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Anderson’s Appointment to the Regional Water Board

This battle continues:

In a message dated 6/23/2006 8:36:16 AM Pacific Standard Time, alevine@mcn.org writes:

Below and Attached is a letter regarding the appointment of Bob Anderson to the Regional Board and related issues of conflict of interest arising out of Mr. Anderson’s employment – with Cc:’s

Read the letter and think about how Mr. Anderson’s appointment may effect pollution control programs in Region 1 – the North Coast. Then take appropriate action.

——————— Letter

June 20 , 2006

Daniel Maguire
Deputy Legal Affairs Secretary
Office of the Governor
Sacramento CA, 95814

Re: Bob Anderson’s Eligibility to Serve on the North Coast Regional Water Quality Control Board

Dear Mr Maguire,

Thank you for responding to our concerns on this matter. However, we disagree with your findings on issues related to conflicts in the case of Mr. Anderson.

Your arguments about why Mr. Anderson is eligible to serve on the RWQCB are not persuasive. You say (page 1, paragraph 3) “…it is unlikely that Mr. Anderson’s employment will result in a conflict of interest in a significant number of matters.” In your discussion, inclusive of the admission that Mr. Anderson’s income (salary) is passed through a trade association, United Winegrowers, and where the membership of this association includes many NPDES permit holders that have significant concerns related to the implementation of water pollution control programs; you fail to explain why a conflict unlikely.

In the next paragraph (Factual Background) you admit that Mr. Anderson works for United Winegrowers, and that more than ten percent of the association’s dues come from growers subject to NPDES permits. Then later in the document (Trade Association’s and Discussion pp. 5-6) you find that due to the fact that United Winegrowers holds no permit and that Mr. Anderson is not a Board member of the association, nor does he have ownership interest, that the 10% rule does not apply. Do you really mean to say that if one NPDES permit holder employees an agent, that agent will have a conflict of interest, but if a number of NPDES permit holders join together and hire and agent, the conflict magically disappears?

You say (page 2, paragraph 2) “United Winegrowers board of directors sets his salary.” What criteria does the board use in setting the salary? Might it possibly be his effectiveness in protecting Sonoma wine growers’ interests? Might these interests not conflict with protecting overall water quality?

1APPLICABLE LAW

You identify as applicable law 33 U.S.C. 1314 (Section 304 of the Clean Water Act). According to you this statute says, “no board approving NPDES permit applications shall include as a member a person who receives…a significant portion of his or her income directly on indirectly from permit holders or applicants.” Mr. Anderson does receive a significant portion of his income directly on indirectly from permit holders.

There is other applicable law. California law is clear and simple. In pertinent part:

1) Cal Wat Code § 13388
§13388. Notwithstanding any other provision of this division or Section 175, no person shall be a member of the state board or a regional board if he receives or has received during the previous two years a significant portion of his income directly or indirectly from any person subject to waste discharge requirements or applicants for waste discharge requirements pursuant to this chapter.

2) Cal Wat Code § 132207
§ 13207. Member’s personal interest precluding participation in board action; Judicial proceedings for removal from office after violation

(a) No member of a regional board shall participate in any board action pursuant to Article 4 (commencing with Section 13260) of Chapter 4, or Article 1 (commencing with Section 13300) of Chapter 5, of this division which involves himself or herself or any waste discharger with which he or she is connected as a director, officer or employee, or in which he or she has a financial interest in the decision within the meaning of Section 87103 of the Government Code.
(b) No board member shall participate in any proceeding before any regional board or the state board as a consultant or in any other capacity on behalf of any waste discharger.

3) Cal Gov Code § 87103 (2003)

§ 87103. Financial interest

A public official has a financial interest in a decision within the meaning of Section 87100 if it is reasonably foreseeable that the decision will have a material financial effect, distinguishable from its effect on the public generally, on the official, a member of his or her immediate family, or on any of the following:

(a) Any business entity in which the public official has a direct or indirect investment worth two thousand dollars ($ 2,000) or more.

(b) Any real property in which the public official has a direct or indirect interest worth two thousand dollars ($ 2,000) or more.

