Another Problem for Pruitt: Deadline in Tar Creek Audit Suit

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By Peter Hayes

The EPA faces a June 19 deadline to tell a federal court if it will release information about Administrator Scott Pruitt’s refusal to release the results of audits finding potentially criminal conduct in the operation of a hazardous waste fund.

The Freedom of Information Act suit stems from the 2013 and 2014 audits of the Lead-Impacted Communities Relocation Assistance Trust, a fund set up to relocate residents who lived on contaminated properties near the Tar Creek Superfund site in Ottawa County, Okla. Pruitt was Oklahoma attorney general at the time.

Campaign for Accountability, a public watchdog organization based in Washington, wants the Environmental Protection Agency to provide relevant documents related to Pruitt’s failure to release the audits publicly. The refusal was widely criticized at the time, including by the auditor himself.

The group also wants to know why the agency’s Office of Inspector General issued a January 2013 memo finding “no evidence to support any allegations” of fund improprieties before the state auditor’s investigation had been completed.

“We’d like to know why an employee at OIG was so intent on finding no wrongdoing,” Dan Stevens, the watchdog’s executive director, told Bloomberg Law June 14.

“We’d also like to know Pruitt’s role in trying to stop the audits from going out,” including whether, after becoming EPA administrator, Pruitt pressured his replacement as Oklahoma AG to continue to keep the audits private, Stevens said.

The EPA didn’t respond to Bloomberg Law’s requests for comment on the suit, or whether it will release any documents related to the Tar Creek audits.

A spokeswoman for Sen. Jim Inhofe (R-Okla.), who helped get the relocation fund started and who recently hinted Pruitt may need to step down as administrator because of problems unrelated to Tar Creek, didn’t respond to requests for comment about the FOIA suit.

The Audits

In April 2011, Pruitt allegedly requested that Oklahoma State Auditor and Inspector Gary Jones look into evidence of bid-rigging for contracts related to the Tar Creek relocation fund, including how bids to raze contaminated houses and other structures were submitted.

Jones was also charged with investigating evidence of collusion among bidders and conflicts of interest among bid winners and trustees, according to the group’s FOIA suit.

Pruitt’s request allegedly came after then-Senator Tom Coburn (R-Okla.) raised concerns about suspected unlawful contracting practices.

But after the 2013 and 2014 audits were completed, Pruitt barred the auditor from releasing the results. He was “concerned about publication of unsubstantiated criminal allegations against private citizens,” he said in a May 2015 letter denying the auditor’s request to publish the findings.

In November 2017, the Campaign for Accountability filed suit in Oklahoma against the new Oklahoma attorney general and Jones. They sought release of the audits and additional documents related to the Tar Creek fund.

And five days after the group filed their federal FOIA suit in April 2018 against the EPA, Hunter posted the audits and some supporting documents on the state AG’s website.

The 2013 audit detailed a number of potential problems including possible violations of the state competitive bidding act, collusion among bidders, unlawful disclosure, conspiracy against the state, and violations of the open meetings act and federal award guidelines.

The 2014 audit found “sufficient circumstantial evidence for additional investigation into a potential conspiracy against the state.”

The later audit said the owner of a contracting business that won a multimillion-dollar demolition bid had a prior business relationship with the project manager for the trust, and “an appearance of favoritism” existed.

FOIA

The FOIA suit stems from the EPA’s alleged failure to comply with the watchdog group’s February request to agency officials in Washington and Region 6 for all audit-related and other relevant documents about the relocation fund.

The government has until June 19 to tell the U.S. District Court for the District of Columbia if it will release the documents and, if not, why not. If the agency declines to release the materials, the court will later rule on whether to compel some or all of the documents.

The court deadline comes as Pruitt faces mounting criticism for questionable spending as EPA administrator, including paying large sums for unnecessary expenses such as first class airfare to and from agency-related business, according to Bloomberg News.

He also has allegedly received a discounted rental deal from a lobbyist, and asked staffers to assist his wife in seeking employment, according to the Washington Post.

Inhofe Not Talking

Senator Inhofe, a friend of Pruitt’s, criticized the administrator for some of those spending problems June 13, and said he may need to leave his federal post.

Leacy Burke, Inhofe’s director of communications, however, didn’t respond to Bloomberg Law’s questions about Pruitt’s handling of the Tar Creek fund audits June 14 or June 15, other than to point out that the state audits were publicly released in April.

The senator was instrumental in getting the Tar Creek relocation plan going, according to a 2008 press release from his office.

His work included securing a provision in a 2007 water bill that directed the EPA to consider relocating the residents and, according to the release, provided the “legal authority” needed to carry out the relocations.

In 2015, Inhofe touted the completion of the relocation work, saying the Tar Creek residents “received quality assistance” with their moves because of the “board members’ diligent work.”

The office of Sen. James Lankford (R-Okla.), who succeeded Sen. Coburn, didn’t respond to a request for comment about the matter.

The case is Campaign for Accountability v. EPA , D.D.C., No. 18-cv-00783, EPA response due 6/19/18 .

To contact the reporter on this story: Peter Hayes in Washington at PHayes@bloomberglaw.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bloomberglaw.com

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