[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
EXAMINING EPA'S PREDETERMINED EFFORTS
TO BLOCK THE PEBBLE MINE
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
November 5, 2015
__________
Serial No. 114-48
__________
Printed for the use of the Committee on Science, Space, and Technology
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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. LAMAR S. SMITH, Texas, Chair
FRANK D. LUCAS, Oklahoma EDDIE BERNICE JOHNSON, Texas
F. JAMES SENSENBRENNER, JR., ZOE LOFGREN, California
Wisconsin DANIEL LIPINSKI, Illinois
DANA ROHRABACHER, California DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas ERIC SWALWELL, California
MO BROOKS, Alabama ALAN GRAYSON, Florida
RANDY HULTGREN, Illinois AMI BERA, California
BILL POSEY, Florida ELIZABETH H. ESTY, Connecticut
THOMAS MASSIE, Kentucky MARC A. VEASEY, Texas
JIM BRIDENSTINE, Oklahoma KATHERINE M. CLARK, Massachusetts
RANDY K. WEBER, Texas DON S. BEYER, JR., Virginia
BILL JOHNSON, Ohio ED PERLMUTTER, Colorado
JOHN R. MOOLENAAR, Michigan PAUL TONKO, New York
STEVE KNIGHT, California MARK TAKANO, California
BRIAN BABIN, Texas BILL FOSTER, Illinois
BRUCE WESTERMAN, Arkansas
BARBARA COMSTOCK, Virginia
GARY PALMER, Alabama
BARRY LOUDERMILK, Georgia
RALPH LEE ABRAHAM, Louisiana
DARIN LaHOOD, Illinois
C O N T E N T S
November 5, 2015
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Lamar S. Smith, Chairman, Committee
on Science, Space, and Technology, U.S. House of
Representatives................................................ 5
Written Statement............................................ 6
Statement by Representative Eddie Bernice Johnson, Ranking
Minority Member, Committee on Science, Space, and Technology,
U.S. House of Representatives..................................
Written Statement............................................ 9
Witnesses:
Panel I..........................................................
The Honorable William S. Cohen, President and Chief Executive
Officer, The CohenGroup
Oral Statement............................................... 13
Written Statement............................................ 16
Mr. Charles Scheeler, Senior Counsel, DLA Piper
Biography.................................................... 29
Discussion I..................................................... 32
Panel II.........................................................
Mr. Tom Collier, Chief Executive Officer, Pebble Limited
Partnership
Oral Statement............................................... 53
Written Statement............................................ 56
Hon. Rick Halford, Former Alaska Senate President
Oral Statement............................................... 76
Written Statement............................................ 78
Discussion II.................................................... 92
Appendix I: Answers to Post-Hearing Questions
The Honorable William S. Cohen, President and Chief Executive
Officer, The CohenGroup........................................ 120
Mr. Charles Scheeler, Senior Counsel, DLA Piper.................. 123
Mr. Tom Collier, Chief Executive Officer, Pebble Limited
Partnership.................................................... 127
Hon. Rick Halford, Former Alaska Senate President................ 130
Appendix II: Additional Material for the Record
Documents submitted by The Honorable William S. Cohen, President
and Chief Executive Officer, The CohenGroup.................... 158
Documents submitted by Representative Suzanne Bonamici, Committee
on Science, Space, and Technology, U.S. House of
Representatives................................................ 172
Documents submitted by Representative Elizabeth H. Esty,
Committee on Science, Space, and Technology, U.S. House of
Representatives................................................ 263
Statement submitted by Trout Unlimited........................... 265
EXAMINING EPA'S PREDETERMINED
EFFORTS TO BLOCK THE PEBBLE MINE
----------
THURSDAY, NOVEMBER 5, 2015
House of Representatives,
Committee on Science, Space, and Technology,
Washington, D.C.
The Committee met, pursuant to call, at 11:24 a.m., in Room
2318 of the Rayburn House Office Building, Hon. Lamar Smith
[Chairman of the Committee] presiding.
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Chairman Smith. The Science, Space, and Technology
Committee will come to order.
Without objection, the Chair is authorized to declare
recesses of the Committee at any time.
Welcome, everyone, to today's hearing entitled ``Examining
EPA's Predetermined Efforts to Block the Pebble Mine.''
I'll recognize myself for an opening statement and then the
Ranking Member, although on second thought, given time
considerations and the fact that we have another vote in 45
minutes or so, and wanting to hear from our witnesses today,
I'm going to ask unanimous consent to put my opening statement
in the record if the Ranking Member is going to do the same
thing, and she's agreed to do the same thing.
[The prepared statement of Chairman Smith follows:]
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[The prepared statement and slides of Ms. Johnson follows:]
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Chairman Smith. So let me immediately go to the
introduction of our witnesses.
Our first witness is the Hon. William Cohen, Chairman and
CEO of The Cohen Group, and former Secretary of Defense.
Secretary Cohen was first elected to public office in 1969 as a
City Councilor. He then spent six years in the House of
Representatives and eighteen years in the Senate. In 1997,
President Clinton nominated him to be his Secretary of Defense.
After 31 years of public service, Secretary Cohen leaves behind
a record of accomplishment, integrity, and respect. Secretary
Cohen received his bachelor's degree in Latin from Bowdoin
College and his law degree from Boston University.
Our second witness is Mr. Charles Scheeler, Senior Counsel
at DLA Piper. Before rejoining DLA, Mr. Scheeler was a Federal
Prosecutor in the U.S. Attorney's Office for the District of
Maryland from 1984 to 1989. Mr. Scheeler serves as the Chairman
of Rosedale Federal Savings and Loan Association and is a
Member on the Boards of Johns Hopkins University, Johns Hopkins
Medicine, Johns Hopkins International, Johns Hopkins Bayview
Medical Center, and the College Bound Foundation. Mr. Scheeler
received his bachelor's degree from the University of North
Carolina at Chapel Hill and his law degree from Harvard
University.
We welcome you both, and Secretary Cohen, if you'll begin?
TESTIMONY OF HON. WILLIAM S. COHEN,
CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
THE COHEN GROUP
Hon. Cohen. Good morning, Chairman Smith and Ranking Member
Johnson, and distinguished Members of the staff. First, let me
thank you for inviting me to discuss the recently completed
independent report or review of EPA's decision-making process
regarding the potential mining in southwest Alaska's Bristol
Bay watershed.
The issue has raised important questions of Congressional
intent and how the EPA made decisions that are fully worthy of
Congressional oversight.
I represented Maine in Congress where the environment is
very important. Our state is known as Vacation Land, and for a
reason. But there's always been an effort to balance the
protection of the environment with permitting responsible
development, and that was a major focus during my Congressional
service.
And then when I served as Chairman of the Senate Oversight
Subcommittee, I focused on ensuring that Executive Branch
agencies operated in a fair and responsible fashion.
In the fall of 2014, rather, I was approached by the Pebble
Partnership to review EPA's actions regarding the potential
mining in southwest Alaska's Bristol Bay watershed. The
Partnership holds mineral claims to lands owned by the State of
Alaska that contain one of the world's largest known
undeveloped copper deposits. The area is also home to one of
the most abundant salmon runs in the world, and the commercial
salmon industry dominates the private sector economy of the
Bristol Bay region.
In July 2014, EPA proposed substantial limits on the
development in the Pebble Deposit area using a controversial
and nearly unprecedented process to do so, known as Section
404(c) instead of the traditional permitting method that was
adhered to in the requirements of the National Environmental
Policy Act, and the Pebble Partnership expressed concern about
the fairness of EPA's decision-making process. They wanted an
objective party to review the process through the lens of how a
Cabinet-level agency should make these kinds of decisions.
Given my experience in the legislative and executive branches,
I agreed to review EPA's actions, assisted by my staff at The
Cohen Group and also the law firm of DLA Piper. The lead
counsel on the review, as you've indicated, is Charles
Scheeler, who is with me today.
I advised Pebble that I would not try to determine whether
a mine should be built nor would I comment on the legality of
EPA's preemptive use of Section 404(c). I also undertook to
review the conditions of complete independence, and I set those
facts out that I would follow the facts wherever they might
lead. The conclusions that I drew were mine. Pebble Partnership
had no rights to edit or censor my views, and my team was
compensated according to commercially standard terms, and no
portion of my compensation was contingent upon the result of
the review or the content of the report.
And so in order to produce the most thorough and balanced
review, we sought to interviewed some 300 people, and we
interviewed more than 60, who agreed to participate,
representing all points of view including those of EPA's
actions including three former EPA Administrators, and we
reviewed thousands of documents from EPA, other federal
agencies, the State of Alaska, and other sources. EPA declined
my request to make current personnel available to interviews,
citing ongoing Congressional and Inspector General inquires,
and also pending litigation. I understand their reluctance to
do that.
I've submitted the Executive Summary and the full report
for the Committee's hearing record, but here are my primary
findings.
Because to date the Pebble Partnership has not submitted a
permit application, EPA relied on hypothetical scenarios for
its assessment rather than using the characteristics of a mine
that is actually proposed to be built and maintained. EPA
failed to address important considerations that would be
included in the permit NEPA process including meaningful
participation by other state and Federal Government agencies.
The permit/NEPA Process has been used for decades and has been
widely endorsed by environmental groups, and yet EPA relied
upon the Watershed Assessment even though they acknowledged to
peer reviewers that there were significant gaps in the
assessment and it was not designed to duplicate or replace the
permit and NEPA process. EPA's unprecedented, preemptive use of
Section 404(c) before a permit filing, in my judgment,
exacerbated the shortcomings of the Bristol Bay Watershed
Assessment and inhibited the involvement of two key
participants: the Army Corps of Engineers and the State of
Alaska. These observations were informed--they informed my
conclusion that EPA's application of Section 404(c) prior to
the filing of a permit application was not fair to all of the
stakeholders, and I found that the fairest, most appropriate
process to elevate possible development in--evaluate
development in the Pebble Deposit Area would use the
established regulatory permit/NEPA process to assess a mine
permit application, rather than using an assessment based upon
the hypothetical mining scenarios described as the basis for
imposing potentially prohibitive restrictions on future mines,
and I could find no reason why the common established approach
was not used.
During the course of my review, there were certain
statements and actions taken by EPA personnel that raised
questions about the integrity of the process that EPA used. Was
the process orchestrated to reach a predetermined outcome? Had
there been inappropriately close relationships with anti-mine
advocates that influenced EPA's process? Was EPA candid about
its decision-making process?
I have refrained from reaching any judgments on any of
these questions, and I've done so because, frankly, I don't
have subpoena power. I don't have the power to compel anyone to
talk to me. I don't have access to documents that have yet to
be produced to the Committee or to other agencies, and so I
think these are issues that are serious enough for Congress,
which does have the power to compel testimony, to follow up on.
I think that the oversight of proper authorities have to be
done so that agencies don't engage in decision-making that is
preordained, and I would urge Congress to continue to explore
the questions I've raised, to illuminate EPA's motives and
better determine whether EPA has met its core obligations of
government service and accountability, and also, finally, to
urge policymakers to consider using the permit/NEPA process in
the context of potential development of the Bristol Bay
Watershed Area, a process regarded by all stakeholders as the
most thorough and fair approach.
And finally, I would think that the Committee may want to
review EPA's apparent effort to considering using 404(c) to
accomplish a national watershed planning, as EPA personnel
stated in a document prepared for the briefing to the
Administrator. If such a model is to be established, I would
expect that Congress would want to weigh in either in favor or
against it, but it's a fundamental issue that Congress, I
think, needs to looked at.
I've tried to shorten my statement, Mr. Chairman, rush
through it, but I stand ready to answer any questions.
[The prepared statement of Hon. Cohen follows:]
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[The submitted biography of Mr. Charles Scheeler, Senior
Counsel, DLA Piper:]
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Chairman Smith. Thank you, Mr. Secretary, and I understand
Mr. Scheeler is not going to testify but will perhaps respond
if necessary.
I've just been told that the next vote is now only 20 or 25
minutes away, and with the concurrence of the Ranking Member,
we'd like to suggest, in order to give as many members of the
Committee as possible an opportunity to ask a question, that we
do just that and try to limit ourselves to one question and see
if we can get through most of the members before the next vote
is cast.
