Documents Reveal Internal Criticism of EPA Enforcement Policies

Documents Reveal Internal Criticism of EPA Enforcement Policies
June 1, 1997

Internal EPA documents released April 2 as a result of a lawsuit reveal that the agency’s own consultants are highly critical of methodology employed by EPA in computing proposed fines in enforcement cases.

The documents indicate that EPA has been significantly inflating proposed fines by employing dubious economic assumptions in its BEN Model, the computer program the agency uses in calculating its fines.

The Washington Legal Foundation (WLF) had filed suit under the Freedom of Information Act (FOIA) against EPA in federal district court in Washington after EPA had refused WLF’s request to disclose the documents in question. The documents were written by leading economists, including Professor James C. Van Horne of Stanford’s Graduate School of Business and Professor Eugene F. Brigham of the University of Florida’s College of Business Administration, both of whom had been hired by EPA to evaluate the BEN Model.

EPA has taken the position that a company shown to have violated environmental laws should be subject to a fine at least as large as the economic benefit that the company derived from its noncompliance. The BEN Model is EPA’s elaborate computer program that purportedly computes a violator’s economic benefit from its noncompliance.

WLF and other EPA critics charge that the BEN Model vastly overstates the economic benefit of failing to comply with environmental laws. As a result, WLF alleges that EPA regularly seeks payment of fines far in excess of the levels authorized by statute. The newly released internal EPA documents indicate that even consultants hired by EPA agree with that criticism.

In its comments filed with EPA regarding changes in the BEN Model, WLF stressed that the most important change would be to eliminate the “cult of secrecy” that surrounds EPA’s fine calculations. WLF argued that such secrecy not only is unfair to the regulated community, but also is counterproductive to EPA’s regulatory mission.

PF: More information on EPA’s enforcement policies is available from PolicyFax. Call 847/202-4888 and request document #????????.