 
violations tell a different story. U.S. PIRG has endeavored to tell 
this story to the public throughout the 1990's by researching, 
analyzing, and releasing this data showing that an alarming number of 
major point source polluters seriously and chronically violate the law.
---------------------------------------------------------------------------
    \1\ Joan Heinz, Esq. and Paul Wallach, Esq., on behalf of the 
Corporate Environmental Enforcement Council, before the U.S. EPA Office 
of Enforcement and Compliance Assurance, Public Meeting re: National 
Performance Measures Strategy, 2/3/97, Alexandria, Va.
---------------------------------------------------------------------------
    In March of this year, U.S. PIRG released our Dirty Water 
Scoundrels report, documenting serious violations of the Clean Water 
Act by the Nation's largest facilities from January 1995 through March 
1996. We were disturbed to find that nearly 20 percent of the major 
industrial, municipal and Federal clean water permit holders nationwide 
were listed by EPA in Significant Noncompliance with the Clean Water 
Act in at least one quarter during this period.
    What's more, these EPA numbers are probably just the tip of the 
iceberg. When we looked at industry's self-reported discharge 
monitoring information for just the first quarter of 1996, we found 
that 576--or 21 percent--of the nations's major industrial polluters 
exceeded their pollutant limits by 50 percent or more. That is nearly 
three times the number of companies EPA listed in Significant 
Noncompliance during this single quarter.
    Unfortunately, national rates of compliance with the Clean Air Act 
are not readily available. The lack of information is, in part, 
attributable to the fact that some States seriously and purposely 
under-report the number of significant violations of the Act.\2\ An EPA 
Inspector General report earlier this year found that although the 
State of Pennsylvania reported only six major air pollution violations 
in 1995, a review of the data revealed that in fact 64 of 270 
Pennsylvania plants (24 percent) had committed major violations in that 
year.\3\ According to that report, the data ``strongly suggests the 
potential for problems in other States.''\4\
---------------------------------------------------------------------------
    \2\ U.S. EPA Office of the Inspector General, Report of Audit: 
Validation of Air Enforcement Data to EPA by Pennsylvania, 2/14/97.
    \3\ Ibid.
    \4\ Ibid.
---------------------------------------------------------------------------
     iii. widespread non-compliance has been encouraged by states' 
                         inadequate enforcement
    Clearly, when one in every five major Clean Water Act permit 
holders is a serious or chronic violator, compliance cannot be said to 
be the rule. We think the findings of the U.S. PIRG and the EPA 
Inspector General reports demonstrate gross and unacceptable levels of 
non-compliance with our environmental laws. The question, then, is: why 
are serious and chronic violations so widespread? The answer is 
obvious: our Federal environmental laws are not being enforced 
effectively. Weak and inconsistent enforcement at the State level 
encourages non-compliance, creates a ``race to the bottom'' in which 
companies shop for States with weak standards, and disadvantages law 
abiding companies who take their environmental responsibilities 
seriously. Without environmental cops aggressively on the beat, without 
a credible, predictable deterrent to illegal pollution, polluters have 
little incentive to clean up their acts and plenty of incentive to 
disregard the law.
Historically Weak State Enforcement
    The problem of inadequate State environmental enforcement is not a 
new one. Indeed, in 1991 Richard Hembra, the Director of Environmental 
Protection Issues at the U.S. General Accounting Office, described 
enforcement of water quality laws as ``weak and sporadic.''\5\ 
According to Hembra:
---------------------------------------------------------------------------
    \5\ Richard Hembra, Director of Environmental Protection Issues at 
U.S. General Accounting Office, Testimony before House Public Works 
Committee's Subcommittee on Water Resources, May 14, 1991.

          Despite serious and longstanding violations, most enforcement 
        actions are informal slaps on the wrist rather than formal 
        actions, such as administrative fines and penalties. Further, 
        even in the relatively few cases where penalties have been 
        assessed, they are often significantly reduced or dropped . . . 
        Without enforcement, dischargers have little incentive to incur 
        the cost of pollution control. At the same time, industrial 
        dischargers that do abide by program requirements are unfairly 
        placed at a disadvantage with those who choose not to invest in 
        pollution control equipment and practices.\6\
---------------------------------------------------------------------------
    \6\ Ibid.

    In a 1989 EPA Inspector General audit of enforcement under all EPA 
programs, the IG concluded that penalties rarely were sufficient to 
recover the economic benefit the violator had gained from avoiding 
compliance.\7\
---------------------------------------------------------------------------
    \7\ EPA Office of the Inspector General, Capping Report on the 
Computation, Negotiation, Mitigation, and Assessment of Penalties Under 
EPA Programs, September 1989.

          When penalties are reduced to below what it would cost to 
        comply with the environmental laws, they encourage rather than 
        deter noncompliance. Small fines and lengthy time limits to 
        achieve compliance promote a pay-to-pollute mentality.\8\
---------------------------------------------------------------------------
    \8\ Ibid.
