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94–991 PDF 2015

S. HRG. 114–30 

OVERSIGHT OF THE MANAGEMENT OF THE 

FEDERAL ENVIRONMENTAL PROTECTION, 

CHEMICAL SAFETY, AND FISH AND WILDLIFE 

AGENCIES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON SUPERFUND, WASTE 

MANAGEMENT, AND REGULATORY OVERSIGHT 

OF THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

APRIL 14, 2015 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys 
(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

JAMES M. INHOFE, Oklahoma, Chairman 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

SHELLEY MOORE CAPITO, West Virginia 

MIKE CRAPO, Idaho 

JOHN BOOZMAN, Arkansas 

JEFF SESSIONS, Alabama 

ROGER WICKER, Mississippi 

DEB FISCHER, Nebraska 

MIKE ROUNDS, South Dakota 

DAN SULLIVAN, Alaska 

BARBARA BOXER, California 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

CORY A. BOOKER, New Jersey 

EDWARD J. MARKEY, Massachusetts 

RYAN JACKSON, Majority Staff Director 

BETTINA POIRIER, Democratic Staff Director 

SUBCOMMITTEE ON SUPERFUND, WASTE MANAGEMENT, 

AND REGULATORY OVERSIGHT

MIKE ROUNDS, South Dakota, Chairman 

DAVID VITTER, Louisiana 

MIKE CRAPO, Idaho 

JOHN BOOZMAN, Arkansas 

DAN SULLIVAN, Alaska 

JAMES M. INHOFE, Oklahoma (ex officio) 

EDWARD J. MARKEY, Massachusetts 

THOMAS R. CARPER, Delaware 

JEFF MERKLEY, Oregon 

CORY A. BOOKER, New Jersey 

BARBARA BOXER, California (ex officio) 
(III) 

C O N T E N T S 

Page 

APRIL 14, 2015 

OPENING STATEMENTS 

Rounds, Hon. Mike, U.S. Senator from the State of South Dakota .................... 1 

Markey, Hon. Edward J., U.S. Senator from the State of Massachusetts .......... 3 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma, prepared 

statement .............................................................................................................. 57 

WITNESSES 

Elkins, Arthur, Inspector General, U.S. Environmental Protection Agency ...... 4 

Prepared statement .......................................................................................... 7 

Responses to additional questions from: 

Senator Inhofe ........................................................................................... 19 

Senator Markey ......................................................................................... 24 

Senator Rounds ......................................................................................... 26 

Senator Vitter ............................................................................................ 31 

Kendall, Mary, Deputy Inspector General, U.S. Department of the Interior ..... 38 

Prepared statement .......................................................................................... 40 

(1) 

OVERSIGHT OF THE MANAGEMENT OF THE 

FEDERAL ENVIRONMENTAL PROTECTION, 

CHEMICAL SAFETY, AND FISH AND WILDLIFE AGENCIES 

TUESDAY, APRIL 14, 2015 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

SUBCOMMITTEE ON SUPERFUND, WASTE MANAGEMENT, 

AND REGULATORY OVERSIGHT, 

Washington, DC. 

The committee met, pursuant to notice, at 9:32 a.m. in room 406, 

Dirksen Senate Building, Hon. Mike Rounds (chairman of the subcommittee) presiding. 

Present: Senators Rounds, Inhofe, Crapo, and Markey. 

OPENING STATEMENT OF HON. MIKE ROUNDS, 

U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA 

Senator ROUNDS. Good morning. 

I am very happy to be chairing the first Superfund, Waste Management, and Regulatory Oversight Subcommittee hearing. 

Ladies and gentlemen, we will begin this on time and we are 

going to try to be done in about 20 minutes after the hour in deference to Secretary Kerry. We will try to get through as much of 

today’s testimony as possible. We will ask the members to submit 

any additional questions for the record and ask that you respond 

to those appropriately. We appreciate your being here. 

The Environment and Public Works Subcommittee on Superfund, 

Waste Management, and Regulatory Oversight is meeting for the 

first time today to conduct a hearing on oversight of the management of the Federal environmental protection, chemical safety and 

fish and wildlife agencies. 

I would like to thank our witnesses, Inspector General Arthur 

Elkins of the U.S. Environmental Protection Agency and Deputy 

Inspector General Mary Kendall of the U.S. Department of the Interior, for taking time out of their schedules to be with us today. 

I am honored to be chairing this subcommittee in the 114th Congress with my friend from Massachusetts, Senator Ed Markey, as 

Ranking Member. As subcommittee chairman, I plan to conduct 

full oversight of the Environmental Protection Agency and the Department of the Interior. 

The Inspectors General from these agencies can and should serve 

as a resource for these reviews and today’s hearings serve as a 

starting point for this oversight plan. Inspectors General are 
2 

tasked with independently conducting audits and investigations relating to agency actions and programmatic mismanagement. 

Not only are they an asset to congressional oversight, but their 

recommendations are effective in correcting mismanagement, 

waste, fraud and abuse at the EPA and the Department of the Interior. It is essential that the Inspectors General view Congress as 

a partner in this oversight process. 

Throughout this Congress, we will be focusing chiefly on good 

governance and making certain the agencies are operating transparently, responsibly managing taxpayer dollars and working to 

achieve their core missions without regulatory overreach so prevalent in agency actions today. 

