[Senate Hearing 114-30]
[From the U.S. Government Publishing Office]





                                                         S. Hrg. 114-30
 
                   OVERSIGHT OF THE MANAGEMENT OF THE
                   FEDERAL ENVIRONMENTAL PROTECTION,
            CHEMICAL SAFETY, AND FISH AND WILDLIFE AGENCIES

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

                                HEARING

                               before the

 SUBCOMMITTEE ON SUPERFUND, WASTE MANAGEMENT, AND REGULATORY OVERSIGHT

                                 of the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 14, 2015

                               __________

  Printed for the use of the Committee on Environment and Public Works
  
  
  
  
  
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                    ONE HUNDRED FOURTEENTH CONGRESS
                             FIRST SESSION

                  JAMES M. INHOFE, Oklahoma, Chairman
DAVID VITTER, Louisiana              BARBARA BOXER, California
JOHN BARRASSO, Wyoming               THOMAS R. CARPER, Delaware
SHELLEY MOORE CAPITO, West Virginia  BENJAMIN L. CARDIN, Maryland
MIKE CRAPO, Idaho                    BERNARD SANDERS, Vermont
JOHN BOOZMAN, Arkansas               SHELDON WHITEHOUSE, Rhode Island
JEFF SESSIONS, Alabama               JEFF MERKLEY, Oregon
ROGER WICKER, Mississippi            KIRSTEN GILLIBRAND, New York
DEB FISCHER, Nebraska                CORY A. BOOKER, New Jersey
MIKE ROUNDS, South Dakota            EDWARD J. MARKEY, Massachusetts
DAN SULLIVAN, Alaska

                 Ryan Jackson, Majority Staff Director
               Bettina Poirier, Democratic Staff Director
                              ----------                              

             Subcommittee on Superfund, Waste Management, 
                        and Regulatory Oversight

                  MIKE ROUNDS, South Dakota, Chairman
DAVID VITTER, Louisiana              EDWARD J. MARKEY, Massachusetts
MIKE CRAPO, Idaho                    THOMAS R. CARPER, Delaware
JOHN BOOZMAN, Arkansas               JEFF MERKLEY, Oregon
DAN SULLIVAN, Alaska                 CORY A. BOOKER, New Jersey
JAMES M. INHOFE, Oklahoma (ex        BARBARA BOXER, California (ex 
    officio)                             officio)
    
    
    
    
                            C O N T E N T S

                              ----------                              
                                                                   Page

                             APRIL 14, 2015
                           OPENING STATEMENTS

Rounds, Hon. Mike, U.S. Senator from the State of South Dakota...     1
Markey, Hon. Edward J., U.S. Senator from the State of 
  Massachusetts..................................................     3
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma, 
  prepared statement.............................................    57

                               WITNESSES

Elkins, Arthur, Inspector General, U.S. Environmental Protection 
  Agency.........................................................     4
    Prepared statement...........................................     7
    Responses to additional questions from:
        Senator Inhofe...........................................    19
        Senator Markey...........................................    24
        Senator Rounds...........................................    26
        Senator Vitter...........................................    31
Kendall, Mary, Deputy Inspector General, U.S. Department of the 
  Interior.......................................................    38
    Prepared statement...........................................    40


 OVERSIGHT OF THE MANAGEMENT OF THE FEDERAL ENVIRONMENTAL PROTECTION, 
            CHEMICAL SAFETY, AND FISH AND WILDLIFE AGENCIES

                              ----------                              


                        TUESDAY, APRIL 14, 2015

                               U.S. Senate,
         Committee on Environment and Public Works,
              Subcommittee on Superfund, Waste Management, 
                                  and Regulatory Oversight,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:32 a.m. in room 
406, Dirksen Senate Building, Hon. Mike Rounds (chairman of the 
subcommittee) presiding.
    Present: Senators Rounds, Inhofe, Crapo, and Markey.

            OPENING STATEMENT OF HON. MIKE ROUNDS, 
          U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA

    Senator Rounds. Good morning.
    I am very happy to be chairing the first Superfund, Waste 
Management, and Regulatory Oversight Subcommittee hearing.
    Ladies and gentlemen, we will begin this on time and we are 
going to try to be done in about 20 minutes after the hour in 
deference to Secretary Kerry. We will try to get through as 
much of today's testimony as possible. We will ask the members 
to submit any additional questions for the record and ask that 
you respond to those appropriately. We appreciate your being 
here.
    The Environment and Public Works Subcommittee on Superfund, 
Waste Management, and Regulatory Oversight is meeting for the 
first time today to conduct a hearing on oversight of the 
management of the Federal environmental protection, chemical 
safety and fish and wildlife agencies.
    I would like to thank our witnesses, Inspector General 
Arthur Elkins of the U.S. Environmental Protection Agency and 
Deputy Inspector General Mary Kendall of the U.S. Department of 
the Interior, for taking time out of their schedules to be with 
us today.
    I am honored to be chairing this subcommittee in the 114th 
Congress with my friend from Massachusetts, Senator Ed Markey, 
as Ranking Member. As subcommittee chairman, I plan to conduct 
full oversight of the Environmental Protection Agency and the 
Department of the Interior.
    The Inspectors General from these agencies can and should 
serve as a resource for these reviews and today's hearings 
serve as a starting point for this oversight plan. Inspectors 
General are tasked with independently conducting audits and 
investigations relating to agency actions and programmatic 
mismanagement.
    Not only are they an asset to congressional oversight, but 
their recommendations are effective in correcting 
mismanagement, waste, fraud and abuse at the EPA and the 
Department of the Interior. It is essential that the Inspectors 
General view Congress as a partner in this oversight process.
    Throughout this Congress, we will be focusing chiefly on 
good governance and making certain the agencies are operating 
transparently, responsibly managing taxpayer dollars and 
working to achieve their core missions without regulatory 
overreach so prevalent in agency actions today.
    More than ever, we are seeing agency regulatory regimes 
expanding Federal jurisdiction beyond their statutory limits, 
encroaching into private businesses, landowners' rights, and 
the States' ability to manage and regulate the environment and 
land within their own borders.
    Additionally, the EPA and the Department of the Interior 
are moving forward with implementing major environmental 
regulations impacting every sector of the U.S. economy and 
affecting hundreds of thousands of American jobs.
    We must make certain that the regulations these agencies 
implement are being written in an open, transparent process 
that allows for full public participation taking into account 
all views regardless of the agencies' notions of their goals.
    The EPA and Fish and Wildlife Service owe it to the 
American people to not only provide a thorough, transparent and 
honest analysis of how regulations will affect them but also to 
base these regulations on the most current and reliable 
economic data and sound science.
    Notably, these IGs have conducted recent investigations on 
mismanagement at the Chemical Safety Board, grant management, 
and administrative management issues. I look forward to hearing 
a review of the work the IGs have done regarding management of 
the EPA, CSB, and Fish and Wildlife Service along with an 
update of the reviews the IGs are currently undertaking.
    Again, I would like to thank our witnesses for being with 
us today and for presenting their testimony.
    Now, I would like to recognize my friend, Senator Markey, 
for his opening statement as well.
    [The prepared statement of Senator Rounds follows:]

              Statement of Hon. Mike Rounds, U.S. Senator 
                     from the State of South Dakota

    The Environment and Public Works Subcommittee on Superfund, 
Waste Management, and Regulatory Oversight is meeting for the 
first time today to conduct a hearing on ``Oversight of the 
Management of the Federal Environmental Protection, Chemical 
Safety, and Fish and Wildlife Agencies.'' I'd like to thank our 
witnesses, Inspector General Arthur Elkins of the Environmental 
Protection Agency, and Deputy Inspector General Mary Kendall of 
the Department of the Interior for taking time out of their 
schedules to be with us today.
    I am honored to be chairing this Subcommittee in the 114th 
Congress with my friend from Massachusetts, Senator Ed Markey, 
as Ranking Member. As Subcommittee Chairman, I plan to conduct 
thorough oversight over the Environmental Protection Agency and 
the Department of the Interior. The Inspectors General from 
these Agencies can and should serve as a resource for these 
reviews and today's hearing serves as a starting point for this 
oversight plan. Inspectors General are tasked with 
independently conducting audits and investigation relating to 
agency actions and programmatic mismanagement. Not only are 
they an asset to congressional oversight, but their 
recommendations are effective at correcting mismanagement, 
waste, fraud, and abuse, at the EPA and Department of the 
Interior. It is essential the Inspectors General view Congress 
as a partner in this oversight process.
    Throughout this Congress we will be focusing chiefly on 
good governance and making certain the agencies are operating 
transparently, responsibly managing taxpayer dollars and 
working to achieve their core missions without the regulatory 
overreach so prevalent in agency actions today. More than ever 
we are seeing agency regulatory regimes expanding Federal 
jurisdiction beyond their statutory limits, encroaching into 
private businesses, landowners' rights, and the States' ability 
to manage and regulate the environment and land within their 
own borders.
    Additionally, the EPA and the Department of the Interior 
are moving forward with implementing major environmental 
regulations impacting every sector of the U.S. economy and 
affecting hundreds of thousands of American jobs.
    We must make certain that the regulations these agencies 
implement are being written in an open, transparent process 
that allows for full public participation taking into account 
all views regardless of the agencies' notions of their goals. 
The EPA and Fish and Wildlife Service owe it to the American 
people to not only provide a thorough, transparent and honest 
analysis of how regulations will affect them but also to base 
these regulations on the most current and reliable economic 
data and sound science.
    Notably, these IGs have conducted recent investigations on 
mismanagement at the Chemical Safety Board, grant management, 
and administrative management issues. I look forward to hearing 
a review of the work the IGs have done regarding management of 
the EPA, CSB, and Fish and Wildlife Service along with an 
update of the reviews the IGs are currently undertaking. Again, 
I'd like to thank our witnesses for being with us today and for 
presenting their testimony.

