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Author of ‘EPA Playbook’? Report claims notorious fraudster was behind costly EPA regulations

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FILE: Oct. 1, 2013: Former EPA official John Beale at a hearing on Capitol Hill, Washington, D.C.

John Beale, the former EPA official who fooled his bosses into believing he worked for the CIA, was deeply involved in crafting costly environmental standards which still are having an impact today -- though he came into the job with little, if any, environmental experience. 

The details were included in a 67-page report from Republicans on the Senate Committee on Environment and Public Works, which claims the fraudster's role should now throw those rules into question. 

The report is the product of months of research into the case of Beale, a top official in the Office of Air and Radiation, who was sentenced to prison in December for defrauding the agency with his CIA lie. It details Beale's role in crafting an aggressive regulatory approach which the report dubs the "EPA Playbook." 

"Ultimately, the guiding [principle] behind the Playbook is the Machiavellian [principle] that the ends will justify the means," the report says. 

Sen. David Vitter, R-La., top Republican on the committee, said in a statement that the study "connects the dots between John Beale and the numerous air regulations that he's responsible for." 

The EPA already has come under scrutiny for failing to act earlier on warning signs about Beale's behavior and fraudulent activity. But the report also calls into question the regulatory work Beale had done over an EPA career that began in the late '80s -- and its lingering impact on businesses today. 

"The product of his labors have remained intact and have been shielded from any meaningful scrutiny, much the same way Beale was protected by an inner circle of career staff who unwittingly aided in his fraud," the report says. "Accordingly, it appears that the Agency is content to let the American people pay the price for Beale and EPA's scientific insularity, a price EPA is still trying to hide almost twenty years later." 

Beale was first brought on as a career employee by his friend Robert Brenner in 1989, after a stint working as a consultant for the agency. According to the Senate GOP report, he had no environmental experience, and his federal legislative experience was limited to an unpaid internship for a senator. Yet he was brought on at the maximum pay level for an employee of his kind -- at a level typically reserved for people with 20 years' experience, according to the report. 

In 1995, Beale and Brenner apparently began working on what are known as National Ambient Air Quality Standards (NAAQS) for Ozone and Particulate Matter (PM). This was a far-reaching process to regulate pollutants in the air -- the push to regulate Particulate Matter covered small particles ranging from smoke to soot to fumes to dust. According to the report, Beale and the rest of the agency ran with the project. 

"Under Beale's leadership EPA took the unprecedented action of proposing standards for the two pollutants in tandem and aggressively tightened the standards to controversial levels," the report said. 

The report goes on to argue that the 1997 standards that resulted "set in motion" the way the EPA issues regulations under the Clean Air Act. The report alleges that this included "inflating benefits while underestimating costs." 

Asked for comment on the Republican report, EPA spokeswoman Alisha Johnson acknowledged Beale's role in the air quality rules but noted he was among many people involved in that process. 

"While Mr. Beale did work on the rules mentioned in the report, he was just one of a large number of people from a number of disciplines across the Agency who provided input on those rules," she said in an email. Those rules, she noted, for the most part were upheld by the courts. 

"Since that time, both standards have been re-reviewed and re-issued by the EPA," Johnson said. "The standards followed the routine open, transparent and public process, providing opportunities for public and interagency review and comment prior to their finalization." 

Despite Republican accusations, the agency defends its air quality standards as firmly grounded in science. 

The Senate GOP study details specific regulations that relied on these standards, including the EPA's controversial regulations on coal-fired power plants. Amid these and other rules, dozens of power plants have been slated for retirement in recent years. 

The report says the air quality standards have also been used to defend 32 major rules since 1997, which together account for billions of dollars in costs to U.S. businesses. 

The so-called "playbook" for implementing EPA rules began during the 1997 process, and allegedly included inflating benefits of proposed rules, as well as using a controversial tactic known as "sue-and-settle" -- where a "friendly" group sues the agency and settles on "mutually agreeable terms." The report says Brenner and Beale were behind that "playbook." 

Republicans argue in the study that Beale reached the "pinnacle of his career" during that 1997 process, and used that status to defraud the agency for years. 

The inspector general's investigation, which later uncovered the fraud, found Beale received improper bonuses until 2013 -- the improper bonuses ended up totaling about $500,000.  This, while he was taking off time supposedly to work for the CIA. 

Since the fraud was made public, EPA Administrator Gina McCarthy has been credited by some with initially flagging Beale's activities and expenses. EPA bosses say they were duped by his CIA story, despite the warning signs. 

An EPA spokeswoman said earlier that Beale "went to great lengths to deceive and defraud the U.S. government over the span of more than a decade" and the agency has "put in place additional safeguards to help protect against fraud and abuse related to employee time and attendance." 

Brenner retired from the agency in 2011.