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Are We Done with Sweetheart Deals for Too Big Banks?

In her first major criminal settlement since becoming Attorney General, Loretta Lynch has delivered, trussed and on a platter, five of the world’s biggest banks—Citigroup, JPMorgan Chase, Barclays, Royal Bank of Scotland, and UBS.  The five will actually plead guilty to specific crimes involving manipulation of foreign currency markets and will pay close to $6 billion in penalties for illegally collaborating to drive trading prices up and down. As one not-so-bright bank executive pronounced slyly in an online chat room that the self-named “cartel” used to communicate, “If you ain’t cheating, you ain’t trying.”  

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Federal Agency Inaction amid Growing Concerns about Health and Safety of Nail Salon Workers

Whether you are a frequent visitor to your local nail salon, or just an occasional passer-by, you are likely familiar with the offending chemical stench that emanates from within.  You may have even considered whether the displeasing fumes are safe to breath, especially for the clinicians who work in the store every day.  This is exactly what New York Times reporter, Sarah Maslin Nir, explores in her recent exposé of the nail salon industry entitled, “Perfect Nails, Poisoned Workers.” 

Nir explains that there is limited research on chemical exposure to nail salon workers, which makes it difficult to reach hard conclusions on the long-term or accumulated health effects.  Yet first-hand accounts of workers in the industry reveal that skin and eye irritation, breathing difficulty, and pregnancy complications are commonplace, and there is substantial data showing that the chemicals used by nail salon workers (like acetone, formaldehyde, and toluene to name a few) are hazardous, and are, in some cases, carcinogenic.  

So why is the Occupational Safety and Health Administration (OSHA) doing so little to step in and protect nail salon workers from harm?  

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The Reality of U.S. Oil Transport

The major oil pipeline spills along the Santa Barbara coast and into the Yellowstone River in Montana this past year are only the most recent chapters in the growing list of major spills associated with oil transportation in the United States. These recent spills of 100,000 gallons and 50,000 gallons of oil, respectively, follow a nearly 1 million gallon spill of Canadian tar sands oil from an Enbridge pipeline that burst in the Kalamazoo River in Michigan in 2010, and other similar spills around the country. These spills and many others like them have resulted in significant harm to public health and the environment, created panic among residents, and forced state officials to declare states of emergency in affected area. 

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Counting Sheep: Livestock Stream Fencing Accounting as Easy as Herding Cats

Recently, the Chesapeake Bay Commission released a report Healthy Livestock, Healthy Streams to advocate for stream fencing, one of several dozen longstanding agricultural best management practices (BMPs) recognized by the Chesapeake Bay Program.  Promoting stream fencing is common sense: when livestock loiter near streams, they compact soil, clearing a path for runoff; when they enter the stream, they erode its bank and send sediment into the channel; and when nature calls, they deposit “nutrients” directly into the stream.  It is not just bad for aquatic habitats, it is bad for farmers and their vet bills. 

Despite significant reductions over the past 30 years in nutrient and sediment loading from agricultural sources, the share of these pollutants from the agriculture sector has remained remarkably consistent, contributing, for example, 45% of the nitrogen to the watershed in both 1985 and 2014.  However, the Bay TMDL calls for the agriculture sector to bring this down to about 40% of the total load, requiring the sector to shoulder over 60% of the reduction burden (figures are even higher for phosphorus).  The good news is that reductions from the agriculture sector are widely recognized to be the most cost effective, although, as noted below, there is much uncertainty for stream exclusion BMPs.  In any event, Maryland, Pennsylvania, and Virginia count on stream exclusion for 9%, 20%, and 24% of sediment reductions from the agriculture sector, respectively – a significant reliance on one single practice.

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More Right-Wing Pseudo-Research on the Costs of Regulation

The Competitive Enterprise Institute is out with the latest in a series of industry-friendly reports overcooking the supposed costs of regulation, while understating or simply ignoring the vast benefits to health, safety and the environment. Not surprisingly, The Wall Street Journal and The Washington Times were good enough to put the right-wing echo chamber in motion in its service.

A few quick thoughts: This report isn’t scholarship, it’s arithmetic advocacy—and it’s poor arithmetic at that.  The organization that sponsored the report is more concerned with advancing its political agenda of laissez faire government at all costs than it is with sound public policy. This report is meant to advance that agenda, rather than inform the ongoing debate over the U.S. regulatory system. After all, what good does it do to tally up the costs of regulation without providing an estimate of regulatory benefits with which to compare them? Policymakers and the media would do well to ignore this report.

The report’s findings appear to be based on several inflated regulatory cost estimates, lined up and added together to produce exactly what the author likely intended: a huge number. Some of the numbers come from estimates produced by regulatory agencies themselves, which several retrospective studies have shown to be systematically inflated. Others come from individual reports assembled by the author. To the extent that the CEI report is based on several different sources that relied on a variety of different methodologies, there is a large possibility that simply adding them up will result in a lot of double counting, further inflating the CEI report’s conclusion. The author of the CEI report, however, appears to make no effort to address this problem either.

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Sunshine in the Forecast for Maryland Government

Spring is here in the Chesapeake Bay Watershed, which means plenty of sunshine ahead, and not just in the weather.  Several important government transparency actions taken by the Maryland General Assembly before it adjourned the 2015 legislative session a few weeks ago will provide Marylanders with greater access to state records and shed new light on compliance with environmental goals. 

