Why Scott Pruitt’s living arrangement raises ethics concerns

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• Judy Woodruff:

  EPA Administrator Scott Pruitt has arguably had as much influence and impact as any other member of the president's Cabinet, especially when it comes to rolling back regulations and reversing policy enacted by the Obama administration.

  But, as William Brangham reports, the controversies and ethical questions around Pruitt are accumulating.

• William Brangham:

  That's right, Judy.

  The most recent controversy is about what some are calling a sweetheart real estate deal. Last week, ABC News reported that Pruitt was occasionally renting a room in Washington, D.C., for $50 a night from the wife of a lobbyist for the energy industry.

  That lobbyist and his firm said they weren't lobbying the EPA at the time, and the EPA said the arrangement wasn't a conflict.

  But The New York Times reported today that a Canadian client of that lobbying firm, Enbridge, Inc., got a sign-off from the EPA during this period to expand a major oil pipeline.

  Administrator Pruitt has also come under scrutiny for expensive charter and first-class travels during his first year.

  Eric Lipton has been reporting on Scott Pruitt's tenure at the EPA for The New York Times. And he broke the most recent story about Enbridge's pipeline. And Kathleen Clark teaches government ethics at Washington University in Saint Louis School of Law.

  Welcome to you both.

• Kathleen Clark:

  Thank you.

• William Brangham:

  Eric Lipton, first off, before we get to the pipeline deal, can you just explain a little bit more about the housing arrangement that Scott Pruitt had? What was going on there?

• Eric Lipton:

  Sure.

  So he comes to Washington, having lived in Oklahoma, where he was serving as the attorney general. He's not lived in Washington full-time before. And he was looking for a place to live, and he knew the chairman of this lobbying firm because he had an Oklahoma tie. And somehow or other, he ends up getting an arrangement where he's going to rent a room in this condo for $50 a night and only have to pay on the nights that he's there.

  If you look around the neighborhood in Capitol Hill, that's significantly less than it typically would cost to get either an Airbnb room or even if you multiply that times 30 what it would be for an apartment.

  So it seems like it was a pretty attractive deal. And the issue is that that same lobbying firm has a whole host of clients with issues before the EPA, Oklahoma Gas and Electric, Colonial Pipeline, ExxonMobil, Enbridge, which is a pipeline, another pipeline company, Concho, an oil and gas company.

  So he's renting a unit at the same time as the husband is the chairman of the company that has a bunch of business before the EPA.

• William Brangham:

  So, Kathleen Clark, what do you make of this, the head of the EPA renting a room from a lobby firm tied to the industry that he's ostensibly regulating?

  The EPA says this was not a conflict. They said he was, in essence, paying market rent for this. What are the implications here?

• Kathleen Clark:

  So federal employees are prohibited from accepting a gift, including a discount, from anyone with a matter before the agency that they work for.

  And in addition to that, all presidential appointees are prohibited from accepting gifts from registered lobbyists. It appears that Pruitt, the EPA head, may have violated both of those ethics provisions.

• William Brangham:

  So the idea being that if you get a room or a rental agreement that is well below market value, that's really me as an industry, the lobbying, giving you, Pruitt, a gift.

• Kathleen Clark:

  That's right.

  The difference between the market rate and the rate that Pruitt paid would be considered a gift under the gift standards.

• William Brangham:

  Understood.

  Eric, you're the one, as I mentioned, that broke this story about the pipeline, that Enbridge, Inc., got. They got a waiver from the EPA while Pruitt was renting this room. Can you tell us a little bit more about that situation?

• Eric Lipton:

  Yes. What the EPA did was to tell the State Department, which has the power to issue what's called a presidential permit, because this was a pipeline that was going to cross the international line between Canada and the United States, the EPA told the State Department that it didn't have serious environmental objections to that pipeline expansion.

