Saturday, May 25, 2019

Toxic Avenger: Did EPA Appointee Do Industry Employer’s Bidding?



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.
Questions remain about why Dunlap only took action after the EPA cut formaldehyde from its list of chemicals to assess, and why he is self-imposing a recusal for the duration of his EPA tenure.









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 
chemical management,” according to his LinkedIn profile
Dunlap was likely well-versed in the issue, 
working with industry groups to prevent the government 
from definitively linking formaldehyde to cancer. 

The EPA classifies formaldehyde as a 
organizations within the Department of Health and Human 
Services and the World Health Organization consider it a
 “known” carcinogenThe EPA study reportedly contained
 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.






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 
recusal statement he filed with the EPA.

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.”
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. 
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 
campaigns and transition teams a stronger two-year ban on
appointees participating in particular matters involving 
specific parties that involved substantial communication 
with the federal government. And we proposed extending
 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 
mostly designed to prevent officials from providing “privileged 
access” to their former employers or clients, and to prevent 
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 
independent process, according to calendars obtained 
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, 
EPA offices submitted priority lists over the next month that did 
not include formaldehyde.

 that included 13 chemicals—9 fewer than the 22 originally 
planned, according to a March 2019 Government Accountability 
Office report on EPA’s track record of assessing toxic chemicals. 
Formaldehyde was one of the chemicals cut from the listing. 
Koch Industries engaged in a long-running campaign to 
delay government action on formaldehyde, funding an
 organization called the Formaldehyde Council to lobby against 
restrictions on the chemical. 

The Formaldehyde Council was replaced in 2010 by 
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, 
according to E&E News. He also emailed 
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 
documents obtained by the Sierra Club through the Freedom of
 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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