Tipton Digs Into Waste and Politics in Administration's War on Coal

Press Release

Today, during a House Natural Resources Committee hearing on the Obama Administration's War on Coal: The Recent Report by the Office of the Inspector General, Congressman Scott Tipton (R-CO) raised concerns on the cost and suspect process behind the Administration's ongoing rewrite of a 2008 coal production regulation that had already undergone over five years of environmental analysis and scientific consideration before completion. The 2008 rule had not yet even been implemented before the new Obama Administration scrapped it, despite the five years of environmental analysis that went into its creation.

Since the start of the rewrite, the Administration has spent over $9 million taxpayer dollars over five years, and has yet to even publish a draft rule. During this process the Administration--the Office of Surface Mining (OSM)--hired contractors to conduct a new environmental impact analysis on the proposed rewrite which found that it would kill 7,000 jobs and hurt the economies of 22 states--including Colorado. A decision was made to part ways with the contractors shortly after their economic findings were leaked to the media. To add insult to injury, the Administration attempted to "cook the books" to lower the findings of the number of jobs that would be lost by the rewrite of the regulation, by changing the baseline from the 1983 rule that was on the books, to the not yet enforced 2008 rule that the Administration was in the process of rewriting.

Tipton questioned Robert Knox, Assistant Inspector General for Investigations in the Office of the Inspector General (OIG), on the findings of the OIG investigation into this process.

The transcript of the exchange follows:

TIPTON: …You testified that in your report you found that the Office of Surface Mining (OSM) initially directed contractors to use the 1983 rule to estimate coal production losses and job losses. You then testified that "after the contractors estimated there would be high costs to the industry and significant job losses" OSM told the contractors to use a 2008 rule that was never implemented to lower the potential job loss numbers. Based on your investigation, do you believe there was willingness by certain agency employees to cook the books in order to lower the potential job-loss numbers?

KNOX: Our investigation found that when the decision my OSM was made to use the 2008 rule for calculating the baseline, there was awareness among the decision-makers that it would have the effect of lowering the estimated job-loss figures, but our investigation did not discover their motivations behind that decision, there was no evidence that it was politically motivated. It was stated that the reasoning behind using the 2008 rule was based simply on trying to identify the best possible EIS product in accordance with the national Environmental Protection Act.

TIPTON: We might tend to disagree on that. It looks as though they were attempting to cook the books just simply based off of some of the potential outcome of the loss of jobs numbers. Did your investigation reveal any emails exchanged between the Office of Surface Mining Director and counsel after the Associated Press reported the draft environmental impact statement could kill those 7,000 jobs?

KNOX: Yes sir, it did.

TIPTON: Would you summarize the content of those emails?

KNOX: I don't have perhaps all of them before me, but there's one that I'm aware of here that I do have dated January 27, in the morning. It's an email from the counselor Diane Shally (sp) to the director in which the title of it is "loss of coal jobs at 7,000.' The body of the email states "We should fire the EIS contractor and put that on the front page' with exclamation marks.

TIPTON: "We should put that on the front page…' Did you review the February 1, 2011 meeting discussing the baseline, did you review that recording?

KNOX: We did.

TIPTON: Could you summarize the content of that tape?

KNOX: The summary indicates that there was a discussion between the contractor and the government about the project generally in the context of following the January 26 leak of the jobs number. And essentially the discussion centered on how to move forward on the project, concerns that the government had about the contractor's performance, and the use of the 2008 rule for baselining as opposed to the 1983 rule.

TIPTON: And this is when the comment was made, "this is not the real world, this is rulemaking'?

KNOX: That's correct sir.

TIPTON: That goes back I think to the first question: was there some political motivation on this?

KNOX: We found no evidence of political motivation, but this was an example where a contractor was alerted very late in the period of performance about a pretty significant change.

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