  And that occurred in March of 2017, at the same time that Pruitt was living in the unit, and Enbridge is represented by Williams & Jensen, the lobbying firm that had the ties to the apartment. So we don't have any evidence that Pruitt intervened or that Williams & Jensen asked for any favor.

  And, in fact, Williams & Jensen asserts that it was not lobbying the EPA on this matter. But the problem is that the standard is that you shouldn't even take any action that creates an appearance of a conflict of interest or that undermines the integrity of the process, even by creating a question mark as to whether or not it perhaps was influenced by the fact that you're living in a $50-a-night condo in a nice neighborhood in Washington, D.C., provided by the spouse of the chairman of the lobbying firm.

  That appearance alone that can cause a problem in terms of the standards of the conduct rules for the federal government.

• William Brangham:

  Is that right, Kathleen, that appearances themselves, even if no law was violated, which the EPA claims didn't happen here, no laws were broken, appearances can be problematic?

• Kathleen Clark:

  That's absolutely right.

  The ethics standards are concerned not with just the reality, but with the appearance of a problem of a conflict. And, in fact, the gift rules that were recently revised require federal employees to consider how the situation will appear to the reasonable person with knowledge of the facts.

  And if those facts would cause a reasonable person to question the integrity of the agency's ethics or that official's ethics, then they shouldn't accept the gift or the discount.

• William Brangham:

  Eric, as you reported today, there were other firms that are represented by this lobbying firm who also had business before the EPA, and they didn't get any special favors or any actions in their favor while Pruitt was renting this room.

  So is it possible this is just a one-off thing, that the timing just looks bad, and that there really was nothing afoot here?

• Eric Lipton:

  Yes.

  No, we still have no evidence that he intervened or that the lobbying firm asked for him to do any special favors. You know, so we do not have that evidence. And the problem, though, is that think of like Gina McCarthy, who was the head of the EPA. Say she was living in the Sierra Club's condo, an environmental group, or at the same time as she was making decisions about coal-burning power plants.

  There would be investigations into that, even if she didn't do any special favors for the Sierra Club. It just seems like the optics of that should be obvious to anyone that is in federal government, that you shouldn't have a financial tie to the spouse of a regulated lobbyist.

• William Brangham:

  Kathleen, you study governmental ethics and you know the laws about this.

  But I'm curious as to your take on Pruitt's future in this administration. He is obviously one of the most durable and popular, as far as the president is concerned. He's been very effective instituting the president's agenda.

  Is your sense that this particular issue, as well as some of the travel and other concerns that have been raised about Pruitt, do those dent his future in the administration? What is your sense of that?

• Kathleen Clark:

  My sense is that, while the president is not exactly an advocate of strong ethics standards, he is willing to abandon an appointee who starts getting into trouble and becomes unpopular.

  And the stories in the last few days may be a tipping point for Pruitt.

• William Brangham:

  Eric, same question to you. What is your sense? Does this accumulated series of stories about questions about Pruitt's behavior and his ethics, are these damaging to his future or is he still a rock-solid member of the administration?

• Eric Lipton:

  Pruitt is the superstar for the Trump administration. I mean, the Clean Power Plan, the waters of the U.S., the methane rule, the coal disposal rule, I could go on and on, the number of rules that he just this — the 54.4 mile per gallon standard, he says it's going to be up for reconsideration as of 2025 for cars they're supposed to meet.

  The automakers were there posing with him in a photo today. The industry is embracing him and supportive of all the changes he's making. This is just what President Trump wants the EPA to be doing. So, on the one hand, he's creating a distraction and ethics issues that are uncomfortable for the White House.

  On the other hand, he's perhaps the most aggressive advocate of the deregulatory push that Trump wants. It is going to be a tough position for them what to do. If things get much worse, then it becomes — his status becomes more of a question mark, but right now he continues to lead the charge for the administration on this deregulatory push.

• William Brangham:

  All right, Eric Lipton, Kathleen Clark, thank you both.

• Kathleen Clark:

  Thank you.

• Eric Lipton:

  Thank you.