WASHINGTON (REUTERS, NYTIMES) - The White House is reviewing Environmental Protection Agency chief Scott Pruitt's activities after reports that he paid below the market rate to live in a condo owned by a lobbyist who deals with issues overseen by the agency, the Wall Street Journal reported on Monday (April 2), citing an unnamed White House official.
The Environmental Protection Agency signed off last March on a Canadian energy company's pipeline expansion plan at the same time that Mr Pruitt was renting a condominium linked to the energy company's powerful Washington lobbying firm.
Both the EPA and the lobbying firm dispute that there was any connection between the agency's action and the condo rental, for which Mr Pruitt was paying US$50 (S$65.63) a night.
"Any attempt to draw that link is patently false," Ms Liz Bowman, a spokeswoman for Mr Pruitt, said in a written statement.
Nevertheless, government ethics experts said that the correlation between the EPA's action and Mr Pruitt's lease arrangement - he was renting from the wife of the head of the lobbying firm Williams & Jensen - illustrates why such ties to industry players can generate questions for public officials: Even if no specific favours were asked for or granted, it can create an appearance of a conflict.
"Entering into this arrangement causes a reasonable person to question the integrity of the EPA decision," said Mr Don Fox, who served as general counsel of the Office of Government Ethics during parts of the Obama and George W. Bush administrations.
The March 2017 action by the EPA on the pipeline project - in the form of a letter telling the State Department that the EPA had no serious environmental objections - meant that the project, an expansion of the Alberta Clipper line, had cleared a significant hurdle.
The expansion, a project of Enbridge Inc, a Calgary-based energy company, would allow hundreds of thousands more barrels of oil a day to flow through this pipeline to the United States from Canadian tar sands.
The signoff by the EPA came even though the agency, at the end of the Obama administration, had moved to fine Enbridge US$61 million in connection with a 2010 pipeline episode that sent hundreds of thousands of gallons of crude oil into the Kalamazoo River in Michigan and other waterways.
The fine was the second-largest in the history of the Clean Water Act, behind the penalty imposed after the Deepwater Horizon spill in the Gulf of Mexico.
A spokesman for Williams & Jensen said that the lobbying firm did not intervene with the EPA or Mr Pruitt on the Enbridge pipeline expansion either before or after Mr Pruitt was living in the condo owned in part by Ms Vicki Hart, the wife of Mr J. Steven Hart, the chairman of the firm.
The lobbying firm also said it had not worked on similar regulatory issues for Enbridge in the past year, even though it was registered at the time as lobbying for the company on "issues affecting pipelines and construction of new pipelines", its disclosure report from early 2017 says.
Ms Cynthia Giles, who served at the EPA as an enforcement official in the agency's mid-Atlantic region in the 1990s before becoming an assistant administrator at the agency in the Obama administration, said Mr Pruitt's housing arrangements raised questions about the fairness of the EPA's decision-making process.
"The people at the EPA are charged with following the science and facts as its applies to individual decisions," she said.
Appearing to accept favours from influential figures "is just not good judgement".
Ms Bowman said the criticism was unjustified, saying that Mr Pruitt paid what one EPA official called a "market value" rent.
However, an examination of Capitol Hill rentals suggests that rates typically are considerably higher and generally do not come with a provision, as Mr Pruitt's did, that the renter can pay for only the nights stayed at the condo.
The EPA's review of the Albert Clipper project was one of at least a half-dozen regulatory matters before the EPA related to clients who were represented by Williams & Jensen at the time that Mr Pruitt was living part time in the Capitol Hill condo.
Williams & Jensen, for example, was lobbying the EPA early last year, according to its disclosure reports, on behalf of both Oklahoma Gas and Electric, a major coal-burning utility, and Concho Resources, a Texas-based oil and gas drilling company.
The work for Oklahoma Gas involved the effort to repeal or revise the landmark Obama-era rule that pushed states to move away from coal in favour of sources of electricity that produce fewer carbon emissions.