---------------------------------------------------------------------------
The Enforcement Crisis Has Worsened
    Today, the problem in many States appears to be growing worse. A 
significant number of States around the country have explicitly 
reduced, or even dismantled, their already weak, under-funded 
environmental enforcement programs under the philosophy that voluntary, 
hand-holding compliance assistance efforts will achieve compliance more 
efficiently.\9\ State and EPA data, as well as anecdotal evidence from 
around the country indicates that the opposite is true: as the numbers 
of inspections conducted, enforcement actions taken, and penalties 
collected by State environmental departments have declined rapidly and 
dramatically, rates of non-compliance, as described earlier, have 
remained persistently high and in some States have worsened. It is 
critical to note that when a decrease in enforcement actions and 
penalties is accompanied by a parallel decline in violations, as has 
happened in New Jersey under a mandatory minimum penalty scheme that I 
will discuss later, the goal of compliance efficiently achieved has 
been met. The data and information U.S. PIRG has gathered from around 
the United States demonstrate that most States are nowhere near this 
goal, and many are headed in the wrong direction.
---------------------------------------------------------------------------
    \9\ Tom Arrandale, ``Can Polluters Police Themselves,'' Governing, 
June 1997.
---------------------------------------------------------------------------
    U.S. PIRG is currently in the process of compiling information on 
State environmental enforcement into a comprehensive national report. 
What follows is a sampling of what we have learned, containing data and 
examples that are either particularly egregious or may be of special 
interest to members of the Committee:
     The Commonwealth of Virginia and its Department of 
Environmental Quality (DEQ) have received significant publicity as a 
leading example of States' ``resistance to vigorous enforcement of 
Federal environmental laws.''\10\ In 1993, citizen groups filed a 
petition asking EPA to revoke Virginia's delegated authority to 
implement the Clean Water Act for the Commonwealth's failure to correct 
long-standing violations and its failure to pursue adequate enforcement 
penalties, among other things.\11\
---------------------------------------------------------------------------
    \10\ Cushman, 12/15/96.
    \11\ Chesapeake Bay Foundation, Environmental Defense Fund, 
Petition for Corrective Action, An Order Commencing Withdrawal 
Proceedings, and Other Interim Relief With Respect to Virginia's Water 
Pollution Control Program, before U.S. EPA Region III, 11/5/93.
---------------------------------------------------------------------------
    Since then, the situation has only deteriorated. According to a 
recent report by the Virginia General Assembly's Joint Legislative 
Audit and Review Commission, top DEQ officials ``have chosen to 
disregard the State's laws and Constitution and were skirting Federal 
environmental requirements to favor industry.''\12\ Water inspections 
are down 38 percent since fiscal year 1990; DEQ has not maintained 
computerized water compliance information for over 2 years; enforcement 
referrals to the Office of the Attorney General have fell from 30 in 
fiscal year 1989 to 1 in fiscal year 1996; civil penalties for water 
violations in fiscal year 1996 totaled $4,000, a 98 percent decline 
from fiscal year 1994, and civil penalties for hazardous waste 
violations dropped by 94 percent in the same period.\13\ According to 
the report, this decline in enforcement ``does not correlate to any 
increase in compliance with the law.''\14\
---------------------------------------------------------------------------
    \12\ Joint Legislative Audit and Review Commission of the Virginia 
General Assembly, Review of the Department of Environmental Quality, 
1997.
    \13\ Ibid.
    \14\ Ibid.
---------------------------------------------------------------------------
     Although approximately 26 percent of major Oklahoma water 
polluters were listed by EPA in ``Significant Non-Compliance'' with 
their Clean Water Act permits at least once from July 1993 through 
March 1996,\15\ Oklahoma's Department of Environmental Quality (DEQ) 
collected a total of $1,000 in fines for water violations from fiscal 
year 1994 through fiscal year 1996.\16\ The story of DEQ's Air Quality 
Division is similar: notices of violation and consent orders have 
decreased in recent years, and fines for air pollution violations 
dropped 86 percent from fiscal year 1994 to fiscal year 1996. Weak air 
pollution enforcement in Oklahoma is not a new problem, however. One 
longstanding beneficiary of DEQ's unwillingness to enforce air 
pollution laws has been the Sun Oil Company refinery in Tulsa. 
According to a January 1989 internal Sun Oil memo, their Tulsa facility 
reported fewer environmental violations than other Sun refineries 
because, among other things, DEQ did not conduct routine inspections of 
the refinery to monitor compliance.\17\ More recently, residents nearby 
the refinery have been pressing DEQ to take action against Sun for 
repeated nighttime releases of sulfur, hydrocarbons, and 
hydrofluorides--some of which have sent neighbors to the hospital with 
headaches and lung ailments--but the department has still never 
conducted an inspection or issued a Notice of Violation.\18\
---------------------------------------------------------------------------
    \15\ U.S. PIRG, Dirty Water Scoundrels, March 1997, Permit to 
Pollute, June 1995.
    \16\ Oklahoma DEQ, Annual Report, Fiscal Years 1994, 1995, 1996.
    \17\ Internal Sun Oil Memo, from W.R. Clarke to W.T. McCollough, 1/
3/89.
    \18\ Telephone conversation with B.J. Medley, Citizen Activist, 
Tulsa, OK, 6/6/97.