So I'll recognize myself to start and will ask just a
single question, and that, Secretary Cohen, is this: What are
the dangers of allowing the EPA's unprecedented actions to go
unchecked? Less time than I thought. So we'll go through as
many people as we can with one question.
Hon. Cohen. Let me be as brief as I can on this issue. We
expect agencies to deal with our citizens in a fair, open,
transparent fashion, and to use the most fair process they can.
When processes that have been established like 404(c), that's
been invoked in 43 years only on 13 occasions, and never, with
one minor, very minor exception, never without a permit having
been filed. And so the question is, is this an appropriate use
of EPA power? I have not reached a conclusion as to whether EPA
has this power. I've assumed for purposes of my investigation
in this that it has. But that's a matter that others will have
to decide.
But to allow an agency to make a ruling on state-owned
land--Alaska owns this land. Alaska has regulated this land or
issued guidelines specifically for mining, and so for the EPA
to come in and say we're going to use a process that has worked
well in the past under these certain conditions where a
permit's been filed is one thing. To then take action which
really intrudes upon state action, state territorial integrity,
state power and say we're going to use an unprecedented process
to me violates this notion of federal agencies working hand in
hand with state agencies to reach an appropriate solution.
Again, I don't come to a judgment. I'm not advocating that
a permit be issued. I'm not advocating that the mine be
stopped. I'm simply saying this process in my judgment was not
fair as carried out.
Chairman Smith. I understand, and you're talking about the
process. Thank you, Secretary Cohen.
And the Ranking Member, the gentlewoman from Texas, Ms.
Johnson, is recognized for her question.
Ms. Johnson. Thank you, Mr. Chairman.
Pebble has been blasted by Members of Congress from both
sides of the aisle for years because of over a decade they
filed for a mine permit, and your report claims that EPA did
not do a good job receiving input from Pebble Partnership.
However, there are ample documents illustrating just how
transparent EPA's process has been including a list of numerous
meetings with the Pebble Partnership over the course of many
years. And we will hear from Mr. Halford, I think, that Pebble
rejected EPA's request to provide input participation in the
watershed assessment process in 2011. And in your own report,
you state that the Pebble Partnership refused repeated requests
for the wholesale disclosure of the raw data and more user-
friendly format. So I'm just wondering, Mr. Secretary, did you
attempt to acquire the raw data from Pebble to verify their
claims or did they provide it or if so, will you please make
us--make that information available to the Committee?
Hon. Cohen. I believe that the raw data you're referring to
is a baseline report that was developed by Pebble, and they did
agree to make that available in a PDF format. The criticism
that was leveled on that issue was that it wasn't as user-
friendly, and what Pebble, as I understand it, was concerned
about was that if it was opened up to all parties, they would--
there could be information that was extracted from that that
would mischaracterize what the report was saying. But in any
event, what EPA has relied upon is the Wardrop Report. The
Wardrop Report was really basically a filing saying this is--
we're going to examine this area to see what's under the
ground. The Wardrop report never proposed to be a mining
proposal, never a defined project. In fact, the author of the
Wardrop report was never contacted by EPA to say what was the
reason that you filed this report and why are you not seeing
this in this fashion.
So I think what Pebble has tried to do is say we'll give
you our baseline data, we've given it to you, offered it to
you, but we're not ready, and you may ask Mr. Collier this, is
it the power of the state or the EPA to compel an owner of
rights to file a defined plan? Does the EPA force you to file
something when you're not ready to file it? I don't know the
reasons why Mr. Collier doesn't want to file it at this point.
It may be he's looking for more technical data. It may be their
financial backers that he needs to acquire. But the notion that
the EPA can make you file something that you're not ready to
file, and over the objection of the State of Alaska, it seems
to me that's quite a stretch for EPA.
Ms. Johnson. Even over a decade?
Hon. Cohen. Even over a decade. As a matter of fact, you
know, what struck me is looking back in the record that I--the
report that I filed, as early as 2005 we have an EPA employee
saying that we should use 404(c), I'm going to recommend this,
or he is suggesting this is right for 404(c). So from the very
beginning before anything is done, you have EPA employees
saying let's use 404(c). That at least indicated to me that
there was some preliminary decision being made that they're
going to invoke this process without giving a fair hearing. So
that was my concern on that issue.
Ms. Johnson. Thank you very much, Mr. Chairman.
Chairman Smith. Thank you, Ms. Johnson.
The gentleman from California, Mr. Rohrabacher, is
recognized for a question.
Mr. Rohrabacher. Thank you very much, and let me just note,
this hearing represents a major problem that we're facing in
our society right now. There is a conflict between the
legislative and executive branches over who's going to make the
rules and who's going to actually determine what policies will
be followed rather than--and I think, unfortunately, what we're
describing just today is yet another example of an arrogant
usurpation of authority by the Administration, and the EPA is
perhaps one of the ones that--instruments that have been used
more than others to centralize this power and create a legal
authority when perhaps they do not have it.
In this case, let me just ask you, Secretary Cohen--by the
way, another thought. There is not--unfortunately quite often
what we're talking about is actions that are taken without
regard to cost to the public, and a lot of times people think
that we can just do these things and we're going to improve
things and there's going to be no cost at all because there's
nothing in the federal budget but it ends up costing the
American consumer enormous amounts of money. In this case, did
you find that the Army Corps of Engineers and the State of
Alaska were brought into the decision-making process here and
the investigation as they should have been?
Hon. Cohen. Well, the answer to that is yes and no. The
State of Alaska was brought into it unwillingly. If you look at
the report, you'll find from day one, Alaska objected to this
process being instituted under 404(c). So the Governor actually
wrote to the EPA Administrator saying it's a case where I'm
damned if I do and damned if I don't. If I refuse to
participate in this, EPA will say you had your chance. If I
don't participate--if I do participate in this, I'll be seen as
complying with it and having my chance, but I, the State of
Alaska, are fundamentally opposed to proceeding in this
fashion. So the State of Alaska did in fact participate
unwillingly and with great objection throughout from the day it
all started.
With respect to the Corps itself, the Army Corps of
Engineers was not brought in to the process. Initially when the
Bristol Bay Watershed Assessment was done, they said they
couldn't participate because they would be called upon to
become active during the NEPA process and therefore wanted to
avoid a conflict of interest, and then when the assessments
were completed, the watershed assessment was completed, they
were asked, do you want to comment, and they said we can't
comment because we have no defined plan. So the Army Corps of
Engineers never participated in this process, which raises the
question that the Army Corps of Engineers is the action agent.
They are the project manager for any type of mine or project
that would be designed. They are not part of this particular
process so they were excluded under it.
Mr. Rohrabacher. The complications that you are----
Chairman Smith. Thank you----
Mr. Rohrabacher. The complications that you are describing
are a result of the fact that somebody's going way beyond their
authority, and that's what happens when you do that.
Thank you, Mr. Chairman.
Chairman Smith. Thank you, Mr. Rohrabacher.
The gentlewoman from Oregon, Ms. Bonamici, is recognized
for her questions.
Ms. Bonamici. Thank you very much, Mr. Chairman, and thank
you to our witnesses.
I represent a district that includes part of the beautiful
Oregon coast, and a lot of my constituents are extremely
concerned about the profound environmental risks associated
with the operation of an open-pit copper mine in Bristol Bay,
and I know we'll hear from Mr. Halford on our second panel, the
people of Alaska are already dealing with some of the
environmental fallout from the exploratory operations conducted
by the Pebble Partnership in the region. They're very concerned
about that.
Secretary Cohen, you talked about an unprecedented process,
but it's my understanding that the Mineral Exploration and
Development Act of 1993 contained very similar provisions--you
supported it--that would have given the Department of Interior
the authority to do essentially what the EPA has done here.
And I wanted to mention how concerned I am that we're
having this conversation without the EPA here. We are
questioning--raising a lot of questions about their process or
their procedure. We absolutely need to hear from them. They
should be in the room answering questions----
Chairman Smith. If the gentlewoman will yield, we are
planning a second hearing with the EPA to be present.
Ms. Bonamici. I appreciate that, Mr. Chairman, because it's
important to hear from them. There's some suggestion that they
did this without a process and without considering input. There
were hundreds of thousands of comments and listening to lots of
people across the region. We need to hear from them. And I know
Ranking Member Johnson asked this question but--about why you
suggested that they could find no valid reason why the NEPA
permit process wasn't used, but as you know, that process can
only take place when the permit application is filed, and I
know you talked about that. I know that over years there were
many people, groups, organizations wanting some certainty about
this. I know my constituents feel very strongly about it, as
those in Alaska do.
I wanted to ask you, Secretary Cohen, in your testimony you
state that ``the Partnership compensated my team according to
commercially standard terms.'' Can you please tell us about
those, what that means?
Hon. Cohen. It's a standard term that I would have with any
client that decides to hire my firm. It's commercially
standard. It gets--nothing greater, nothing less than what I
would charge any other client, and the point I wanted to make
is nothing was contingent upon what I would produce, and I
wanted to do this primarily because I really am trying to avoid
this becoming a partisan issue, Democrats for the EPA,
Republicans opposed to EPA. What I really wanted to do was to
say can someone like myself who has been involved in public
service for 31 years involved in major investigations--when I
look back, for example, on Watergate hearings--long before your
time here--but the biggest supporters of mine at that time were
the Republican party, the ones who contributed to my campaign,
the Republican party, and yet I felt compelled to vote to
impeach my own President. And then in Iran-Contra, my biggest
supporters were the Republican party, and I found that the
President Reagan Administration has abused its position and
violated some Constitutional provisions, so--and I assume
that's one of the reasons why President Clinton asked me to
serve in his Administration because he felt that I would be
fair and independent, and that's what I've tried to do here.
And I'll just ask you to look at the facts that I laid out, and
you can make your own judgment on this, and frankly, it comes
down to a policy issue. Do you think under the 404(c) process
that there should be a permit filed? Do you think that EPA
should say in the absence of that, we will construct a
hypothetical scenario and make judgments on what can be done? I
think those are policy issues that you as a member would want
and I certainly support what you want.
Ms. Bonamici. And I appreciate that, Mr. Secretary,
especially your effort to make sure that this is not a partisan
issue, but it also has to be an issue about protecting the
environment and having a process, and I know you have your
legal team, I know you have some sort of strategic partnership
with DLA Piper. What we're trying to figure out is, you're
being compensated. We are trying to get the facts so that we
can analyze, you know, was everyone on your review team
employed by DLA Piper or The Cohen Group. We're trying to get
some facts about how you arrived at your position.
And again, Mr. Chairman, we really need to hear from the
EPA on this. Thank you. I yield back.
Chairman Smith. Thank you, Ms. Bonamici.
And the gentleman from Alabama is recognized for his
question.
To respond to the gentlewoman from Oregon, EPA was invited
and declined to testify on either of these panels, and that is
why we're having another hearing with them to be present.
The gentleman from Alabama.
Mr. Brooks. Secretary Cohen or Mr. Scheeler, whoever
prefers to answer, in your investigation, have you discovered
any other instance where EPA limited or stopped a project using
Section 404(c) before any permit applications have been
submitted?
Hon. Cohen. There was one incident that I'm aware of, and
Mr. Scheeler can amplify it. Out of the 43-year period of time
in which this Act has been in law, there've been 13 occasions
when 404(c) has been called upon only after the filing of a
permit. The one exception to that was a case in Florida in
which there were three contiguous parcels, and in two of those
three parcels there had been permits filed and giving the
opportunity for EPA and the Army Corps of Engineers and others
to participate. Based upon their examination of those three
contiguous properties, they decided that there was no need to
file a permit in that one exception in Florida based upon the
same characteristics, same area, different ownership. They said
no need there, we've looked at all of the information from the
Army Corps of Engineers and all who had participated and were
satisfied this is the right course of action. There was one
minor exception, and that was only after two of the three
participants in the mining proposals had filed permit
applications.
