Imagine the following scenario:
The guy in charge of directing regulatory policy on chemicals for a
huge conglomerate is given a top position at the Environmental
Protection Agency (EPA). Once there, he participates in sidelining a
long-awaited study on a suspected carcinogenic chemical produced
by his former employer—and only recuses himself from the matter
after the fact.
All this is allowable under current federal ethics guidelines because
several companies—not just the former employer—produce the
chemical in question. Really?? Really. This is why EPA ethics
officials allowed David Dunlap, former head of regulatory policy for
Koch Industries, to participate in selecting which chemicals to
evaluate for health dangers after Dunlap started work as the
number-two administrator of the EPA’s main science office last
October.
That selection process resulted in the EPA halting a study on
formaldehyde nearly two decades in the making.The study
was initiated as part of an EPA program that evaluates the
potential harm of chemicals. As a chemical engineer who
served for more than eight years as Koch’s “lead and subject
matter expert with a primary focus on ... chemicals and
Dunlap was likely well-versed in the issue,
from definitively linking formaldehyde to cancer.
The EPA classifies formaldehyde as a
organizations within the Department of Health and Human
information showing a link between formaldehyde and leukemia,
information that would have likely led to increased regulation—
and decreased sales—of the chemical. One of the largest
producers of formaldehyde in the United States is Georgia-Pacific
—a subsidiary of Koch Industries, which is owned by brothers
Charles and David Koch, who are known for their substantial
political donations and opposition to government regulation.
(Disclosure: The Project On Government Oversight receives
funding from the Charles Koch Institute.)
Global construction booms will drive the market for the type
of formaldehyde Georgia-Pacific produces to $11.7 billion by 2023,
The federal ethics system is supposed to prevent political
appointees like Dunlap from serving the interests of former
employers. All political
appointees are required to sign the White House ethics pledge
promising not to “participate in any particular matter involving specific
parties that is directly and substantially related to my former employer
or former clients, including regulations and contracts” for the first two
years of their appointment. Dunlap submitted his signed pledge on
his third day at EPA, and has “consistently sought” EPA counsel on
ethics matters, according to an EPA spokesperson.The phrase
the ethics laws and regulations. In Dunlap’s case, EPA
ethics officers determined that because formaldehyde is
used by many companies in many industries, it was not a
“specific party matter,” and so was not subject to the ethics pledge,
the spokesperson said.
However, on the same day EPA took formaldehyde off the list of
chemicals assessed by the Integrated Risk Information System
(IRIS)—the agency’s independent process for evaluating the harms
toxic chemicals pose to people and the environment—Dunlap
voluntarily recused himself from decision-making on the chemical
“to avoid the appearance of any ethical concerns,” according to
Dunlap’s recusal stated that he would not participate “in any matters
related to the formaldehyde IRIS assessment for the duration of [his]
EPA tenure.” The EPA’s spokesperson explained to POGO that:
Although not required by federal ethics law or regulation,
Mr.Dunlap voluntarily recused himself from participating
in matters related to the EPA’s Integrated Risk Information
System (IRIS) assessment on formaldehyde, which is
not a specific party matter and therefore subject
to the terms of the Trump Ethics Pledge. Nevertheless,
to avoid even the appearance of any loss of impartiality,
Mr. Dunlap chose to recuse himself given his previous
involvement in this issue while with his former employer.
In addition to the ethics pledge, current impartiality ethics standards
prohibit, for one year, a government employee from participating
in a “particular matter involving specific parties” where the employee
knows that a party has a “covered relationship” and “where the
employee determines that the circumstances would cause a
reasonable person with knowledge of the relevant facts to question
his impartiality in the matter.”
in a “particular matter involving specific parties” where the employee
knows that a party has a “covered relationship” and “where the
employee determines that the circumstances would cause a
reasonable person with knowledge of the relevant facts to question
his impartiality in the matter.”
