45 State Officials Have Ties to Fracking Industry in Pa.

Many of the state's policymakers and regulators have come from or go straight to jobs in the oil and gas industry they oversee, according to a report that questions the impacts of such a "revolving door" on public policy decisions.
March 12, 2013
 

By Don Hopey

Many of Pennsylvania's policymakers, regulators and enforcement workers have come from the oil and gas industry they oversee, or they leave state jobs for industry jobs, according to a recent report that questions the impacts of such a "revolving door" on public policy decisions.

A report titled "Fracking and the Revolving Door in Pennsylvania" identified 45 current or former state officials who have links to the energy industry and gas drilling and fracking regulation, including 28 who have left to take industry jobs.

The 30-page report, released two weeks ago by the Public Accountability Initiative (public-accountability.org), a Buffalo, N.Y.-based nonprofit, nonpartisan research organization focused on corporate and government accountability, said that attrition from government jobs to positions in the regulated industry calls into question the commitment of those employees to enforce regulations on companies they could soon work for. Enforcement could also be hurt, the report said, when industry executives move into regulatory positions in government.

According to the report, the last four governors, including Tom Corbett, have "strong ties to the natural gas industry," as do a number of administrators from previous governors' offices, and 20 DEP administrators and employees, Democrats and Republicans alike, including all five DEP secretaries since the department was created in 1995.

That group includes DEP Secretary Michael Krancer, who was a judge on the state Environmental Hearing Board before his appointment as secretary. But prior to that, the report said, he was a general counsel at a utility, Exelon, that relies on natural gas, and once worked as a litigation partner at Blank Rome LLP, a law firm and lobbying group that represents natural gas interests and is an associate member of the Marcellus Shale Coalition. "The revolving door data in this report raises troubling questions about the incentives that may be guiding public officials' oversight of fracking in Pennsylvania, from governors to DEP secretaries to well inspectors." Robert Galbraith, a research analyst at Public Accountability Initiative, said in the report he authored.

A two-year gap needed?

The "revolving door" issue was also raised two weeks ago at the House Democratic Policy Committee hearing in Washington, Pa., where Judy Armstrong Stiles of Bradford County spoke about how incomplete reporting of water well test results by the DEP allowed her family to continue using contaminated water that damaged their health.

Also at that hearing, Craig Stevens, a resident of Silver Lake Township in Susquehanna County, told the policy committee that "the DEP looks like it's run by the industry," and "there should be a two-year moratorium on people from [the department] going to the industry."

Barry Kauffman, executive director of Common Cause Pennsylvania, a government accountability advocate, said ex-government workers can be a significant resource for oil and gas drilling companies, and the public "should be vigilant about conflicts of interest that may arise from the transition of government administrators or lower-level employees to private companies they may have regulated."

He said the state ethics law has very narrow and limited prohibitions only against government administrators lobbying the departments they worked for, and then only for a year.

So, for example, a person who worked for the governor's office could legally lobby the DEP the day after he quits state government.

"The prohibition for lobbying should be extended to two years and extended to the entire state government," Mr. Kauffman said.

The report notes that Mr. Corbett received campaign contributions totaling more than $1.8 million from the oil and gas industry, and worked as a lawyer for Waste Management, a waste hauling firm that's a member of the Marcellus Shale Coalition, a lobbying organization for shale gas development.

Mr. Corbett also appointed Mr. Krancer as DEP secretary and C. Alan Walker as Department of Community and Economic Development secretary. Mr. Walker was president and CEO of Bradford Energy, a firm grown out of his family's coal business. According to the report, Mr. Walker has holdings in a variety of companies related to the oil and gas industry, including a 30 percent stake in Gigo Oil and Gas.

Eric Shirk, a spokesman for Mr. Corbett, questioned the accuracy of the PAI report, and said in a written response to questions that it isn't surprising that "the most highly qualified and experienced" state officials overseeing shale gas development have a background in the industry they are regulating, or that others might move from government jobs to new careers in the industry.

"No doubt, Pennsylvania's citizens would expect their government to draw from talented citizens when filling important positions of trust," Mr. Shirk wrote. "But, to protect our taxpayers, Pennsylvania has strict ethics and disclosure laws to guard against undue influence in the policymaking arena.

"Nothing in the PAI's 'report' demonstrates that any officials -- past or present, Democrat or Republican -- have done otherwise."

Kevin Sunday, a DEP spokesman, said in a written reply to questions that department employees must follow state ethics rules that prohibit lobbying the department for a year after they leave.