          OPENING STATEMENT OF HON. EDWARD J. MARKEY, 
          U.S. SENATOR FROM THE STATE OF MASSACHUSETTS

    Senator Markey. Thank you very much.
    I want to thank you, Chairman Rounds, for holding this 
first hearing of the subcommittee. I am looking forward very 
much to working with you in this Congress on these very 
important issues.
    The offices of Inspector General are tremendously important 
to governmental integrity. These watchdogs must be independent, 
non-partisan and maintain the highest ethical standards to 
ensure the public's trust.
    In addition to fighting fraud, waste and abuse of power, 
they ensure the Government works the way Congress intended and 
the public deserves. For example, the Securities and Exchange 
Commission Inspector General uncovered the mishandling of 
whistleblowers' tips in the Madoff Ponzi scheme and the failure 
to take basic steps to stop it.
    In response, Congress passed the Dodd-Frank Act to protect 
whistleblowers and provide incentives and mechanisms to report 
and promptly remedy misconduct.
    Inspectors general also save billions of taxpayer dollars 
each year. For example, the Special Inspectors General for 
Afghanistan and Iraq reconstruction together recovered almost 
$3 billion related to waste and fraud associated with the 
government's reconstruction work.
    Your offices have also made notable contributions. For 
example, the former Department of Interior Inspector General 
identified a culture of ethical failure that occurred when the 
same office was responsible for oil and gas leases, revenue 
collection and enforcement of drilling safety and environmental 
regulations.
    Following this report, the department implemented a more 
robust ethics program and announced a major departmental 
reorganization to eliminate those conflicts of interest.
    The Environmental Protection Agency Inspector General has 
also done significant work in overseeing management and 
personnel challenges at both the Environmental Protection 
Agency and the Chemical Safety Board.
    The Inspector General has also found that the Environmental 
Protection Agency needs to improve oversight of the States' 
implementation and enforcement. In a 2014 memo, the Inspector 
General raised concerns about States' implementation and 
enforcement of environmental programs assigned to protect the 
public from beaches contaminated by dangerous levels of 
bacteria and to ensure proper long term monitoring of Superfund 
sites so that they are safe for reuse.
    For oversight by Inspectors General to garner public trust, 
transparency is key. Inspectors General have a responsibility 
to promptly report their activities, findings and 
recommendations to Congress and the public. Yet, in 2014, the 
Department of Interior, Office of Inspector General, closed 533 
investigations and released just 55 public reports.
    Inspectors General also rely on the cooperation of the 
agencies they oversee. As Mr. Elkins' 2014 testimony indicated 
when an Inspector General is faced with obstruction and 
obfuscation by an agency, inefficiency thrives unchecked and 
potential wrongdoing evades both notice and consequences.
    I agree with that. Agencies must cooperate to guarantee 
access to the information you need and to take corrective 
actions in response to your findings.
    I look forward to your testimony about the important work 
you do and how Congress can help you to do better do your job.
    I yield back the balance of my time.
    Senator Rounds. Thank you, Senator, for sharing your 
thoughts.
    Now, we will turn to our first witness, Mr. Elkins from the 
EPA, for 5 minutes. Mr. Elkins, you may begin.

      STATEMENT OF ARTHUR ELKINS, INSPECTOR GENERAL, U.S. 
                ENVIRONMENTAL PROTECTION AGENCY

    Mr. Elkins. Good morning, Chairman Rounds, Ranking Member 
Markey and members of the subcommittee.
    I am Arthur Elkins, Inspector General for EPA and CSB.
    Thank you for inviting me to appear before you today. This 
morning I will touch on a few matters I believe will be of 
special interest. However, my written statement provides much 
greater detail on these and additional topics. I will begin 
with audit highlights.
    Following OIG's criminal investigation of John Beale, an 
EPA senior policy advisor who defrauded the Government of 
nearly $900,000 while pretending to be an undercover agent for 
the CIA, OIG commenced a series of audits examining certain EPA 
processes.
    Two of those audits on timekeeping and use of 
administrative leave are ongoing. We expect to issue our 
reports in mid-June and late summer respectively.
    Simultaneously, OIG is conducting a program evaluation of 
how EPA and States are using their authorities to manage the 
potential impacts of hydraulic fracturing on water resources. 
This report too is on track for issuance in late summer.
    On the investigative front, last month, Florida jury 
convicted two scientists, a married couple, of wire fraud, 
identity theft and obstruction. They had fraudulently obtained 
about $10.5 million in small research awards, including several 
contracts with EPA, by using stolen identities of real people 
to create false endorsements. The investigative team included 
the EPA OIG. Sentencing in that case has been set for May 28 of 
this year.
    As an independent and objective office charged under the IG 
Act with oversight of management and program performance, it is 
critical that an OIG be able to carry out its work without 
obstruction.
    Two impediment issues, one at EPA and one at CSB, have 
forced Congress to become actively involved during this past 
year. At EPA, a unit called the Office of Homeland Security has 
impeded OIG's authority to investigate threats against 
employees and facilities and certain misconduct allegations and 
computer intrusions.
    After saying otherwise for months, OHAS now agrees that 
there is no category of activity at EPA to which OIG does not 
have unfettered access. FBI senior management confirms that FBI 
does not require EPA to withhold information from the OIG.
    Still, EPA has not rescinded a memorandum of understanding 
with the FBI that has precluded such information sharing. Also, 
important is the fact that OIG has been unable to resolve the 
issue of OAHS having an assigned criminal investigator while 
lacking any investigative authority.
    The second impediment to OIG relates to CSB. We requested 
documents following complaints alleging use of non-governmental 
email accounts to conduct official business which CSB officials 
refused to provide for more than a year.
    Not until I sent a 7-day letter and the House Committee on 
Oversight and Government Reform's Chairman and Ranking Member 
instructed Chairman Rafael Moure-Eraso to provide the documents 
did CSB substantially comply with the OIG's request.
    OIG's investigation found evidence sufficient to support 
the conclusion that the CSB Chair and two of its senior 
officials had violated the Federal Records Act in implementing 
regulations by using non-governmental email systems to conduct 
official Government business and not capturing those emails in 
the CSB records system.
    Ultimately, President Obama requested that the Chair 
resign. Mr. Moure-Eraso stepped down from that role last month 
and ended his membership on the Board this past Friday.
    Meanwhile, a former CSB Chief Information Officer has 
provided to the OIG a sworn statement alleging inconsistencies 
in the Chair's communication to me as well as during another 
HOGR hearing last month. My Office of Investigations has 
notified the U.S. Attorney's Office that the Chair may have 
committed perjury and certain other crimes.
    These items represent a sampling of OIG's work and 
challenges. We will continue to work with management at both 
EPA and CSB to help ensure that appropriated funds are properly 
managed and executed and accurate information is reported.
    I would like to leave the subcommittee with a thought. An 
OIG's recommendations are only as good as an agency's 
implementation of them. At this time, many of this OIG's 
recommendations to the agencies for which I have oversight are 
unimplemented and way past due. Money left on the table, so to 
speak, does a tremendous disservice to the taxpayers.
    Mr. Chairman, this concludes my prepared statement. I will 
be pleased to answer any questions you or subcommittee members 
may have.
    [The prepared statement of Mr. Elkins follows:]
    
