Last week, Attorney General Merrick Garland announced the creation of a new program to advance "environmental justice." As part of it, Garland ordered the immediate repeal of a Justice Department (DOJ) regulation prohibiting the corrupt and illegal practice of including supplemental environmental projects (SEPs) in environmental enforcement settlements.
SEPs are, by definition, not a form of relief that Congress has authorized or that any court can order. SEPs arise when prosecutors agree to reduce the penalties owed by a defendant in exchange for that defendant "voluntarily" agreeing to pay a proportional sum to fund an environmental project that prosecutors like, but that Congress has not authorized.
Environmental activists love SEPs—who doesn't love free money? So does big business. They take credit for buying electric school buses or installing solar panels on municipal buildings while reducing the penalties paid to the U.S. Treasury and easing bad publicity from illegal pollution. Lawyers at DOJ and the Environmental Protection Agency like SEPs too; they grease the settlement skids and send money to projects that fit their agenda.
The thing about lawless and collusive settlements, though, is that they inevitably lead to corruption.
Under the Obama administration, for example, DOJ entered into hundreds of settlements with SEPs or SEP-like agreements that diverted funds from the U.S. Treasury to the administration's friends and supporters, including the Sierra Club, the National Community Reinvestment Coalition and the National Council of La Raza. In one surprisingly candid email, a senior DOJ official explained that it was important for a proposed settlement to be drafted in such a way as to "not allow" the defendant "to pick a statewide intermediary like the Pacific Legal Foundation (does conservative property-rights free legal services)." In other words, it was DOJ policy to ensure that payments to third parties only benefitted Democratic Party supporters.
Of course, Garland's explanatory memorandum resurrecting SEPs disclaims any return to the bad old days, telling DOJ attorneys that they "shall not propose" the projects and beneficiaries—those must come from the defendant. But this barrier is illusory. Defendants don't need DOJ attorneys to say the quiet part out loud. As the memo explains, proposed SEPs will be vetted by senior political appointees in the administration, meaning that defendants will propose projects and beneficiaries that are likely to please those political appointees. Even worse, the memo states that DOJ "may specify the type of entity" that should be a beneficiary of a SEP. The context of Garland's announcement leaves little doubt that DOJ will deploy the banner of "environmental justice" to select projects that benefit members of favored demographic categories and party supporters, at the expense of others.
This isn't only a matter of honesty and fairness; diverting money intended for the U.S. Treasury is also illegal and unconstitutional. Article I of the Constitution gives Congress exclusive authority over taxing, spending and appropriations. Consistent with this authority, federal law requires anyone who receives "money for the government" or "public money" to deposit it into the U.S. Treasury and not use or exchange it for other purposes. The law also prohibits government officials from expending funds or incurring obligations without congressional authorization. Officials who violate these prohibitions can be removed from office and even prosecuted criminally.
SEPs can't be squared with these constitutionally grounded prohibitions. As DOJ's Office of Legal Counsel explained decades ago, "money available to the United States and directed to another recipient is constructively 'received'"; that "no cash actually touches the palm of a federal official is irrelevant." Congress for its part has also indicated that SEPs are illegal absent explicit congressional authorization, which it has granted only in one narrow circumstance and with the immensely telling caveat that this authorization was made "notwithstanding" the federal laws mentioned above.
Of course, as in any good racket, defenders of SEPs have taken pains to create plausible deniability, contending that SEPs don't actually redirect public money. Instead, defenders portray SEPs as "voluntary" payments not subject to government "control." This is transparent sophistry. It certainly isn't how defendants think of SEPs—for them, SEPs are exactly what they seem to be, a tool for "lowering their fines while also letting them perform projects that improve their public image." No defendant would enter into a SEP without an agreement by prosecutors to reduce civil penalties. And no prosecutor would agree to a SEP if it didn't serve his desired policy goals.
Garland knows he's on shaky ground. He may hope to avoid accountability because of the fact that SEPs can be hard to challenge. Judges typically don't scrutinize settlement agreements, and courts are skeptical of direct attacks on government enforcement policies. Things may be different now, however, as Garland rescinded a regulation, not just a policy memo. And there are new judges on the bench who may be more willing to hold the executive to account. At the very least, Congress can and should investigate and, if necessary, cut off funding.
The need for accountability is pressing. An "environmental justice" initiative that abandons the principle of equal justice under law isn't worthy of the name. SEPs are a betrayal of the public trust, and their use must cease.
C. Boyden Gray served as White House counsel to President George H.W. Bush and as Ambassador to the European Union and Special Envoy for Eurasian Energy under President George W. Bush. He is the founding partner of Boyden Gray & Associates, a law and strategy firm in Washington, D.C. Michael Buschbacher is counsel at Boyden Gray & Associates. Previously, he served in the leadership office of the Environment and Natural Resources Division of the Department of Justice, where he helped draft departmental policy on the proper scope and procedure for environmental enforcement, including the memos and the regulation prohibiting SEPs.
The views expressed in this article are the writers' own.
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