When several senators voiced concern in May 2001 that his extensive lobbying ties might conflict with his new job as deputy interior secretary, J. Steven Griles insisted it wouldn't be a problem.
"I will do my utmost . . . to prevent the appearance of any improprieties or conflicts in terms of my prior associations," Griles told the Senate Energy and Natural Resources Committee during his confirmation hearing. He signed two letters pledging to recuse himself for up to six years from matters that could affect his former lobbying firm or the array of utilities, mining companies and other energy producers he represented.
Within weeks of taking office, Griles began a series of meetings with former clients and administration officials on regulatory matters important to several of his former clients.
was involved in discussions about rule-making that have weakened environmental
laws and have had positive impacts on his previous clients.
Griles, 54, says he has violated neither his pledge to the senators nor federal guidelines meant to curb conflicts of interest. Some environmental groups disagree, however, and a U.S. senator has called for an investigation.
A review of Griles's activities shows that he has met frequently with some of the energy industry leaders he once represented. For example, he met at least three times with Harold P. Quinn Jr. and other senior officials of the National Mining Association between Aug. 16, 2001, and Jan. 8, while the industry group -- a former client -- was lobbying the administration to loosen standards for mountaintop mining operations and preserve a hardrock mining law highly favorable to the industry.
He also took part in a meeting on Sept. 10, 2001, with a dozen top executives of another former client, the Edison Electric Institute, to discuss Bush administration plans to relax clean-air enforcement actions against aging coal-fired power plants but to seek tough new industry-wide standards for emissions of sulfur dioxide, nitrogen oxide and mercury. Accounts of the meetings come from Washington Post interviews and official government logs obtained by two environmental groups, Friends of the Earth and the Citizens Coal Council.
Federal ethics statutes and regulations are open to wide interpretation. Generally, however, they prohibit a government official from knowingly participating "personally and substantially" in any "particular matter" that could affect his or her own financial interests or that involves a former employer or client of that employer. The stated intent is to avoid a situation in which "a reasonable person" familiar with relevant facts would question the official's impartiality.
In a recent interview, Griles said his meetings with former clients were largely social or informational in nature, and that he never took part in administration deliberations over "any particular matter" that might directly affect his former lobbying firm or clients. When in doubt, he said, he obtained approval for his scheduled meetings from the Interior Department's ethics lawyer to avoid the possibility of a conflict of interest. More than once, he said, he backed out of meetings when it appeared he would be discussing matters of direct interest to former clients."We are all as scrupulous as we can be to assure that I will not be involved in any particular matter that would violate the ethics agreement or even have the appearance of a conflict of interest," Griles said. "The president said he wanted this administration to be held to the highest ethical standards, and I don't want it ever to be said that I didn't."
As the Interior Department's No. 2 official, Griles is responsible for managing the government's vast mineral and land holdings as well as conferring with other departments and the White House on a broad range of energy-related issues with substantial environmental consequences and financial implications for the energy industry.
While maintaining contacts with former clients and industry associates, Griles had at least 32 meetings with executive branch officials on pending mining and clean-air regulatory matters that were of concern to several of his former clients. Those meetings occurred between July 27, 2001, and Feb. 20, according to the logs.
Griles's critics say he flouted his recusal agreements and government conflict-of-interest rules by repeatedly involving himself in issues with significant economic consequences for his former industry clients.
"The biggest thing is that Mr. Griles said he wouldn't be involved in any particular matter that impacts his previous clients and employer, and he clearly was involved in discussions about rule-making that have weakened environmental laws and have had positive impacts on his previous clients," said Kristen Sykes, a researcher for Friends of the Earth.
Carolyn Johnson, staff director of the Citizens Coal Council, said Griles "just didn't hold back at all."
Sen. Ron Wyden (D-Ore.), one of four energy committee members who voted against Griles's nomination, said last week that the Interior Department's inspector general should investigate Griles's conduct to determine whether he directly or indirectly helped his former lobbying firm and clients, as some are alleging. "I think that it's critical to get to the bottom of this situation and not have the public wondering if powerful special interests get dealt a winning hand, with Mr. Griles doing the dealing," Wyden said.
Griles maintains a financial link to one of his former Washington lobbying firms, National Environmental Strategies. It was founded in 1990 by Marc Himmelstein and Haley Barbour, before Barbour became chairman of the Republican National Committee. As a condition of his July 12, 2001, Senate confirmation, Griles sold his interest to Himmelstein and closed another firm called J. Steven Griles & Associates.
Under the sales agreement, Himmelstein's firm is paying Griles $284,000 annually for four years. Griles began receiving installments on the roughly $1.1 million purchase agreement last year, on top of his $150,000 annual government salary.
