CHESAPEAKE BAY:

Emails reveal Md. governor's efforts to play ball with Big Chicken

In March 2010, environmental groups working with the University of Maryland law school filed a lawsuit with a long-sought, potentially landmark objective: to hold Perdue Farms responsible for water pollution to the Chesapeake Bay from one of its 515 contract chicken growers on the Delmarva Peninsula.

Eight days later, they got what they regarded as a slap in the face from someone they considered a reliable ally: Maryland Gov. Martin O'Malley.

The rising political star and chairman of the Democratic Governors Association, who is widely seen as a possible 2016 Oval Office contender, gave Jim Perdue, company chairman and grandson of its founder, the Maryland Governor's International Leadership Award.

O'Malley extolled Perdue Farms as "one of the great corporate citizens of our state," praising the company for, among other things, its "innovation in environmental stewardship."

"Jim is one of the people I turn to for advice on a variety of issues," O'Malley said. He made no mention of the headline-grabbing lawsuit that will go to trial later this year.

Four months later, it was Perdue's turn to feel betrayed.

In late July 2010, the group Environment Maryland gathered 55 signatures from Eastern Shore chicken growers on a petition delivered to O'Malley. It urged him to hold big poultry companies such as Perdue Inc. and Tyson Foods Inc. responsible for the massive amount of pollution-rich chicken litter produced by their contract growers.

Numerous media accounts featured O'Malley's press secretary praising the effort.

"It certainly doesn't do anybody any good for poultry farmers to say we own the chickens, but not the manure they produce," the spokesman told the Maryland Daily Record.

Industry officials bristled. Late the next day, a Friday, Herbert Frerichs Jr., general counsel for the Perdue family companies and a longtime friend and former University of Maryland law school classmate of O'Malley's, tapped out this brusque email to the governor, citing the various newspaper quotes:

"Martin. Hi," wrote Frerichs, a partner in the Baltimore office of Venable LLP. "Was trying to have a vacation but was read in on the articles in response to Enviro MD petition. Big news on shore. I assume your press secretary speaks for you but we were surprised. Is this your current position? Its certainly your right to think this way-just let us know."

Hours later, O'Malley replied, blaming the episode on the "pressure" resulting from U.S. EPA's then-new Chesapeake Bay cleanup standards, called Total Maximum Daily Loads (TMDLs). O'Malley wrote that his spokesman "didn't need to state the obvious or encourage more pressure."

"But we do all need to work together, and it would have been silly for him not to have acknowledged that animal manure is a factor in figuring out these tmdl's," O'Malley wrote.

On Sunday, Frerichs replied: "Not really much in there about working together. Curious -- what is 'the obvious?'"

"The obvious is that implementing these tmdl's is going to be a challenge across the board," O'Malley wrote back later that day.

Frerichs' brief reply, sent first thing Monday morning, ended with a pointed word of advice:

"The message I have to deliver as friend. Is that you have always distanced yourself from the other on the attack. Now you can't."

Political maneuvering

This candid exchange was one of many that became public last week, when the environmental group Food & Water Watch published 70 pages of emails between O'Malley and Frerichs that the group obtained through a public records request.

The environmental group decried what it called O'Malley's unduly "cozy" relationship with the attorney for the Salisbury, Md.-based chicken company. The third-largest poultry company in the United States, Perdue contracts with 2,100 growers in 14 states to produce about 635 million broiler chickens a year -- and annual revenues of about $4.75 billion.

Food & Water Watch Executive Director Wenonah Hauter wrote in a blog post that "the emails suggest that in all things chicken, the Governor is little more than Perdue's cheerleader and his real interest is in protecting the company." She called the governor "henpecked" and wrote that he "walks on eggshells around the chicken industry."

The emails reveal a relationship more complicated than Hauter's criticism suggests.