"Former employees have gone on to work for nonprofits, think tanks, the federal government, other agencies, industry or entirely other fields," he said in the statement. "Also, it is common sense that we would hire staff with expertise of specific industries -- for example, we require our oil and gas inspectors to have a minimum of three years of technical experience. While staff work for DEP, they are guided by established science and the law."

Taking the revolving door

Among those politicians and bureaucrats who passed through the revolving door from government to the oil and gas industry, or from industry to government, according to the PAI study, are:

  • Pennsylvania's previous three governors: Tom Ridge's firms received a $900,000 lobbying contract from the Marcellus Shale Coalition; Mark Schweiker joined a firm that lobbies for the gas drilling industry; and Ed Rendell is a partner in a private equity firm with investments in fracking services companies. He recently lobbied on behalf of Range Resources in a dispute with federal regulators in Texas.
  • K. Scott Roy, Mr. Rendell's deputy chief of staff, who left state government in 2010 to work for Range Resources, where he is vice president of regulator and government affairs.
  • Sarah Battisti, Mr. Rendell's deputy chief of staff, who quit in 2010 to work for BG Group, a British gas company with Marcellus Shale gas holdings, where she was director of government and public affairs and co-chaired the Marcellus Shale Coalition's legislative committee. Ms. Battisti now works at the Bravo Group, a public relations company where she is head of the government relations section of the firm's energy practice. She is a registered lobbyist for The Energy Association of Pennsylvania, America's Natural Gas Alliance, Southwest Energy and UGI Energy Services.
  • Eric Battisti, Sarah's husband and Mr. Rendell's senior deputy secretary for legislative affairs, works as a government relations specialist in Buchanan Ingersoll Rooney's oil and gas practice, where he lobbies for gas industry clients EQT, Williams Cos., NRG and Koch Cos.
  • Barbara Sexton was DEP executive deputy secretary and helped persuade then-Secretary John Hanger to cut the state's Conservation District offices out of the gas drilling permit approval process because they were an obstacle to quick permit approval. She held the department's second-highest office from 2001 until she left in 2010 to take a job with Chesapeake Energy as director of governmental affairs.
  • John T. Hines, at the DEP for 18 years and a deputy secretary for water management and later executive deputy secretary to Mr. Krancer, quit to join Shell Oil Co. as government relations adviser.
  • Range Resources, Chesapeake Energy and Atlas Energy together also have hired at least four former well-site inspectors to work in environmental compliance and other aspects of their Marcellus Shale operations.

Mr. Hines, Mr. and Ms. Battisti, and K. Scott Roy did not return multiple phone calls requesting comment. Kimberly Windon, a Shell spokeswoman, said Mr. Hines was hired because of his "wealth of experience" in state and regional policy matters and water management.

Ms. Sexton also declined to comment and referred questions to Jacque Bland, a Chesapeake spokeswoman, who refused to comment about Ms. Sexton's employment or answer questions about any company strategy for hiring state employees or benefits it receives from doing so.

Ms. Bland later issued a written statement that said, "Chesapeake hires the best people with the deepest expertise for every position, from geologists to engineers to public policy experts."

Matt Pitzarella, a spokesman for Range Resources, where Mr. Roy works, said the company's hiring of former government administrators is normal business practice. The firm had Mr. Rendell speak on its behalf in a dispute in Texas with the U.S. Environmental Protection Agency.

"Our desire is to hire the best, the brightest and the most qualified, which in some instances may include individuals who previously worked as public servants," he said, noting that environmental groups also hire away state workers and administrators or have their employees tapped for positions in government.

Examples of that include George Jugovic, who was an attorney with Citizens for Pennsylvania's Future before serving as a DEP attorney, then southwest regional director from November 2009 through September 2011. The Corbett administration sought his resignation and he returned to PennFuture, a statewide environmental advocacy organization, as president and CEO.

Another is John Hanger, who was president of PennFuture when he was tapped by Mr. Rendell to become DEP secretary. He left office when Mr. Corbett was elected for a job at Eckert Seamans, a law and lobbying firm that represents the Pennsylvania Oil & Gas Association and is a member of the Marcellus Shale Coalition.

But that revolving door spins much more frequently between government and industry, said Jeff Schmidt, executive director of the Sierra Club in Pennsylvania and a longtime observer of the Harrisburg political scene. When it occurs on the administrative and lobbying levels, it can drain experienced administrators from government, and result in reduced regulation and enforcement of industries, like oil and gas, where there are much more lucrative employment opportunities.

"There's a concern about people in state government providing favors to industries that might hire them, in effect helping to feather the nest they land in," Mr. Schmidt said. He also has concerns about former industry executives coming to government and being in positions to weaken or reduce enforcement.

(c)2013 the Pittsburgh Post-Gazette

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