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    Senator Rounds. Thank you, Mr. Elkins.
    We will now hear from Ms. Kendall from the Department of 
the Interior. Ms. Kendall, you may begin.

   STATEMENT OF MARY KENDALL, DEPUTY INSPECTOR GENERAL, U.S. 
                   DEPARTMENT OF THE INTERIOR

    Ms. Kendall. Thank you, Mr. Chairman and members of the 
subcommittee. Good morning. I am pleased to be here to testify 
about our oversight of the Fish and Wildlife Service.
    As you know, my office conducts a wide range of oversight 
of fish and wildlife programs and operations. Two of Fish and 
Wildlife's grant programs, the Wildlife Restoration Program and 
the Sport Fish Restoration Program, were among DOI's four 
largest grant programs in fiscal year 2014, disbursing about $1 
billion.
    For years, my office has provided consistent audit 
oversight to Fish and Wildlife for grants funded under these 
programs. When we took over this audit work, we created a 
small, dedicated unit to perform these audits, launched a 
systematic coverage cycle and established a uniform approach to 
all State audits.
    Our audit findings range from internal control issues to 
Fish's monitoring of the States' expenditures. We have found 
that uniformity of our audits provides both Fish and the States 
with consistency of oversight that ensures that internal 
controls are in place to minimize financial risk in this 
popular grant program.
    Like other DOI bureaus that have underground injection 
control wells, Fish and Wildlife could not fully identify and 
does not effectively manage the UIC wells on its lands. We 
found several issues with Fish and Wildlife's shallow gravity 
drain wells, one of six categories defined in EPA's regulations 
that could potentially threaten underground drinking water.
    We found that the department has no overarching guidance or 
policy to assist bureaus in complying with EPA's regulations 
concerning Class V injection wells. This has led to 
inconsistent management at the Bureau level.
    We also found that Fish does not maintain a national data 
base on sanitary leach fields or in fish hatcheries that could 
have agricultural wells, another type of Class V well.
    Finally, Fish listed 54 banned types of floor drains in 29 
different States but did not know if these were Class V wells. 
It has reportedly plugged them since we conducted our 
evaluation.
    The Coastal Impact Assistance Program provides grant funds 
derived from Federal offshore lease revenues to oil-producing 
States for conservation, protection, or restoration of coastal 
areas, wildlife, and natural resources.
    The Secretary of the Interior was directed to disburse $250 
million in each of fiscal years 2007-2010 to eligible CIAP 
grant recipients. Responsibility for CIAP was transferred to 
Fish and Wildlife as of October 1, 2011.
    At the request of Fish, we initiated an audit in 2011 
focusing on grant funds awarded to Mississippi followed by an 
audit of funds awarded to Louisiana in 2013. Our audits 
revealed deficiencies in both States' management of grant 
funds, as well a poor Federal oversight of grant recipients and 
weak risk management.
    In total, we questioned more than $44.1 million in CIAP 
costs awarded only to Mississippi and Louisiana, representing 
ineligible grant charges, unreasonable costs and expenses not 
supported by documentation.
    Our investigative oversight of Fish and Wildlife has 
focused primarily on administrative management issues in the 
recent past. In 2013, we issued a Management Advisory to the 
Secretary urging Fish and Wildlife leadership to act on long 
outstanding complaints of retaliation made by employees who 
raised scientific integrity concerns to us and to Fish and 
Wildlife management.
    As of yesterday, two of the three cases were settled. The 
other case is still pending Fish and Wildlife action on 
settlement.
    We also have ongoing administrative investigations into 
allegations of mismanagement and other wrongdoing on the part 
of Fish and Wildlife officials, including unfair and 
potentially illegal hiring practices, conflicts of interest, 
preferential treatment and wasteful spending.
    Additionally, we have referred similar allegations from the 
same region to Fish and Wildlife management for review.
    Finally, we are currently investigating allegations of Fish 
and Wildlife Service employee misconduct related to 
conservation efforts and wildlife management.
    Mr. Chairman, this concludes my prepared testimony today. I 
would ask that my full testimony be entered into the record. I 
would be happy to answer any questions you or members of the 
subcommittee may have.
    [The prepared statement of Ms. Kendall follows:]
    