It’s hard for us to believe that Dunlap’s previous work on
formaldehyde issues wouldn’t have triggered the one-year
cooling off period. That ethics standard would deem Koch
a covered relationship, and Dunlap should have easily determined
that his work for the company and specifically on opposing
regulations involving formaldehyde would cause reasonable
people to question his impartiality. Apparently, he did eventually
come to that conclusion when he recused himself from the
EPA’s assessment on formaldehyde to “avoid even the
appearance” of impartiality.
formaldehyde issues wouldn’t have triggered the one-year
cooling off period. That ethics standard would deem Koch
a covered relationship, and Dunlap should have easily determined
that his work for the company and specifically on opposing
regulations involving formaldehyde would cause reasonable
people to question his impartiality. Apparently, he did eventually
come to that conclusion when he recused himself from the
EPA’s assessment on formaldehyde to “avoid even the
appearance” of impartiality.
The “particular matter involving specific parties” language isn’t
preventing many conflicts of interest for people coming into
government service. In response to this problem,
POGO asked Congress to prohibit government
employees from participating in matters in which they know
there is a “financial interest” favoring their former employer
or client. Additionally, we proposed to the Trump and Clinton
appointees participating in particular matters involving
specific parties that involved substantial communication
the two-year restriction to cover a “specific issue area”—
an area that “has a special or distinct effect on that party
other than as part of a class.”
Testimony: H.R. 1 and Executive Branch Conflicts of Interest
POGO asked Congress to prohibit government employees from participating in matters in which they know there is a “financial interest” favoring their former employer or client.
Unfortunately, the Dunlap case shows that the current ethics
protections and even our recommendations don’t go far enough.
POGO’s review of the laws and regulations found that they were
former government officials from switching sides to represent an
individual or entity on matters with which the former employee
was involved while working for the government.
As it stands, limiting the restrictions to “specific parties” allowed
Dunlap to run EPA operations that he worked on in the past and
that significantly impact Koch Industries, because the matter
impacted other entities too.
While it’s a nice change to see a voluntary recusal,
questions remain about why Dunlap only took action after
the EPA cut formaldehyde from its list of chemicals to
assess under the IRIS program, and why he is self-imposing a
recusal for the duration of his EPA tenure, which exceeds the
required one- or two-year bans. Dunlap’s position at EPA’s
Office of Research and Development (R&D) did not require
Senate confirmation, but the office plays a pivotal role in the
agency’s scientific work.
The office oversees research at three national laboratories
and six other research facilities located across the country,
and houses IRIS as well. In the first two months of his EPA tenure,
Dunlap participated in at least nine meetings about the
by Politico through the Freedom of Information Act. Dunlap
asked senior EPA officials in late October 2018 to have their
offices list just three to four priority chemicals IRIS should assess,
not include formaldehyde.
On December 19, EPA publicly announced its IRIS listing
that included 13 chemicals—9 fewer than the 22 originally
planned, according to a March 2019 Government Accountability
Formaldehyde was one of the chemicals cut from the listing.
Koch Industries engaged in a long-running campaign to
restrictions on the chemical.
the American Chemistry Council’s Formaldehyde Panel,
a group of formaldehyde producers, suppliers, and users
that disputes the chemical’s connection to leukemia
Dunlap participated in the Formaldehyde Panel,
Nancy Beck, the principal deputy assistant director
of the EPA’s Office of Chemical Safety and Pollution Prevention
(and a former senior director at the American Chemistry Council),
about the Toxic Substances Control Act, another chemical safety
law that could restrict the use of certain chemicals, according to
Information Act.
The Dunlap case highlights a major flaw in ethics laws that
allowed him to take part in government decisions that benefited
his former employer because the issues he worked on were not
specific to Koch Industries—seemingly a distinction without
related to Dunlap and the decision to halt the formaldehyde
health assessment, but it should also turn its attention to
creating stronger ethics laws requiring a recusal for any
appointee or government official when their former
employer or client holds any interest in the outcome.
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