---------------------------------------------------------------------------
     In Alabama, after several years of steady cuts in the 
State Department of Environmental Management's (DEM's) budget, waterway 
assessments and discharger inspections are at an all-time low. 
Inspections dropped 62 percent from 1994 to 1995 alone, and the 
percentage of waters assessed by the State in 1994 was only 17 percent, 
the lowest in the southeast.\19\ Meanwhile, Alabama ranked tenth worst 
in the Nation with 44 major water polluters listed in Significant Non-
Compliance with the Clean Water Act from January 1995 through March 
1996.\20\
---------------------------------------------------------------------------
    \19\ Greg Jaffe, ``Officials Fear EPA Takeover in Alabama,'' ``The 
Wall Street Journal Southeast Journal, 2/14/96.
    \20\ U.S. PIRG, March 1997.
---------------------------------------------------------------------------
     According to U.S. PIRG's March 1997 study, the State of 
Missouri ranked third worst in the Nation with 44 percent of its major 
water polluters in Significant Non-Compliance with the Clean Water Act 
at least once during a recent period. A review of Clean Water Act 
permit files at the Missouri Department of Natural Resources by the 
Ozark Chapter of the Sierra Club revealed that many of the listed non-
compliers have long histories of almost constant violations of water 
standards. The files of the State's two major lead mining companies, 
Doe Run and Asarco, showed steady patterns of violations going back as 
far as 1984 and 1968, respectively. In fact, the records on Asarco 
indicate that the company has never been in compliance with the Clean 
Water Act, demonstrating that Missouri DNR's enforcement program has 
not provided a credible deterrent that succeeds in returning violators 
to compliance.
     In Florida, where civil penalties imposed against 
violators by the Department of Environmental Protection (DEP) are down 
in some regions of the State by 90 percent since 1993,\21\ the State's 
recently delegated Clean Water Act permit program is particularly 
troubled. In 1995 and early 1996, 87 major facilities in Florida were 
listed by EPA in Significant Non-Compliance with the Clean Water Act, 
the second highest number of violators in the country for that 
period.\22\ What is worse is that a substantial number of those 
polluters were violating out-of-date permits: recent U.S. EPA Region IV 
statistics indicate that 41 percent of Florida's major industrial 
facilities are operating with expired permits, the worst in the 
southeastern region.\23\
---------------------------------------------------------------------------
    \21\ St. Petersburg Times, ``Has State Environmental Watchdog Lost 
It's Bite?'' 4/13/97.
    \22\ U.S. PIRG, March 1997.
    \23\ U.S. EPA, Region 4 NPDES Permits Update, May 1997.
---------------------------------------------------------------------------
     A recent U.S. EPA Region I audit of the Connecticut 
Department of Environmental Protection's (DEP's) enforcement program 
revealed serious shortcomings in the department's water bureau.\24\ 
According to the audit, the water bureau shifted most of its 
enforcement personnel to other areas in 1993, and since then has 
conducted significantly fewer inspections and issued many fewer notices 
of violation for water violations. In addition, notices and orders 
issued or negotiated since late 1992 have gone unmonitored.\25\ During 
the same period industrial non-compliance with the Clean Water Act has 
worsened--with one in five of the State's major industries in serious 
violation from mid-1993 through 1994\26\ and one in four in serious 
violation from 1995 through early 1996.\27\ The audit also found that 
DEP ignores chronic violations, delays initiation of enforcement 
actions, substantially reduces penalties without justification, and 
systematically fails to recover the economic benefit gained by 
violators from avoiding compliance.\28\ Most recently, the department 
has come under scrutiny for accepting a relatively low fine from 
MacDermid chemical company, whose 1994 spill of 1,500 gallons of 
corrosive, copper-containing liquid into the Naugatuck River killed 
12,000 fish. MacDermid's C.E.O. has been identified as a political 
contributor to Governor Jim Rowland.
---------------------------------------------------------------------------
    \24\ U.S. EPA Region I, Draft Multimedia Review of the Enforcement 
Programs of the Connecticut Department of Environmental Protection, 
November 1996.
    \25\ Ibid.
    \26\ U.S. PIRG, June 1995.
    \27\ U.S. PIRG, March 1997.
    \28\ Ibid.
---------------------------------------------------------------------------
     Recent data show that more than 40 percent of South 
Carolina's major industrial water polluters were considered in 
Significant Non-Compliance with their permits during 1995 and early 
1996, the third highest percentage in the U.S. for that period.\29\ One 
company not on that list was Laidlaw, a company that operates a 
hazardous waste incinerator in the State. When citizens sued Laidlaw 
for dumping significant quantities of mercury over its permit limits 
into a nearby stream, the State Department of Health and Environmental 
Control (DHEC) imposed a modest penalty in order to block the citizen 
suit from proceeding. When the court found that civil penalties that 
amount to less than the economic benefit to the polluter are not 
sufficient to block a citizen suit, DHEC simply relaxed Laidlaw's 
mercury limit so significantly as to make the violations ``go 
away.''\30\
---------------------------------------------------------------------------
    \29\ U.S. PIRG, March 1997.
