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Our Country's Deadly Energy Combo

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The corruption of the Minerals Management Service (MMS) is now so legendary that we're practically numb to the findings of yesterday's Interior Department report on MMS during the Bush years. Among other things, it found that MMS inspectors "accepted lavish gifts from representatives of oil and gas production companies, possibly worked while under the influence of crystal methamphetamine, and may have allowed oil and gas production company personnel to fill out inspection forms." The Washington Post also reported that the system itself allowed for cash bonuses paid to those who disregarded environmental concerns to meet oil and gas federal leasing deadlines. At the same time, the New York Times reported that the MMS has granted "at least seven new permits for various types of drilling and five environmental waivers" since President Obama put a moratorium on all of this in April.

The problems with MMS could not be more obvious, but the solutions are deceptively difficult. Ask anyone with experience trying to seek justice from just about any regulatory body. Typically, the process has little resemblance to the idealized image of how agencies are supposed to work, like the version that law students learn in Administrative Law class. In my own experience, when just out of law school, I joined what became a six-year legal fight against the restart of the Three Mile Island nuclear plant before the Nuclear Regulatory Commission. I was shocked by the injustice of the regulatory structure. It was bad enough that the judges represented the NRC. But the NRC staff itself was a main party in the case, along with the company. Anyone from the outside was merely an "intervener." The fix was in from the beginning.

This industry favoritism seems especially true when two things are at work: the government depends on the regulated industry to accomplish an important federal objective (e.g., energy production), and the regulated industries are motivated by profit (e.g., oil, mining, nuclear power companies). When these two things are at work, the combination is lethal.

This problem cannot be solved simply by separating an agency's "promotion" function from its "regulatory" function, which seems to be the President's solution to the MMS mess. Something similar was done with the nuclear industry back in 1975 when the government's nuclear energy "promotional" function was separated from its "regulatory" job, creating the Nuclear Regulatory Commission. The TMI accident followed four years later. The coziness between the nuclear industry and the NRC is still a significant problem today, and one about which even this Administration seems utterly unconcerned.

As for the coal mining industry, the closeness between regulators and the regulated has had deadly consequences. There was heartbreaking Congressional testimony yesterday from a very brave panel of West Virginia miners and their families who said, among other things, that Massey Energy illegally warned workers when safety inspectors were arriving. Moreover, despite "pervasive safety violations ... Massey supervisors focused on increased production. One witness said his son was told by a foreman to 'rethink your career' after complaining of dangerous conditions." Alice Peters, the mother-in-law of Edward Dean Jones who died in the Big Branch mine explosion, testified:

"Dean [Jones] often told me and his wife [sic] that he was afraid to go to work because the condition at the [Upper Big Branch] mine were so bad. At least seven times, Massey supervisors told him that, if he shut down production because of the ventilation problems, he would lose his job. They knew Dean needed to keep his job to make sure his son could get the medical care he needed. [Because of his son's physical disability, he faced an] absolute necessity of maintaining his health insurance benefits. He continued to work even though he knew [the mine] was unsafe because he was afraid of being fired and losing his health insurance coverage."

While perhaps it may sound like a side note to this tragic story, today in New Orleans there is an important panel discussion with both plaintiff and defense attorneys about the ever increasing catastrophe in the Gulf. It's a related topic because whenever a hazardous industry is operating - say oil, mining or nuclear power - the legal system is a critical last line of defense against even wider corporate abuse. Our civil court system is also important because unlike regulatory agencies, courtrooms can function to provide at least some measure of justice and compensation for those who have been hurt by massive corporate and regulatory failures. There are many legal and liability issues still to overcome in the Gulf, but hopefully some of these great plaintiffs lawyers, who are speaking at this symposium, will help. They include Elizabeth Cabraser of Lieff Cabraser Heimann & Bernstein, whose firm represented plaintiffs in the Exxon Valdez litigation and will discuss "lessons learned from that oil spill." (Exxon, you may recall, fought the Alaska fisherman in court for 19 years.) Also speaking are Mark Lanier and Dana Taschner; Brian Barr of Florida's Levin, Papantonio, Thomas, Mitchell, Echsner, Rafferty & Proctor; and Steve Herman of New Orleans' Herman Herman Katz & Cotlar, all with important insights to add.

When the regulatory structure fails, the legal system is the critical back up for all of us. Or as the conference's keynote speaker James Carville (who has been critical of the government's response to the BP spill) is expected to say, when there are "regulatory failures," the tort system is the "safety net."