Mr. Scheeler. And Congressman, EPA themselves have written
on this. There was a discussion matrix presented to the
Administrator in September of 2010, and they were discussing
the potential use of 404(c) before any permit application had
been filed, and the EPA written statement is that that had
never been done before in the history of the Clean Water Act.
Mr. Brooks. Are there any underlying facts that would
suggest to you that the EPA's use of 404(c) in the Florida
instance was justified while it's not justified at the Pebble
Mine?
Mr. Scheeler. Well, yes, because there were three adjacent
parcels all from the Rem Estate in the Florida situation. The
two adjacent parcels had had permits filed for those parcels,
and it was determined by the EPA and reflected in the decision
that it was expected that any permit filed for the third
adjacent parcel would be substantially identical to the ones
already filed. So in that case, the EPA did in fact have two
permits in hand which were substantially similar, if not
identical, to that which would be filed for the third parcel.
So that's a complete different situation than we have here
where of course there've been no permits filed anywhere at or
near the Pebble Deposit Area.
Mr. Brooks. Thank you, Mr. Chairman, and I yield back.
Mr. Babin. [Presiding] Yes, sir. Thank you. And I now
recognized the gentleman from Virginia, Mr. Beyer.
Mr. Beyer. Thank you, Mr. Chairman.
Secretary Cohen, Mr. Scheeler, Pebble's been blasted by
Members of Congress from both sides of the aisle for years
because for over a decade they haven't filed the mine permit.
Mr. Secretary, you talked about there's nothing that the state
can do, the EPA can do to compel them to do it. At the same
time, they went to the SEC and did detailed information for
investors on this, and I understand that much of what the EPA
based their 404(c) determination on was Pebble's information to
the SEC.
How much of EPA's decision to move forward was based on
frustration that emerged from the fishermen who depend on this,
from the Native Americans, from the people of Alaska that this
was just a sword of Damocles hanging over their head, that
Pebble was not coming forward with a mine permit and there was
a lot of pressure on the EPA to try to do something?
Hon. Cohen. Well, that's another policy issue, Congressman,
that I think needs to be addressed. If the State of Alaska,
which owns the property, and have given mining rights to Pebble
is there a requirement that they file a defined plan, a
specified defined plan, in a certain time frame. I mean, it
would seem to me that for the government to say you must file
something is really kind of preempting certainly the state's
interest in this and certainly Pebble's interest but any time a
landowner including the State of Alaska is forced to take
action, which it says it's not ready to take or the individual
involved who owns the property right or the mineral right, you
must do this, it seems to me that this is a policy issue which
I think Congress needs to look at closely.
If you think 404(c) should be applied and can be applied on
multiple occasions, not just this one but multiple occasions
without a permit having been filed, then that's a very big
policy decision, and I think it's worth--I think you need to
explore it. I think this is very important.
And I would tell the Committee and the people who are here,
I've been a big supporter of EPA. Historically, I've supported
much if not all of their work in the past certainly when I was
a Member of Congress, but I also felt when I was in the Senate
and the House that I wanted every agency to act as openly and
fairly as possible and you come to the situation where you say
I'm going to force you to file a plan before you're ready. I
think that trespasses upon the state's right and also the
individual's rights. That's a personal opinion. It's a policy
decision which I think you need to raise and hopefully resolve.
Mr. Scheeler. And Mr. Congressman, I think you would be
careful about going from the statement that there's been
something submitted to the SEC to the conclusion that there
could have been a permit filed. They are very different.
We spoke to Mr. Ghaffari, who wrote the Wardrop Report to
which you're referring. That report basically focused on what
was in the ground, that is, are there enough valuable minerals
that this could potentially be a viable project. A permit
application, on the other hand, focuses on how you get that out
of the ground and whether you can do it safely or not in
accordance with environmental regulations. So there're two very
different documents. As a result of that, EPA not only had to
rely on the Wardrop Report but fill in a lot of blanks where
Wardrop did not have the type of information you would find in
a permit application and so they used what they called
conventional mining techniques. So in trying to equate the
Wardrop Report to what a mine application would look like, I
really think we're dealing with an apples-and-oranges
situation.
Mr. Beyer. All right. Thank you very much.
Mr. Chair, I yield back.
Mr. Babin. Thank you.
And Mr. Secretary, I have a couple of questions. The--do
you believe that the Environmental Protection Agency followed
the proper process when determining, evaluating, and
identifying the science behind the Bristol Bay Watershed
Assessment, and if this has already been asked, I apologize. I
had to run down and vote. You know the procedure.
Hon. Cohen. The answer is no. I think there was not the
fairest process that should have been employed, and that's
where it comes down to this element of fair. Do I think the
State of Alaska, Pebble were treated fairly in the sense that a
report that was used and filed with the SEC, and Mr. Scheeler
has just mentioned, and then to have a watershed assessment
filed and to then represent to the Pebble Partnership and to
the State of Alaska this watershed assessment is not going to
be used as a basis for our decision when in fact it was used as
a basis for their decision. So that gets into the issue of, is
that a fair way to treat a key participant that we're not going
to use this because this is really incomplete. It doesn't have
anything to do with mitigation efforts that might be developed.
They might be insufficient. I don't know. But under the normal
NEPA process, at least the Corps of Engineers would have a
recommendation as to whether there is scientifically valid
technology and processes available that would reduce or
mitigate the damage that could be caused to the environment.
None of that was included, and EPA recognized it, saying look,
this doesn't seek to compensate for the regular NEPA process
but the implication was, we're not going to use it as the basis
for determination, and that's precisely what they did. They
used the assessment as the basis for their determination.
Mr. Babin. So if I'm understanding correctly, Mr.
Secretary, how much, in your opinion, of the EPA review process
for this project really depended on science that was
specifically from the Bristol Bay Watershed Assessment?
Hon. Cohen. Well, there was a great--I should be clear on
this. There was a great deal of science that was supplied. The
opponents of the mine, they had many talented science experts
present information. I think Pebble also had their scientists
present information. There was disagreement. If you look at the
comments in the peer review, you will find that in the peer-
review process, there were citations of where the watershed
assessment plan was deficient, and it pointed out you haven't
taken into account what the Army Corps of Engineers would do
and designate whether or not there were mitigation techniques
that could be applied whether there could in fact be a
reasonable way and a responsible way for controlling the damage
from any potential harm to the environment, which is an
important consideration.
Mr. Babin. Certainly.
Hon. Cohen. And so I think there's science on both sides. I
decided I'm not a scientist and I wouldn't even step into this.
It's beyond my capability. But I respect the individuals who
submitted scientific reports on both sides. I just think
there's a difference of opinion in terms of whether or not you
should have the benefit of having the best technology
available, have that presented as evidence through the Army
Corps of Engineers. That was not done, and so I think that's
the point that needs to be focused upon.
Mr. Babin. Absolutely. One more question. Why is having an
unbiased scientific process important for determining the
environmental impact from this project?
Hon. Cohen. Well, you'd like--you would hope you would take
the politics out of something this important. This is important
to the State of Alaska, to the tribes--no, I think the tribes'
members who have traveled from Alaska or who represent the
tribes of Alaska, this is important to them. This--salmon's
important to the economy of Alaska, and to not only Alaska but
the Lower 48 states as well. And so--and it's also important to
the State of Alaska to say whether or not we can have economic
development in an area that we specifically have designated for
economic development in the form of mining. So there are big
issues involved, and my point is, when you've got these kinds
of issues involved, isn't it the best way to pursue it is do it
through the traditional process that you have used historically
on those 13 occasions when you invoked 404(c), do it when an
application's been filed. And Pebble can say I'm not ready to
file it yet. That's--I think that's up to them. They may need
more--they may be looking for more technology that would
satisfy EPA, but that's a decision. Can EPA force you to do it
when you're not ready, and that's a policy decision that
Congress is going to have to act upon.
Mr. Babin. Okay. Thank you very much.
Now I'd like to recognize the gentleman from Georgia, Mr.
Loudermilk.
Mr. Loudermilk. Thank you, Mr. Chairman, and thank you both
for being here.
As a ten year resident of Alaska who did some recreational
mining, this is--I can equate to what you're going through, but
question for either one of you, Mr. Secretary or Mr. Scheeler.
In the course of your investigation, did you determine whether
EPA employees were using private email accounts to discuss
official EPA business with outside groups opposed to your mine?
Hon. Cohen. The answer is yes. There were--and we
documented that in the report. There were a number of occasions
when private emails were set up to conduct business, which
violates actually EPA's own rules, in the aspect that those
private conversations or communications need to be filed with
EPA. There----
Mr. Loudermilk. What kind of information was included in
those emails?
Hon. Cohen. Well, that's--I indicated information that's in
the email file in those documents but I want to get to this
point. There was a case of Mr. North, Phil North, who was very
instrumental in recommending a process, a 404(c) process. His
computer crashed. Not to be unexpected. It happens. His
computer was not backed up, and as a result of that, a year or
plus years' worth of correspondence was lost. Now, the best
person to explain this of course is Mr. North. We tried to make
contact with him. I know this Committee or Congress has tried
to make contact with him. The latest information I have is that
he retired from his position in Alaska, then went on a sailing
trip around much of the world. I first tried to find if he was
living in New Zealand but now I'm told he's living in
Australia, and has refused to respond to requests to meet with
him, talk with him. As a matter of fact, he is under subpoena
now for a trial taking place in Alaska on November 12th. So I
think he would be the best person to say what was in that. I
don't know. It might be totally benign. I mean, this is the
issue. It might be perfectly legitimate what they were
communicating. I don't have any way of knowing yet. I don't
want to prejudge it. But there were missing emails, and----
Mr. Loudermilk. And these were personal, using personal
email accounts?
Hon. Cohen. Outside of the official government----
Mr. Loudermilk. Do you know why they would use personal?
Hon. Cohen. You would have to ask Mr. North and you would
have to ask others who had these exchanges with--and they would
go to the Administrator as well.
Mr. Loudermilk. Mr. Scheeler?
Mr. Scheeler. Just to provide one example, in the summer of
2010, a number of area native tribes filed a petition with the
EPA asking them to invoke or commence a section 404(c) process.
In the months that preceded the filing of that petition, the
attorney for the tribes sent to Mr. North, who was the
principal EPA liaison with the tribes, a draft of that petition
along with other documents which had been labeled apparently by
the counsel for the tribes' ``attorney-client privileged.'' So
drafts were exchanged between the EPA representative and
between the tribes in the months prior to the actual filing of
the petition. Now, that petition was consequential because EPA
used that petition sand said they were responding to that
petition as their basis for deciding to ultimately proceed with
the BBWA, the Bristol Bay Watershed Assessment, which in turn
ultimately triggered the 404(c) proceeding.
Mr. Loudermilk. Let me make sure I understand what you're
saying here. Mr. North, who was an employee of the EPA,
correct?
Mr. Scheeler. Yes, sir.
Mr. Loudermilk. You're saying he used a personal email
account, drafted a letter for the Native corporation or agency
for them to use as a document as a petition? Am I getting
that----
Mr. Scheeler. No, not exactly. That's--what I'm saying is,
a draft of the petition and related materials were sent by the
lawyer for the tribes----
Mr. Loudermilk. Okay.
Mr. Scheeler. --to Mr. North and then ultimately----
Mr. Loudermilk. To his personal email?
Mr. Scheeler. To his personal email. Ultimately what we see
filed in June is the petition. It is different in some respects
from the draft that was sent earlier. We do not have--we're not
sure if we have all the email correspondence so we do not know
whether Mr. North provided comments or any of the changes were
due to his input or otherwise, but we did find it remarkable
and we did remark upon it the fact that a draft petition was
being sent to the EPA along with attorney-client-privileged
documents in the months preceding the filing of that petition.
Mr. Loudermilk. I find it remarkable too.
One last question, Mr. Secretary. Being in government
before, is this appropriate to use private--it seems to be a
trend that we're seeing now using private email accounts. Is
this, in your opinion, professional opinion, an appropriate way
to conduct government business?