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    Senator Rounds. Thank you for your testimony, Ms. Kendall. 
Your full remarks will be entered into the record without 
objection.
    Senators will now have 6 minutes each for questions. I will 
allow members to stay for a second round of questions but with 
the notice that we will do our best to have a hard stop of 20 
minutes past the hour.
    With that, I will begin. We will do these in 6-minute 
increments.
    I would like to begin by following up a bit with Mr. Elkins 
in terms of the comments you made. I wanted to ask you about 
the transparency of the agencies based on your experiences.
    In recent reports, there have been concerns that your 
respective agencies do not give you full and open access to 
information that you need to conduct a thorough investigation 
of certain programmatic issues or agency actions.
    Inspector General Elkins, I believe this is an issue your 
office faced when conducting your investigation of the Chemical 
Safety Board, as you mentioned, and when looking into how the 
EPA's Office of Homeland Security impedes your own 
investigations.
    Can you explain in a little more detail some of the issues 
you faced in gaining full access to the information your office 
needs or having information withheld from you when you are 
conducting investigations of your respective agencies, not only 
what it does to impede your ability to actually investigate, 
but if you could, I would like your thoughts about what we 
could do to assist you in getting that information you need?
    Mr. Elkins. I would be very happy to respond to your 
question.
    Generally speaking, on the transparent access issue, my 
sense is that both the EPA and the CSB fail to truly embrace 
the underlying authorities and the concepts in the IG Act and 
understand exactly what it means.
    We spent a lot of time trying to do outreach and educate 
the agencies on the IG Act and the fact of what independent 
stands for and the fact that we are there to help but we are 
also independent.
    The challenge I have run into is that in certain areas, the 
agencies tend to embrace that concept but when it works in a 
way that it may embarrass them, they tend not to embrace that 
concept and that is where we start to get some push back.
    Having these sorts of hearings is very important. Having 
statements come from this panel as well as members on the House 
side in support of the work that we do is extremely important.
    Under the IG Act, we basically have a dual reporting 
responsibility. One is to the agency head and the other is to 
this body. To the extent that we don't get cooperation on the 
agency side, the only avenue we have available to us is you. 
The fact that you are doing what you are doing is very helpful 
and I really appreciate it.
    Senator Rounds. Thank you.
    Ms. Kendall, last summer, 47 of your colleagues from the IG 
community sent a letter to Congress raising serious concerns 
about how agencies had either not cooperated with 
investigations or how the IGs had limited access to records or 
witnesses. Mr. Elkins signed this letter and cited problems in 
working with the EPA as an example.
    You chose not to sign the letter. Can you tell us why you 
chose not to sign this letter? Does your unwillingness to sign 
the letter indicate that you did not agree with the concerns 
that were raised? Can you share a little with us about your 
thought process in terms of why you did not?
    Ms. Kendall. I would be happy to, Mr. Chairman.
    I chose not to sign that letter for several reasons. One, I 
am a part of the Executive Council for the CIGIE. That body 
sent a formal letter to the Department of Justice with its 
formal position on the access issue. I felt as a signatory by 
virtue of being on the Executive Council that was my position 
by virtue of CIGIE. It did not, in any way, mean that I 
disagreed with the letter signed by the 47.
    The other reason I chose not to sign that separate letter 
was I did not want to give an indication to my agency, where I 
have had absolutely no problem whatsoever with access to 
information, to suggest that I felt there was a problem.
    We have not had the access problems that Mr. Elkins and 
some of the other IGs have had. I did not want to indicate to 
my agency I had that feeling.
    Senator Rounds. I just want to follow up and be clear. As I 
understand it, you have not had a problem gaining access to 
records, you have not had any grant interviews refused to its 
staff and there has been no sense of impediments to your 
investigations within your agency?
    Ms. Kendall. None, that I am aware of, sir.
    Senator Rounds. Thank you very much.
    With that, Senator Markey.
    Senator Markey. Thank you, Mr. Chairman.
    Mr. Elkins, across the Country, thousands of miles of old, 
leaking natural gas distribution pipelines that run under our 
streets are costing consumers money, threatening public health 
and safety with potentially dangerous explosions and 
contributing to global warming by releasing natural gas into 
the atmosphere.
    An Office of Inspector General July 2014 report found that 
EPA was not regulating methane emissions from natural gas 
distribution pipelines, had not partnered with the Pipeline and 
Hazardous Materials Safety Administration, and that its 
voluntary program to address methane leaks has achieved limited 
success.
    Moreover, your report found that consumers were losing 
nearly $200 million each year from this leaking natural gas.
    I have introduced legislation in the Senate that would 
address some of the financial and policy barriers that are an 
impediment to repairing and replacing our aging, leaking 
natural gas pipeline infrastructure.
    While I know you have not read the legislation, would 
efforts to remove these barriers and disincentives that may be 
in place to reduce methane emissions from leaking natural gas 
pipelines such as cost recovery and up front capital 
investments help address that problem?
    Mr. Elkins. Yes, sir. I think that would be a good thing.
    Senator Markey. Mr. Elkins, the EPA agreed with your 
recommendation that it should work with HMSA to address methane 
leaks from a safety and environmental standpoint. EPA agreed to 
implement this recommendation by December 31, 2014. Has that 
recommendation been implemented, in your opinion?
    Mr. Elkins. According to our books, it shows that the 
recommendations have been implemented but until we are able to 
go out and do follow up work, I cannot tell you specifically 
that has occurred.
    Senator Markey. Is it your intention to follow up and find 
out whether or not that work has been done?
    Mr. Elkins. Yes, sir. We will be following up.
    Senator Markey. That would be very helpful.
    Ms. Kendall, coal on Federal lands belonging to the 
American people generates billions of dollars in revenue from 
the Federal Government each year. However, three decades after 
the GAO, at my request, discovered improprieties in coal lease 
sales in the Powder River Basin in Wyoming and Montana, recent 
evaluations of the Federal Coal Program have found that many of 
the same problems persist today.
    Recently, the Inspector General and the GAO, again at my 
request, issued reports showing that taxpayers may be losing 
millions of dollars on this coal that belongs to them. In fact, 
based on my staff's review, I believe using appropriate market 
calculations and assumptions in recent coal lease sales could 
potentially have yielded $200 million additional or more for 
the American people.
    Ms. Kendall, of the 13 recommendations made in the IG 
report on the Federal Coal Program, the Bureau of Land 
Management agreed with the majority of them, although none had 
been implemented at the time the report was issued.
    Since this report was issued in 2013, BLM has taken some 
steps to address the deficiencies identified in the Coal 
Program. Of the 13 recommendations made in the IG report, how 
many are still left to be implemented?
    Ms. Kendall. Senator Markey, my understanding is that 
recommendations 2, 3, 6, 9 and 12 remain open and remain 
unimplemented, but I have a document I would be happy to 
provide you and your staff that outlines the specifics of the 
status of those recommendations which we would be happy to 
provide.
    Senator Markey. So 5 of the 13 recommendations have yet to 