    \30\ Telephone conversation with Carolyn Pravlik, Esq., attorney 
against Laidlaw, 6/6/97.
---------------------------------------------------------------------------
     Although 53 major water polluting facilities in New York 
committed serious Clean Water Act violations in 1995 and early 
1996,\31\ the New York State Department of Environmental Conservation 
(DEC) experienced a 45 percent decline in the number of formal water 
enforcement actions it initiated from 1992 to 1996.\32\ In addition, 
according to U.S. EPA's Office of Enforcement and Compliance Assurance, 
DEC has issued general stormwater permits to only 14 percent of the 
10,000 industrial facilities and municipalities subject to stormwater 
controls. Among the worst casualties of DEC's neglect is Lake Onondaga, 
widely regarded as the most polluted lake in the United States. Despite 
the fact that the lake's primary polluter, the Metropolitan Syracuse 
Sewage Treatment Plant (Metro), settled a citizen suit and agreed in 
1988 to develop a plan to come into compliance, today no clean-up plan 
yet exists, much less any action to reduce pollution in the lake. In 
the almost 10 years since the settlement, DEC has taken no affirmative 
action against the county to enforce the agreement.\33\
---------------------------------------------------------------------------
    \31\ U.S. PIRG, March 1997.
    \32\ Based on U.S. EPA Permit Compliance System data.
    \33\ From materials provided by Timothy P. Mulvey, Onandaga Lake 
Cleanup Corp., 6/5/97.
---------------------------------------------------------------------------
     From July 1995 to June 1996, 70 percent of the 334 
facilities permitted to discharge pollutants into Puget Sound in 
Washington committed violations, the overwhelming majority of which 
were repeat violations. Of the violators, 35 percent were listed as 
serious or chronic. Nonetheless, the State imposed penalties against 
only 10 percent of the repeat violators during this period.\34\
---------------------------------------------------------------------------
    \34\ Puget Soundkeeper Alliance, 1997.
---------------------------------------------------------------------------
     Although a recent Mellman Group poll showed that an 
overwhelming majority of Louisiana voters support stronger clean water, 
clean air, toxic emissions, and right to know regulations and believe 
businesses lobby to weaken environmental laws out of greed rather than 
concerns about job losses,\35\ the Louisiana Department of 
Environmental Quality has, nonetheless, steadily reduced its commitment 
to enforcement of current laws in recent years. From 1991 to 1996, 
enforcement actions have declined by 32 percent, the percentage of 
enforcement actions with penalties assessed dropped from 14.7 to 5, and 
the total number of penalty dollars assessed has dropped by 82 
percent.\36\ In addition, the State House of Representatives has passed 
an audit privilege and immunity law that, if enacted, will be among the 
broadest and most pro-business self-audit laws in the county.\37\ 
Meanwhile, Louisiana ranked eighth worst in the country, with 57 major 
facilities listed by EPA in Significant Non-Compliance with the Clean 
Water Act from 1995 through early 1996.\38\
---------------------------------------------------------------------------
    \35\ Mellman Group poll, January 1997.
    \36\ Robert Keuhn, Tulane Law School, June 1997.
    \37\ Christi Daugherty, ``Polluter, Heal Thyself, Environmental 
Self-Audits Would Let Louisiana Polluters Off the Hook,'' Gambit, 
April, 1997.
    \38\ U.S. PIRG, March 1997.
---------------------------------------------------------------------------
     According to a report last year of the Environmental 
League of Massachusetts Education Fund, the Massachusetts Department of 
Environmental Protection has been substantially less aggressive about 
penalizing behavior that violates environmental protection laws in 
recent years.\39\ While the department has been issuing more ``Notices 
of Non-compliance,'' (NON) analogous to a warning rather than a ticket, 
administrative penalties have dropped by more than half since 1989.\40\ 
A recent EPA Region I audit found that NONs were issued when penalties 
should have been, including a case where a paper company had multiple 
serious Clean Water Act and Resource Conservation and Recovery Act 
violations.\41\ Also, inspectors returned to the scene of violations to 
follow up on subsequent compliance steps in fewer than 2 percent of the 
cases during 1995 and 1996, despite State guidelines requiring 
subsequent inspections.\42\
---------------------------------------------------------------------------
    \39\ Donna Tesiero, James Gomes, Enforcement Trends at the 
Massachusetts Department of Environmental Protection 1989-96, May 1996.
    \40\ Ibid.
    \41\ Ibid.
    \42\ Ibid.
---------------------------------------------------------------------------
     In California, the San Diego Regional Water Quality 
Control Board (RWQCB) announced its formal decision to commit resources 
to permitting of new facilities, in order to encourage development, 
rather than enforcement, according to environmental advocates.\43\ One 
example of weak enforcement involved the San Diego County sanitation 
district, which caused 3,700 sewage spills, dumping 86 million gallons 
of sewage into surface waters that flow into San Diego Bay in the past 
7 years. The RWQCB assessed $5 million in penalties, and then settled 
for $300,000, despite the fact that the sanitation district had avoided 
$18 million in costs as a result of its long history of 
exceedences.\44\
---------------------------------------------------------------------------
    \43\ Telephone Conversation with Laura Hunter, Environmental Health 
Coalition, San Diego, CA, 6/5/97.