More than ever, we are seeing agency regulatory regimes expanding Federal jurisdiction beyond their statutory limits, encroaching into private businesses, landowners’ rights, and the 

States’ ability to manage and regulate the environment and land 

within their own borders. 

Additionally, the EPA and the Department of the Interior are 

moving forward with implementing major environmental regulations impacting every sector of the U.S. economy and affecting hundreds of thousands of American jobs. 

We must make certain that the regulations these agencies implement are being written in an open, transparent process that allows 

for full public participation taking into account all views regardless 

of the agencies’ notions of their goals. 

The EPA and Fish and Wildlife Service owe it to the American 

people to not only provide a thorough, transparent and honest 

analysis of how regulations will affect them but also to base these 

regulations on the most current and reliable economic data and 

sound science. 

Notably, these IGs have conducted recent investigations on mismanagement at the Chemical Safety Board, grant management, 

and administrative management issues. I look forward to hearing 

a review of the work the IGs have done regarding management of 

the EPA, CSB, and Fish and Wildlife Service along with an update 

of the reviews the IGs are currently undertaking. 

Again, I would like to thank our witnesses for being with us 

today and for presenting their testimony. 

Now, I would like to recognize my friend, Senator Markey, for his 

opening statement as well. 

[The prepared statement of Senator Rounds follows:] 

STATEMENT OF HON. MIKE ROUNDS, U.S. SENATOR

FROM THE STATE OF SOUTH DAKOTA

The Environment and Public Works Subcommittee on Superfund, Waste Management, and Regulatory Oversight is meeting for the first time today to conduct a 

hearing on ‘‘Oversight of the Management of the Federal Environmental Protection, 

Chemical Safety, and Fish and Wildlife Agencies.’’ I’d like to thank our witnesses, 

Inspector General Arthur Elkins of the Environmental Protection Agency, and Deputy Inspector General Mary Kendall of the Department of the Interior for taking 

time out of their schedules to be with us today. 

I am honored to be chairing this Subcommittee in the 114th Congress with my 

friend from Massachusetts, Senator Ed Markey, as Ranking Member. As Subcommittee Chairman, I plan to conduct thorough oversight over the Environmental 

Protection Agency and the Department of the Interior. The Inspectors General from 

these Agencies can and should serve as a resource for these reviews and today’s 

hearing serves as a starting point for this oversight plan. Inspectors General are 
3 

tasked with independently conducting audits and investigation relating to agency 

actions and programmatic mismanagement. Not only are they an asset to congressional oversight, but their recommendations are effective at correcting mismanagement, waste, fraud, and abuse, at the EPA and Department of the Interior. It is 

essential the Inspectors General view Congress as a partner in this oversight process. 

Throughout this Congress we will be focusing chiefly on good governance and 

making certain the agencies are operating transparently, responsibly managing taxpayer dollars and working to achieve their core missions without the regulatory 

overreach so prevalent in agency actions today. More than ever we are seeing agency regulatory regimes expanding Federal jurisdiction beyond their statutory limits, 

encroaching into private businesses, landowners’ rights, and the States’ ability to 

manage and regulate the environment and land within their own borders. 

Additionally, the EPA and the Department of the Interior are moving forward 

with implementing major environmental regulations impacting every sector of the 

U.S. economy and affecting hundreds of thousands of American jobs. 

We must make certain that the regulations these agencies implement are being 

written in an open, transparent process that allows for full public participation taking into account all views regardless of the agencies’ notions of their goals. The EPA 

and Fish and Wildlife Service owe it to the American people to not only provide a 

thorough, transparent and honest analysis of how regulations will affect them but 

also to base these regulations on the most current and reliable economic data and 

sound science. 

Notably, these IGs have conducted recent investigations on mismanagement at 

the Chemical Safety Board, grant management, and administrative management 

issues. I look forward to hearing a review of the work the IGs have done regarding 

management of the EPA, CSB, and Fish and Wildlife Service along with an update 

of the reviews the IGs are currently undertaking. Again, I’d like to thank our witnesses for being with us today and for presenting their testimony. 

OPENING STATEMENT OF HON. EDWARD J. MARKEY, 

U.S. SENATOR FROM THE STATE OF MASSACHUSETTS 

Senator MARKEY. Thank you very much. 

I want to thank you, Chairman Rounds, for holding this first 

hearing of the subcommittee. I am looking forward very much to 

working with you in this Congress on these very important issues. 

The offices of Inspector General are tremendously important to 

governmental integrity. These watchdogs must be independent, 

non-partisan and maintain the highest ethical standards to ensure 

the public’s trust. 

In addition to fighting fraud, waste and abuse of power, they ensure the Government works the way Congress intended and the 

public deserves. For example, the Securities and Exchange Commission Inspector General uncovered the mishandling of whistleblowers’ tips in the Madoff Ponzi scheme and the failure to take 

basic steps to stop it. 

In response, Congress passed the Dodd-Frank Act to protect 

whistleblowers and provide incentives and mechanisms to report 

and promptly remedy misconduct. 

Inspectors general also save billions of taxpayer dollars each 

year. For example, the Special Inspectors General for Afghanistan 

and Iraq reconstruction together recovered almost $3 billion related 

to waste and fraud associated with the government’s reconstruction 

work. 

Your offices have also made notable contributions. For example, 

the former Department of Interior Inspector General identified a 

culture of ethical failure that occurred when the same office was 

responsible for oil and gas leases, revenue collection and enforcement of drilling safety and environmental regulations. 
4 

Following this report, the department implemented a more robust ethics program and announced a major departmental reorganization to eliminate those conflicts of interest. 