An EPA calendar in March 2017 shows that Mr Pruitt and his chief of staff were scheduled to meet with company executives at the request of a Williams & Jensen lobbyist.
Mr Brian Alford, a spokesman for Oklahoma Gas, said the company had received no favours from Mr Pruitt.
"By no means has OGE benefited from any living arrangements for Administrator Pruitt," he said in a statement. "In fact, Administrator Pruitt did not attend the mentioned meeting."
Concho, a 2017 lobbying disclosure report shows, hired Williams & Jensen to help it handle matters including "EPA regulatory proposals re: oil and gas operations".
The company's regulatory filings indicate its concerns included the regulation of methane emissions (a major factor in climate change) from drilling and production operations, as well as rules intended to protect drinking water supplies.
Mr Pruitt has considered revisions in both regulatory areas.
In the Enbridge case, the EPA was asked to evaluate the potential environmental effect of the pipeline expansion application, as well as the quality of a preliminary review of the project that the State Department had already conducted.
When the pipeline opened in 2010, it was permitted to carry only as much as 500,000 barrels of oil a day. The expansion would allow it to move an additional 390,000 barrels through a key 4.8km section near the Canadian border.
Mr Michael Barnes, a spokesman for Enbridge, said the project deserved to be approved, noting the "vital service that this existing pipeline provides in delivering secure and reliable supplies of North American crude oil to the United States".
The oil it carries comes from the so-called Canadian tar sands, like the oil for the proposed extension of the Keystone XL pipeline.
Extraction from tar sands has drawn opposition from environmentalists, given that the process requires more energy than traditional drilling.
Pipelines, like this one, that cross an international border into the United States require a presidential permit, which is issued only after the State Department has conducted a detailed environmental review and has taken input from other federal agencies, including the EPA.
In this case, the pipeline expansion was further complicated by the fact that a related Enbridge pipeline involved in oil imports from Canada spilled nearly 1 million gallons of oil in Marshall, Michigan, in July 2010 after tape intended to prevent corrosion on the pipeline failed.
Investigators later found that employees allowed the oil to continue to flow after wrongly assuming that the alarms sounding were caused by a harmless vapour bubble.
Enbridge has argued it has learned from that accident and taken corrective measures to prevent it from happening again.
The settlement with the EPA also requires the company to spend at least US$110 million to install advanced leak detection and monitoring measures to prevent spills.
In March 2017, while Mr Pruitt's lease at the Washington condo was in effect, the EPA issued a letter giving the pipeline project the second-best rating it offers out of 10 possible scores.
The agency concluded that while the project raised "environmental concerns", the review had adequately examined the alternatives and determined that "no further analysis or data collection is necessary".
If the EPA had wanted to more aggressively challenge the project, the agency could have rated it as "environmental objections" or "environmentally unsatisfactory".
The conclusion stands in contrast to a similar evaluation by the agency in 2013 of the Keystone XL pipeline project.
That evaluation focused more on the effect that the flow of tar-sands oil could have on the goal of limiting global climate change and gave the project an "environmental objections" rating.
With the signoff by the EPA and the State Department, Enbridge received the expansion permit it needed in October, five years after it first applied for permission.
Additional pumping stations have already been built, meaning the pipeline expansion project is already completed, the company said.
Mr Pruitt is separately the focus of an investigation by the EPA inspector general, Mr Arthur Elkins Jr, based on Mr Pruitt's travel in early 2017 back to his home state of Oklahoma on government-funded flights, as well as his use of first-class tickets for flights and, at times, costly chartered planes.
Discussions have already started on Capitol Hill about asking the EPA inspector general to expand his inquiry to include the condo deal.
Late on Monday, three House Democrats who serve on the committee with oversight of the EPA sent a letter to Mr Pruitt asking a series of questions about the condo lease, which was first reported by ABC News.
"As administrator you have taken a number of actions to benefit industries regulated by EPA," the letter said. "And this news raises the possibility that you may have personally benefited from your relationship with industry."