    \44\ Ibid.
---------------------------------------------------------------------------
    While these data and cases represent only a sampling of the many 
examples of States beating a retreat from their responsibilities to 
enforce environmental laws, they illustrate that an alarming number of 
States are increasingly allowing for strong influence by those being 
regulated, while others are simply dismantling environmental 
protections altogether. Moreover, when viewed in the context of 
persistently high rates of environmental non-compliance, these findings 
demonstrate that the current approach at the State level of compliance 
assistance without the underlying deterrent of strong enforcement tools 
at the ready has sent the message to industry that environmental 
compliance is voluntary, not mandatory. As State agencies seek to pat 
the backs of the entities they regulate, with an occasional slap on the 
wrist, the result is that, for scofflaws, it pays to break the law, and 
for law-abiding companies, the playing field is tilted against them.
State Self-Audit and ``Regulatory Innovation'' Legislation Further 
        Threaten Enforcement
    We believe the evidence we have presented raises serious questions 
as to the ability, or inclination, of the States to protect the 
environment and the health and safety of their citizens. As for the 
ability of States to carry out the mandates of Federal environmental 
law, an increasing number of State officials make the legitimate 
complaint that inadequate Federal funding significantly impedes the 
implementation of Federal environmental programs.\45\ Nevertheless, 
most State officials have chosen not to join citizen groups and 
environmentalists in their call to improve environmental funding by 
shifting the burden from the tax-payers to the polluters. Creating 
polluter-pay mechanisms to fund enforcement and other environmental 
programs would be practical and equitable in a time of fiscal 
constraint.
---------------------------------------------------------------------------
    \45\ U.S. General Accounting Office, EPA and the States: 
Environmental Challenges Require a Better Working Relationship, GAO/
RCED-95-64, 4/3/95.
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    Nevertheless, many State officials have echoed the deregulatory 
rhetoric of corporate interests that labels EPA, other Federal 
agencies, and the Federal programs they oversee as harmful to economic 
development, and have proceeded to create further, more serious 
resource shortages by actively cutting their own environmental agency 
staffs and budgets.
    What is more, many States have pursued environmental policies that 
reflect this anti-Federal sentiment and reveal that the problem of 
inadequate State enforcement may have more to do with inclination than 
ability. Although couched in the attractive language of 
``flexibility,'' ``innovation,'' ``local control,'' and the like, these 
policies seem aimed instead toward effectively minimizing protection of 
the environment and public health in what has been characterized as a 
``race to the bottom.''
    For example, 21 States, have passed ``audit privilege'' and/or 
``immunity'' laws that dangerously undermine both enforcement and the 
public's right to know. Citizens groups in Idaho, Ohio, Colorado, 
Michigan, and Texas have petitions pending before U.S. EPA asking the 
agency to withdraw these States' authority to enforce Federal 
environmental laws in light of the obstacles the audit laws potentially 
pose to enforcement and victim compensation. Audit privilege laws, 
which allow a company that discovers its own violations and corrects 
them to conceal all internal evidence of its violations from the 
government and citizens, keep vital information out of the public's 
hands. Under audit immunity laws, a company's voluntary disclosure of 
information regarding its violations immunizes the company from any 
civil penalties.
    The rationale behind these laws is to give incentives for more 
thorough, voluntary internal reviews of corporate behavior.\46\ 
However, that rationale, like the rationale behind voluntary 
compliance, is based on an assumption of good faith by polluting 
companies and largely ignores the potential for abuse. By cloaking 
routinely generated corporate information in secrecy, audit privilege 
laws can make it more difficult for those outside, in communities 
affected by the company's practices, from knowing what the company is 
doing and holding it accountable. The sunshine provided by strong right 
to know laws, combined with a genuine threat of firm, but fair 
enforcement far better serves the goal of encouraging voluntary 
compliance, as we have seen in New Jersey, where a strong water 
enforcement program has companies taking their permits seriously.
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    \46\ Sanford Lewis, ``Feel-Good Notions, Corporate Power & The 
Reinvention of Environmental Law,'' Good Neighbor Project for 
Sustainable Industries, 1997.
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    In a most recent development, some members of the Environmental 
Council of the States, a body of State environmental commissioners, 
have drafted a legislative proposal to authorize States to develop and 
implement ``regulatory innovation projects'' where any Federal standard 
or requirement under the Clean Water Act, the Clean Air Act, the Safe 
Drinking Water Act, or the Resource Conservation and Recovery Act could 
be waived with no prior U.S. EPA approval.\47\ This draft bill, being 
formally circulated among commissioners and informally circulated in 
Congress, would also allow minimum Federal standards to be waived with 
no requirement of superior environmental performance, and would 
actually allow projects that increase the risk to human health or 
further degrade the environment, as long as the increase is not 
``significant.'' The bill also makes no guarantee of equal public 
participation and accountability in the development of projects, and 
would prohibit Federal and citizen enforcement of waived Federal 
standards.
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    \47\ ECOS, ``The Environmental Regulatory Innovation Act of 1997,'' 
draft, April, 1997.