be implemented?
    Ms. Kendall. That is correct, sir.
    Senator Markey. The IG and GAO reports both found that BLM 
does not fully account for the potential that coal produced 
from Federal lands will be exported to foreign countries where 
it can be sold at a higher price.
    Coal exports from the Powder River Basin and other Federal 
lands are expected to increase substantially in the coming 
years. Do you believe that BLM is doing enough to evaluate the 
possibility of exports in determining the value of Federal 
coal?
    Ms. Kendall. Like Mr. Elkins, I do not believe we have gone 
in to do a verification of what they are actually doing, but by 
virtue of what they have reported to us in terms of 
implementing the recommendations, it appears they are doing 
what we asked as a result of our evaluation.
    Senator Markey. You are saying they are now factoring in?
    Ms. Kendall. No, I believe that they are; we have not 
verified it, though.
    Senator Markey. OK. I think that is very important. 
Ultimately, it is public property that is being sold to the 
private sector. If they are getting a higher price overseas for 
the coal that should be factored into what we sell it to the 
private sector for so that we are putting more money into the 
Federal treasury for a publicly owned good.
    No. 2 has yet to be implemented. I think it is important 
for us to be able to get to the bottom of that story as well.
    I thank you, Mr. Chairman. I yield back the balance of my 
time.
    Senator Rounds. Thank you, Senator Markey.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    Let me start with Mr. Elkins. More than a decade ago, the 
last time the Republicans were a majority, I chaired this 
committee and we raised concerns over the EPA's grants 
management. It seems a lot still needs to be done. Just last 
month, I think it was, two scientists were convicted of 
stealing about $10 million in research grants.
    Is your office investigating any of these right now? You do 
not need to elaborate, just yes or no.
    Mr. Elkins. Senator, right off the top of my head, I cannot 
think of an active case right now.
    Senator Inhofe. We will give you the information and would 
like to work with you in that respect. We know you would find 
that to be of interest.
    In February, your office launched an evaluation of EPA and 
the States' ability to manage the potential threats to water 
resources and hydraulic fracturing. Hydraulic fracturing is 
something I can talk about.
    The first hydraulic fracturing took place in my State of 
Oklahoma in 1948. I remember when Lisa Jackson was the first 
Administrator to the EPA chosen by President Obama. I asked her 
have you ever had any documented cases of groundwater 
contamination as a result of hydraulic fracturing. She gave the 
answer that she had not.
    I am wondering though if you are going to be getting into 
this thing and making evaluations as to what they are 
attempting to do, it seems to me--I have been one of the top 
critics of the EPA--that when they get involved in these 
things, we find out nothing ever happens.
    Do you remember the case of Armendariz and Range Resources 
in Texas? That got a lot of publicity. It was our staff that 
uncovered the conversation that he had with his subordinates 
saying, what you've got to do with the oil and gas industry is 
what the Romans did to the Turks--when they would go into a new 
town, they would crucify the first four Turks they saw and then 
they had their attention.
    As a result, that exposure took place and he is no longer 
there. He has a better job with one of the environmental 
groups. I do not know which one it is but he is doing all 
right. Don't feel bad about him.
    Also, Pavillion, Wyoming was something where they came up 
with this criticism--remember the person lost their home. They 
decided to take it to court and they won and the EPA was wrong. 
The same thing happened in Pennsylvania.
    I would say that I am hoping that you will be looking at 
these in terms of the performance, the history of what their 
successes and failures have been. Would you be willing to do 
that? Working with our office, we have an abundance of 
information to help you.
    Mr. Elkins. Senator, we would be more than happy to work 
with your office.
    Senator Inhofe. I would say a similar thing to you, Ms. 
Kendall. We are involved in two things right now that I think 
would be of interest to you. One has to do with the Endangered 
Species Act--both do, actually.
    These closed door litigation settlement agreements with 
environmental groups that require the Service to decide whether 
to list species under the Endangered Species Act, I don't care 
whether it is the burying beetle or the lesser prairie chicken 
or what it is, once they either list something as threatened or 
endangered, they never get off the list. There are reasons they 
should get off the list.
    Would you agree to work with my staff, Ms. Kendall, 
specifically in reviewing the process that led to the 
settlements and how they are being implemented? I am talking 
about cooperative settlements with groups where they file the 
lawsuits and you know what the settlement is all about. Would 
you be willing to look into that and work with our office to 
try to resolve what I consider to be a serious problem?
    Ms. Kendall. It is an issue of which I am generally aware, 
Senator Inhofe. We would be happy to work with your staff to 
learn more about it and look into what this involves.
    Senator Inhofe. I appreciate that. I mentioned that once 
something gets listed, they never get off. As an example, the 
Service listed the American burrowing beetle as endangered in 
1989. Twenty-five years later, the Service still has not 
established criteria for delisting the beetle.
    This is something that we need to work together on. Our 
staff is going to be involved in doing this. Several things we 
thought should have been done some 10 years ago when we first 
got involved in this.
    This particular beetle and the endangered status it enjoys 
is one that has a lot to do with people out there farming, 
trying to plow their fields, people are building roads and 
drilling for energy, so it is something that certainly has a 
great effect in my State of Oklahoma.
    If you would join us in that, we would appreciate it very 
much. Would you do that?
    Ms. Kendall. We would be happy to work with you to better 
understand this issue.
    Senator Inhofe. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Rounds. Thank you.
    Senator Crapo.
    Senator Crapo. Thank you, Mr. Chairman.
    I don't have any questions for these witnesses, although I 
do want to indicate that I agree with the concerns that have 
been raised by my colleagues here today. I look forward to 
learning more about the responses we will see from both the EPA 
and the Department of the Interior on these issues.
    I yield back my time, given that we have a hard stop, for 
you to utilize in your questioning.
    Senator Inhofe. It might be a good idea, Mr. Chairman--
maybe you did this before I came in--to remind him why we have 
to cut this short, because we do have a well publicized hearing 
with Secretary Kerry.
    Senator Rounds. What I would like to do is if there are 
additional questions, we will try to do them in 3-minute 
increments. When we are done with that second round and if we 
have time, we will take it. If not, we will close it down.
    I just have a question. I would like to follow up a little 
bit with Ms. Kendall.
    To follow up on Senator Inhofe's questions, with regard to 
your work being done on the Endangered Species Act, with the 
record number of species that have been listed as a result of 
the environmental litigation settlements as the Senator 
indicated, it would appear--perhaps it is not correct and I 
would like your thoughts on it--your office has done very 
little oversight on the settlements themselves or specifically 
the Endangered Species Act and the implementation.
    Has it not been requested, or does your office not see the 
ESA oversight as a priority compared to other areas? Can you 
talk with us a bit about whether or not there has been a review 
of the settlements done internally that have placed some of 
these specific species under the Act or being identified as 
being endangered?
    Ms. Kendall. Certainly, sir. We have not been advised 
