Smoke and Mirrors

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

Golemon was at the signing and shook Bush's hand moments before the governor sealed the deal.

Backing measures popular with industry has paid off handsomely for Bush. Companies that have taken advantage of the Audit Privilege Act have been among the most generous contributors to his campaigns. A 1999 report by Texas Public Employees for Environmental Responsibility found that 45 of the 242 companies that had submitted self-audits accounted for a whopping 48 percent of the requests to have violations forgiven under the Audit Privilege Act. Personnel or political action committees for those companies contributed about $950,000 to Bush's gubernatorial campaigns.

"In other words, the politically active companies pushing the legislation were collectively among the worst environmental actors with the most to gain by concealing their polluting activities," the report said.

But Mike Jones, a spokesman for Bush, says the audit act has nothing to do with campaign cash. It's just good policy.

"We believe the law is a strong incentive for any of these regulated groups to do better than the bare minimum required by federal and state law," he says. "Overall, we think the law is a good common-sense idea that's having a positive impact."

The Audit Privilege Act does a lot more than help firms meet the bare minimums required by law, says Tom Smith, the director of Public Citizen's Texas office. The statute helps companies break the law and in some cases profit by doing so.

"A polluter simply says, "Whoops, we made a mistake and we have a plan [to fix it].' Without that fear of enforcement, there's no real incentive to clean up their acts," he says. "As a result, we may never get clean air."

Golemon compared it to parents hearing a 14-year-old son talk about beer-drinking. "You hammer him real big because he was there when somebody popped a beer open," he explains. "You think he's going to come and tell you again? No, I don't think so."

Smith finds another boozy metaphor more apt.

"A drunk every time stumbles home and says to his wife, "I promise I'll never do it again,' and proceeds to do it again," Smith intones. "Because of this law, we have a state agency that facilitates violations of pollution laws."

Critics of the audit statute argue that companies do not need special incentives to do audits. A business has a clear interest in running an efficient and responsible operation, catching problems before regulators do and avoiding liability.

Twenty-five states have passed audit privilege or immunity laws. Another 11 have some form of audit policy. The National Conference of State Legislatures found in a 1998 study that the percentage of facilities conducting self-audits was the same in states with an audit statute as in states without -- about 80 percent. The NCSL also determined that such laws or policies did not appear to impact the disclosure of violations. Between one-fourth and one-third of facilities disclosed violations in states with and without audit provisions.

Golemon believes the audit act comes down to trust. He says that if regulators and the public sprinkled just a few grains of that rare commodity on companies, they would be rewarded with a harvest of impeccable corporate behavior. "If you're going to get honesty in the process, somebody has got to have a little trust along the way," he says.

But if companies cannot be trusted to act responsibly enough to operate cleanly within the law, should they be entrusted with enhanced powers to police themselves?

Elf Atochem has notified the TNRCC of its intent to conduct nine audits since the law passed. In a letter dated October 12, 1995, a company official described the scope of one investigation, to begin four days later, as covering "all operations and activities" at the Houston chemical plant. "The scope of the audit will be to evaluate compliance with all applicable environmental laws and regulations as well as environmental permits."

Aside from the eye-poppingly short notice the company gave for such an ambitious probe, the notable fact is that the company did not, upon completion of the audit, report a single violation. This was the same company that less than five years earlier had to pay a settlement of $900,000 for more than 50 separate alleged violations of federal hazardous waste laws.

"It's so scary," Maschino says.


Elf Atochem's failure to find a single violation during its self-audits is not surprising. Phillips Petroleum has reported 47 self-inspections under the audit act, some casting a net wide enough to cover all federal, state and local environmental laws, rules and regulations and any associated permits and authorizations. At least eight audits were conducted at its Pasadena complex, which has been rocked by deadly explosions. Nevertheless, Phillips says it has not found a single violation to report.

Skeptical environmentalists have come to expect such pristine findings when the state leaves it up to industry to regulate itself. The TNRCC itself admits limitations in its oversight of these companies.

TNRCC officials frequently bemoan the "limited resources" they have to ensure full environmental compliance. A particular area of concern is the paltry number of full-time field inspectors, some 482 in all. Patrick Shaughnessy, an agency spokesman, says the TNRCC would like to inspect every facility annually but doesn't always meet that goal.

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