INCOME

As you point out the meaning of “indirect” is not carefully spelled out, but whatever way you want to slice it, numerous NPDES permit holders added together paying their own private organization to pay Mr. Anderson, looks like indirect income to the unbiased eye. As you pointed out in your footnote, it also looks like indirect income in the eyes of the Legislative Council where they found that “employment income from a trade association whose members were permittees does count as income from a permittee”.

According to California Government Code, salary is income.

§ 82030. “Income”

(a) “Income” means, except as provided in subdivision (b), a payment received, including but not limited to any salary, wage, advance, dividend, interest, rent, proceeds from any sale, gift, including any gift of food or beverage, loan, forgiveness or payment of indebtedness received by the filer, reimbursement for expenses, per diem, or contribution to an insurance or pension program paid by any person other than an employer, and including any community property interest in the income of a spouse…
Cal Gov Code § 82030 (2006) in pertinent part [emphasis added].

You say the USEPA’s general counsel drew a distinction between salaried employees versus persons with an ownership interest. This is less to the point that what the USEPA had to say about the Clean Water Act/Porter Cologne Act 10-percent Rule for NPDES Conflicts:

USEPA guidance in February 14, 1973 addressed numerous issues related to the conflicts rule:
Memorandum from John R Quarles, Jr (USEPA General Counsel) to All Regional Counsels re Conflict of interest Provisions:
“It may be argued that such persons should not be disqualified if they have no connection with the management or operation of discharging facilities or budgetary decision-making that would affect such management. The conflict provisions makes no such distinction, however, nor can such a distinction reasonably be implied.”

The USEPA counsel have maintained that the Clean Water Act’s conflicts provisions are intentionally broad and cite the following excerpt from the Clean Water Act’s legislative history:
“Indeed, the only legislative history discussing this provision evidences the intent for broad application of this provision. In statements made during a House debate on the conference bill, Congressman Dingell stated that the intent of the conflict of interest provisions was to:
‘…wipe out industry representation on any water pollution control board or similar body that has anything to do with issuing, denying or conditioning permits…Even one such representative shall not be allowed because of the potential that the board will consider permits of which he has an interest.’” 1 Leg. Hist. 251

Applying the above principles, the income Mr. Anderson receives from United Winegrowers disqualifies him from sitting on the North Coast RWQCB.

CONFLICTS OF INTEREST

There is no denying the existence of conflict. Mr. Anderson is the agent of permit holders. He is employed to, and acts to, protect their interests. He sits on the regional water board to protect winegrowers’ interests.

There is no explanation, from your office, regarding how it is possible for a person, in the position of Mr. Anderson, to fulfill his obligation to protect the interests of United Winegrowers, and its members, and at the same time protect the interests of the citizens of the State of California and California’s Water Code and clean water programs.

You have stated, as a Board Member and considering his employment with United Windegrowers, Mr. Anderson must be sensitive to potential conflicts and recuse himself from deliberations in certain circumstances.

Mr. Anderson will find himself considering Waste Discharge Reports, Conditional Waivers from Waste Discharge Reporting, NPDES Permits for entities, Enforcement Actions, Cleanup and Abatement Orders, and Basin Plan Amendments. All of the aforementioned actions can, and will, have affects the operations of members of United Winegrowers. We would like disclosure (as a policy statement) on just what type of actions and deliberations that would require recusal on the part of Mr. Anderson.

Sincerely,

For Coast Action Group

Cc: Governor Arnold Schwarzenegger
Att: Appointments Secretary
State Capitol
Sacramento, CA 95814

Senate Natural Resources and Water Committee
Att. William Craven
State Capitol, Room 407
Sacramento, CA 95814

Office of Chief Counsel
State Water Resources Control Board
P.O. Box 100
Sacramento, CA 95812

Attorney General’s Office
California Department of Justice
Attn: Public Inquiry Unit
P.O. Box 944255
Sacramento, CA 94244-2550

Alan Levine
Coast Action Group
P.O. Box 215
Point Arena, CA 95468

Phone: Week Days 707 542-4408
Weekends 707 882-2484