externally from Congress, from the public or internally through 
whistleblowers that there are specific problems about specific 
listings. If we had been so advised, we would certainly take a 
look at them.
    What I hear Senator Inhofe saying is that he has concerns 
about some very specific species. We would be glad to get with 
staff to understand what those concerns are and take a look at 
them as appropriate.
    Senator Rounds. I would like to expand that just a little 
in terms of the process you utilize or the existing practice of 
how they are identified, how the determination is made to 
actually list them, and what the criteria is that is out there.
    I was wondering also if you would work through that process 
with our committee, go back through it and see how exactly that 
process is being implemented today.
    Ms. Kendall. Certainly. One of the things we do and have 
done in the 15, coming on 16, years that I have been with the 
IG's Office is look at process such as the Endangered Species 
Act listing or delisting process and ensure that the process, 
as it is being both practiced and in place, is being 
appropriately executed.
    Senator Rounds. When was the last time that was completed?
    Ms. Kendall. Usually, we do it in the context of a specific 
concern, so it has been a number of years, sir.
    Senator Rounds. Thank you.
    Senator Markey.
    Senator Markey. Thank you, Mr. Chairman.
    Ms. Kendall, in 2014, your office completed a report that 
examined Department of the Interior management of the disposal 
wells containing chemicals like benzene and pathogens from 
untreated sanitary waste on DOI-managed public lands.
    The report found that the department's failure to 
understand its responsibilities under Federal law may have 
endangered public health and drinking water supplies by 
allowing these sorts of wells to continue in operation for 
nearly 10 years after they were banned by the EPA.
    Has DOI implemented your recommendations to consistently 
identify, inspect and manage these disposal wells and ensure 
compliance with Federal regulations on public lands?
    Ms. Kendall. Sir, I do not have the specifics on the 
Underground Injection Control Report recommendations and what 
has been implemented. I would be glad to get those to you and 
your staff in regard to what they have implemented and what has 
not been implemented so far.
    I do know that generally, the department agreed that it 
would work with EPA to ensure that they were in compliance with 
EPA regulations relative to Class V underground injection 
control wells.
    Senator Markey. While the IG report only looked at one type 
of well, do you think it is possible that other types of wells 
such as those designed for disposal of hazardous waste and 
byproducts from oil and gas production might be similarly 
mismanaged by the Department of the Interior?
    Ms. Kendall. That was a concern of ours, sir. However, we 
took a look at a very high level and did not see the same kind 
of concern that we had with the Class V wells. At this point, 
we chose not to pursue that evaluation further.
    Senator Markey. Could you take another look at it to 
determine whether or not that was the correct decision? Again, 
I would respect your judgment in that case. Taking another look 
at it would be extremely helpful.
    Ms. Kendall. Certainly we can do that.
    Senator Markey. Thank you, Mr. Chairman.
    Senator Rounds. Thank you, Senator Markey.
    Senator Inhofe.
    Senator Inhofe. Really quickly, Mr. Chairman, to Mr. 
Elkins.
    We had a chemical hearing in this committee I think on 
March 18. We are going to have another coming up next week, I 
think.
    The recent report by your office includes 23 
recommendations to improve the Chemical Safety Board. Now that 
we have that change taking place, what are the unresolved 
challenges that a new Chemical Safety Board leadership would 
have to address now that the chairman has resigned? Do you have 
any comments about that? This is going to take place this 
coming week.
    Mr. Elkins. There are a number of governance issues. 
Reinstating a board order that was rescinded would be a good 
first step. Gaining respect, the morale at that agency is very 
low. Treating the employees with respect is a big issue.
    I could go on. There are a number of other issues I would 
be glad to share with you but off the top of my head, those 
would be some of the key issues.
    Senator Inhofe. That is significant. I remember that same 
issue was a problem with the Nuclear Regulatory Commission. To 
regain the respect and the working relationship, I think, is 
very important. I would appreciate that.
    Thank you.
    Senator Rounds. Right now, I am showing we have about 6 
minutes left and we are going to have to shut down.
    Ms. Kendall, you indicated earlier that you had 
approximately 533 investigations that have been completed or 
thereabouts. I understand Senator Markey indicated perhaps 55 
of them had been made public. My information says even less 
than that have been made public.
    I am just curious. There obviously has to be a reason why 
so many of them have not been made public. Can you clarify a 
bit why those have not been made public and what processes are 
in place to determine which are made public? I think it would 
be fair for you to be able to respond to that.
    Ms. Kendall. There are a couple things that need to be 
clarified. First, I think the 533--I don't have the specific 
numbers but will rely on Senator Markey's numbers--were 
probably complaints that were received by our criminal 
investigative group. That does not mean that all of those would 
become criminal cases or even administrative cases.
    We have had a process in place to release investigative 
cases based on the FOIA rules which say if you have three 
requests, they should become public. We have since changed that 
process. We will be deferring, quite frankly, to a release 
status as opposed to a non-release status by virtue of summary 
of our investigative cases.
    We have just started getting that underway. In deference to 
and recognition of Senator Markey's observation, we think it is 
important to release more of the investigative information. We 
did not keep it from anyone for any particular reason other 
than we were following the FOIA rules which suggest that after 
three requests, they become public.
    Senator Rounds. If you have made a change in your policy 
and if it is a written policy--I am assuming it is--would you 
share that with our committee as well, please?
    Ms. Kendall. I am not sure that we have reduced it to 
writing but we would be glad to share in theory what our new 
policy is and it is being developed.
    Senator Rounds. I think it is important enough where if you 
are following it, that it be something we should have a look at 
as well.
    Ms. Kendall. Whatever we have, sir, we will get to you.
    Senator Rounds. Thank you very much.
    Senator Markey, do you have any final comments, thoughts or 
questions?
    Senator Markey. Ms. Kendall, I just want to clarify with 
respect to your office's recommendation to improve the Federal 
Coal Program. You stated one of the five recommendations that 
have not yet been implemented is recommendation No. 2. 
Recommendation No. 2 states that the BLM should take action to 
fully account for the export potential in developing coal, the 
fair market value.
    It appears that BLM has not yet fully implemented the 
possibility of exports in determining the fair market value of 
Federal coal leases as your office recommended.
    Can you check on the status of the five recommendations for 
the Federal Coal Program and report back to the committee?
    Ms. Kendall. We will do that actually with all the 
recommendations.
    Senator Markey. Thank you.
    Senator Rounds. Thank you, Senator.
    Once again, I would like to thank the Inspectors General 
for the work they do overseeing the management of our agencies. 
I would also like to thank my colleagues who attended this 
hearing for their thoughts and questions.
    The record will be open for 2 weeks which brings us to 
Tuesday, April 28.
    Thank you for coming and sharing. We look forward to 
working with you.
    With that, this hearing is adjourned.
    [Whereupon, at 10:15 a.m., the subcommittee was adjourned.]
    [An additional statement submitted for the record follows:]

