State of the States
by Mark Woodall
Chair, Sierra Club Audit Privilege Task Force
In a landmark 1988 case, the U.S. Supreme Court stated
clearly the compelling public interest in corporate
openness. "The greater portion of evidence of wrongdoing by
an organization or its representatives," wrote the majority,
"is usually found in the official records and documents of
that organization. Were the cloak of privilege to be thrown
around these records and documents, effective enforcement of
many federal and state laws would be impossible."
Proof of that assertion comes, ironically - if not
surprisingly - from polluters and their representatives, who
are focused on throwing the "cloak of privilege" around
their own corporate crimes and misdemeanors.
Under what proponents like to call "audit privilege"
legislation - but more accurately termed "dirty secrets" or
"pollution secrecy" bills - they'd get their wish. Audit
privilege measures have been considered in at least 40
states since Oregon first took the plunge into willful
ignorance by passing its version in 1993. And while the
particulars may vary, all would allow polluters to shield
from judges, juries and the public a wide range of
information on how well, or how poorly, they're complying
with environmental and other laws. The worst of these bills
would grant complete immunity from prosecution to those who
discover and disclose evidence of their malfeasance -
regardless of the extent of the damage to people or
It's a can't-lose proposition for polluters.
That much is evident, fortunately, not just to the
conservative Supreme Court but to many state lawmakers
throughout the country. While 15 legislatures have followed
Oregon's bad example by enacting dirty-secret measures, a
larger number have refused. The Environmental Protection
Agency has also taken a strong stand against privilege and
immunity for corporate scofflaws. The agency is "firmly
opposed to the establishment of a statutory evidentiary
privilege for environmental audits," as well as to blanket
immunities for irresponsible conduct.
Instead of privilege and immunity, the EPA's official policy
- reached last December following 18 months of hearings and
roundtable discussions with industry reps and the public -
calls for reductions in fines and penalties for companies
that voluntarily disclose and correct their violations,
along with the agency's promise not to recommend criminal
prosecution. The reasonableness of that position is
underscored by its endorsement by the Justice Department, 16
state attorneys general, the National District Attorneys
Association, numerous state environmental agencies and a
raft of environmental groups, including the Sierra Club.
The pollution lobby, therefore - from corporations including
Chevron, Dow Chemical, Coors and Du Pont to interest groups
like the American Forest and Paper Association and the
American Petroleum Institute - is intent on exempting itself
from law and reason. A proposed South Carolina measure, said
one state legislator, "would simply attract bad actors ...
by giving them a mechanism to avoid civil and criminal
prosecution." A Georgia lawmaker observed of a bill under
consideration there that "you could hide criminal acts, you
could hide any number of things."
The Sierra Club's state lobby corps is working to keep
polluters from hiding under the cloak of privilege. Club
lobbyists have been leaders in assembling coalitions in
state after state to defeat dirty-secrets measures. But the
bills are still being considered in many statehouses, and
federal versions - H.R. 1047 by Rep. Joel Hefley (R-Colo.)
and S. 582 by Sens. Mark Hatfield (R-Ore.) and Hank Brown (R-
Colo.) - merit our most vigorous opposition.
As Michael Barnes, president of the National District
Attorneys Association, wrote to Rep. Jack Reed (D-R.I.): "We
want to reiterate that this is an extreme measure far beyond
any remedy necessary and that, if you enact a self-audit
privilege, you will be doing a vast disservice to law
enforcement efforts not only in the realm of environmental
law, but across the spectrum of white-collar crime."
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