From: Jones, Danielle [mailto:Danielle_Y_Jones@omb.eop.gov] 

Sent: Thursday, February 18, 2016 5:28 PM

To: Cogliano, Gerain <Cogliano.Gerain@epa.gov>

Subject: SBA Comment

Attachments:

Document1.docx

Hi Gerain,

This is the first of SBA comments and Kevin wanted me to share this with you right away. Let me 

know if we should set up a call to discuss.

Best,

Danielle

Danielle Y. Jones

Policy Analyst

Office of Management and Budget

Phone: (202) 395-1741 | djones@omb.eop.gov
Attachment: Document1. docx

SBA Comment 02/18/16

Attorney-Client Privilege for Audit Reports

This is the new revised text:

Proposed §§ 68.59(c)(2) and 68.80(c)(2), if finalized, would include requirements for the 

retention of reports and records by the third-party auditors. Proposed §§ 68.59(c)(3) and 68.80(c)(3), if 

finalized, would require the audit report to be submitted to the implementing agency at the same time, or 

before, it is provided it to the owner or operator. Finally, EPA is proposing in §§ 68.59(c)(4) and 

68.80(c)(4) that the audit report and related records cannot be claimed as attorney-client communications 

or as attorney work products even if the auditors are themselves, or are managed by or report to, 

attorneys. EPA seeks comment on these proposed requirements including any legal concerns that may 

result from the provision that limits attorney-related privileges.

DISCUSSION:

EPA does not indicate why it needs to waive attorney client privileges for THIRD PARTIES. EPA should 

explain why it isn’t enough for the EPA or the implementing agencies to have access. If it wants to request 

comment on this, it should explicitly say. EPA wants to get access for third parties BECAUSE - and then solicit 

comment on that. If not, EPA should simply say that implementing agencies will have access irrrespective of 

attorney-client claims - and not the current text which waives it for all parties. 

The request for “legal concerns” does not address our specific complaint and doesn’t alert the reader to 

the third party litigation problem. 

Commented [A1]: IA v.3 Comment #7 Page 80, regarding Third 

Party Reports: EPA could require production of such reports despite 

the existence of the attorney client privilege. Instead of the current 

regulatory language which makes these materials potentially 

available to third parties in litigation, why not state that these 

materials are available to EPA and implementing agencies without 

regard to the applicability of an attorney client privilege? This 

achieves EPA's purpose without making this information potentially 

available to the public. EPA does not have the authority to waive 

attorney client privilege for non-governmental parties.

Commented [A4]: IA Comment #32 Page 76, regarding “Finally, 

EPA is proposing in §§68.59(c)(4) and 68.80(c)(4) that the audit 

report and related records cannot be claimed as confidential 

attorney work products even if the auditors are themselves, or 

managed by or report to, attorneys.” EPA should not interfere with 

attorney client privilege. This is unnecessary, and would 

compromise the honesty and value of the audit. It should suffice to 

have access to the audit, if needed by the agency. This provision 

could harm companies who are trying to perform a proper audit, 

but would subject them to litigation liability. What is the 

justification for such a provision?

Commented [A2]: EPA added preamble language requesting 

comment on this concern.

Commented [KLB3]: EPA does not indicate why it needs to 

waive attorney client privileges for THIRD PARTIES. The comment 

below suggests this is only needed for implementing agencies. We 

agree.

EPA should explain why it isn’t enough for the EPA or the 

implementing agencies to have access. If it wants to request 

comment on this, it should explicitly say so. EPA wants to get 

access for third parties BECAUSE - and then solicit comment on 

that. If not, EPA should simply say that implementing agencies will 

have access irrespective of attorney-client claims - and not the 

current text which waives it for all parties. 

Commented [A5]: This is to prevent o/o from shielding 

regulatory compliance documents under the guise of attorneyclient privilege. These documents should be available to the 

implementing agency for compliance monitoring purposes.