Griles pledged in one of his recusal letters to take no action that would affect his former firm's "ability or willingness" to continue making the payments. Last week, he defended the arrangement as a reasonable business transaction that would not leave Himmelstein's lobbying firm strapped for cash. Himmelstein said recently that, since Griles moved to Interior, the two men have continued to socialize, occasionally getting together for a beer or dinner, but that "We don't talk about work. We're not allowed."
Barred From Certain
The Bush administration has recruited scores of corporate executives and industry lobbyists to serve in key regulatory posts, particularly at the Energy Department, the Environmental Protection Agency and Interior. Many of these officials are barred by law and administrative policies from handling certain issues for a year or more because of the potential for conflicts of interest involving former employers.
Interior Secretary Gale A. Norton, a Colorado lawyer and onetime advocate for western property interests, and at least 10 other high-ranking Interior officials have recused themselves from certain government activities that might affect their former employers, clients, or industry-backed foundations, according to department documents.
Griles, a mid-level Interior official in the Reagan administration and onetime Virginia coal company vice president, has generated concern among environmentalists and some lawmakers because of his extensive industry ties and his reputation for aggressively pushing to loosen environmental restrictions to open more public land to drilling and mining. The Washington Post reported earlier this year that Griles had intervened in a dispute over a massive coal methane gas extraction project involving energy companies he once represented. Griles wrote a memorandum challenging an EPA report critical of the country's largest domestic energy exploration project, in Wyoming's Powder River Basin.
The Interior Department's lawyers concluded in April that Griles's memo did not violate ethics rules or his recusal agreement. Griles said he subsequently signed another agreement, on May 8, specifically disqualifying himself from coal-bed methane issues "for the world to know I'm not even going to be talking to anybody about it again."
The Interior Department logs cite several meetings between Griles and Quinn, the National Mining Association's senior vice president. The two men had lunch on Aug. 16, 2001, and then met again on Nov. 29. A spokesman for Quinn described the lunch as a "social gathering," and said Quinn couldn't recall the second meeting's purpose.
The National Mining Association was concerned at the time about the administration's deliberations over a proposed rule change to make it easier for mining companies to dump dirt and rock waste from mountaintop mining operations into adjoining valleys and streams -- a move strongly supported by the group. The rule change -- which eventually was approved by the EPA and the Army Corps of Engineers April but then blocked by a federal court ruling -- would have provided a major boost to low-sulfur coal mining operations in West Virginia and Kentucky and would have stepped up hardrock mining in western states.
According to an Interior department routing slip, Quinn sent Norton a "courtesy copy" of his analysis of the draft rule changes on Dec. 3, 2001, highlighting his group's concerns and criticisms and recommending deletions. Quinn says he never sent the memo. Griles said that he may have discussed mountaintop mining with Quinn in passing, but that he doesn't recall any substantive discussions or Quinn's memo.
On Jan. 8, Quinn visited Griles again, accompanied by mining association president Jack Gerard and four other officials. This meeting was for "a more general discussion of the outlook for mining reform," according to Carol Raulston of the National Mining Association, who attended the 7 a.m. session.
Mining association officials were alarmed by a letter Norton had sent to Congress in October 2001 saying she would support changes in an 1872 law governing hardrock mining on federal lands that likely would add to industry's costs and impose new federal management constraints. "We were there to discuss where that effort was headed from the industry perspective," said Raulston.
Griles said that at most he briefed the mining executives on where the deliberations stood, but that he referred them to another Interior official to talk specifics. Norton never formally proposed legislation to revise the mining law.
Griles has also been involved in deliberations over clean-air enforcement policy and initiatives, a topic handled primarily by the EPA and the Energy Department According to his calendar, Griles attended at least 16 meetings with other administration officials or industry groups or advocates to discuss air pollution issues. One of those sessions, on Oct. 5, 2001, included White House political adviser Karl Rove, according to the logs.
On Aug. 30, 2001, Griles was briefed on air pollution issues by the Electric Power Research Institute, an industry group represented by Himmelstein. On Sept. 10, Griles attended a meeting organized by James Connaughton, the White House environmental adviser, with 12 utility executives who belong to the Edison Electric Institute, another former Griles client.
Dan Riedinger, a spokesman for the institute, said the officials discussed two matters of major concern to the utility industry: One was the administration's progress in rewriting "New Source Review" rules to reduce the number of government suits brought against older coal-fired power plants for violations of the Clean Air Act, a move heartily endorsed by the industry. The other was an administration proposal dubbed "Clear Skies," intended to sharply reduce industry-wide emissions of sulfur dioxide, nitrogen oxide and mercury, which can cause serious health problems.
Officials of the Edison Electric Institute were troubled by aspects of "Clear
Skies" and provided Connaughton, Griles and others with computer analyses highlighting
the potential adverse affects of such an approach on energy costs and supplies.
© 2002 The Washington Post Company