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Interior Official's Memo Raises Conflict Issue

By Michael Grunwald
Washington Post Staff Writer

Saturday, May 25, 2002; Page A02

Deputy Interior Secretary J. Steven Griles, a former lobbyist for the coal-bed methane industry, intervened in a recent dispute over a massive coal-bed methane project even though he had signed an agreement recusing himself from issues involving his former clients.

The Interior Department's lawyers concluded last month that Griles did not violate ethics rules or break his recusal agreement when he wrote a memorandum challenging a report critical of America's largest domestic energy exploration project, in Wyoming's Powder River Basin. But they had Griles, the department's number-two official, sign a second agreement specifically disqualifying himself from coal-bed methane issues.

Griles has been a favorite target of liberal activists who decry the large number of Bush administration officials with ties to industries they oversee. But Interior spokesman Mark Pfeifle said that Griles's second recusal agreement was simply designed to "reemphasize" the first and that he did nothing to benefit his former clients.

"His memorandum didn't discuss any specific issues, or any of his former clients," Pfeifle said. "It was just a procedural memo about interagency cooperation."

The Griles memo to Environmental Protection Agency Deputy Administrator Linda Fisher complained that a proposed EPA letter criticizing Interior's environmental review of the Powder River project "will create, at best, misimpressions, and possibly impede the ability to move forward in a constructive manner."

In the private sector, Griles had represented the Coal Bed Methane Ad Hoc Committee, an industry consortium, as well as Devon Energy, Redstone and Western Gas Resources, three firms seeking to drill for natural gas trapped in coal deposits in the Powder River Basin. National Environmental Strategies -- the firm that bought Griles's consultancy when he entered public service -- helped arrange a tour of the basin for Interior and EPA officials.

Kristin Sykes, who watches Interior for the environmental group Friends of the Earth, accused Griles of a blatant conflict of interest and criticized the department for approving it.

"It's not surprising that Griles flouted his recusal agreement in order to help out former clients and friends in the mining industry," Sykes said. "The Bush administration hired a fox to guard the hen house -- that's been their approach to environmental protection since Day One."

Last August, after contentious Senate confirmation hearings, Griles signed an agreement recusing himself for one year "from any particular matter involving specific parties in which any of my former clients is or represents a party." But he has participated in mountaintop removal coal-mining issues, even though he used to represent Arch Coal. He has weighed in on a host of energy issues, even though he served more than 40 energy-related clients, from the American Gas Association to the Edison Electric Institute.

The Powder River issue flared up in April, when the EPA's acting regional administrator in Denver, Jack McGraw, gave the agency's worst possible rating to an environmental impact statement (EIS) prepared by Interior's Bureau of Land Management. The BLM had signed off on a plan for more than 39,000 potential gas wells on 8 million acres of rugged ranch land, a key element of the Bush administration's energy plan. But in a draft letter, McGraw rated the BLM's review "environmentally unsatisfactory" and detailed a series of "inadequacies," including insufficient analysis of potential water-quality and air-quality problems.

That's when Griles fired off his April 12 memo to Fisher, under the subject line of "Proposed EPA Region 8 Letter on Coalbed Methane -- EIS's Prepared by the Department of Interior -- Wyoming and Montana." In it, Griles complained that McGraw, a career employee, was taking "this significant action" even though President Bush's political appointee was about to replace him. Griles contended that the EPA had failed to respond to Interior's requests for information and urged Fisher to "consider the best means of addressing EPA's concerns together" instead of releasing McGraw's letter.

In an internal memo dated April 24, Interior's lawyers told Griles his memo did not violate ethics rules or his promise to keep out of matters involving former clients, saying it was "procedural in nature and dealt primarily with the relationship between high-level officials of executive agencies." The lawyers said the Griles memo "does not advocate for or against any particular policy position."

"He just asked that high-level officials be assigned to work together to find a solution to a coal-bed methane issue," Pfeifle said. "It could have been any issue."

However, the lawyers also told Griles that "as we discussed, you have prior association with several of the coalbed methane companies that may be affected by the EIS, and we agreed that you would not participate in the department's decision on the EIS." On May 8, Griles signed the second recusal agreement, noting that "I have become aware that several of my former clients may be parties or represent parties in the development of these EIS's."

Environmentalists scoffed at the implication that Griles had been unaware his coal-bed methane clients might benefit from the Powder River project, or that his memo was simply an effort to promote generic cooperation. The EPA letter had the potential to put the project on hold for a second environmental review. If the Griles memo was not improper, the environmentalists ask, why did he need to "reemphasize" his commitment to avoid conflicts of interest?

"His memorandum was clearly designed to put pressure on the EPA to change their unsatisfactory rating," said Steve Jones, an attorney for the Wyoming Outdoor Council. "Getting the EIS done early would clearly benefit his former clients."

© 2002 The Washington Post Company

-- Cherri (whatever@who.cares), May 26, 2002

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