Hon. Cohen. In my opinion, no. I think if you're going to
communicate, you have to do it using government property and
government channels. There may be an occasion where someone
gets a call or someone gets an email that is of a business
purpose but under EPA's own regulations, that should be
immediately filed with the EPA so that the public can then see
whether or not a public issue was being discussed privately
without disclosure so----
Mr. Loudermilk. I guess----
Hon. Cohen. --I think the basic rule is, don't do it, but
if there are extraordinary circumstances that require it, that
something happens in terms you have to get in touch with a
higher level official, just make sure it's fully filed with the
agency.
Mr. Loudermilk. But let's just hypothetically--I know I'm
running out of time here, Mr. Chairman. But hypothetically, if
I wanted to get around FOIA, I could use a private email
account to try to do that?
Hon. Cohen. You could.
Mr. Loudermilk. Okay.
With that, Mr. Chairman, I yield back.
Mr. Babin. Thank you, Mr. Loudermilk.
I'd like to recognize the gentleman from California, Mr.
Takano.
Mr. Takano. Thank you, Mr. Chairman. Thank you both for
being here today.
Mr. Scheeler, the report stresses that you conducted an
independent review although you were paid by the Pebble
Partnership to write the report, but I've learned of a recent
transaction that raises some questions about the association
between your law firm, DLA Piper, and Northern Dynasty, the
parent company of Pebble Limited Partnership. I'd like to put
up a slide, if I may.
[Slide.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
This slide here, slide one, shows that on October 28th,
nearly 9 million shares of Northern Dynasty stock worth more
than $2.7 million were transferred to a British Columbia
company listed by its business number 1047208 BC Limited. Slide
two, please.
[Slide.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Actually, is it slide two or slide three? Well, this slide
clearly identifies Stewart Morrow listed as the contact for the
business 1047208 as a DLA Piper partner. Last slide, please.
[Slide.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
This slide shows that the address this numbered company
provided on a British Columbia Securities Commission form is
the same exact address and suite number as DLA Piper's
Vancouver office.
Now, Mr. Scheeler, I don't know the background or specifics
about this transaction but I do believe the mere fact that a
DLA Piper partner was involved in a significant business
transaction involving the parent company of the Pebble
Partnership less than 6 weeks before you and Secretary Cohen
released your independent review of the EPA's actions regarding
Northern Dynasty's proposed Pebble Mine in Bristol Bay does
raise serious conflicts of interest and questions about the
independence of your report.
Were you aware of this transaction before the release of
the Cohen Report?
Mr. Scheeler. Absolutely not, and thank you for the
opportunity to respond to this issue. We just learned about it
yesterday when we got a call from a reporter. Prior to that
time, neither I nor anyone on my team had any idea or knowledge
about this transaction. So the fact of this transaction could
not and did not play any role in connection with the
preparation of the report or the development of the
investigation because none of us knew anything about it until
yesterday.
When I did learn of it, I did inquire of management, and
what I did learn from them yesterday is that DLA Piper Canada,
the Vancouver office with whom we combined just this past
April, acted on instructions of a long-term client to create
the entity that's referred to there you have in slide one and
that client used that entity to make a purchase of stock
without any direction or consultation with DLA Piper.
So the short answer is nobody on our end knew anything
about this until yesterday, and nobody in Vancouver had any
access or information about what we were doing on behalf of The
Cohen Group.
Mr. Takano. Well, it would seem to me before issuing a
report of this importance to maintain the aura of its
independence so there's no even appearance, there's no
appearance of even a conflict, that law firms of your size
would conduct, you know, a check, a conflict check of some
kind. I realize big firms, the left hand may not know what the
right hand is doing but still, I think it's--I think an
independent, objective observer would see that a law firm
that's taken on quite a bit of an acquisition here of stock in
a company, I mean, it would raise in that person's mind the
idea of this report being so independent.
Mr. Scheeler. Let me make clear, there may be a
misassumption that you have. It was not the law firm that
acquired the stock. The DLA Piper Canada law firm has zero
interest in that stock. That stock was purchased by a client of
DLA Piper. All that DLA Piper Canadian did was create the
corporation which the client used as a vehicle to purchase the
stock. In other words, the client purchased the stock and put
it into that company and established Mr. Morrow as the contact
point for that company. But my understanding is, neither Mr.
Morrow nor DLA Piper Canada nor any DLA attorney or entity have
any financial interest whatsoever in Northern Dynasty.
Mr. Takano. Just finally, if you would please follow up and
get back to the Committee to let us know of any other DLA
attorneys that may have had involvement that DLA attorneys
might have had with Northern Dynasty or the Pebble Partnership
during the time you were working on the Cohen Report, the Cohen
Report's independent review of the EPA actions in Bristol Bay.
I mean, it would be helpful if--you probably did that thorough
review of any involvement of your partners or the company.
Mr. Scheeler. We would be happy to do so.
Mr. Takano. Thank you.
Mr. Babin. Thank you.
Now I'd like to recognize the gentleman from Alabama, Mr.
Palmer.
Mr. Palmer. Thank you, Mr. Chairman, and thank you to the
witnesses.
Secretary Cohen, in your investigation, did you determine
that EPA employees had considered using 404(c) of the Clean
Water Act long before EPA had obtained any science on the
impacts of the mine?
Hon. Cohen. I indicated in the report that there were
allegations to that effect and that there was some indication,
some examples that were cited in the report of conversations
had as early as 2005 on the part of Mr. North talking to others
that this was something that would be ripe for a 404(c)
application. In addition to that, there were a number of
matrixes set out, a pro and con matrix, for the Administrator
to look at to say well, if we go the NEPA way, here's what
happens. If we use 404(c), we have these advantages. And so
there were indications that long before they made a
determination that this has been something that they were
considering. Also, there's a budgetary issue involved. It
appears--and again, this is something that we couldn't really
confirm but it appears that money was being requested as early
as 2009 in order to carry out the 404(c) investigation. There
were--it's in the 2010 budget, it appears to be in the 2010
budget of EPA. To get it in the budget, you would have to have
started talking about it as early as 2009. So there's--there
are a lot of examples. I didn't come to any conclusion that
there was--that they in fact had made that decision but there's
enough there for you to want to follow up on to say how come
these processes were used that early.
Mr. Scheeler. And we did, I might add, provide EPA's side
of the story. While they didn't speak to us, they provided
written record with respect to this. They contend that the
documents described by Secretary Cohen were by lower-level
employees, they were preliminary, they were not decision-making
documents, and so I think that's the way they've articulated
their side of the story thus far.
Mr. Palmer. But even though it's lower-level employees,
wouldn't that be indicative of a, I guess, an attitude of
predetermined predetermination?
Hon. Cohen. Well, if you look at the matrix, one of the
interesting things you will note is that the--in that matrix it
says this is unprecedented, this action under 404(c) would be
unprecedented. Number two, if you take action here, it would
allow EPA to be able to take greater control on the political
spinning of an issue. So these were laid out as potential
actions, pros and cons. If you go 404(c), here are the
benefits, here are the liabilities. It's likely if you go
404(c) that you'll stimulate litigation. You're likely to run
into litigation. It's likely to be fought legally.
So the Administrator had to look at these issues and make a
decision based on the pros and cons, and obviously came out in
favor of using 404(c) without the filing of the plan, and based
it upon the hypotheticals that we mentioned in the report,
three hypotheticals in terms of what the size might be, and
again, an issue for Congress. Is this something that comports
with a government's obligation to be as forthcoming and fair as
possible?
Mr. Palmer. And you know, that's part of my concern with
how the EPA does business and what we've seen in this Committee
is that EPA makes a determination based on science and then
will not turn over the data to back up the science that they
used for the decision, but in this case, it seems that there's
a predetermination without any science.
Hon. Cohen. Oh, I think--I think there's science involved,
Congressman. I really do. I think that I disagree with the
method used here but I don't question EPA's calling upon
experts with great scientific background.
The issue for me is there's science on both sides, and
that's up to the courts and others and Congress to reconcile.
But the issue for me is whether or not that you would use a
process whereby you preclude in effect a company like Pebble
from saying yes, we are going to dredge this amount of land,
we're going to do this amount of change to the environment or
harm to the environment but we also have some mitigation
measures which we feel will give EPA and the State of Alaska
and the people of the Greater 48 an opportunity to see that
we've got the best possible science that's being developed on a
day-by-day basis. That's the part that is missing here. I don't
question the science used by EPA to say these things would
happen. I just question whether or not they have precluded an
equally compelling case to be developed by the Pebble people.
Mr. Palmer. Thank you, Mr. Chairman. My time is expired. I
yield.
Mr. Babin. Yes, sir. Thank you.
And I'd like to recognize the gentleman from New York, Mr.
Tonko.
Mr. Tonko. Thank you, Mr. Chair.
Mr. Cohen, I have a series of questions about your report,
and please answer a simple yes or no. Did you make any public
announcement of your intention to initiate a review of EPA's
actions?
Hon. Cohen. I made a public announcement. I had a press
conference.
Mr. Tonko. So the answer is yes. Have you disclosed the
names and affiliations of the original 200 to 300 people you
solicited to participate in your review?
Hon. Cohen. Not all the names, the numbers--.
Mr. Tonko. Yes or no.
Hon. Cohen. No.
Mr. Tonko. Have you disclosed the names and affiliations of
the 60 people who responded to your letters and who
participated in your review?
Hon. Cohen. No.
Mr. Tonko. Are the individuals' responses or the questions
or other information you solicited from them publicly
available?
Hon. Cohen. We can arrange for them to be----
Mr. Tonko. Yes or no. Are they available?
Hon. Cohen. They're available if you call for them to be
published, yes.
Mr. Tonko. Did you subject your questions and methodologies
used in the review to public or outside expert input or comment
regarding the validity of your questions and methodologies?
Hon. Cohen. I--the answer is yes.
Mr. Tonko. Before it was finalized, was your report
subjected to peer review by anyone unconnected with the
report's development, your firm or DLA Piper?
Hon. Cohen. It's not been subjected to peer review.
Mr. Tonko. Did you provide any preliminary drafts of your
report to the public?
Hon. Cohen. No.
Mr. Tonko. To EPA?
Hon. Cohen. No.
Mr. Tonko. To the State of Alaska?
Hon. Cohen. No.
Mr. Tonko. To the Pebble Mine Group?
Hon. Cohen. No.
Mr. Tonko. To the 60 individuals who participated in your
review?
Hon. Cohen. No.
Mr. Tonko. Well, if I had an EPA witness here, the
responses would have demonstrated that they used a far more
rigorous and public process to conduct its business than you
used to produce this document. This document is little more
than a slanted reiteration of the timeline of events. It deals
with neither scientific nor legal issues. Your report was
privately commissioned and done in a closed process that was
subject to little scrutiny. It appears to be little more than
your opinion, an opinion that just happens to align with that
of your client.
I'd like to point out one small example of the report's
bias. Your report describes numerous meetings and
communications between EPA and your client in objective,
dispassionate terms. Fine. But when it comes to describing
contacts between EPA and any of your clients' opponents, all of
a sudden these are evidence of bias on the part of the agency.
Nonsense. It is evidence that EPA is being responsive to
citizens asking for help. Your client has used this Committee
and the Freedom of Information Act and firms like yours to
harass and discredit its opponents. It's not working.
As more people become aware of the unique beauty and value
of Bristol Bay for Alaskans and for the Nation, the region and
its people are gaining more support. By contrast, your client's
reputation and credibility are losing ground and apparently
investors, and this project is being exposed as a potential
environmental and social nightmare.
I have enough experience in Washington to be very familiar
with the tactic of trying to validate something by simply
repeating it. You can label your report ``independent'' and you
can repeat the word as many times as you like but a report
produced at the behest of a client who paid you and your team
is not independent. A report that was produced with no public
scrutiny or independent review of the methodologies, the
information sources or findings is not independent. All you
have exposed is the agency responding to the people of Bristol
Bay who are trying to preserve their livelihoods, their
culture, their communities, and their environment from
predation by a foreign company that will take far more from
them than it will ever provide.
And with that, Mr. Chair, I yield back.
Hon. Cohen. Mr. Chairman, if I could----
Chairman Smith. Yes, Secretary, please respond.
Hon. Cohen. I appreciate the comment that was just made but
I'd be willing to say I've never questioned your integrity,
Congressman, and if it came to a question of--questioning mine,
I'd be willing to put my reputation up against yours any day.