The Environmental Protection Agency Inspector General has also 

done significant work in overseeing management and personnel 

challenges at both the Environmental Protection Agency and the 

Chemical Safety Board. 

The Inspector General has also found that the Environmental 

Protection Agency needs to improve oversight of the States’ implementation and enforcement. In a 2014 memo, the Inspector General raised concerns about States’ implementation and enforcement 

of environmental programs assigned to protect the public from 

beaches contaminated by dangerous levels of bacteria and to ensure 

proper long term monitoring of Superfund sites so that they are 

safe for reuse. 

For oversight by Inspectors General to garner public trust, transparency is key. Inspectors General have a responsibility to promptly report their activities, findings and recommendations to Congress and the public. Yet, in 2014, the Department of Interior, Office of Inspector General, closed 533 investigations and released 

just 55 public reports. 

Inspectors General also rely on the cooperation of the agencies 

they oversee. As Mr. Elkins’ 2014 testimony indicated when an Inspector General is faced with obstruction and obfuscation by an 

agency, inefficiency thrives unchecked and potential wrongdoing 

evades both notice and consequences. 

I agree with that. Agencies must cooperate to guarantee access 

to the information you need and to take corrective actions in response to your findings. 

I look forward to your testimony about the important work you 

do and how Congress can help you to do better do your job. 

I yield back the balance of my time. 

Senator ROUNDS. Thank you, Senator, for sharing your thoughts. 

Now, we will turn to our first witness, Mr. Elkins from the EPA, 

for 5 minutes. Mr. Elkins, you may begin. 

STATEMENT OF ARTHUR ELKINS, INSPECTOR GENERAL, U.S. 

ENVIRONMENTAL PROTECTION AGENCY 

Mr. ELKINS. Good morning, Chairman Rounds, Ranking Member 

Markey and members of the subcommittee. 

I am Arthur Elkins, Inspector General for EPA and CSB. 

Thank you for inviting me to appear before you today. This 

morning I will touch on a few matters I believe will be of special 

interest. However, my written statement provides much greater detail on these and additional topics. I will begin with audit highlights. 

Following OIG’s criminal investigation of John Beale, an EPA 

senior policy advisor who defrauded the Government of nearly 

$900,000 while pretending to be an undercover agent for the CIA, 

OIG commenced a series of audits examining certain EPA processes. 

Two of those audits on timekeeping and use of administrative 

leave are ongoing. We expect to issue our reports in mid-June and 

late summer respectively. 
5 

Simultaneously, OIG is conducting a program evaluation of how 

EPA and States are using their authorities to manage the potential 

impacts of hydraulic fracturing on water resources. This report too 

is on track for issuance in late summer. 

On the investigative front, last month, Florida jury convicted two 

scientists, a married couple, of wire fraud, identity theft and obstruction. They had fraudulently obtained about $10.5 million in 

small research awards, including several contracts with EPA, by 

using stolen identities of real people to create false endorsements. 

The investigative team included the EPA OIG. Sentencing in that 

case has been set for May 28 of this year. 

As an independent and objective office charged under the IG Act 

with oversight of management and program performance, it is critical that an OIG be able to carry out its work without obstruction. 

Two impediment issues, one at EPA and one at CSB, have forced 

Congress to become actively involved during this past year. At 

EPA, a unit called the Office of Homeland Security has impeded 

OIG’s authority to investigate threats against employees and facilities and certain misconduct allegations and computer intrusions. 

After saying otherwise for months, OHAS now agrees that there 

is no category of activity at EPA to which OIG does not have unfettered access. FBI senior management confirms that FBI does not 

require EPA to withhold information from the OIG. 

Still, EPA has not rescinded a memorandum of understanding 

with the FBI that has precluded such information sharing. Also, 

important is the fact that OIG has been unable to resolve the issue 

of OAHS having an assigned criminal investigator while lacking 

any investigative authority. 

The second impediment to OIG relates to CSB. We requested 

documents following complaints alleging use of non-governmental 

email accounts to conduct official business which CSB officials refused to provide for more than a year. 

Not until I sent a 7-day letter and the House Committee on 

Oversight and Government Reform’s Chairman and Ranking Member instructed Chairman Rafael Moure-Eraso to provide the documents did CSB substantially comply with the OIG’s request. 

OIG’s investigation found evidence sufficient to support the conclusion that the CSB Chair and two of its senior officials had violated the Federal Records Act in implementing regulations by using 

non-governmental email systems to conduct official Government 

business and not capturing those emails in the CSB records system. 

Ultimately, President Obama requested that the Chair resign. 

Mr. Moure-Eraso stepped down from that role last month and 

ended his membership on the Board this past Friday. 

Meanwhile, a former CSB Chief Information Officer has provided 

to the OIG a sworn statement alleging inconsistencies in the 

Chair’s communication to me as well as during another HOGR 

hearing last month. My Office of Investigations has notified the 

U.S. Attorney’s Office that the Chair may have committed perjury 

and certain other crimes. 

These items represent a sampling of OIG’s work and challenges. 

We will continue to work with management at both EPA and CSB 
6 

to help ensure that appropriated funds are properly managed and 

executed and accurate information is reported. 