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    Proposals such as this are irresponsible and manifestly 
inconsistent with the States' mandate to protect the environment and 
the public whose health would be put at risk. Indeed, it is critical to 
note that, in asserting our grave concern about the problem of poor or 
nonexistent environmental enforcement and other deregulatory policies 
by the States, our interest is not merely in achieving compliance for 
compliance's sake. The widespread violations that occur in the vacuum 
created by lax enforcement often have serious consequences for the 
environment and public health.
    Although the attorney for Smithfield Foods, Inc., the pork producer 
recently held liable for illegal dumping into the Pagan River in 
Virginia, claims ``[t]here's a difference between discharging of a 
pollutant [over legal limits] and pollution,'' the facts in many cases 
around the country demonstrate otherwise. To cite from just a few of 
the examples discussed earlier, the illegal releases by the Sun 
refinery in Tulsa repeatedly sent its neighbors to the hospital, the 
MacDermid spill in Connecticut killed thousands of fish in the 
Naugatuck River, and Lake Onandaga has been pronounced ``dead'' to 
aquatic life after decades of violations by the Syracuse sewage 
treatment plant. In fact, a scientific consensus is emerging that the 
threats to human health and the environment posed by toxic pollution 
are more insidious than once thought--toxic chemicals cause not only 
cancer, but also reproductive, respiratory, endocrinological, 
neurological, and developmental health problems in humans and other 
animals.\48\ In addition, these problems can be passed from one 
generation to the next.
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    \48\ See, for example, U.S. EPA, Draft Reassessment of Dioxin's 
Toxicity, 1994.
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    Therefore, when we talk about poor enforcement and serious 
violations, more than the legal status of the violator is at stake, 
especially for those in communities downwind or downstream, and that is 
why this is no time to be talking about relaxing environmental 
standards and transforming our environmental law system into one of 
voluntary compliance.
     iv. despite need for strong oversight, federal environmental 
                     enforcement has also declined
    When enforcement works the way it is supposed to, providing a 
credible deterrent to illegal conduct, States should be able to achieve 
environmental compliance more efficiently, taking fewer actions and 
imposing fewer penalties because permits are taken seriously. Under 
these conditions, as we have seen in New Jersey, the State is able to 
assume primary responsibility for the implementation of Federal 
environmental laws, while U.S. EPA maintains a constructive, but non-
intrusive oversight role.
    However, the Federal enforcement role we envision under the 
alarming conditions I have described today is somewhat different. From 
the perspective of the public interest, the eagerness States have 
exhibited to dismantle many hard-won environmental protections 
highlights our position that the Federal Government must not only 
continue, but improve, its oversight role of maintaining strong 
national standards. In recent years and months, several--but not 
enough--examples of EPA fulfilling its oversight role emerge:
     In Rhode Island, where the budget of State's Department of 
Environmental Management (DEM) has been repeatedly reduced in recent 
years and staffing has dropped by more than 100 employees in the past 2 
years, the number of State employees managing wastewater permits has 
dwindled to just two people.\49\ As a result, permits for most 
treatment plants have expired and violations at others persist, causing 
closed shellfish beds, destroyed habitat, and lost recreational 
opportunities. Serious problems with DEM's RCRA, air, and pesticide 
programs have also developed.\50\ In response, U.S. EPA's Region I 
intervened earlier this year in Rhode Island's budget process, and has 
been working with the State to rebuild DEM in order to avoid an EPA 
takeover of the State's environmental programs. Recent reports indicate 
an agreement is imminent and adequate staffing levels will be restored.
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    \49\ John Cushman, ``EPA Warns Rhode Island About Water Quality 
Effort,'' New York Times, 2/4/97.
    \50\ ``Rhode Island and USEPA Near Deal on State Environment 
Budget,'' State Environmental Monitor, 6/2/97.
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     In 1995, in what was described as a ``rush to remove 
barriers to industrial development,''\51\ the State of Mississippi 
significantly slashed the budget and staffing of the State Department 
of Environmental Quality (DEQ), resulting in an almost complete 
collapse of the department's water enforcement program. Inspections 
fell by a dramatic 96 percent, and expired permits in the State rose 64 
percent from 1993. As a result, U.S. EPA Region IV was forced to take 
over enforcement of industrial and municipal permits, inspection of 
major permitees, and the drafting of some permits.\52\ Tough action by 
EPA prompted the State to hire 30 additional personnel to enforce 
pollution laws.\53\
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    \51\ ``EPA Asks What's In the Water,'' The Sun Herald, 9/95.
    \52\ Robert McGhee, Acting Director of Water Management Division, 
U.S. EPA Region IV, Letter to Barry Royals, Surface Water Division, 
Mississippi DEQ, 8/9/95.
    \53\ Charles Seabrook, ``U.S. Asked to Control Georgia Waters,'' 
The Atlanta Journal-Constitution, 1/11/97.