Chairman Smith. Thank you, Secretary Cohen.
Mr. Scheeler. If I could just add to the notion that this
was just opinions that we made up, the fact of the matter is,
we borrowed and investigated and see what others had to say
about it, and so in terms of, for example, which process was
more robust, which process should be used to decide whether or
not to build a mine, we really relied upon what the Army Corps
of Engineers said. They said that without a permit application,
there was no way to evaluate the potential discharges associate
with the Pebble Deposit. So if the Army Corps of Engineers with
all their expertise could not do this, how could EPA or anybody
else? That helped inform our inclusion--our conclusion.
EPA made many statements that also helped inform our
conclusion. For example, they admitted in publishing the BBWA,
the Bristol Bay Watershed Assessment, that this was not an in-
depth assessment of a particular mine, that they did not do a
formal determination of compensatory mitigation, that only
takes place in the context of a permit/NEPA process. So the EPA
was quite candid about describing and exposing the gaps in
their analysis that would be filled by the more robust permit
process. And so the conclusions were not unique to us. They
actually come--if you look at the report, they actually come
from the EPA and Corps documents.
Chairman Smith. Thank you, Mr. Scheeler.
Let me say to the gentleman from New York, I wouldn't want
anybody to take down his words so I would suggest in the future
that he not impugn the integrity of any witness, and I think
that will lead to a more constructive exchange of ideas on this
subject.
And now we'll go to the gentleman from Arkansas, Mr.
Westerman, for his questions.
Mr. Westerman. Thank you, Mr. Chairman, and thank you,
Secretary Cohen, for your testimony today and for your service
to our country, and Mr. Scheeler, thank you for being here.
As we broach this subject of integrity and fair processes,
the EPA claims that they took their action against the Pebble
Mine because the agency received a petition letter asking them
to stop the mine by using a preemptive 404(c) action. Mr.
Cohen, can you explain what you found regarding this in the
course of your investigation?
Hon. Cohen. Well, I think that Mr. Scheeler has already
commented on this, that there is evidence that a decision--a
recommendation for a decision to go to 404(c) preceded the
action taken by EPA so that there is a fairly lengthy period of
time in which it's clear that it was not the petition that
activated this but rather that this was something that was
thought about as long ago as 2005, long before the agency took
action by instituting a so-called Bristol Bay Watershed
Assessment in 2011.
Mr. Westerman. So in the course of your investigation, did
you find that any EPA employees were assisting the petitioners
in their efforts to draft the letter?
Hon. Cohen. Again, Mr. Scheeler testified to this a few
moments ago, but there was correspondence from an attorney
representing the tribes sending a letter to Mr. North
suggesting or requesting any assistance he might want to give
or comment he might want to make on a potential petition filed
by the tribes. That was a subject matter we discussed earlier
where we don't know what Mr. North said in return. It was
communicated to Mr. North's private email account and not to
the public one.
Mr. Westerman. So in your opinion, is it appropriate for a
federal government employee to assist a group that petitions a
federal agency for action?
Hon. Cohen. I think it's appropriate if it's public. If
such communication is taking place and it's above board and
this is the EPA assisting tribes or others who have a very
strong interest in this, as long as it's fully disclosed and
above board, then I certainly don't have any question about
that.
Mr. Scheeler. Congressman, I think you put your finger on
one of the core issues that we identified that we could not run
to the ground because we did not have subpoena power but it's
obviously a very important issue you're raising. So without
subpoena power, we were unable to talk to Mr. North or Mr.
Parker, the tribe's counsel, and understand what the full
amount of collaboration, if any, there was, but that's
obviously an important issue, and you know, the question is,
what--you know, what did happen, if anything, in terms of
collaboration to put together the tribe's document, which was
said by the EPA to be really the act that kicked off the 404(c)
BBWA process. That's an important point. There may be benign
explanations for this interaction but we have not been able to
get to the bottom of it lacking subpoena power but it is an
important point to run down.
Mr. Westerman. And I know with the votes, some of us were
in and out, and maybe missed part of the testimony, so I
apologize for doubling up on the same question, but would it be
your recommendation that the Committee use its subpoena power
to try to get to the bottom of some of these questions?
Hon. Cohen. The answer is absolutely. You're the ones in
charge of this in terms of oversight over EPA. EPA should
welcome oversight by the appropriate committees, and I think
it's a policy decision that Congress really has to adopt here.
404(c) has been used 13 times in 43 years. They've used it
after a permit for a mine has been applied for. This is the
first time this has been used in this case without one. So I
think it's a policy decision.
Now, EPA may say look at the statute, look at the
regulation that went into effect without any comment, by the
way, look at that and say we have the power. Now, does Congress
feel they have the power? Does Congress feel that this should
be a model for watershed modeling for land-use planning? That
would have some pretty serious consequences to every state if
power had shifted to EPA in this fashion. So I think these are
issues of policy issues and you can get at them, Congress can
get at them through the subpoena power, and frankly, I would be
surprised if EPA wouldn't be willing to come before you and
testify as to exactly what has happened so that they can say we
did everything we feel we were required to do. I don't know why
you'd even be forced to issue subpoenas since you have
oversight over the EPA, and I don't know why they would be
reluctant to do that.
Mr. Westerman. Thank you, Mr. Chairman.
Chairman Smith. Thank you, Mr. Westerman.
And all members have asked questions of our panelists
today. We're going to take a five minute recess so we can reset
the witness table. And let me thank both Secretary Cohen and
Mr. Scheeler for their comments today, very, very helpful and
much appreciated.
We'll take a five minute recess.
[Recess.]
Chairman Smith. The Science, Space, and Technology
Committee will resume our hearing, and if Mr. Collier and Mr.
Halford would come forward and be seated? And I'll introduce
our two witnesses.
Our first witness on the second panel is Mr. Tom Collier,
Chief Executive Officer for Pebble Limited Partnership. Prior
to this position, Mr. Collier enjoyed a 40-year legal career
with Steptoe and Johnson. There, he helped guide companies
through the federal environmental permitting process. He has
worked on several Alaskan resource projects. In addition to his
legal career, Mr. Collier was the Chief of Staff for the U.S.
Department of the Interior. Mr. Collier received his bachelor's
degree in international relations from the University of
Virginia and his law degree from the University of Mississippi.
Our other witness is Senator Rick Halford, former Alaska
State Senator and Representative of Trout Unlimited. Senator
Halford served for nearly 25 years in the Alaska State Senate
with multiple terms as both Senate President and Senate
Majority Leader. In addition, he served as an RNC Committeeman
for Alaska and earned a Defender of Freedom Award from the NRA.
Prior to joining the Alaska State Senate, Senator Halford was a
float plane pilot, and he earned his bachelor's degree from
Alaska Methodist University.
We welcome you both, and appreciate your being here and
appreciate your patience as well since we're running a little
bit late, and Mr. Collier, if you'll begin?
TESTIMONY OF MR. TOM COLLIER,
CHIEF EXECUTIVE OFFICER,
PEBBLE LIMITED PARTNERSHIP
Mr. Collier. Thank you, Mr. Chairman and Members of the
Committee, for the opportunity to testify today.
As you all know, there's a well-worn pathway to build a
natural resources project in America. You file your permit
application. You go to the Corps of Engineers. The Corps of
Engineers selects an independent contractor to do an extensive
environmental impact statement, and then makes a decision on
your permit. In fact, the environmental organizations refer to
the environmental impact statement as the Magna Carta of
environmental protection, and in fact, I agree with them on
that characterization.
In our situation, however, EPA decided to abandon this
well-worn pathway, and for the first time ever in the history
of the statute, it's issued an intent to veto our project
before we've even filed a permit application.
The question is why have they done this, and a starting
point in that analysis is recognizing that there's no
environmental harm that will happen whatsoever if we're simply
allowed to go through the permit process. We don't get to build
a mine. We don't get to turn a shovel of dirt. In fact, we go
through the permit process. But you don't need to speculate on
why because we found documents, internal documents within EPA,
that clearly explain what their motive is, what their intent in
establishing this precedent is.
The first one is that they want the opportunity when
there's a controversial project before them to take
jurisdiction away from the Corps of Engineers, away from the
state, and to leave it unilaterally with EPA. Second, and this
is language straight from EPA documents, they want to establish
a precedent for proactive watershed planning for
sustainability. They want to be able to go out there and look
at a watershed and decide whether or not it should be a park or
it should be something subject to development. They want
something akin to local zoning authority to reside with EPA.
They want to be able to zone the watersheds of America. I don't
think the Clean Water Act gives them that authority.
The problem is, when a federal agency wanders off the well-
worn pathway, there's opportunity for mischief, and here that
mischief has been extensive. As detailed more in my written
statement, and as Secretary Cohen just eloquently testified to,
EPA, in my view, predetermined the outcome with respect to
Pebble. That's what the documents show. And they manipulated
the process in order to get to that outcome.
Just a couple of examples, and the record is full of many
of these examples. EPA says that they initiated this process
because petitions were drafted by Native tribes and submitted
to them. The documents show that as early as January, the year
before these petitions were submitted in June, an EPA employee
and an environmental activist colluded to draft those petitions
and then circulated them to the tribes that signed them. In
addition, they worked together, an EPA employee and an
environmental activist, to draft the decision memo that would
be used by the Regional Administrator. This was being done
before the petitions had even been filed and the decision memo,
the EPA decision memo, was being drafted not just in EPA but
was being drafted with the participation of environmental
activists. I worked in a federal agency that dealt with
environmental issues, and if that had happened on my watch,
that employee would have been fired that day. That's how
egregious this conduct is.
The BBWA that resulted from this has been characterized by
EPA as good science. It's not good science. How in the world do
you take a scientific look at the environmental impacts of a
project when you don't know what the project is? There's no
project on the table.
Second, what they did to get around this is they assigned a
biologist in Alaska to design the mine that they assumed Pebble
would design, and that biologist designed the mine--Phil
North--designed it so that it would have the most egregious
environmental impacts so that they could use those impacts as
their justification for deciding that the mine should be
vetoed. Phil North, by the way, fled the country in order to
avoid a subpoena from another committee of Congress.
Look, the impact of this preliminary veto, this preemptive
veto on Pebble has been devastating but it's not just an impact
on Pebble. This is going to have an impact across the country.
We have invested $750 million to get ready to go into
permitting, and EPA is trying to tell us unilaterally that we
cannot even initiate the permitting process. If you send that
message to people out there regarding natural resource projects
across America, nobody's going to stand in line to file
permits. Nobody's going to invest in the permitting process.
Thank you for your time today.
[The prepared statement of Mr. Collier follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Smith. Thank you, Mr. Collier.
Senator Halford.
TESTIMONY OF HON. RICK HALFORD,
FORMER ALASKA SENATE PRESIDENT
Mr. Halford. Thank you, Mr. Chairman, and thank----
Chairman Smith. Is your mic on? There we go.
Mr. Halford. Thank you, sir. Thank you, Mr. Chairman, and
thank you for the opportunity to testify. I'm one of the many
defenders of this watershed including departed friends like Ted
Stevens, Jay Hammond, and inspirational elders like Bobby
Andrew and Ofi Olsen, Mary Olympic and Violet Wilson. I'm here
today humbly in their behalf, and I believe that the people of
Bristol Bay who have been dependent on these resources for
untold generations, and I believe in the defense of the 14,000
jobs and the $1.5 billion annual fishery that's supported by
Bristol Bay wild salmon.
I live in Bristol Bay and in Chugiak. I've been a
commercial pilot and a hunting guide for all my adult life,
although I spent 24 years in a detour to the state legislature.
I retired as Senate President in 2003. In all my years in the
legislature, I never ran without the support of the Alaska
mining industry. I was active in their support. I believe that
mining is important to Alaska.
You've heard today that EPA has been unfair and has made
its mind up in advance. Neither of these things could be
further from the truth. The truth is that while EPA was far
from the first choice of the people of Bristol Bay in terms of
getting someone to listen, EPA was the only choice with the
authority and the jurisdiction that had the interest to help,
and sadly to me, that included the State of Alaska. The truth
is, EPA listened to the people of Bristol Bay and responded by
preparing the most objective assessment of the potential
impacts of a massive sulfide mine in this particular location.