I would like to leave the subcommittee with a thought. An OIG’s 

recommendations are only as good as an agency’s implementation 

of them. At this time, many of this OIG’s recommendations to the 

agencies for which I have oversight are unimplemented and way 

past due. Money left on the table, so to speak, does a tremendous 

disservice to the taxpayers. 

Mr. Chairman, this concludes my prepared statement. I will be 

pleased to answer any questions you or subcommittee members 

may have. 

[The prepared statement of Mr. Elkins follows:] 
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Senator ROUNDS. Thank you, Mr. Elkins. 

We will now hear from Ms. Kendall from the Department of the 

Interior. Ms. Kendall, you may begin. 

STATEMENT OF MARY KENDALL, DEPUTY INSPECTOR 

GENERAL, U.S. DEPARTMENT OF THE INTERIOR 

Ms. KENDALL. Thank you, Mr. Chairman and members of the 

subcommittee. Good morning. I am pleased to be here to testify 

about our oversight of the Fish and Wildlife Service. 

As you know, my office conducts a wide range of oversight of fish 

and wildlife programs and operations. Two of Fish and Wildlife’s 

grant programs, the Wildlife Restoration Program and the Sport 

Fish Restoration Program, were among DOI’s four largest grant 

programs in fiscal year 2014, disbursing about $1 billion. 

For years, my office has provided consistent audit oversight to 

Fish and Wildlife for grants funded under these programs. When 

we took over this audit work, we created a small, dedicated unit 

to perform these audits, launched a systematic coverage cycle and 

established a uniform approach to all State audits. 

Our audit findings range from internal control issues to Fish’s 

monitoring of the States’ expenditures. We have found that uniformity of our audits provides both Fish and the States with consistency of oversight that ensures that internal controls are in 

place to minimize financial risk in this popular grant program. 

Like other DOI bureaus that have underground injection control 

wells, Fish and Wildlife could not fully identify and does not effectively manage the UIC wells on its lands. We found several issues 

with Fish and Wildlife’s shallow gravity drain wells, one of six categories defined in EPA’s regulations that could potentially threaten 

underground drinking water. 

We found that the department has no overarching guidance or 

policy to assist bureaus in complying with EPA’s regulations concerning Class V injection wells. This has led to inconsistent management at the Bureau level. 

We also found that Fish does not maintain a national data base 

on sanitary leach fields or in fish hatcheries that could have agricultural wells, another type of Class V well. 

Finally, Fish listed 54 banned types of floor drains in 29 different 

States but did not know if these were Class V wells. It has reportedly plugged them since we conducted our evaluation. 

The Coastal Impact Assistance Program provides grant funds derived from Federal offshore lease revenues to oil-producing States 

for conservation, protection, or restoration of coastal areas, wildlife, 

and natural resources. 

The Secretary of the Interior was directed to disburse $250 million in each of fiscal years 2007–2010 to eligible CIAP grant recipients. Responsibility for CIAP was transferred to Fish and Wildlife 

as of October 1, 2011. 

At the request of Fish, we initiated an audit in 2011 focusing on 

grant funds awarded to Mississippi followed by an audit of funds 

awarded to Louisiana in 2013. Our audits revealed deficiencies in 

both States’ management of grant funds, as well a poor Federal 

oversight of grant recipients and weak risk management. 
39 

In total, we questioned more than $44.1 million in CIAP costs 

awarded only to Mississippi and Louisiana, representing ineligible 

grant charges, unreasonable costs and expenses not supported by 

documentation. 

Our investigative oversight of Fish and Wildlife has focused primarily on administrative management issues in the recent past. In 

2013, we issued a Management Advisory to the Secretary urging 

Fish and Wildlife leadership to act on long outstanding complaints 

of retaliation made by employees who raised scientific integrity 

concerns to us and to Fish and Wildlife management. 

As of yesterday, two of the three cases were settled. The other 

case is still pending Fish and Wildlife action on settlement. 

We also have ongoing administrative investigations into allegations of mismanagement and other wrongdoing on the part of Fish 

and Wildlife officials, including unfair and potentially illegal hiring 

practices, conflicts of interest, preferential treatment and wasteful 

spending. 

Additionally, we have referred similar allegations from the same 

region to Fish and Wildlife management for review. 

Finally, we are currently investigating allegations of Fish and 

Wildlife Service employee misconduct related to conservation efforts and wildlife management. 

Mr. Chairman, this concludes my prepared testimony today. I 

would ask that my full testimony be entered into the record. I 

would be happy to answer any questions you or members of the 

subcommittee may have. 

[The prepared statement of Ms. Kendall follows:] 
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Senator ROUNDS. Thank you for your testimony, Ms. Kendall. 

Your full remarks will be entered into the record without objection. 

Senators will now have 6 minutes each for questions. I will allow 

members to stay for a second round of questions but with the notice that we will do our best to have a hard stop of 20 minutes past 

the hour. 

With that, I will begin. We will do these in 6-minute increments. 

I would like to begin by following up a bit with Mr. Elkins in 

terms of the comments you made. I wanted to ask you about the 

transparency of the agencies based on your experiences. 

In recent reports, there have been concerns that your respective 

agencies do not give you full and open access to information that 

you need to conduct a thorough investigation of certain programmatic issues or agency actions. 

Inspector General Elkins, I believe this is an issue your office 

faced when conducting your investigation of the Chemical Safety 

Board, as you mentioned, and when looking into how the EPA’s Office of Homeland Security impedes your own investigations. 

