Why Are EPA S Enforcement Numbers Different Than DOJ S

Differences in EPA and DOJ Counting of Enforcement Activities and Outcomes

Draft May 19, 2006

The Process of Comparing Data

ETDD’s Reporting and Analysis Section (RAS) works directly with DOJ’s Environmental and Natural Resource Division (ENRD) on reviewing and confirming our civil judicial enforcement data. Within ENRD there are two sections handling OECA actions: Environmental Defense (ED) and Environmental Enforcement (EE). EE handles most of EPA’s enforcement cases; ED handles mainly CWA Wetlands (CWA §404) enforcement actions. Both ENRD divisions must be involved in our communications to gain a complete picture of OECA’s civil judicial enforcement cases. RAS communicates routinely with Peggy Fenlon-Gore.

On a quarterly basis, ENRD and RAS exchange reports from respective databases and compare the cases listed on the reports. A conference call between RAS and ENRD is scheduled after a brief review period between RAS and ENRD to discuss the findings. Then, RAS and ENRD report back to internal staff and Regions with comments, either via telephone or email, with questions and requests for corrections. As the fiscal year goes on, the amount of time required for review, comparison and corrections becomes more demanding because issues often aren’t resolved in a timely manner and more cases are filed as the end-of-year approaches.

EPA (OC and OCE) and DOJ have suggested having a meeting to discuss differences in how each agency counts judicial enforcement cases and matters relating to these cases. The case counting issues are set forth below.

Identified Case Counting Issues

Issue 1: OECA and DOJ differ in approach to counting civil referrals.

EPA Approach: OECA gives credit for a referral using the date the referral package is signed in the Region approving the package for transmission to DOJ.

DOJ Approach: DOJ gives referral credit based on the date they receive the referral package.

Example: On October 11, 2005, DOJ received a referral package from a Regional office dated September 27, 2005. DOJ did not back-date the receipt of the referral. They will count it as a FY ’06 referral while OECA will count it in FY ’05. This time lag contributes to differences in referral counts especially during Q1 and Q4 when referrals occur near the start and end of the fiscal year.

Draft; Deliberative Process Privileged; FOIA Exempt; Enforcement Sensitive Proposed Action: Will DOJ consider counting referrals based on the date of transmission to DOJ? Accurately counting distinct referrals in a timely fashion is a critical data element for EPA.

Issue 2: OECA and DOJ differ in referral counts that relate to multi-regional actions including HQ-led CERCLA bankruptcies which usually involve more than one EPA Region.

EPA Approach: Each EPA Region involved in a multi-regional enforcement action enters a distinct referral into ICIS. Each Region receives a referral count based on the date of the referral to DOJ.

Also, EPA Regions transmit indirect, multi-regional bankruptcy referrals to OECA. OECA then prepares a consolidated bankruptcy referral package and sends it to DOJ. OECA gives each Region credit for their referral to HQ. Each Region uses the date of HQ’s transmittal to DOJ to receive credit for a referral to DOJ.

DOJ Approach: For multi-regional actions, DOJ tracks one, single, consolidated referral under the Region where the complaint/proof of claim is filed.

Example: St. Gobain is a FY 2005 multi-regional CAA case - six Regions made referrals to DOJ. EPA counted all six referrals while DOJ consolidated the referrals into one package, which became one complaint, and DOJ will track the case under the Region where the complaint is filed.

Proposed Action: None at this time. In FY 2006, DOJ modified the way it tracks multi- regional cases in PSR. There is an individual entry for each EPA Region now instead of just one case. OECA encourages its Regions to bring nationally significant cases, especially those which involve facilities in multiple regions. It is important to OECA’s Regional offices that their individual participation in a multi-regional case be identifiable and recognized.

Issue 3: DOJ includes in its counts as referrals actions such as penalty waivers (usually CAA) and penalty write-offs (usually CERCLA); EPA does not include these actions in its counts.

EPA Approach: OECA does not track penalty waivers and penalty write-offs as referrals to DOJ.

DOJ Approach: DOJ tracks other types of actions as referrals and counts them in the total number of EPA referrals.

Proposed Action: Further investigate these types of referrals and determine whether these are actions which should be counted by EPA in the “Referrals to DOJ” data element 2

Draft; Deliberative Process Privileged; FOIA Exempt; Enforcement Sensitive or whether DOJ should cease counting these actions in the same category as civil judicial referrals. Issue 4: EPA and DOJ differ in tracking injunctive relief estimates.

EPA Approach: EPA guidance directs that EPA may take credit for the value of any action that the violator takes to return to compliance, if that complying action was taken in response to the enforcement action - whether ordered by the court or not.

DOJ Approach: DOJ usually only tracks injunctive relief/complying action cost estimates for activities explicitly ordered in consent decrees.

