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Lawmakers seek investigation into Scott Pruitt’s friend with no toxic site cleanup experience

Albert Kelly was banned from banking soon after taking over as the EPA's top Superfund official.

TWO DEMOCRATIC HOUSE MEMBERS HAVE CALLED FOR AN INVESTIGATION INTO SUPERFUND ADVISER ALBERT KELLY, WHO THE FDIC BANNED FOR LIFE FROM BANKING. CREDIT: C-SPAN/SCREENSHOT
TWO DEMOCRATIC HOUSE MEMBERS HAVE CALLED FOR AN INVESTIGATION INTO SUPERFUND ADVISER ALBERT KELLY, WHO THE FDIC BANNED FOR LIFE FROM BANKING. CREDIT: C-SPAN/SCREENSHOT

Environmental Protection Agency (EPA) Administrator Scott Pruitt selected an old friend to oversee the nation’s toxic waste cleanup program. The friend, Albert Kelly, had no experience in environmental regulation, although he had invested in fossil fuel companies responsible for toxic waste that led to the designation of official Superfund sites.

Two lawmakers are now calling on the EPA’s internal watchdog to investigate why Pruitt’s friend was hired to serve as his top adviser for the agency’s Superfund program. They want to find out if Kelly — a former banker who was banned from the profession — was properly vetted before getting appointed to his high-level position and whether Kelly has violated federal rules since joining the EPA.

Reps. Don Beyer and Gerry Connolly, both Democrats from Virginia, sent a letter to the EPA’s Office of Inspector General on Tuesday requesting the investigation. Pruitt appointed Kelly in April 2017 to oversee the nation’s Superfund program.

Beyer and Connolly want the inspector general to find out whether Kelly disclosed to the EPA and the Office of Personnel Management that, when he was hired by Pruitt in April 2017, he was also under investigation by the Federal Deposit Insurance Corporation (FDIC) for possibly violating banking laws and regulations that contributed to significant losses for his bank .

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The lawmakers also believe Kelly did not have the necessary qualifications to serve as Pruitt’s Superfund adviser. In the letter, Beyer and Connolly said there are “still-unexplained red flags” about Kelly that they believe the inspector general’s office should examine.

“At the time of his appointment by Administrator Pruitt, Mr. Kelly’s resume showed no qualification related to environmental regulation nor to the oversight of a government agency,” the lawmakers wrote in the letter. “Mr. Kelly’s only apparent connections to environmental regulation were his investments in companies deemed by the EPA to be responsible for the creation of Superfund sites and his longstanding friendship and financial relationship with Administrator Pruitt.”

In recent weeks, Kelly has been working with Pruitt to help him survive allegations of ethics violations and corruption. In early April, Kelly failed to show up at a scheduled meeting with residents of a West Virginia town contaminated by toxic chemicals — Kelly stayed behind in Washington to help Pruitt deal with the fallout from the barrage of controversies.

Instead, Kelly sent his top assistant, Nick Falvo, to Minden, West Virginia, to hear from residents about why they believe the town should be placed on the Superfund program’s priorities list. Falvo told residents that Kelly would come back to visit Minden himself “once the storm in D.C. clears up,” referring to scandal-plagued Pruitt.

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Kelly has also been criticized for his fossil fuel investments. He has held as much as $75,000 in financial stakes in several fossil fuel companies, including investments in Phillips 66, according to a financial disclosure report. The EPA deemed Phillips 66 responsible for contaminating Bayou Verdine in 2010, which is located in the Calcasieu estuary in Lake Charles, Louisiana. And more recently, in 2016 Phillips 66 was among a group of companies forced to pay to clean up the Portland Harbor Superfund site — a process which is expected to take 30 years.

And previously, Kelly headed SpiritBank which is based in Pruitt’s hometown of Tulsa, Oklahoma. Last year, though, the Federal Deposit Insurance Corp. (FDIC) reached a settlement with Kelly over alleged wrongdoing. The FDIC issued an order in July 2017 that banned Kelly from the banking industry for life for violating federal banking laws.

“Despite such severe action from a federal financial institution, Mr. Kelly now oversees a landmark environmental program with a budget of $1 billion,” Beyer and Connolly wrote in their letter to the EPA’s inspector general.

The congressmen urged the inspector general to investigate Kelly’s “fitness to manage the EPA Superfund program and whether his appointment followed appropriate procedures, given the serious findings and disciplinary action by the FDIC.”

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While Kelly served as president, CEO and chairman of the family-owned SpiritBank, the bank provided Pruitt with four loans in 2003 and 2004, totaling nearly $1 million. As longtime friends, Kelly helped Pruitt get financing for a mortgage and to buy a minor league baseball team.

Last May, Pruitt returned the favor to Kelly with an announcement that he would be appointing the former banker to head a new Superfund task force, The Intercept reported in December. The task force looked into reprioritizing and streamlining procedures for remediating more than 1,300 Superfund sites.

The task force in June 2017 issued a nearly three dozen-page report containing 42 recommendations, all of which Pruitt immediately adopted, according to the Associated Press.

Beyer and Connolly want the inspector general to investigate whether Kelly violated EPA policy by failing to document the meetings of the Superfund Task Force and to properly record its activities.

The creation and retention of records related to the task force and providing the public with access to the records is required under the Federal Records Act and the EPA’s Records Management Policy.

“Transparency and public accountability on such matters have been recurring problems for Administrator Pruitt’s team, and in this case may have included the violation of regulations or even federal law,” the lawmakers wrote.