Can you explain in a little more detail some of the issues you 

faced in gaining full access to the information your office needs or 

having information withheld from you when you are conducting investigations of your respective agencies, not only what it does to 

impede your ability to actually investigate, but if you could, I 

would like your thoughts about what we could do to assist you in 

getting that information you need? 

Mr. ELKINS. I would be very happy to respond to your question. 

Generally speaking, on the transparent access issue, my sense is 

that both the EPA and the CSB fail to truly embrace the underlying authorities and the concepts in the IG Act and understand 

exactly what it means. 

We spent a lot of time trying to do outreach and educate the 

agencies on the IG Act and the fact of what independent stands for 

and the fact that we are there to help but we are also independent. 

The challenge I have run into is that in certain areas, the agencies tend to embrace that concept but when it works in a way that 

it may embarrass them, they tend not to embrace that concept and 

that is where we start to get some push back. 

Having these sorts of hearings is very important. Having statements come from this panel as well as members on the House side 

in support of the work that we do is extremely important. 

Under the IG Act, we basically have a dual reporting responsibility. One is to the agency head and the other is to this body. To 

the extent that we don’t get cooperation on the agency side, the 

only avenue we have available to us is you. The fact that you are 

doing what you are doing is very helpful and I really appreciate it. 

Senator ROUNDS. Thank you. 

Ms. Kendall, last summer, 47 of your colleagues from the IG 

community sent a letter to Congress raising serious concerns about 

how agencies had either not cooperated with investigations or how 

the IGs had limited access to records or witnesses. Mr. Elkins 

signed this letter and cited problems in working with the EPA as 

an example. 

You chose not to sign the letter. Can you tell us why you chose 

not to sign this letter? Does your unwillingness to sign the letter 
50 

indicate that you did not agree with the concerns that were raised? 

Can you share a little with us about your thought process in terms 

of why you did not? 

Ms. KENDALL. I would be happy to, Mr. Chairman. 

I chose not to sign that letter for several reasons. One, I am a 

part of the Executive Council for the CIGIE. That body sent a formal letter to the Department of Justice with its formal position on 

the access issue. I felt as a signatory by virtue of being on the Executive Council that was my position by virtue of CIGIE. It did not, 

in any way, mean that I disagreed with the letter signed by the 47. 

The other reason I chose not to sign that separate letter was I 

did not want to give an indication to my agency, where I have had 

absolutely no problem whatsoever with access to information, to 

suggest that I felt there was a problem. 

We have not had the access problems that Mr. Elkins and some 

of the other IGs have had. I did not want to indicate to my agency 

I had that feeling. 

Senator ROUNDS. I just want to follow up and be clear. As I understand it, you have not had a problem gaining access to records, 

you have not had any grant interviews refused to its staff and 

there has been no sense of impediments to your investigations 

within your agency? 

Ms. KENDALL. None, that I am aware of, sir. 

Senator ROUNDS. Thank you very much. 

With that, Senator Markey. 

Senator MARKEY. Thank you, Mr. Chairman. 

Mr. Elkins, across the Country, thousands of miles of old, leaking 

natural gas distribution pipelines that run under our streets are 

costing consumers money, threatening public health and safety 

with potentially dangerous explosions and contributing to global 

warming by releasing natural gas into the atmosphere. 

An Office of Inspector General July 2014 report found that EPA 

was not regulating methane emissions from natural gas distribution pipelines, had not partnered with the Pipeline and Hazardous 

Materials Safety Administration, and that its voluntary program to 

address methane leaks has achieved limited success. 

Moreover, your report found that consumers were losing nearly 

$200 million each year from this leaking natural gas. 

I have introduced legislation in the Senate that would address 

some of the financial and policy barriers that are an impediment 

to repairing and replacing our aging, leaking natural gas pipeline 

infrastructure. 

While I know you have not read the legislation, would efforts to 

remove these barriers and disincentives that may be in place to reduce methane emissions from leaking natural gas pipelines such as 

cost recovery and up front capital investments help address that 

problem? 

Mr. ELKINS. Yes, sir. I think that would be a good thing. 

Senator MARKEY. Mr. Elkins, the EPA agreed with your recommendation that it should work with HMSA to address methane 

leaks from a safety and environmental standpoint. EPA agreed to 

implement this recommendation by December 31, 2014. Has that 

recommendation been implemented, in your opinion? 
51 

Mr. ELKINS. According to our books, it shows that the recommendations have been implemented but until we are able to go 

out and do follow up work, I cannot tell you specifically that has 

occurred. 

Senator MARKEY. Is it your intention to follow up and find out 

whether or not that work has been done? 

Mr. ELKINS. Yes, sir. We will be following up. 

Senator MARKEY. That would be very helpful. 

Ms. Kendall, coal on Federal lands belonging to the American 

people generates billions of dollars in revenue from the Federal 

Government each year. However, three decades after the GAO, at 

my request, discovered improprieties in coal lease sales in the Powder River Basin in Wyoming and Montana, recent evaluations of 

the Federal Coal Program have found that many of the same problems persist today. 

Recently, the Inspector General and the GAO, again at my request, issued reports showing that taxpayers may be losing millions of dollars on this coal that belongs to them. In fact, based on 

my staff’s review, I believe using appropriate market calculations 

and assumptions in recent coal lease sales could potentially have 

yielded $200 million additional or more for the American people. 

