The Department of Justice (DOJ) is doing away with an enforcement tool that has been used in the past to get states and localities into compliance with environmental laws.
Assistant Attorney General Jeffrey Bossert Clark announced Wednesday in an internal letter obtained by The Hill that the agency will no longer utilize Supplemental Environmental Projects (SEPs) in settlements with state and local government polluters.
The enforcement tool is often offered in settlements with industries and states that violate environmental laws such as the Clean Water Act and allows them the opportunity to pay lower fines by instituting actions such as environmental cleanups or infrastructure upgrades.
The DOJ letter addressed to environmental enforcement staff criticized the tool, used frequently under the Obama administration, as going “beyond what is required under federal, state, or local laws.”
“By definition, a SEP goes beyond what is required under federal, state, or local laws ... and thus exceeds what could be obtained through agency enforcement authority or by litigating a matter to judgment,” Clark wrote.
E&E News was the first to report on the letter.
Critics, including some congressional Republicans, have argued the SEP program chooses clean energy favorites by putting revenue into the pockets of unrelated industries.
For example, in the 2016 landmark Volkswagen emissions cheating case, the car company settled with the EPA for $14.7 billion for its diesel vehicles violating Clean Air Act regulations. As part of that settlement, $2.7 billion was paid toward a nitrogen oxide reduction program, giving states money toward a clean transportation program including electric vehicles.
House lawmakers in 2018 attempted to pass the "Stop Settlement Slush Funds Act," which would have prohibited SEPs and other third-party payments from being paid under environmental settlements. The bill was never taken up in the Senate, but it was referenced in the DOJ memo.
In most instances where entities are charged with failing to comply with environmental standards, the dispute is resolved through a settlement or consent decree with the DOJ. Both typically include some sort of monetary penalty. Critics have also argued that SEPs limit the dollar amount owed to the Treasury Department through those settlements by redirecting dollars to other indirect areas.
“SEPs are debated devices that many members of Congress and academic commentators view as mechanisms for sidestepping the power of the purse,” the DOJ memo reads.
“SEPs involving state and local government defendants therefore unambiguously fall within the core of the Attorney General's November 2018 Policy, and are precluded, absent the granting of an exception based on other considerations,” it continues.
The directive is the latest policy change to come from the Trump administration regarding polluter enforcement. EPA Administrator Andrew WheelerAndrew WheelerLobbying world Science matters: Thankfully, EPA leadership once again agrees EPA bans sale of COVID-19 disinfectant authorized under Trump MORE as well as leadership at the EPA’s Office of Enforcement and Compliance Assurance (OCEA) have been vocal in their preference for pollution mitigation efforts over direct enforcement. That preference is reflected in the agency’s dwindling annual enforcement data. OCEA has also introduced in the past year a series of changes to its polluter self-audit program, including one developed specifically for the oil and gas industry.
The policy also appears to build off a 2018 memo by then-Attorney General Jeff SessionsJefferson (Jeff) Beauregard SessionsOvernight Hillicon Valley — Apple issues security update against spyware vulnerability Stanford professors ask DOJ to stop looking for Chinese spies at universities in US Overnight Energy & Environment — Democrats detail clean electricity program MORE, who said the settlements deprived localities of the ability to decide their own policy issues.
Eric Schaeffer, executive director of the Environmental Integrity Project and a former director of the EPA’s Office of Civil Enforcement, said the directive is "consistent" with the Trump administration's environmental approach but argues it also has embraced the tool to some extent.
"They’ve argued its 'coercive,' and some of that comes from right-wing bloggers and groups like Competitive Enterprise Institute. That explains why they don’t want to raise the concept with industry. On the other hand, they seem quite happy to give the industry credit for SEP’s that don’t really seem to pass muster under the existing policy or under the argument we heard from Republicans in the House that penalty dollars aren’t supposed to be diverted to SEPs," Schaeffer told The Hill.
An employee within the EPA’s enforcement office likened the SEP directive to a “chill” in the agency.
“Over many years there have been a lot of good projects in communities that benefit the environment beyond putting money in the Treasury. And right now there’s a real chill,” the source said.
The EPA did not return a request for comment on the SEP policy change.