[Congressional Record Volume 143, Number 160 (Thursday, November 13, 1997)]
[Senate]
[Pages S12535-S12536]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              THE STATE ENVIRONMENTAL AUDIT PROTECTION ACT

  Mr. ENZI. Mr. President, I come to the floor--in the waning hours of 
this session--to express my continuing frustration with the way that 
the Environmental Protection Agency is handling Wyoming's environmental 
audit law. The troubles began last September, when the EPA delayed 
granting final approval of Wyoming's clean air permitting plan.
  Earlier this year, I joined with the other Members of Wyoming's 
congressional delegation in sending a letter to Administrator Carol 
Browner at the EPA. We suggested that it was inappropriate to withhold 
delegation of Clean Air Act permitting authority because of the State's 
environmental audit law. Administrator Browner responded with an 
assurance that,

       EPA has not taken steps to withhold further delegations of 
     Federal programs in Wyoming as a result of the State 
     environmental audit law.

  In September, the EPA announced that it had completed its review of 
Wyoming's audit law. It found that,

       The State won't need to make statutory changes to the self-
     audit law to retain primacy over Federal laws like the Clean 
     Air Act.

  The EPA went on to say that,

       The law shouldn't interfere with the Wyoming Department of 
     Environmental Quality's efforts to gain primacy over several 
     other Federal programs.

  Mr. President, in spite of Ms. Browner's assurances, there has been a 
very real and ongoing manipulation of States that attempt to craft 
sensible audit laws. I trust that my colleagues from Colorado, Utah, 
Michigan, and Texas would be able to verify that activity. Their States 
have all been coerced by the EPA into changing their audit laws.
  On October 29, I introduced the State Environmental Audit Protection 
Act, which is S. 1332. This bill would provide a safe harbor from EPA's 
coercive actions for States that adopt reasonable audit laws. The next 
day, the Senate Environment and Public Works Committee held a very good 
hearing on the issue. We listened to an excellent panel of witnesses on 
both sides of the issue. Both myself, and Senator Hutchison of Texas--
who has also introduced legislation to resolve this problem--testified 
on the need for Federal legislation.
  I was interested to read in the paper on October 30, the day after 
the hearing, that the EPA is now requiring Wyoming to change its law. 
The EPA has submitted legislation to a special session of the Wyoming 
legislature. On Monday, a joint committee in Cheyenne heard preliminary 
testimony on the revisions. The proposal would strike at least 50 
percent of Wyoming's law regarding discovery of evidence in criminal 
proceedings.
  A State environmental audit law is designed to help clean up the 
environment. In Wyoming, we created our State law to provide incentives 
for good faith efforts. We thoroughly debated this issue in the Wyoming 
State legislature. We consulted with the State Department of 
Environmental Quality and different stakeholder groups. We wanted to 
provide a mechanism that would encourage people to make an extra 
effort--an extra effort--to clean up the environment in their 
communities. We debated it in a Democratic forum and we passed a 
consensus bill. And we passed it by more than a two-thirds vote in each 
body.
  Our State law allows an entity to hire an auditor to review their 
operations. The entity might be a town that is trying to examine its 
storm drainage system. It might be a hospital that wants to review its 
air emissions. It might be a college or school district whose 
vocational education department uses solvents. It might be a company 
that maintains a construction yard, or a garage. These are all entities 
that may be affecting their environment without even knowing the 
consequences of their operations.
  Some of them are on regular inspection schedules, but the majority of 
them will never be inspected.
  How many of those entities would know, with 100 percent certainty, 
that they are in full compliance with all applicable State and Federal 
laws? How many of them think they are in compliance? How many of them 
don't know? How many inspectors are out there randomly checking these 
facilities?
  These are questions I cannot answer. In fact, I asked a similar 
question to the Environmental Protection Agency in Senator Chafee's 
committee hearing. There was a general notion of how many EPA 
inspectors were employed, but they did not know how many total 
inspectors are out there. Furthermore, they could not say what 
percentage of regulated entities were on an actual inspection schedule.
  There is one simple question here that I can answer. That is, how 
many of those regulated entities would ask an EPA inspector to come 
around and take a look? How many of them would trust the EPA to offer 
friendly advice.
  The answer to these questions, my friends, is zero. People don't 
trust the EPA any more than they trust the IRS.
  The fact is, Mr. President, most of these entities are afraid of the 
EPA. Most of them are unaware that their operations could land them in 
Federal court. They are unfamiliar with the regulations and they are 
afraid to find out if they are in compliance. They are afraid because 
if they search for problems and find them, they may be fined and even 
sued. And if they are sued, their own review has given regulators a 
roadmap for prosecution.
  No small business is going to spend money to hire an auditor to 
collect evidence for regulators to use against the small business. And 
I do not believe more heavy handed enforcement is the answer. We, as 
legislators, should be able to encourage entities to look for problems. 
We can designlegislation that protects good faith efforts, without 
sacrificing traditional enforcement. We can design legislation that 
promotes cooperation toward a cleaner environment.
  The EPA and the Department of Justice rely heavily on enforcement as 
a deterrent. But in spite of Vice President Gore's reinventing 
Government proposals--and in spite of President Clinton's commitment to 
revinventing regulations--neither the EPA nor the