Ms. Kendall, of the 13 recommendations made in the IG report 

on the Federal Coal Program, the Bureau of Land Management 

agreed with the majority of them, although none had been implemented at the time the report was issued. 

Since this report was issued in 2013, BLM has taken some steps 

to address the deficiencies identified in the Coal Program. Of the 

13 recommendations made in the IG report, how many are still left 

to be implemented? 

Ms. KENDALL. Senator Markey, my understanding is that recommendations 2, 3, 6, 9 and 12 remain open and remain 

unimplemented, but I have a document I would be happy to provide you and your staff that outlines the specifics of the status of 

those recommendations which we would be happy to provide. 

Senator MARKEY. So 5 of the 13 recommendations have yet to be 

implemented? 

Ms. KENDALL. That is correct, sir. 

Senator MARKEY. The IG and GAO reports both found that BLM 

does not fully account for the potential that coal produced from 

Federal lands will be exported to foreign countries where it can be 

sold at a higher price. 

Coal exports from the Powder River Basin and other Federal 

lands are expected to increase substantially in the coming years. 

Do you believe that BLM is doing enough to evaluate the possibility of exports in determining the value of Federal coal? 

Ms. KENDALL. Like Mr. Elkins, I do not believe we have gone in 

to do a verification of what they are actually doing, but by virtue 

of what they have reported to us in terms of implementing the recommendations, it appears they are doing what we asked as a result 

of our evaluation. 

Senator MARKEY. You are saying they are now factoring in? 

Ms. KENDALL. No, I believe that they are; we have not verified 

it, though. 
52 

Senator MARKEY. OK. I think that is very important. Ultimately, 

it is public property that is being sold to the private sector. If they 

are getting a higher price overseas for the coal that should be 

factored into what we sell it to the private sector for so that we are 

putting more money into the Federal treasury for a publicly owned 

good. 

No. 2 has yet to be implemented. I think it is important for us 

to be able to get to the bottom of that story as well. 

I thank you, Mr. Chairman. I yield back the balance of my time. 

Senator ROUNDS. Thank you, Senator Markey. 

Senator Inhofe. 

Senator INHOFE. Thank you, Mr. Chairman. 

Let me start with Mr. Elkins. More than a decade ago, the last 

time the Republicans were a majority, I chaired this committee and 

we raised concerns over the EPA’s grants management. It seems a 

lot still needs to be done. Just last month, I think it was, two scientists were convicted of stealing about $10 million in research 

grants. 

Is your office investigating any of these right now? You do not 

need to elaborate, just yes or no. 

Mr. ELKINS. Senator, right off the top of my head, I cannot think 

of an active case right now. 

Senator INHOFE. We will give you the information and would like 

to work with you in that respect. We know you would find that to 

be of interest. 

In February, your office launched an evaluation of EPA and the 

States’ ability to manage the potential threats to water resources 

and hydraulic fracturing. Hydraulic fracturing is something I can 

talk about. 

The first hydraulic fracturing took place in my State of Oklahoma in 1948. I remember when Lisa Jackson was the first Administrator to the EPA chosen by President Obama. I asked her have 

you ever had any documented cases of groundwater contamination 

as a result of hydraulic fracturing. She gave the answer that she 

had not. 

I am wondering though if you are going to be getting into this 

thing and making evaluations as to what they are attempting to 

do, it seems to me—I have been one of the top critics of the EPA— 

that when they get involved in these things, we find out nothing 

ever happens. 

Do you remember the case of Armendariz and Range Resources 

in Texas? That got a lot of publicity. It was our staff that uncovered the conversation that he had with his subordinates saying, 

what you’ve got to do with the oil and gas industry is what the Romans did to the Turks—when they would go into a new town, they 

would crucify the first four Turks they saw and then they had their 

attention. 

As a result, that exposure took place and he is no longer there. 

He has a better job with one of the environmental groups. I do not 

know which one it is but he is doing all right. Don’t feel bad about 

him. 

Also, Pavillion, Wyoming was something where they came up 

with this criticism—remember the person lost their home. They de-
53 

cided to take it to court and they won and the EPA was wrong. The 

same thing happened in Pennsylvania. 

I would say that I am hoping that you will be looking at these 

in terms of the performance, the history of what their successes 

and failures have been. Would you be willing to do that? Working 

with our office, we have an abundance of information to help you. 

Mr. ELKINS. Senator, we would be more than happy to work with 

your office. 

Senator INHOFE. I would say a similar thing to you, Ms. Kendall. 

We are involved in two things right now that I think would be of 

interest to you. One has to do with the Endangered Species Act— 

both do, actually. 

These closed door litigation settlement agreements with environmental groups that require the Service to decide whether to list 

species under the Endangered Species Act, I don’t care whether it 

is the burying beetle or the lesser prairie chicken or what it is, 

once they either list something as threatened or endangered, they 

never get off the list. There are reasons they should get off the list. 

Would you agree to work with my staff, Ms. Kendall, specifically 

in reviewing the process that led to the settlements and how they 

are being implemented? I am talking about cooperative settlements 

with groups where they file the lawsuits and you know what the 

settlement is all about. Would you be willing to look into that and 

work with our office to try to resolve what I consider to be a serious 

problem? 

Ms. KENDALL. It is an issue of which I am generally aware, Senator Inhofe. We would be happy to work with your staff to learn 

more about it and look into what this involves. 

