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AT GE, FORMER ENEMIES ARE NOW EMPLOYEES
SWITCHING SIDES ANGERS THOSE IN PCB FIGHT
August 6, 2000

PITTSFIELD - Shortly after Stephen Ramsey left his job as head of the environmental enforcement section of the federal Department of Justice, he helped write a 10-page manual on how to stymie government efforts to hold companies accountable for pollution. By this point, Ramsey was working for a law firm that represented General Electric Corp. and other companies accused of pollution.

The Ramsey manual included advice on flooding the government with paperwork by using the Freedom of Information Act "broadly and often" and making "artful use of the `Book-of-the-Month-Club response' " ("If we don't hear from you, we assume you agree with us").

The advice in Ramsey's manual, based on his intimate knowledge of how the government works, was so worrisome to David Buente Jr., his successor at the Justice Department, that Buente distributed a memo warning colleagues about it.

That was before Buente himself became part of GE's team.

Now, almost a decade and a half later, the tactics Ramsey recommended, and Buente warned of, are very familiar to government regulators here. For the past three years, they have been haggling with GE and its lawyers over the cleanup of PCBs in the Housatonic River and around Pittsfield.

Often, the regulators have found themselves sitting across the table from people who once worked for the government but are now with GE. In fact, GE has had nearly a dozen former state and federal regulators working on its behalf on the Pittsfield case and GE's companion PCB battle involving the Hudson River in New York. The officials have passed through the so-called revolving door from the top echelons of government watchdog agencies to fight on GE's side, working on the PCB issue for the corporation or one of its law firms, notably Sidley & Austin.

Ramsey is now GE's vice president for environmental programs. He took an active part in Pittsfield negotiations that led to an agreement now awaiting approval by a federal judge. The man with whom Ramsey coauthored the manual, Samuel Gutter, was also deeply involved in the Pittsfield case. Previously, Gutter served as the lead staff attorney for Superfund matters at the Environmental Protection Agency.

That lawyers leave government service for the private sector is nothing new. And there is no reason to believe that any of the former regulators working for GE and the firms they hire are breaking the law. But that so many high-level government environmental regulators, with such detailed knowledge of government operations, have ended up representing GE on PCB issues has left many environmentalists and citizen activists feeling betrayed.

"Corporate power is so extraordinary. Our only potential ally is government," said Mickey Friedman, a founder of the environmental group the Housatonic River Initiative. He added: "Government officials who go to work for polluters betray the public interest."

When GE manufactured electrical transformers at its Pittsfield plant, it used PCBs, polychlorinated biphenyls, as insulation. Between 1929 and 1977, the year the EPA banned PCBs, millions of gallons of the suspected carcinogen either leaked into the Housatonic River, were present in material used in the 1940s to straighten the river, or, in the case of a 1968 accident, spilled directly into the waterway, according to the EPA.

Three years ago, the federal government intensified its efforts to remove PCBs from the riverbed, flood plains, and properties around Pittsfield. The EPA threatened to declare Pittsfield a Superfund site, which could have made GE responsible for triple the cleanup costs once fines were factored in. The corporation is named as a potentially responsible party for more Superfund sites around the country than any other company, according to the EPA.

Even though it took responsibility for PCBs in the river, GE spent years and huge sums on lawyers - some who played major roles in drafting and enforcing Superfund legislation when they worked for the government - arguing that PCBs are not dangerous. GE escaped Superfund designation in the Pittsfield case after negotiating an agreement under which it will pay, it is estimated, anywhere from $250 million to $750 million as part of one of the nation's largest cleanups involving contamination by a private company, according to the EPA.

Whether the agreement goes far enough is hotly debated. Mindy Lubber, the regional EPA administrator, has been part of the negotiations for the last three years. She said that, under the negotiated settlement, Pittsfield will "get cleaned up to the same standard as it would have been under a Superfund listing." Without the agreement, it would have taken much longer, according to Lubber. "Particularly given the kinds of resources GE might have used to litigate this," she said, "it could have turned into the full employment act for lawyers, instead of having shovels in the ground."

Yet, Lubber is critical of GE's tactics. "GE plays tough and there are many times I don't like it," she said, giving as an example the flood of Freedom of Information Act document requests that GE submitted. "I don't like having our resources tied up in that way. . . . I find many of their efforts objectionable in the extreme."