[[Page S12536]]

Department of Justice have supported any statutory compliance 
assistance programs. Their command and control methods remain firmly 
ensconced--not just in rhetoric, but in practice.
  I agree that strong enforcement is necessary as a deterrent against 
environmental violations. I have never suggested that we should 
hamstring our regulators. We can, however, look at audit laws as a 
positive and reasonable way to supplement strong enforcement. When the 
goal is a cleaner, healthier environment, we should not be afraid to be 
innovative. We can do it in a reasonable and thoughtful way. We can 
agree not to penalize good behavior.
  The EPA and the Department of Justice have shown a complete 
unwillingness, however, to cooperate. They have repeatedly argued 
against State and Federal audit laws. They maintain that such laws are 
unnecessary and dangerous. They describe numerous imaginative scenarios 
where laws could be abused. When asked for constructive suggestions, 
however, they choose instead to mischaracterize audit laws, implying 
that there is no middle ground. In the rhetorical attacks on audit 
laws, the EPA and Department of Justice always start by constructing 
their own premises--not those of the actual law--so the most frightful 
conclusions can be drawn to support their position.
  I point this out because the term ``secrecy'' has been the most 
recurrent fallacy dragged across this debate. It was used to excess in 
the recent Environment and Public Works Committee hearing. The EPA 
maintains the danger of secrecy by suggesting that audit laws will 
shield evidence of wrongdoing and impede public access to information.
  Nobody in this body has been talking about creating an audit law to 
allow secrecy or fraud. These are things the EPA argues against. They 
are things I have argued against. Under a well-crafted audit law, this 
kind of abuse can be easily avoided.
  First, the EPA claims companies will conduct audits to hide evidence. 
I want to expose the holes in that argument. An audit report can only 
include information gathered during a specific time period and 
according to a defined audit procedure. Because privilege is not 
extended to cover fraud or criminal activity, it cannot reach back to 
cover prior malfeasance.
  For example, in Wyoming, before a company conducts an audit pursuant 
to our State law, they must tell the regulators they plan to conduct an 
audit. Only information that is gathered after that date, and as a part 
of the audit, can fall under the audit protections. An audit report 
cannot include information that is otherwise required to be disclosed, 
such as emissions monitoring. It can only include information that is 
voluntarily disclosed.
  How does the privilege work in practice? First, if nothing is 
discovered and nothing is disclosed, the report may not be privileged. 
If the company does find a deficiency during the audit, then it must 
report the problem and clean it up with due diligence. If these 
conditions are not met, then it cannot assert privilege to the 
information related to the deficiency. The privileged information is 
never secret because the deficiency must be disclosed.
  Remember, the company must report the deficiency and clean it up to 
assert privilege. The public can view the disclosure form. They can 
know about the problem and they can make sure it is cleaned up. As long 
as these conditions for privilege are met, the report may not be 
admitted as evidence in a civil or administrative action. The end 
result of this is a cleaner environment--not secrecy--as the EPA 
suggests.
  One only has to think logically to expose the flaws in EPA's 
arguments about secrecy. If a company says they are going to conduct an 
audit, then they must find violations, disclose them, and clean them up 
to get any benefit from the law. If they don't disclose anything, they 
gain no protections from an audit law. A company would not spend money 
to conduct an audit and then keep the violations secret. If they did 
so, they would face criminal liability for knowingly violating the law.
  I ask my colleagues, if a company conducts an audit, discloses its 
violations, and cleans them up, what have we lost? Haven't we improved 
environmental quality? That is the goal of our environmental laws. That 
is the point of compliance assistance.
  The EPA and Department of Justice maintain that audit laws run 
counter to our common interest in encouraging the kind of openness that 
builds trust between regulating agencies, the regulated community, and 
the public.
  Mr. President, litigation does not build trust. Using voluntarily 
gathered information to prosecute good actors does not build trust. 
Enforcement depends on intimidation to act as a powerful deterrent. But 
it does not build trust.
  Reasonable audit laws will promote cooperation between regulated 
entities and their regulators. We should ensure that people who act in 
good faith and who go the extra mile don't face stricter enforcement 
than those companies that do nothing. Audit laws do build trust.
  Most importantly, they will result in a cleaner and healthier 
environment.
  I look forward to working on this issue when the Senate reconvenes 
next year. It has been a broad bipartisan issue in the States and I 
know it can be a broad bipartisan solution here in the U.S. Senate.
  I yield the floor.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LIEBERMAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LIEBERMAN. Mr. President, I ask if it is appropriate that I be 
allowed to address the Senate in morning business?
  The PRESIDING OFFICER. It is more than appropriate. The Senator from 
Connecticut is recognized to speak in morning business for up to 10 
minutes.

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