Senator INHOFE. I appreciate that. I mentioned that once something gets listed, they never get off. As an example, the Service 

listed the American burrowing beetle as endangered in 1989. 

Twenty-five years later, the Service still has not established criteria for delisting the beetle. 

This is something that we need to work together on. Our staff 

is going to be involved in doing this. Several things we thought 

should have been done some 10 years ago when we first got involved in this. 

This particular beetle and the endangered status it enjoys is one 

that has a lot to do with people out there farming, trying to plow 

their fields, people are building roads and drilling for energy, so it 

is something that certainly has a great effect in my State of Oklahoma. 

If you would join us in that, we would appreciate it very much. 

Would you do that? 

Ms. KENDALL. We would be happy to work with you to better understand this issue. 

Senator INHOFE. Thank you very much. 

Thank you, Mr. Chairman. 

Senator ROUNDS. Thank you. 

Senator Crapo. 

Senator CRAPO. Thank you, Mr. Chairman. 

I don’t have any questions for these witnesses, although I do 

want to indicate that I agree with the concerns that have been 

raised by my colleagues here today. I look forward to learning more 
54 

about the responses we will see from both the EPA and the Department of the Interior on these issues. 

I yield back my time, given that we have a hard stop, for you 

to utilize in your questioning. 

Senator INHOFE. It might be a good idea, Mr. Chairman—maybe 

you did this before I came in—to remind him why we have to cut 

this short, because we do have a well publicized hearing with Secretary Kerry. 

Senator ROUNDS. What I would like to do is if there are additional questions, we will try to do them in 3-minute increments. 

When we are done with that second round and if we have time, we 

will take it. If not, we will close it down. 

I just have a question. I would like to follow up a little bit with 

Ms. Kendall. 

To follow up on Senator Inhofe’s questions, with regard to your 

work being done on the Endangered Species Act, with the record 

number of species that have been listed as a result of the environmental litigation settlements as the Senator indicated, it would appear—perhaps it is not correct and I would like your thoughts on 

it—your office has done very little oversight on the settlements 

themselves or specifically the Endangered Species Act and the implementation. 

Has it not been requested, or does your office not see the ESA 

oversight as a priority compared to other areas? Can you talk with 

us a bit about whether or not there has been a review of the settlements done internally that have placed some of these specific species under the Act or being identified as being endangered? 

Ms. KENDALL. Certainly, sir. We have not been advised externally from Congress, from the public or internally through whistleblowers that there are specific problems about specific listings. If 

we had been so advised, we would certainly take a look at them. 

What I hear Senator Inhofe saying is that he has concerns about 

some very specific species. We would be glad to get with staff to 

understand what those concerns are and take a look at them as appropriate. 

Senator ROUNDS. I would like to expand that just a little in 

terms of the process you utilize or the existing practice of how they 

are identified, how the determination is made to actually list them, 

and what the criteria is that is out there. 

I was wondering also if you would work through that process 

with our committee, go back through it and see how exactly that 

process is being implemented today. 

Ms. KENDALL. Certainly. One of the things we do and have done 

in the 15, coming on 16, years that I have been with the IG’s Office 

is look at process such as the Endangered Species Act listing or 

delisting process and ensure that the process, as it is being both 

practiced and in place, is being appropriately executed. 

Senator ROUNDS. When was the last time that was completed? 

Ms. KENDALL. Usually, we do it in the context of a specific concern, so it has been a number of years, sir. 

Senator ROUNDS. Thank you. 

Senator Markey. 

Senator MARKEY. Thank you, Mr. Chairman. 
55 

Ms. Kendall, in 2014, your office completed a report that examined Department of the Interior management of the disposal wells 

containing chemicals like benzene and pathogens from untreated 

sanitary waste on DOI-managed public lands. 

The report found that the department’s failure to understand its 

responsibilities under Federal law may have endangered public 

health and drinking water supplies by allowing these sorts of wells 

to continue in operation for nearly 10 years after they were banned 

by the EPA. 

Has DOI implemented your recommendations to consistently 

identify, inspect and manage these disposal wells and ensure compliance with Federal regulations on public lands? 

Ms. KENDALL. Sir, I do not have the specifics on the Underground Injection Control Report recommendations and what has 

been implemented. I would be glad to get those to you and your 

staff in regard to what they have implemented and what has not 

been implemented so far. 

I do know that generally, the department agreed that it would 

work with EPA to ensure that they were in compliance with EPA 

regulations relative to Class V underground injection control wells. 

Senator MARKEY. While the IG report only looked at one type of 

well, do you think it is possible that other types of wells such as 

those designed for disposal of hazardous waste and byproducts 

from oil and gas production might be similarly mismanaged by the 

Department of the Interior? 

Ms. KENDALL. That was a concern of ours, sir. However, we took 

a look at a very high level and did not see the same kind of concern 

that we had with the Class V wells. At this point, we chose not to 

pursue that evaluation further. 

Senator MARKEY. Could you take another look at it to determine 

whether or not that was the correct decision? Again, I would respect your judgment in that case. Taking another look at it would 

be extremely helpful. 

Ms. KENDALL. Certainly we can do that. 

Senator MARKEY. Thank you, Mr. Chairman. 

Senator ROUNDS. Thank you, Senator Markey. 

Senator Inhofe. 

Senator INHOFE. Really quickly, Mr. Chairman, to Mr. Elkins. 