If there's any unfairness in the discussion, it was
produced by Pebble. For years they've tried to manufacture
consent for their project. Their obvious efforts to manufacture
that consent collapsed under the weight of facts and growing
public opposition. Pebble has shown that it's willing to do or
say anything to advance this project. By now, the opposition
has grown to roughly 90 percent of the people in the region and
about 60 percent of the people in Alaska statewide. Of the 1.8
million comments EPA got, 85 percent were in support of the
process and EPA.
The more people have learned about this mine, the stronger
the opposition has grown. This is in part due to Pebble's
numerous false promises, and they're listed in my written
testimony in terms of when they're going to apply, when they're
going to apply and the continuous parade of changes in their
process.
Pebble's contention that the outcome was predetermined is
ridiculous. As an advocate, those of us in Bristol Bay couldn't
even agree on what to ask for. We didn't know anything about
404(c). We looked first to the state and then went on through
federal agencies in any way to look for help. EPA's action thus
far if finalized places protection on the resources of Bristol
Bay. Pebble must show that it can mine and protect those
resources. They can apply for a permit today, tomorrow, the
next day. Nothing has been vetoed. Pebble has the opportunity
to prove its critics wrong. They've done no field work for the
last two years, and they're only waiting for the right
political climate.
The stress and uncertainty on the people of Bristol Bay has
been a cloud for over a decade. If there's unfairness, it's the
unfairness to the people of Bristol Bay.
The uncertainty makes it difficult even for legitimate
mining projects to get support to develop in Alaska because of
that uncertainty. Senator Murkowski two years ago asked Pebble
to file their permits and get the process started. As Finance
Chairman and Presiding Officer in Alaska in years in the
process, I probably signed appropriations to sue EPA. My
attitude was not positive as we started this process, and I
know there are many issues and conflicts with EPA, but my
experience in Alaska with the EPA personnel from the
secretaries and the office people to the top administrators was
amazingly positive. It changed my perceptions about a huge
faraway bureaucracy. They came and they listened, and I want to
take this opportunity to thank those people because I think
they did their best in a difficulty situation in this one place
that I saw very extensively.
Today, the people of Bristol Bay are left with questions
and fear about the massive exploration project in the head of
their watershed. There are over 1,300 drill holes, thousands of
settling ponds, potentially acid-generating material in those
settling ponds, and tons of material stored on the land at
their headwaters.
Pebble should be using its resources to seal their problem
wells, to assure there's no acid drainage, and to clean up
their mess.
Now, I am fortunate to have wonderful children, and
whenever I say, particularly to my 13-year-old, clean up your
mess, his response is ``It's not fair.'' I think it is fair to
the people of Bristol Bay for Pebble to spend their energy to
clean up their mess.
Thank you for your time and your consideration.
[The prepared statement of Mr. Halford follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Smith. Thank you, Senator Halford.
Instead of recognizing myself first, I'm going to recognize
the gentleman from Texas, Mr. Babin, for his questions.
Mr. Babin. Yes, sir. Thank you, Mr. Chairman. I appreciate
it. And I want to thank the witnesses for being here as well.
I would ask that a slide be placed up here in just a
second, but first I want to ask Mr. Halford a question. You
were the recipient of the notes taken by a Trout Unlimited
colleague at a meeting between the EPA and several opponents of
the Pebble Mine, and I'd like to point everyone's attention to
some excerpts from these notes in light of the fact that we
just heard Secretary Cohen testify under oath that there should
never be any politics involved in the review process, but I
would point your attention to these notes, and this was a--
notes that was--that were from Richard Parkin, who is the
project leader of the Bristol Bay project and working for the
Environmental Protection Agency. It says where the bottom red
line, this is what he said. This is the EPA's own
representative at the time at this meeting. It said that--
clarified--it stressed that while a 404(c) determination would
be based on science, he says politics are as big or a bigger
factor. Now, how do you--was it your understanding, Senator
Halford, that politics would play as big or as big a factor as
what Mr. Parkin said than the science in EPA's decision to use
section 404(c) to stop the Pebble Mine, and bearing in mind
what Secretary Cohen had just testified just a few minutes ago?
Mr. Halford. Well, certainly I--you're talking about
something that happened in 2011. I don't remember anything
about it, and I can see the date but I don't know--I mean, I
don't think politics should be the factor. Obviously that's not
the way----
Mr. Babin. Tuesday, February 22nd, 2011, at 4:26 p.m.
That's the date and time.
Mr. Halford. I can't remember that conversation at all. If
it was a memo, particularly if it came by email, I'm one of
those people that still lives in an analog world so I have
trouble just keeping track of all my emails.
Mr. Babin. Well, in light of the fact that we just heard
Secretary Cohen say that in these types of decisions when we're
using--supposedly using science and we have the EPA's own
project leader saying that science does play a big factor but
politics can be a big factor or bigger factor. That leads me to
believe that this is not really based on science after all.
Mr. Halford. I have no idea how he was saying it. He might
have been saying it as an objection to what politics has
influence on. I don't know.
Mr. Babin. Okay.
Mr. Halford. I don't recall.
Mr. Babin. Mr. Collier, EPA's Bristol Bay project leader
Richard Parkin, whose name and quote is here, admitted that
politics would play as large a role as the science, in fact,
even a larger role, in its determination to stop the Pebble
Mine. If this is the feeling of the agency at EPA, how then can
the judgment and impartiality of the EPA be trusted at all in
these decisions?
Mr. Collier. Congressman, obviously I've questioned their
judgment in these proceedings, and I think this is one example
of why. I'd like to point out to the Committee that Mr. Parkin
was the leader of the scientific effort for this, and this is
what he's saying, and I think that's indicative of the problem.
Mr. Congressman, I've probably read more internal memos and
emails regarding this situation than anyone else in this room,
and this is just one of dozens of examples of this kind of
concern, and the criticism of Secretary Cohen's report that
it's not independent, what hasn't been criticized is the
detailed citation throughout that 350 pages where every one of
his statements has been cited back to a document from EPA to
verify its authenticity.
Mr. Babin. Thank you very much to both of you witnesses,
and I think the only conclusion you can draw is that science is
not the biggest criteria they use to come up with these
permits.
Thank you, Mr. Chairman.
Chairman Smith. Thank you, Mr. Babin.
The gentleman from Virginia, Mr. Beyer, is recognized for
his comments.
Mr. Beyer. Thank you, Mr. Chairman, very much, and thank
you to the witnesses.
The heart of the questioning today seems to me why did the
EPA feel the need to use the 404(c) process rather than just
wait for Pebble to file a mining permit. Senator Halford talked
about the stress and uncertainty of the people of Bristol Bay,
and I'd like to use my time to help the public understand why
the EPA took the actions that it has and to help show the
potential consequences of a mine failure in Bristol Bay.
The Pebble Partnership has pledged that they would operate
their mine safely and that it would contain modern engineering
practices that would prevent virtually any conceivable accident
from occurring, and they've repeatedly pointed to the Fraser
River in British Columbia and specifically the Mount Polley
Mine as a working example of a mine with modern engineering
that has had minimal impact on the surrounding environment.
I'd like to start by playing a video the Pebble Partnership
produced on the coexistence of mines and fish in the Fraser
River Basin several years ago.
[Video shown.]
So that is very encouraging. In 2012, in response to the
EPA's analysis of the potential impact a Pebble mine could have
on the Bristol Bay Watershed, John Shiveley, the CEO of Pebble
Partnership and now as Chairman of the Board of Directors,
wrote the EPA arguing that their analysis had faulty
assumptions based on outdated mining technology. He attached
seven White Papers including three by the international
engineering firm Knight Piesold and two papers that focused on
the coexistence of mining and salmon in the Fraser River. I've
prerecorded excerpts from that letter and those papers over a
video of the Mount Polley Mine's tailing ponds rupture. This
occurred in August 2014, sending 25 million cubic meters of
water and mine waste into the waterways of the Fraser River
Basin. If we can now play that video?
[Video shown.]
I want to emphasize that those--I was reading it but those
are not my words. Those came from the previous CEO of Pebble
Mine and the reports that were issued, so we see the incredible
irony and unhappiness.
So three questions that come out. What was the cause of the
Mount Polley tailings pond breach? An expert panel found that
the geological features of the tailings dam were neglected in
its construction and concluded that ``the design was doomed to
failure.'' Who designed the Mount Polley tailing storage
facility? It was the same firm that produced the three White
Papers that we read from, arguing that modern engineering
standards had prevented any failures at the Mount Polley Mine
and would prevent any future mishaps at Pebble's Bristol Bay
mine. It's also the same company hired to design Pebble's
tailings dam at the proposed mine in Bristol Bay.
Finally, what was the environmental impact of the Mount
Polley mine breach? Not yet clear but what is clear is that the
Pebble Partnership pointed to the Mount Polley mine as an
example of what we could expect from modern engineering
practices that would be used to construct their mine in Bristol
Bay. Hence, the stress and uncertainty of the people of Bristol
Bay.
Senator Halford, how do you respond to this? What are your
thoughts?
Mr. Halford. I guess the question, and there's been some
discussion about the uniqueness of the process and how the
process has gone, how hard the people of Alaska tried to get
somebody to listen for a decade or more, but I think the other
part of it is, this is the last greatest salmon resource left
on Earth. It's the only place where you have all five species
and the dependent culture totally intact. Is this the place
that we should experiment with something that has never worked
in all of history in a wet climate in a comparable size? I
don't think it is. I think it's a very, very dangerous
experiment, and again, if this one goes, it's the last one.
Salmon have been destroyed all over the globe, sadly.
Chairman Smith. Thank you, Mr. Beyer.
Mr. Collier--well, first of all, let me recognize myself
for questions, and Mr. Collier, would you like to respond?
Mr. Collier. Thank you. Congressman Beyer, I know that
you've been a champion, your career, of the environmental
impact statement process. This is exactly the kind of thing
that ought to be examined very rigorously and very thoroughly
in an environmental impact statement setting. And that's what
we're asking for. That's all. Just let us have due process.
As to your questions, though, I'm on record, have been
since the Mount Polley situation occurred, that we would not go
forward with any permit application without an independent
review of anything that Knight Piesold came close to on our
project.
But let me give you a little bit of background that you may
not know about this situation. Knight Piesold withdrew as the
engineer of record years before the failure of Mount Polley,
and they did so because of an express concern that the facility
was not being managed according to the way it was designed. It
was designed as a tailings facility to store essentially sand.
It was being used to store wastewater. And the reason the
facility failed is because there was way too much water in that
facility. And it essentially overtopped.
That's the kind of thing we need rigorous enforcement to
make sure doesn't ever happen anywhere in the world, especially
in America, and we would support that strongly.
There's an existing criminal inquiry going on in Canada
with respect to this occurrence, and if they find the facts
that are necessary, the industry will support where that should
go.
But we're the first ones to say that rigorous enforcement
of design characteristics are very important to the mining
industry everywhere in the world, and we're confident that
would be the case in America if we build ours in Alaska.
But the real point, Congressman, is we need an
environmental impact statement to look at these issues and lots
of other issues. And that's all we're asking for, just process.
Chairman Smith. Thank you, Mr. Collier.
My next question is this: What are the implications for
private property owners of the EPA's regulatory overreach? What
are the implications for the private property owners? They're
the ones to me that ought to be most concerned.
Mr. Collier. You know, Mr. Chairman, there's a lot of
criticism often of something that's called the Antiquities Act,
and that's the process by which the President of the United
States can sign a document and withdraw federal land and make
it a park. What you're faced with here through the use of
404(c) preemptively is the Antiquities Act on steroids because
now the Administrator of EPA can unilaterally sign a document
and withdraw not just federal land but withdraw state land and
private land and essentially declare it a park never to be
developed, without doing an environmental impact statement,
right?
This is outrageous. I think that private landowners around
America should be extremely concerned about what this precedent
can set. This gives EPA extraordinary powers that the statute
didn't give them. There's not a word in that statute that says
this is what ought to play out.