            Statement of Hon. James M. Inhofe, U.S. Senator 
                       from the State of Oklahoma

    Inspector General Elkins and Deputy Inspector General 
Kendall, thank you for appearing this morning. And thank you, 
Subcommittee Chairman Rounds, for scheduling this hearing.
    Congress has a constitutional duty to conduct vigorous 
oversight to ensure that agencies are following the law and 
spending taxpayer dollars wisely.
    When I became chairman, I promised that we would conduct 
real oversight of the Administration. Such congressional review 
is ever more important as the EPA stretches its regulatory arm 
over our entire economy with more red tape based on shaky 
science and analysis, and absent consultation with the States 
or congressional authority. We see the same overreach at the 
Fish and Wildlife Service, which is making a record number of 
Endangered Species Act listings due to a closed-door settlement 
with environmental groups, among other hyper-regulatory 
actions. This hearing is a step in that direction.
    It is important that we hear directly from the Inspectors 
General about problems within their agencies, and that they are 
reminded they have a statutory duty to assist Congress with its 
oversight so that problems can be identified and corrected.
    I am looking forward to hearing from Inspector General 
Elkins about his work uncovering management and performance 
problems at the EPA and the Chemical Safety Board, including 
recent IG reports exposing EPA grant and contract 
mismanagement, scientific integrity concerns, as well as the 
dysfunction and outstanding corrective actions at the CSB. I am 
also looking forward to hearing from Deputy Inspector General 
Kendall about her work involving the Fish and Wildlife Service 
and its highly controversial ESA decisions.
    I ask that my full statement be entered into the record. 
Thank you.