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     In Alabama, the Jefferson County sewer system has been 
experiencing overflows and bypasses for at least 20 years. Despite 
improvements taken by the county, the lack of attention from the State 
DEM allowed the problem to grow worse. DEM never imposed any fines 
against the county, despite the fact that over one billion gallons of 
raw and partially treated sewage mixed with stormwater were discharged 
into the Cahaba and Black Warrior creeks in recent years, causing five 
incidents where residents were evacuated due to raw sewage flooding in 
their homes. After two and a half years of negotiating, citizen 
plaintiffs, supported by the intervention of the U.S. Department of 
Justice, have secured a win-win agreement whereby the County will 
develop a remedial plan and pay for a supplemental environmental 
project to reduce stormwater polluted runoff into Cahaba and Black 
Warrior streams.\54\
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    \54\ Beth Steward, Cahaba River Society Newsletter, 1997.
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     In Montana, where the State's water quality enforcement 
program has been described as ``a toothless dog, snarling and lunging 
at the end of a short chain,''\55\ EPA intervention in some cases has 
also made a difference. From 1990-1994, of the 30 water violation cases 
the State deemed severe enough to warrant action, fines were assessed 
in only two, and problems persisted in more than half. In the case of 
Meadow Gold Dairy, where Spring Creek was virtually destroyed by the 
company's wastewater discharges, the State took nearly 1 year to take 
formal action, and then the action was to give temporary approval of 
the pollution due to threats that the company would shut down.\56\ The 
same day in 1991, EPA filed a $5.2 million lawsuit, eventually 
collecting $265,000 in penalties for the same violation. Two years 
later, Meadow Gold again began applying its wastewater illegally. No 
action was taken by the State.
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    \55\ ``Toothless, Montana's Water Police Choosing Not to Penalize 
Most Polluters,'' Independent Record, 7/17/94.
    \56\ Ibid.
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     With respect to Idaho, Michigan, Ohio, and Colorado, EPA 
has maintained a strong position against these States' audit privilege 
and immunity laws. In Idaho, when EPA notified the State earlier this 
year that its audit privilege law would need to be changed before the 
State could receive final approval to carry out the Clean Air Act, the 
State legislature decided to allow the audit law expire at the end of 
the year. In addition, EPA has taken a similarly strong stand in 
Louisiana in the midst of a heated legislative battle surrounding a 
particularly pro-business self-audit proposal, threatening to withdraw 
the State's right to administer Federal environmental programs if the 
law is enacted.\57\
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    \57\ Daugherty, Gambit, April 1997.
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    As these cases indicate, Federal Government intervention can play a 
critical role in protecting minimum standards of public health and 
environmental protection when States fail to fulfill their delegated 
responsibilities. However, given the widespread nature of inadequate or 
nonexistent State enforcement, EPA could be and should be doing more. 
Despite cries of EPA ``overregulation'' by State officials, the EPA 
enforcement presence, if anything, has dwindled. Again, the numbers are 
illustrative:

         While EPA Clean Air Act inspections of stationary 
        sources have increased, Clean Water Act inspections are down 31 
        percent, Safe Drinking Water inspections are down 42 percent, 
        Toxic Substances Control Act inspections are down 38 percent, 
        and pesticidspections are down 80 percent since fiscal year 
        1994. \58\
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    \58\ U.S. EPA Office of Enforcement and Compliance Assurance, 
January 1997.
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         Similarly, Administrative Penalty Order Complaints 
        and Administrative Compliance Orders fll statutes are down 
        byercent since fiscal year 1994 \59\
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    \59\ Ibid.
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         Civil referrals from EPA to the Department of Justice 
        are down 31 percent for all statutes since fiscal year 1994, 
        with a 44 percent drop in Clean Water Act cases and a 50 
        percent drop in Clean Air Act cases. \60\
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    \60\ Ibid.
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         In the 10 States where EPA has retained 
        responsibility for issuing Phase I stormwater general permits, 
        EPA has issued permits to only 16 percent of the near 10,000 
        facilities potentially subject to storm water controls. \61\
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    \61\ U.S. EPA Office of Enforcement and Compliance Assurance, 1997.

    Thus, when viewed in the context of EPA's apparent embrace of 
``devolution'' policies, illustrated by the 20 ``performance 
partnership agreements'' EPA has signed with States giving them 
increased responsibility for environmental enforcement, these declining 
enforcement numbers show a waning Federal commitment to step into the 
void when States turn their backs.
    In addition, even regarding the audit privilege issue, EPA is 
signalling a retreat. In a recent agreement reached with Texas, without 
consultation with the citizen group petitioners, EPA gave its approval 
in March to several proposed amendments to the State law. If the 
amendments are enacted by Texas, the audit law would, nonetheless, 
continue to hurt the public's right to know, silence whistleblowers, 
and curb citizen enforcement under State law. Finally, despite the 
angry response in some quarters to EPA's ``overfiling'' in the recent 
Smithfield Foods case in Virginia,\62\ even the Environmental Council 
of the States (ECOS) found in its own 1995 survey that EPA overfiling 
was not a common occurrence, and that when it did occur, it was often 
``prompted by a mutual belief that the Federal Government has an 
enhanced opportunity for success in the action.''\63\
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    \62\ ``Virginirm Fined $3.5 Million in Pollution Case,'' Waston 
Post, 10/23/96.
