Sierra Club: The Planet--1996
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The Planet
The Cloak of Privilege: Dirty Secrets from Polluters

State of the States

by Mark Woodall
Chair, Sierra Club Audit Privilege Task Force

In a landmark 1988 case, the U.S. Supreme Court stated clearly the compelling public interest in corporate openness. "The greater portion of evidence of wrongdoing by an organization or its representatives," wrote the majority, "is usually found in the official records and documents of that organization. Were the cloak of privilege to be thrown around these records and documents, effective enforcement of many federal and state laws would be impossible."

Proof of that assertion comes, ironically - if not surprisingly - from polluters and their representatives, who are focused on throwing the "cloak of privilege" around their own corporate crimes and misdemeanors.

Under what proponents like to call "audit privilege" legislation - but more accurately termed "dirty secrets" or "pollution secrecy" bills - they'd get their wish. Audit privilege measures have been considered in at least 40 states since Oregon first took the plunge into willful ignorance by passing its version in 1993. And while the particulars may vary, all would allow polluters to shield from judges, juries and the public a wide range of information on how well, or how poorly, they're complying with environmental and other laws. The worst of these bills would grant complete immunity from prosecution to those who discover and disclose evidence of their malfeasance - regardless of the extent of the damage to people or property.

It's a can't-lose proposition for polluters.

That much is evident, fortunately, not just to the conservative Supreme Court but to many state lawmakers throughout the country. While 15 legislatures have followed Oregon's bad example by enacting dirty-secret measures, a larger number have refused. The Environmental Protection Agency has also taken a strong stand against privilege and immunity for corporate scofflaws. The agency is "firmly opposed to the establishment of a statutory evidentiary privilege for environmental audits," as well as to blanket immunities for irresponsible conduct.

Instead of privilege and immunity, the EPA's official policy - reached last December following 18 months of hearings and roundtable discussions with industry reps and the public - calls for reductions in fines and penalties for companies that voluntarily disclose and correct their violations, along with the agency's promise not to recommend criminal prosecution. The reasonableness of that position is underscored by its endorsement by the Justice Department, 16 state attorneys general, the National District Attorneys Association, numerous state environmental agencies and a raft of environmental groups, including the Sierra Club.

The pollution lobby, therefore - from corporations including Chevron, Dow Chemical, Coors and Du Pont to interest groups like the American Forest and Paper Association and the American Petroleum Institute - is intent on exempting itself from law and reason. A proposed South Carolina measure, said one state legislator, "would simply attract bad actors ... by giving them a mechanism to avoid civil and criminal prosecution." A Georgia lawmaker observed of a bill under consideration there that "you could hide criminal acts, you could hide any number of things."

The Sierra Club's state lobby corps is working to keep polluters from hiding under the cloak of privilege. Club lobbyists have been leaders in assembling coalitions in state after state to defeat dirty-secrets measures. But the bills are still being considered in many statehouses, and federal versions - H.R. 1047 by Rep. Joel Hefley (R-Colo.) and S. 582 by Sens. Mark Hatfield (R-Ore.) and Hank Brown (R- Colo.) - merit our most vigorous opposition.

As Michael Barnes, president of the National District Attorneys Association, wrote to Rep. Jack Reed (D-R.I.): "We want to reiterate that this is an extreme measure far beyond any remedy necessary and that, if you enact a self-audit privilege, you will be doing a vast disservice to law enforcement efforts not only in the realm of environmental law, but across the spectrum of white-collar crime."

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