Proposed Action: OECA emphasizes the importance of measuring compliance with our orders which can include all actions taken to return to compliance. OECA suggests DOJ consider adding estimated costs not explicitly ordered to their calculation of the value of injunctive relief because it represents a more complete picture of the value associated with attaining compliance.

Issue 5: EPA and DOJ differ in tracking injunctive relief when the estimate provided is a range.

EPA Approach: If an estimated injunctive relief cost range is provided to EPA HQ, EPA will report the conservative, low-end of the range.

DOJ Approach: If an estimated injunctive relief cost range is provided to DOJ, DOJ proposed in FY 2006 to report the average of the range.

Example: During FY 2005 there was one case in particular, Louisville and Jefferson County, with an estimated injunctive relief value of $500 million to $800 million. DOJ reported the high-end of the range while EPA was more conservative and reported the low-end.

Proposed Action: OECA recommends both EPA and DOJ use the conservative low-end of a range when injunctive relief is estimated as a range.

Issue 6: EPA lags behind DOJ counting interest payments and stipulated penalties

EPA Approach: In FY 2003, EPA began reviewing, quality-checking, and reporting on stipulated penalties and EPA keeps the amount separate from the amount of civil penalties.

DOJ Approach: DOJ adds interest payments and stipulated penalties to EPA’s civil penalty values to get EPA’s overall penalty amount. EPA Regions track interest payments inconsistently if at all.

Draft; Deliberative Process Privileged; FOIA Exempt; Enforcement Sensitive Proposed Action: EPA could investigate encouraging Regions to track interest payments better in ICIS. The interest payments should be uniquely identifiable. OECA is doing a better job of reporting stipulated penalties and should continue to emphasize the importance of this data.

Issue 7: OECA and DOJ report bankruptcy dollars differently - OECA reports the amount of money awarded in the CD while DOJ reports the money actually received.

EPA Approach: Most of OECA’s bankruptcy claims fall under CERCLA. EPA reports the amount of the proof of claim and does not make corrections based on the amount that is actually received.

DOJ Approach: DOJ tracks only the amount that is received, which amounts to only “pennies on the dollar.”

Proposed Action: None at this time. OECA tracks the awards of the case conclusions. It does not track the accounts receivable. The Financial Management Office and the Regions track accounts receivable.

Issue 8: Inter-agency consistent end-of-year performance reporting deadline and announcement

EPA Approach: OECA utilizes a certification process to collect, review, and finalize all mid-year and end-of-year numbers. The process involves a significant amount of quality review of the data and results in a time lag of approximately four to five weeks following the mid-year and end-of-year before numbers are finalized. OC gives the Regions two weeks after the end of the fiscal year to finish entering data into various systems then two weeks to review and correct their data. OC does not run any final reports from any data systems until these four weeks have passed. OC then leads an effort involving multiple OECA offices to review, correct, and finalize numerous data points. In FY 2005, EPA’s end-of-year data was final on November 9, 2006.

DOJ Approach: DOJ ENRD focuses solely on civil judicial data, a much smaller enforcement universe than EPA manages. DOJ’s FY 2005 deadline for end-of-year data was much earlier than EPA’s deadline, around October 10, 2005.

Example: In FY 2005, DOJ counted $15 million as injunctive relief that EPA considered to be a SEP under the Illinois Power CD. While EPA was investigating whether Region 5 had obtained a waiver from certain aspects of the SEP policy from then Acting OECA Assistant Administrator Tom Skinner, DOJ had already finalized their numbers and transmitted them to OMB. Thus, DOJ reported $15 million more than EPA as injunctive relief and EPA reported $15 million more than DOJ as SEPs.

Draft; Deliberative Process Privileged; FOIA Exempt; Enforcement Sensitive Proposed Options: EPA and DOJ should try to synchronize their end-of-year close-out schedules. Could DOJ follow the same schedule as EPA for finalizing and announcing end-of-year numbers?

Issue 9: OECA and DOJ differ in approach to tracking and counting SEPs from CD amendments

EPA Approach: EPA counted a SEP obtained through an amended CD in the year the amended CD was approved by the court. The CD, which amended the original CD, substituted a new SEP for the SEP previously ordered.

DOJ Approach: DOJ substituted the new SEP for the SEP obtained in the original 2001 CD.

Example: EPA counted the SEP in FY 2003 by adding a new settlement representing the amended CD to the record in ICIS. DOJ entered the information under the record for the original 2001 CD; therefore, the substituted SEP was not counted by DOJ in FY 2003.

Proposed Action: None at this time. EPA is currently reviewing its approach to entering amended CDs and associated data into ICIS.

Draft; Deliberative Process Privileged; FOIA Exempt; Enforcement Sensitive