First and foremost, Marylanders for Open Government spearheaded an effort to address longstanding problems facing concerned citizens, stakeholder groups, and the press in obtaining public information in Maryland, culminating the most significant reform of the Public Information Act (PIA) since its enactment in 1970.  The new law establishes a new compliance board to hear complaints regarding overcharging of fees for PIA requests and sets out a relatively swift timetable for the resolution of complaints.  The law also creates a Public Access Ombudsman, appointed by the Attorney General, who will help resolve complaints between PIA applicants and custodians over the denial of inspection of records, among other issues.  The also law requires a response within 10 working days if a custodian believes that it will take that long to produce a record and, upon denial, to provide an explanation for the denial and a description of the undisclosed record to allow the applicant to understand the legal basis for the denial.  Finally, the law also requires the Attorney General to submit interim and final reports, in consultation with stakeholders, on how to improve the PIA law and process.  So, beginning October 1 of this year, consider whether and how the PIA process is changing and what additional change is needed.  CPR will be keeping a close eye on how the PIA process improves this fall and, particularly, the continued secrecy over agricultural nutrient management plans.

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Supreme Court To Hear Major Energy Law Federalism Case

As many scholars have noted (see here and here, for example), the Federal Power Act’s bright line jurisdictional split between “retail” sales of electricity (regulated by states) and “wholesale” sales (regulated by the Federal Energy Regulatory Commission) is untenable in the modern era. The interconnected nature of the electric grid – electricity flows freely throughout the nation - means that many activities at one level affect the other, and vice versa. The precise allocation of state and federal jurisdiction to regulate this modern network, however, remains unclear.

On Monday, the Supreme Court took a step toward providing that clarity, granting the petition for certiorari in FERC v. Electric Power Supply Association. This case squarely tests the split of authority between FERC and the states, as it is an appeal of a decision by a divided D.C. Circuit panel that held that, although “demand response” can impact the wholesale markets, it is exclusively a retail level matter beyond FERC’s jurisdiction. Demand response involves reductions in electricity demand in response to price signals or emergency conditions on the grid. In the wholesale energy markets, aggregated blocks of demand reductions can substitute for electricity generation. 

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Katrina Ruling Breaches Sovereign Immunity

Almost a decade after Hurricane Katrina, New Orleans-area residents are still trying to hold their government accountable for mistakes that allowed a monstrous flood to devastate their city. Last week, in a case called St. Bernard Parish v. United States, a federal judge helped their cause.

In a dispute involving a major navigation channel controlled by the Army Corps of Engineers, Judge Susan G. Braden of the United States Court of Federal Claims in Washington, D.C., found that the Corps’ negligence in maintaining that passage caused flooding of such consequence that it amounted to a “taking” of homeowners’ property under the federal constitution, thus requiring the payment of “just compensation.”

The facts behind the Katrina flood—perhaps the most expensive engineering failure in American history—are well known to experts. After Hurricane Katrina had passed over New Orleans, a series of levee breaches caused flooding to 80 percent of the city. Independent investigations blamed shoddy design and construction on the part of the Army Corps. A deteriorating navigation channel, the Mississippi River Gulf Outlet, or MR-GO (pronounced “Mr. Go”), also maintained by the Corps, amplified the damage by increasing the storm’s surge and funneling it toward the heart of the city. Four years after Katrina, MR-GO was finally de-authorized and closed. (See previous posts hereherehere, and here.)

Describing the MR-GO fiasco in a 2009 court ruling, the federal trial judge Stanwood Duval nearly blew a fuse. “It is the court’s opinion that the negligence of the Corps, in this instance by failing to maintain the MR-GO p

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GM and Its No Good, Very Bad Year

With the announcement that GM Chief Executive Officer Mary Barra received the outsized compensation of $16.2 million in 2014, what should have been a year of humiliation and soul-searching for that feckless automaker instead ended on a disturbingly self-satisfied note.  Purely from a public relations perspective, Barra worked hard for her money.  Appearing repentant, sincere, and downcast, she persuaded star-struck members of Congress that the company was committed to overhauling a culture characterized by what she called the “GM shrug,” loosely translated as avoiding individual accountability at all costs.  Even as she blinked in the television lights, GM fought bitter battles behind the scenes to block consumer damage cases and exploit corporate tax loopholes.

Largely on the basis of her political adeptness, Barra has been taking victory laps in the business press, hailed as the rare (female) CEO who has led her corporation out of a morass that could happen to anyone.  This performance and the accolades it inspired provide a troubling coda to what was a destructive year for American drivers.  Dubbed “the year of the recall,” automakers recalled an unprecedented 64 million vehicles ? about one in five cars on the road; GM led with 26 million of this total.

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The Horne Case and the Public Trust in Wildlife

Who could have imagined that the takings case of Horne v Department of Agriculture argued in the Supreme Court last week might portend revival of the doctrine of public trust ownership of wildlife?  But it might. Really.

The Horne case involves a claim that an arcane raisin-marketing program administered by the Department of Agriculture effects a taking by requiring raisin growers, in certain years, to turn over a portion of their crop to the government in order to keep raisin prices high.   While there are several issues presented and lurking in the case, the central question is whether takings claims based on government seizures or other “appropriations” of personal property are governed by a per se rule. The Petitioners’ case rests on persuading the Court to apply a per se rule because they declined, for better or for worse, to present an alternative takings claim resting on the multi-factor Penn Central analysis.  In the oral argument, a majority of the Court seemed persuaded that the raisin-marketing program was “ridiculous” and that some ground should be found for calling it a taking.

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