Smoke and Mirrors

As part of the Bush legacy, a special law can hide polluting industries

Administrative law Judge Sylvia A. McClellen agreed with Hurst's assessment, and the audits remained hidden from public review.

"We believe those two audits were done so they could really determine what was going on without ever having to tell anybody," Lowerre charges, adding, "When you create those kinds of environmental risks, you shouldn't get that privilege."

In the end the judge recommended denying the permit because of the groundwater pollution, but the TNRCC reversed her decision.

Companies benefiting from the law contributed almost $1 million to Bush's gubernatorial races.
Companies benefiting from the law contributed almost $1 million to Bush's gubernatorial races.
Exxon's Bayport plant was among the company facilities that did 18 audits without reporting any violations.
Deron Neblett
Exxon's Bayport plant was among the company facilities that did 18 audits without reporting any violations.

Lowerre likens the law's effect to a card game where all players except one have to lay what they're dealt face up on the table. The lucky one gets to keep his cards hidden. Lowerre says audit laws can be effective if they offer immunity without letting polluters profit, and if they protect the public's right to know. But Texas's statute does neither.

"The legislature said, "It's more important for companies to audit than for you to be able to get information,' " he says. "It's a dramatic shift. A reversal of 200 years toward openness."

Even as Texas reigns as the nation's undisputed pollution champ, the Audit Privilege Act gives expanded powers to polluters. Environmentalists view the statute as a signature piece of pro-industry legislation, and one of the sorrier legacies of Governor Bush. He gave his blessing to a bill that had its origins in a straight-talking lobbyist named R. Kinnan Golemon.

A former general counsel for the Texas Chemical Council, Golemon had a busy 1995. That year he added several top-shelf companies to his already weighty list of corporate clients, which included the likes of Exxon, Shell Oil and Hoechst Celanese.

Mobil Oil, Motorola and Koch Industries solicited Golemon's services for between $10,000 to $24,999 each. In filings with the Texas Ethics Commission, Golemon reported that his work for those corporations focused in part on lobbying for the Audit Privilege Act.

Golemon says he became intrigued by the audit privilege concept when he learned about a related Colorado statute that passed in 1994. He says that his work on behalf of industry interests in Texas led him to conclude that the state's environmental laws are "dysfunctional." The system, he says, favors companies that stay silent about mishaps rather than those firms that report them to regulators. He says he witnessed this with some of his own clients who tried to come clean.

"Because they were good citizens and sat down with the state, they got the beautiful opportunity to pay significant penalties," Golemon says. "The person who screws up 50,000 times and never goes in and tells anybody, he doesn't have to pay unless somebody catches him, and we don't have enough people out there to begin to inspect and enforce."

The lobbyist says he discussed the Colorado law with industry clients, who exhorted him to get to work on creating a similar statute for Texas. Those were heady days when a conservative revival was sweeping the country, heralded by Newt Gingrich's Contract with America. Policy makers across the nation sought to give industry a freer hand at policing itself.

Perhaps, then, it was no mere coincidence that state Representative Warren Chisum, the chairman of the House Environmental Regulation Committee, was himself working on an audit privilege law with the conservative American Legislative Exchange Council. Golemon sat down with the Pampa Republican to kick around ideas. The two agreed that companies needed special incentives to tackle pollution violations without fear of reprisals.

With Golemon's input, Chisum and his staff prepared the bill. Golemon, meanwhile, rallied lawmakers on behalf of his corporate clients who wanted the audit privilege and immunity in the worst way.

Representative Steve Wolens, D-Dallas, claims there are only a couple of bills that upset him in his 20 years in the Texas legislature. House Bill 2473, Golemon and Chisum's Audit Privilege Act, was one of them. He first heard about it from Golemon, who paid him a visit to discuss the measure in what Wolens describes as a "very forthcoming and open and honest way."

Wolens could not believe what he was hearing. He recalls asking the lobbyist with a certain degree of awe, "How did you have the gall to dream this up? How did you have the gall to think this big?"

The bill was one of many that crawled through the legislature that session. Because it lacked the visceral spark of abortion or budgets, Wolens says, the measure slipped past most people's radar screens.

But it proved polarizing during an Environmental Regulations Committee hearing in late March 1995. In public statements, environmentalists and prosecutors decried the measure for undermining accountability and offering special rights to polluters. Meanwhile, industry lobbyists and groups like the Texas Association of Business and Chambers of Commerce urged its passage.

In his inaugural address earlier in 1995, Bush declared that "What Texans can dream, Texans can do." Wolens recalls taking the house floor when the bill was being debated. "This bill is evidence of only one thing," he told colleagues. "What lobbyists can dream, lobbyists can do."

The measure easily passed both the house and senate, where it was introduced by Lake Jackson Republican J.E. "Buster" Brown.

During the legislative session Golemon had met with members of the governor's staff to win their support for the measure. "They said, "Well, it's an interesting concept, and if it gets to us and we like it, we will give it due consideration,' " he recollects. The governor signed it into law.

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