Chairman Smith. Okay. Thank you, Mr. Collier.
My last question goes to the appearance that taxpayers'
dollars were actually used to lobby against Pebble Mine. I'm
going to ask you what evidence we have of that, but I also, as
a way to emphasize the significance of it, want to read to
members of the Committee an excerpt from 18 U.S. Code paragraph
1913, lobbying with appropriated monies. ``No part of the money
appropriated by any act of Congress shall be used directly or
indirectly to pay for any personal service, advertisement,
telegram, telephone, letter, printed or written matter, or
other device intended or designed to influence in any manner a
Member of Congress, a jurisdiction, or an official of any
government to favor, adopt, or oppose, by vote or otherwise,
any legislation, law, ratification, policy,'' and so forth. The
penalties for doing so are fines that range from $10,000 to
$100,000 for each individual violation of that law.
Would you like to comment on that?
Mr. Collier. Well, I'm aware of the penalties of the anti-
lobbying statute. I know anyone that runs a federal agency in
America is quite aware of them. Congressman, I haven't seen any
documents that provide the kind of evidence that would be
necessary to bring a prosecution under the anti-lobbying
statute.
But I've got to tell you, I've got a lot of concern about
that issue in Pebble. My concern may be a step away, and
whether it's actually a violation of statute I don't know, but
the collusion between environmental activists and EPA in this
matter are extraordinary. There are over 1,000 times there were
contacts between them. They've documented 30 with Pebble to put
that into some kind of relative consideration.
The massive lobbying campaign and massive public relations
campaign undertaken by those environmental organizations that
were in constant contact with EPA, I can't help but wonder
whether EPA wasn't suggesting to them that maybe they could be
aided if those organizations did some lobbying for them.
Chairman Smith. Thank you, Mr. Collier. Just to reassure
you and others, we will be continuing our investigation into
whether or not the anti-lobbying statute was violated.
I thank you.
The next person up is the gentlewoman from Oregon, Ms.
Bonamici.
Ms. Bonamici. Thank you very much, Mr. Chairman. And again,
we absolutely need to hear from the EPA.
The people of Oregon and the northwest part of the United
States are keenly aware of the potential repercussions of an
open-pit copper mine and what those--what that would do to
sports fishing, commercial fishing in Bristol Bay. Pebble's
exploratory activities are already having a negative toll. A
2015 Alaska Department of Natural Resources report examined 24
of 1,300 exploratory drill holes and found that eight of those
24 had already leached acidic waste into waterways in the
region or have caused other environmental damage.
I have a copy of a reclamation petition dated November 3
filed by 15 Alaska-based organizations and individuals calling
for Pebble to assess the damage that they've caused and
demanding that they come up with a cost estimate and timeline
for remediation. And I ask that this petition be included in
the record, Mr. Chairman.
Chairman Smith. Without objection.
[The information appears in Appendix II]
Ms. Bonamici. And I also sent a letter to the EPA
Administrator McCarthy, along with several of my colleagues
from the Northwest. This is dated January 30, 2014, urging the
Administrator to use the authority given to the EPA under the
Clean Water Act to protect the Bristol Bay salmon fisheries
from the potentially devastating impacts of the proposed Pebble
Mine. And I would like to enter this into the record as well.
Chairman Smith. Without objection.
[The information appears in Appendix II]
Ms. Bonamici. Thank you. Senator Halford, I know you fly
over Bristol Bay regularly, and we saw some pictures. I wonder
if you could just mention what you see now and expand on the
current repercussions of the mining activities. But I want you
to be brief because I have another important issue I want to
ask you about.
Mr. Halford. Well, the last time I flew over it was
probably just about a week ago, and there was no activity but
an awful lot still left on the land. Two years ago, they
cleaned up their fuel dump on what they called, I think, Big
Wiggly Lake. But there hasn't been much of anything done since
then. And again, the settling ponds where they drilled down
through in some cases a mile deep into basically what's a
sulfur deposit if it were named for its biggest mineral, those
things have the potential of acid generation. They're sitting
there like test cells in the watershed. They're dangerous.
Ms. Bonamici. Thank you. And I need to ask you, too, that,
you know, we've heard a lot about subpoenas this morning and
also lobbying. I understand that there's been a significant
amount of money spent by the company lobbying as well and with
a public relations campaign. But could you talk a little bit
about this talk about at least 72 subpoenas that are going to
be issued or have been issued? What's the talk about that among
people in Alaska? Is it----
Mr. Halford. Well----
Ms. Bonamici. --stifling debate or silencing critics?
Mr. Halford. There's a very sad case that is--actually
turned around when it to the Supreme Court. But one of the
Constitutional Convention delegates and a former First Lady
filed a suit against the State and Pebble on water rights
application just to get notice. When they lost at the lower
court, Pebble proceeded to try and research to go after them
individually for the money, for the legal costs. They lost at
the Supreme Court so it never went forward from there.
But the point is these kinds of actions stop people from
trying to question what's being done out there. The same
organizations----
Ms. Bonamici. And I'm sorry to interrupt, but also want,
Mr. Chairman, to read from a letter sent to Secretary Cohen
from an Assistant Attorney General at the U.S. Department of
Justice in April. This is in response to a letter Secretary
Cohen wrote in March of 2015 to the Department of Justice about
the purported independent review of this issue. And the letter
from the Justice Department reads in part, ``the federal courts
provide the appropriate forum for resolving Pebble's
allegations against EPA.''
``As you are aware, this matter is in litigation in three
separate lawsuits filed by Pebble against EPA in connection
with EPA's assessments of the potential environmental effects
of Pebble's proposed mine activities.''
The letter continues, ``your review obviously overlaps with
the pending litigation.'' Then, the letter went on to say that
``Pebble has sought a preliminary injunction regarding Section
404(c) activities and the--purportedly, the letter said, ``so
it could maintain its legal rights and the status quo, not so
that it could launch its own private investigation into the
EPA's actions. Pebble is attempting to obtain government
information relating to its pending claims against the United
States outside of the normal discovery context.'' The letter
continued.
This letter is contained in a report released yesterday by
the Natural Resources Defense Council. That report is titled
``The Demeaning of Independence,'' which is a rebuttal to the
Cohen report. And I ask that this report, which contains the
letter I quoted, also be entered into the record.
Chairman Smith. Without objection.
[The information appears in Appendix II]
Ms. Bonamici. Thank you. And, Mr. Chairman, I do want to
emphasize that it would be inappropriate for this committee to
follow up on the advice that was raised earlier this morning
for the Committee to issue subpoenas for information that might
be used by the Pebble Partnerships solely as a tool in its
current litigation. The Department of Justice knows this and
recognizes it, and Members of this Committee should know that
as well.
Thank you, Mr. Chairman. I yield back the balance of my
time.
Chairman Smith. Thank you, Ms. Bonamici.
The gentleman from Texas, Mr. Weber, is recognized for his
questions.
Mr. Weber. Thank you, Mr. Chairman.
Mr. Collier, this question is for you. What is your
understanding of the decision EPA undertook to initiate the
Bristol Bay Watershed Assessment? Did the EPA initiate this
study to gather more information, or would--did it seem more
like a preemptive 404(c) action?
Mr. Collier. Congressman, if you give me just one second,
please, sir, to respond quickly to a couple of other----
Mr. Weber. Go ahead.
Mr. Collier. --points raised. There's been no finding by
the Department of Natural resources, based on the recent tour
that we had leached acidic waste into the environment.
The 24 wells were not random samples. The eight that were
leaking water, we took DNR to those eight because we had noted
they were leaking water to show them what was going on. We--
this--we brought this to their attention, and we wanted them to
see what we intended to do in order to plug that water from
leaking in the future. Any suggestion that we have any issues
out there, we are 100 percent in compliance with our permits.
Mr. Congressman, the--from the get-go there has been a
decision made at EPA to veto this project. There are countless
emails that show that. I saw a couple new ones just within the
last few days----
Mr. Weber. If I may, let me put you on hold right there. I
have a slide I wanted to get your take on----
Mr. Collier. Please.
Mr. Weber. --if we can put the slide up.
[Slides.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Weber. If you look at this email communication, it's
between EPA employees David Evans and Palmer I guess it's
Hough, H-o-u-g-h is how that would be pronounced----
Mr. Collier. Yes.
Mr. Weber. --regarding Alaska Senator Murkowski's press
release upon the EPA's announcement to conduct the Bristol Bay
watershed assessment. In it, David Evans writes, and I'm
quoting, ``interesting spin on EPA's announcement/decision. Her
communications would suggest no 404(c) would be done until all
the science is in.'' Now, here's the smoking gun. David Evans
says, ``obviously, that's not what we have in mind.'' Does it
get--when you see a statement like that, do you think a
reasonable person says the EPA's probably objective on this
matter?
Mr. Collier. And, you know, Congressman, this is one of
dozens, dozens of such emails. The one I saw just yesterday was
one where they--talking back and forth and one says to the
other, you know, there are two options. We can do a little
science and then veto it or we can just veto it without doing
the science. And they said, well, at least we don't have a
disagreement of what the end result is.
Mr. Weber. That's the juror to the judge. Judge, let's give
him a fair trial and then hang him.
Mr. Collier. Yes. Exactly. And that's why, you know, our
request continues to be just let us have due process. Give us
an environmental impact statement. Give us an independent to
review that environmental impact statement, and then we'll have
this debate.
We recognize there are environmental challenges with
building a mine in Bristol Bay, but we think we've got answers
to those if we can just get an opportunity to have that debate
and----
Mr. Weber. So you're in business. I own an air-conditioning
company 34 years. I've dealt with the EPA over Freon issues for
a long time. So as businesspeople, we would say, well, the
EPA's job is to be fair and an impartial judge if you will to
make an assessment based on something that you the business
community brings to EPA. It's not--we would--I would argue, see
if you agree, that it's not necessarily EPA's job to go out
before you bring them something and to tell you, hey, don't
bother bringing this to you because we're not going to approve
it. Would you agree with that?
Mr. Collier. Congressman, I do. And I think fair process is
what it's all about. One of the proudest things I've had a
chance to do in my career was to work with Vice President Gore
and Secretary Babbitt on the spotted owl timber issue in the
Pacific Northwest. And I was part of a team that was--helped
manage that situation. And our goal was for the first time in a
handful of times to be able to put together a scientific report
that would withstand judicial scrutiny, been thrown out a
number of times before because of process issues. And we did
that.
And there are a couple of things we did that were very
important. We made sure we had independent scientists that
didn't have pre-stated views----
Mr. Weber. Sure.
Mr. Collier. --on the issue. That did not happen here. And
we didn't allow there to be contact between the stakeholders
and the decision-makers as the process was going on. Those were
two fundamentally fair things we did, and neither of those is
present right here.
Mr. Weber. Well, I'm running out of time, but I would argue
that in this case it seems apparent to me that the EPA has
acted as judge, jury, and executioner in killing this project.
Mr. Chairman----
Mr. Collier. Prosecutor also, sir.
Mr. Weber. Mr. Chair, I yield back.
Chairman Smith. Thank you, Mr. Weber.
The gentleman from Arkansas, Mr. Westerman, is recognized.
Mr. Westerman. Thank you, Mr. Chairman.
And to follow up from the gentleman from Texas, I do
believe the discussion today has devolved more into whether
there should be a mine in Bristol Bay or whether there should
or shouldn't be a mine. But the real question here is about a
fair and impartial process to determine whether there should be
a mine. And, Mr. Collier, Secretary Cohen testified that EPA
employee Phil North and Jeff Parker, an attorney representing
groups opposed to the Pebble Mine, were in regular contact
about what action EPA could take with regard to the Pebble
Mine. As the CEO of the mining development company, how does
this make you feel?
Mr. Collier. I've always been shocked by the actions of my
government in this situation. You know, I've twice left my law
practice and gone into government service. That's an important
part of my family's history. And I can't believe that this is
the kind of thing--that politics has taken us where it's taken
us on issues like this.
As I read these documents, the reason we filed our Federal
Advisory Committee Act case--and that's a case, by the way,
where a federal judge has granted us a preliminary injunction.
And you know you've got to show you've got a likelihood of
succeeding on the merits before you get a preliminary
injunction.