We had a chemical hearing in this committee I think on March 

18. We are going to have another coming up next week, I think. 

The recent report by your office includes 23 recommendations to 

improve the Chemical Safety Board. Now that we have that change 

taking place, what are the unresolved challenges that a new Chemical Safety Board leadership would have to address now that the 

chairman has resigned? Do you have any comments about that? 

This is going to take place this coming week. 

Mr. ELKINS. There are a number of governance issues. Reinstating a board order that was rescinded would be a good first step. 

Gaining respect, the morale at that agency is very low. Treating 

the employees with respect is a big issue. 

I could go on. There are a number of other issues I would be glad 

to share with you but off the top of my head, those would be some 

of the key issues. 
56 

Senator INHOFE. That is significant. I remember that same issue 

was a problem with the Nuclear Regulatory Commission. To regain 

the respect and the working relationship, I think, is very important. I would appreciate that. 

Thank you. 

Senator ROUNDS. Right now, I am showing we have about 6 minutes left and we are going to have to shut down. 

Ms. Kendall, you indicated earlier that you had approximately 

533 investigations that have been completed or thereabouts. I understand Senator Markey indicated perhaps 55 of them had been 

made public. My information says even less than that have been 

made public. 

I am just curious. There obviously has to be a reason why so 

many of them have not been made public. Can you clarify a bit 

why those have not been made public and what processes are in 

place to determine which are made public? I think it would be fair 

for you to be able to respond to that. 

Ms. KENDALL. There are a couple things that need to be clarified. 

First, I think the 533—I don’t have the specific numbers but will 

rely on Senator Markey’s numbers—were probably complaints that 

were received by our criminal investigative group. That does not 

mean that all of those would become criminal cases or even administrative cases. 

We have had a process in place to release investigative cases 

based on the FOIA rules which say if you have three requests, they 

should become public. We have since changed that process. We will 

be deferring, quite frankly, to a release status as opposed to a nonrelease status by virtue of summary of our investigative cases. 

We have just started getting that underway. In deference to and 

recognition of Senator Markey’s observation, we think it is important to release more of the investigative information. We did not 

keep it from anyone for any particular reason other than we were 

following the FOIA rules which suggest that after three requests, 

they become public. 

Senator ROUNDS. If you have made a change in your policy and 

if it is a written policy—I am assuming it is—would you share that 

with our committee as well, please? 

Ms. KENDALL. I am not sure that we have reduced it to writing 

but we would be glad to share in theory what our new policy is and 

it is being developed. 

Senator ROUNDS. I think it is important enough where if you are 

following it, that it be something we should have a look at as well. 

Ms. KENDALL. Whatever we have, sir, we will get to you. 

Senator ROUNDS. Thank you very much. 

Senator Markey, do you have any final comments, thoughts or 

questions? 

Senator MARKEY. Ms. Kendall, I just want to clarify with respect 

to your office’s recommendation to improve the Federal Coal Program. You stated one of the five recommendations that have not 

yet been implemented is recommendation No. 2. Recommendation 

No. 2 states that the BLM should take action to fully account for 

the export potential in developing coal, the fair market value. 
57 

It appears that BLM has not yet fully implemented the possibility of exports in determining the fair market value of Federal 

coal leases as your office recommended. 

Can you check on the status of the five recommendations for the 

Federal Coal Program and report back to the committee? 

Ms. KENDALL. We will do that actually with all the recommendations. 

Senator MARKEY. Thank you. 

Senator ROUNDS. Thank you, Senator. 

Once again, I would like to thank the Inspectors General for the 

work they do overseeing the management of our agencies. I would 

also like to thank my colleagues who attended this hearing for 

their thoughts and questions. 

The record will be open for 2 weeks which brings us to Tuesday, 

April 28. 

Thank you for coming and sharing. We look forward to working 

with you. 

With that, this hearing is adjourned. 

[Whereupon, at 10:15 a.m., the subcommittee was adjourned.] 

[An additional statement submitted for the record follows:] 

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR

FROM THE STATE OF OKLAHOMA

Inspector General Elkins and Deputy Inspector General Kendall, thank you for 

appearing this morning. And thank you, Subcommittee Chairman Rounds, for 

scheduling this hearing. 

Congress has a constitutional duty to conduct vigorous oversight to ensure that 

agencies are following the law and spending taxpayer dollars wisely. 

When I became chairman, I promised that we would conduct real oversight of the 

Administration. Such congressional review is ever more important as the EPA 

stretches its regulatory arm over our entire economy with more red tape based on 

shaky science and analysis, and absent consultation with the States or congressional 

authority. We see the same overreach at the Fish and Wildlife Service, which is 

making a record number of Endangered Species Act listings due to a closed-door settlement with environmental groups, among other hyper-regulatory actions. This 

hearing is a step in that direction. 

It is important that we hear directly from the Inspectors General about problems 

within their agencies, and that they are reminded they have a statutory duty to assist Congress with its oversight so that problems can be identified and corrected. 

I am looking forward to hearing from Inspector General Elkins about his work 

uncovering management and performance problems at the EPA and the Chemical 

Safety Board, including recent IG reports exposing EPA grant and contract mismanagement, scientific integrity concerns, as well as the dysfunction and outstanding corrective actions at the CSB. I am also looking forward to hearing from 

Deputy Inspector General Kendall about her work involving the Fish and Wildlife 

Service and its highly controversial ESA decisions. 

I ask that my full statement be entered into the record. Thank you. 

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