    \63\ ECOS Enforcement Survey, 6/1/95.
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    In our analysis, then, the problem is not too great a Federal 
presence, but not enough.
       v. strong clean water enforcement is working in new jersey
    Clearly, current State and Federal approaches to enforcement are 
not working. Significant cuts in State enforcement budgets and 
personnel, accompanied by compliance assistance approaches that rely on 
little more than industry's good intentions, have failed to efficiently 
achieve compliance as promised. To figure out what does work when it 
comes to improving environmental enforcement, we need only look as far 
as the State of New Jersey.
    In 1990, New Jersey PIRG helped write and pass the New Jersey Clean 
Water Enforcement Act.\64\ Some of the law's key provisions include 
mandatory minimum penalties for serious violations and significant non-
compliance, requirements that penalties recover the economic benefit 
gained from violations, strengthened citizen suit provisions, and 
uniform monthly monitoring and reporting requirements for all 
dischargers.
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    \64\ N.J.S.A., 58:10A-14.1.
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    The Clean Water Enforcement Act has been a remarkable success. The 
New Jersey Department of Environmental Protection's (NJ DEP's) 
assessment, and we agree, is that under the Clean Water Enforcement 
Act, the deterrent value and the certainty of mandatory minimum 
penalties has caused permittees to take their permits seriously.\65\ NJ 
DEP's 1996 annual report states that compliance with permit limits and 
reporting requirements has significantly improved since passage of the 
Act.\66\ NJ DEP's numbers are worth a thousand words: since 1992, the 
total number of Clean Water Act violations in New Jersey has dropped by 
78 percent. According to one citizen suit attorney with extensive 
experience in New Jersey, although there are still some problems with 
underreporting violations, ``at least companies have NPDES permits on 
tfront burner\67\
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     New Jersey DEP, 1995 Annual Report of the Clean Wateforcement 
Acarch 196
    \66\ NJ DEP, 1996 Annual Report of the Clean Water Enforcement Act, 
March 1997.
    \67\ Telephone Conversation with Carolyn Pravlik, Esq., 6/6/97.
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    At the same time, with dischargers more widely abiding by the law, 
the number of enforcement actions naturally has declined as well. By 
prompting the agency to take timely enforcement action, especially 
against serious and chronic violators, the law ensures that problems 
are addressed quickly and more effectively, thus reducing the average 
amount and the total amount of penalties. Since 1992, enforcement 
actions are down 67 percent. While penalties rose substantially from 
1991 to 1994 as longstanding non-compliance problems were finally 
addressed, total penalties are down 92 percent since 1994, and the 
average penalty amount dropped 46 percent from 1993 to 1995 \68\
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    \68\ NJ DEP, March 1997.
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    Under this approach everybody wins: industry wins by paying lower 
penalties, and by enjoying a level playing field while playing under 
consistent game rules; the State wins by producing better compliance 
more efficiently; and, most importantly, the public wins by having a 
more accountable system, as well as a cleaner environment. Plus, the 
program has been self-funding: enforcement is paid for primarily 
through a fund made up of penalty dollars collected from violators.
    Finally, when enforcement works as it does in New Jersey, the State 
is able to assume primary responsibility for the implementation of 
Federal environmental laws, while EPA maintains a constructive, but 
non-intrusive oversight role. It is worth noting that in the 1995 ECOS 
enforcement survey, New Jersey reported no cases of Federal overfilling 
in Clean Water cases. ``All DEP enforcement programs enjoy an excellent 
working relationshith EPA and do not see overfiling on cases by EPA as 
a signant issue,'' \69\ the State said.
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    \69\ ECOS Enforcement Survey, 1995.
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        vi. the lautenberg-torricelli bill (s. 645): a solution
    The success story in New Jersey should serve as a model for the 
rest of the country. The Senators from New Jersey have introduced S. 
645, legislation to replicate key aspects of the New Jersey Clean Water 
Enforcement Act at the Federal level. U.S. PIRG, the State PIRGs, and 
the members of the Clean Water Network strongly support this bill, 
because it would bring certainty, predictability, and credibility to 
Clean Water Act enforcement throughout the country. Specifically, S. 
645 would do the following:

         By establishing mandatory minimum penalties for 
        serious violations and requiring that all penalties recover the 
        violator's economic benefit, serious and chronic violations 
        will be deterred and permitees will take their permits more 
        seriously. Also, government accountability will be improved and 
        the playing field for businesses will be leveled.
         By strengthening the right of citizens to enforce the 
        law themselves, communities will be better able to protect 
        themselves and make polluters pay for the pollution they 
        create.
         By extending reporting and monitoring requirements 
        for dischargers, and by requiring the government to post signs 
        warning the public of polluted waterways and contaminated fish, 
        the public's right to know about water pollution in the places 
        they fish and swim will be fulfilled.

    The time to address the environmental enforcement crisis is now. As 
the Clean Water Act approaches its 25th birthday this year, we urge you 
to support this important piece of legislation that will give States 
and EPA needed direction and clarity so that they may work together, in 
a constructive partnership, to realize the promise of this visionary 
law.
    Thank you very much for the opportunity to share my comments with 
you today.

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