But the reason we filed that case is--I took off to
vacation with me two duffel bags full of documents and sat down
and read them all. And at the conclusion of that I was shocked
with what I found because what I found was collusion between
the decision-makers and environmental activists. And we can't
allow that in this country. It's going to chase off investment.
It's going to stop people from wanting to step forward to put
these projects together.
The amount of money you've got to spend to get ready to go
into permitting is astronomical today, and we've done that, and
all we want is due process. And, Congressman, if you can do
anything to help us, we sure would be appreciative.
Mr. Westerman. Well, and this issue is about much more than
a mine in Alaska; it's policy that affects the whole country
and projects that could potentially take place all across the
country.
There's a slide I would like to have shown.
[Slide.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
This is from Phil North, who worked with the EPA. And it's
an email between Mr. North and Jeff Parker, who was an attorney
representing groups opposed to the Pebble Mine. And if you
look, the date on this is April 12th, 2009. And we see here
from Mr. North, he said, ``a few suggested edits. I keep trying
to include ecological impacts, but if they make the sentenced
awkward, then delete. Of course, ignore any suggestions
anyway.''
Given this email, Mr. Collier, from your perspective how
can you feel that Pebble Mine received any fair treatment by
the EPA?
Mr. Collier. It's been a long time since I felt we ever got
any fair treatment, Congressman, so it's a little tough to
answer that question. But this is one of the situations that
first shocked me so much. What's going on here--this is one of
a whole handful of emails. What's going on here is that EPA is
drafting the petitions that they said were then the reason why
they launched the process against us. I mean that's poppycock.
They launched this process against us because they'd always
planned to kill this project, particularly Phil North. And he's
helping draft the petitions that he then said were the reasons
why he initiated this process.
So it's not just that they were working on this together.
They then misled the rest of us about why they moved forward
with this proposed veto.
Mr. Westerman. So have you ever competed and lost in
anything?
Mr. Collier. Yes, I have.
Mr. Westerman. So have you ever felt like you were--you
competed and it was an unfair competition?
Mr. Collier. I have indeed.
Mr. Westerman. So we've all had times when we win and when
we lose, but it's a little bit harder to swallow when we feel
like it was an unfair competition. If you were able to go
through the process and your permit was denied and you couldn't
build the mine, how would you feel about it if you thought the
process was fair?
Mr. Collier. You know, if we go through the permit process
and we don't get a permit, that's an entirely different
situation. What galls me is that for the first time in the
history of the Clean Water Act, for the first time in handfuls
of Administrators of EPA there's been a decision made to put us
out of business before we even filed a permit application. I
think it's outrageous.
Mr. Westerman. It looks like I'm out of time, Mr. Chairman.
Chairman Smith. Thank you, Mr. Westerman.
The gentleman from Alabama, Mr. Palmer, is recognized.
Mr. Palmer. Thank you, Mr. Chairman.
Mr. Collier, Secretary Cohen testified that EPA employees
were considering preemptive 404(c) process for the Pebble Mine
as early as 2005. The documents obtained by the Committee show
that the EPA employee Phil North began preparing a record to
base a preemptive 404(c) action as early as 2009. Tell me, if
you would, explain to the Committee why these actions concern
you.
Mr. Collier. Well, there are two things that concern me,
and I think Secretary Cohen, much more eloquently than I'll be
able to do, put his finger on both of them. The first one is
even if they'd done this fairly, this is not a process you
should use in this situation. 404(c) preemptively is not
something you should use for a controversial project like this.
It deserves to go through the entire permitting process,
period.
But second, he also said that the documents that he looked
at raised serious questions as to whether the Agency hadn't
predetermined the outcome here. So even when they used a
process that I think they should never have used and that he
thought they should never have used, they then abused the way
they did that. So as I said in my opening statement, when an
agency wanders off of a well-worn pathway to create a unique
process, there's serious opportunity for abuse, and boy did
they do that here.
Mr. Palmer. I've got a slide I'd like for the Committee to
put up.
[Slide.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
And to the point you just made, this email appears to lay
out the playbook for initiating a preemptive 404(c) action. Is
it troubling that EPA employees appear to have made up their
minds in stopping the Pebble Mine so early in the process? And
how much faith can you have in the objectivity of the EPA to
evaluate the mine?
Mr. Collier. Well, I don't any longer have any such faith,
Congressman. I'm no longer surprised by these kinds of emails.
This is another one that I just saw quite recently, yesterday
for the first time and--with the release of another committee's
report. And I'm shocked at the number.
But let me also remind you, Congressman, that Phil North is
a guy that was using his private emails to hide, I suspect, the
most damaging of his emails.
Mr. Palmer. We've had some issues with private emails. You
may have heard of them.
Mr. Collier. Yes, I have. But--so this is what he says when
he's communicating on the EPA email process. I wonder what
those others say, Congressman.
Mr. Palmer. There's another slide I'd like to put up.
[Slide.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Here again it's very apparent that they--the playbook is
already laid out and has less to do with establishing the
actual science or determining the actual impacts of the project
or conducting objective analysis and more to do with appealing
to politics and optics to achieve a certain outcome at the EPA.
Would you agree with that?
Mr. Collier. I do agree, Congressman.
Mr. Palmer. It's almost--I hate to even ask the question,
but is that the correct way for an agency to make decisions?
Mr. Collier. Not at all. And also as I said in my opening
statement, when I was involved in government, these folks
wouldn't have been around anymore.
Mr. Palmer. Well, my--Mr. Chairman, if I may before I yield
back, I'd just like to point out that the topic of this hearing
is just another example of the EPA working outside acceptable
parameters, overreaching and in some cases--in this case it
just appears to be very manipulative of the process to reach a
predetermined outcome.
And we've seen it in other areas where the EPA is involved,
the ozone standards, the Clean Power Plan, the Waters of the
U.S., and now with Pebble Mine. I just think that at some point
the EPA has got to be held accountable for actions such as
this.
I yield back.
Chairman Smith. Thank you, Mr. Palmer.
The gentleman from Georgia, Mr. Loudermilk, is recognized.
Mr. Loudermilk. Thank you, Mr. Chairman. And it looks like
I'm the last one between several people flying home.
I'm just amazed. When I hear of all the questions and the
testimonies and, quite frankly, the evidence that I've seen,
this reads more like a novel. We've got predetermined outcomes.
You testified to potential collusion. Some of those involved in
the collusion have moved to other countries and will not
respond to our subpoenas or questions. And, Mr. Chairman, I
don't know how legal it is for us to do a CODEL down to
Australia, but if we need to go down there to get some answers,
you know, I may be willing to volunteer, but----
Chairman Smith. True.
Mr. Loudermilk. And of course the using of private emails,
this--Mr. Collier, as I hear the allegations of collusion,
that's very troubling, but what's even more troubling is the
evidence I see. It looks very overwhelming that this has
happened.
I would like to show you an email conversation between two
of the EPA lawyers, Cara Steiner-Riley and Keith Cohen, as well
as employees Phil North and Rick Parkin, who again I think Phil
is the one who is now in Australia. And they're discussing
conversations with Jeff Parker, who is an attorney representing
the groups that petitioned the EPA to use a preemptive 404(c)
action. Can we have the slide up?
[Slide.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
EPA attorney Cohen writes, number one ``my observation,
Jeff Parker is talking straight to Rick and Phil regarding a
matter which EPA is represented by counsel, Cara. I'm sure the
rules of professional responsibility in Alaska are like they
are everywhere and that they prohibit Jeff''--prohibit Jeff--
``from talking to either Rick or Phil without Cara's consent.
We are engaged''--we are engaged--``in a potentially adverse
proceeding with them, the petition, possible litigation. And
he's a lawyer who's kind of pumping us, me included, for
information he can use to help his client. It sounds like he's
talking to Phil about their 404(c) petition, the status of it
and how to help move it forward. He certainly did so with me.''
Now, if we could go to the next slide.
[Slide.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Cohen sends a followup email and writes, ``I just want to
clarify. I am not against helping Jeff or his clients''--again,
Jeff representing those opposed to the mine. ``I am not against
helping Jeff or his clients or siding with them on the
substantive issues.'' To me that sounds like predetermined
outcome, as well as collusion going on.
Is this some of the collusion that you have referred to?
Mr. Collier. It is Congressman. When I first saw this
collection of emails, and there are another four or five----
Mr. Loudermilk. And I do have another one to go to after
this.
Mr. Collier. --I was shocked. It's one thing to say that
it's improper for a lawyer to be talking to someone else's
client. That's an ethics rule that anyone who has practiced law
is familiar with. But it's like they completely missed the
ball. The ball is you shouldn't be talking to him at all,
nobody should, not about helping draft the petitions that are
going to be filed by the native communities, and, God forbid,
not about help letting him draft the decision memo for the
regional administrator. They completely missed the ball here.
And what it means is that they're colluding with
environmental activists on decisions Region 10 has to make
appear to be the way the region works.
Mr. Loudermilk. Let me--because I'm running out of time,
can we go ahead and go to the next slide here. And this answers
a question that I asked Secretary Cohen in the first panel.
Why? Why would you use a private email to conduct business,
which is totally improper? Why? Would it be to avoid the
Freedom of Information Act? Could that be why you would do
something like that? Let's look at this email.
[Slide.]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
``Cara, in terms of the record for the decision-making on
the 404 petitions, are message chains such as this one
protected from FOIA?'' This is asking are we going to be
protected from FOIA? I think this clearly gives the reason why
they're using private emails. ``Should we be concerned with
that?'' It appears that EPA employees were attempting to
prevent the release of this series of email communications
because it would show the inappropriate contact between EPA
employees and you.
Would you like to comment? I mean to me when I look at this
it's clear. It's clear that there was collusion, there was
predetermined outcome, there was potentially illegal activity,
definitely improper activity, as Secretary Cohen mentioned
early, that they used private emails to conduct official
business, which is against EPA policy. And by their own
admission, I think it's to keep the American people in the
dark, and they knew that they were doing wrong.
Mr. Collier. Congressman, I agree. And let me also remind
you that Phil North's laptop computer crashed, crashed----
Mr. Loudermilk. Yes.
Mr. Collier. --he was using his personal emails and he was
encrypting thumb drives that he stored documents on.
Mr. Loudermilk. They quit--need to buy the computers that
the IRS buys, I guess.
And so with that, Mr. Chairman, I yield back the balance of
my time.
Chairman Smith. Thank you, Mr. Loudermilk.
We have no other Members who want to ask questions.
Senator Halford, yes?
Mr. Halford. Just briefly, I'd like to say that although TU
has supported me, a number of other organizations in Bristol
Bay have also supported me, I consult for a lot of them and I
try to represent them all and work with them all, for them all.
They are concerned about fairness as well. They have been under
this cloud for well over a decade. They would like to see some
resolution. They went to the EPA.
When I first talked to EPA people, I was talking about
wetlands things. It had nothing to do with--and I didn't
understand or know anything about the 404(c) process.
Chairman Smith. Yes.
Mr. Halford. So I just wanted to make that clear.
Chairman Smith. Okay.
Mr. Halford. The people of Bristol Bay went to EPA. EPA
didn't come to Alaska to get involved.
Chairman Smith. Right.
Mr. Halford. People were concerned.
Chairman Smith. I just wish they'd followed proper process
and--anyway, Mr. Collier, anything you want to clarify?
Mr. Collier. [Nonverbal response.]
Chairman Smith. Okay. All set. Thank you both for your
testimony today. It was very, very helpful. And we stand
adjourned.
[Whereupon, at 1:32 p.m., the Committee was adjourned.]
Appendix I
----------
Answers to Post-Hearing Questions
Answers to Post-Hearing Questions
Responses by The Hon. William S. Cohen
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Responses by Mr. Charles Scheeler
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Responses by Mr. Tom Collier
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Responses by The Hon. Rick Halford
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Appendix II
----------
Additional Material for the Record
Report submitted by The Hon. William S. Cohen
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Documents submitted by Representative Suzanne Bonamici
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Report submitted by Representative
Elizabeth H. Esty
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Statement submitted by Trout Unlimited
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]