Environmentalists such as Tim Gray argue that the agreement government officials made with GE falls far short of what they could and should have gotten from the corporation. Gray, who lives in Lee, 12 miles downstream of the GE plant, and runs a greenhouse business there, said he is dismayed that many former allies now "have high-paying jobs or have gone to the other side." Executive director of the Housatonic River Initiative, Gray worries about "huge amounts of PCBs being left in the flood plain of the river." He said government negotiators settled for "half a cleanup."

Cristobal Bonifaz, an Amherst lawyer representing property owners along the river seeking to intervene in the negotiated settlement, accuses the government of allowing itself to be intimidated by GE.

"To properly clean up the Housatonic and adjacent sites would cost them $1 billion cold," said Bonifaz, "and that is without the triple damages the government could seek under Superfund." He said the agreement ignores hundreds of thousands of tons of PCB-contaminated soil and "writes off ground water" in large areas.

And he said he is incensed by GE's pool of legal talent, starting with the former Justice Department official who is now GE's vice president for environmental programs. "I think Stephen Ramsey has a tremendous conflict of interest in even participating in this thing," said Bonifaz. "It is fundamentally wrong that people who once worked for the government use their knowledge to exploit the weaknesses of the government."

Beth Comstock, GE's vice president for corporate communications, said everyone in the company fully complies with conflict-of-interest laws. "For anyone to suggest that we don't is just irresponsible," she said.

"We hire people based on their skills and experience, we hire the best people, and it's not unusual to find former government employees at our company." Those employees know coming in what they can and cannot work on, Comstock said, adding that the company employs 340,000 people.

One of the most highly valued companies in the United States, GE reported profits of $3.378 billion in the second quarter of this year - the highest quarterly earnings in its history.

The revolving door is not limited to former regulators on the federal level.

As the top lawyer with the Massachusetts Department of Environmental Protection, Ralph Child led his agency's charge against GE during the negotiations that culminated last October in the cleanup agreement now awaiting approval by a federal judge. Then in January, he left his state post to work for Mintz Levin, a Boston law firm that represents GE and had defended the corporation against criminal allegations that the company hid documents relating to PCB contamination in Pittsfield.

Many of the negotiating sessions over the Pittsfield agreement took place in the Boston office of Mintz Levin.

For making the move to Mintz Levin, Child took a lot of guff at his going-away party at the Elephant and Castle restaurant in Boston in January, said one of his former assistants at the DEP, Robert Bell.

A Mintz Levin spokeswoman, Nancy Sterling, however, said Child "is not working on any GE matter, nor is he going to be." Asked for how long Child would stay away from GE business, Sterling said, "For the foreseeable future."

Child's experience as a top state environmental regulator is advertised in Mintz Levin promotional material. His move to a firm that represents GE did not surprise state Representative Christopher Hodgkins, a Democrat of Lee and a founder of the Housatonic River Initiative. "If you get close enough to GE they'll hire you," said Hodgkins. Former regulators have valuable knowledge about the cultures of the agencies they once served, he said.

Just over a year ago, Gary Sheffer, an assistant commissioner at the Department of Environmental Conservation in New York, became a top GE spokesman specializing in environmental matters. He was a key player in that state's efforts to find a settlement for dealing with PCBs in the Hudson River. His move caught the attention of New York Attorney General Eliot Spitzer. "It was one of those career moves that kind of raised a few eyebrows," said a Spitzer spokesman, Marc Violette, "and some of the raised eyebrows belonged to people in our offices."

Sheffer, who is not a lawyer, is now a GE spokesman on the Pittsfield cleanup.

Former Massachusetts attorney general Scott Harshbarger, who now heads Common Cause, a Washington, D.C.-based group pushing governmental reform, said the unchecked revolving door is unacceptable. "Companies would never tolerate this kind of stuff," said Harshbarger. Many businesses force employees to sign "non-compete" clauses limiting the kinds of things they can do later on. "But they think it's OK for public employees," said Harshbarger. "The system that allows this kind of action to occur is corrupt."

Those on the receiving end say GE's tactics clearly have an impact. Peyton Fleming, a spokesman for the EPA's Boston office, said his and other agencies received at least 21 Freedom of Information Act requests from GE, covering thousands of documents related to Pittsfield.

The EPA alone had to assign five lawyers and paralegals for half a year to respond to the requests. "It was certainly among the largest FOIA requests we've gotten in this regional office and possibly for the entire agency," Fleming said.

One of the lawyers assigned to dealing with those requests, John Kilborne, said, "If they think they need a delay, then they FOIA you . . . [and] that tied us up for a huge amount of time in the GE case."

Asked if he thought any of the FOIA requests were frivolous, Kilborne paused and then said, "I guess frivolous is not the word I would use. I'd call them harassing."

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