The mid-2010 back and forth over the Environment Maryland petition, one of the earliest exchanges in the year and a half of correspondence, shows that relations between O'Malley and Perdue were not warm at the time. Frerichs' advice to O'Malley suggests that he, and likely other industry officials, distrusted the governor for what they saw as his tendency to look the other way when Maryland's chicken industry came under attack from environmentalists.

That would soon change.

Considered in the context of events that transpired over the following 16 months, the emails show an ambitious Democrat straining to push environmental initiatives important to his green legacy while cultivating a mutually beneficial relationship with agriculture industry giant Perdue.

Agriculture contributes about 0.35 percent to Maryland's gross domestic product. It is responsible for 1.2 percent of U.S. GDP. But it is an industry dominated by big corporate players like Perdue, which altogether wield considerable clout in Washington -- and whose support would be invaluable to the 49-year-old Maryland governor should he try to move from Annapolis to the White House.

In the emails, O'Malley at times strains to keep his administration in Perdue's good graces.

In a November 2011 email responding to Frerichs' complaints about state Agriculture Secretary Earl "Buddy" Hance's job performance compared with his counterparts in Delaware and Virginia, O'Malley writes:

"I'm guessing you don't have the personal email of the governors of DE or VA, so let me know when Buddy can/should be doing more to help you push stuff. I'm serious. I'll have him call you monday."

At other times, it's O'Malley who appears to go on offense.

"Buddy says he spoke with you and you said that it was I that was inattentive and unappreciative of Perdue," O'Malley wrote days later. "Which is it, or is it your perception that neither of is [sic] properly attentive, present, appreciative or responsive?"

The two occasionally spar over policy, miscommunications and false rumors. Often, they end up finding common ground.

To O'Malley's critics in the environmental community, the emails are evidence that the governor is in bed with Big Chicken.

They argue that O'Malley's Chesapeake Bay legislative victories frequently amount to stiff water utility fee increases -- rather than crackdowns on agricultural runoff.

EPA estimates that farmland runoff accounts for 42 percent to 54 percent of pollution loads to the Chesapeake Bay. "Point source" dischargers such as wastewater treatment plants and concentrated animal feeding operations, such as chicken houses, are roughly tied for second place, accounting for 14 percent to 18 percent.

Farmers dispute EPA's figures. They also argue that farms and feeding houses have made great strides and face stringent environmental standards. They say that pollution hot spots around the Delmarva Peninsula are the result of the legacy pollutants leaching out of the soil from decades ago, when farming practices were much different because neither farmers nor scientists knew better.

Environmentalists, however, argue that there is still much work to be done in cleaning up farms. And O'Malley's critics say he has failed to step up.

"The largest water pollution source to the bay is agriculture, and that's the one industry he won't touch," said Scott Edwards, attorney for Food & Water Watch. "So every legislative session, they'll pass a septic bill or flush tax, and he'll say, 'I've got this great environmental record.' But they never support any ag bills. This governor will not touch the biggest polluter in the watershed, and I think we know why now."

But to O'Malley's environmental allies, who view him as a vast improvement over his Republican predecessor, Bob Ehrlich, the emails simply show the governor playing shrewd politics with a powerful industry.

They also dispute that O'Malley has failed to stand up to agriculture, pointing to forthcoming state regulations nearly two years in the works that are expected to reduce nutrient pollution flows from Maryland farms -- for example, by likely prohibiting the spread of manure over fields in the winter, when it is most likely to wash off into waterways.

"I would say that this set of regulations is probably one of the bigger things that we've done related to strengthening agricultural regulations in quite some time, so it is significant," said Jenn Aiosa, Maryland senior scientist with the Chesapeake Bay Foundation.

O'Malley's allies and critics in the environmental movement acknowledged the political wisdom of keeping Perdue executives close.

"If this guy is someone who has national aspirations, he does have to think about the Ohio farmer and the farm lobby and all that," said one environmentalist supportive of O'Malley who agreed to speak only on the condition of anonymity. "There is some motivation for him not to hammer agriculture beyond just the economics of our state. But that some relationship with the attorney of Jim Perdue is the reason? That's a real stretch, I think."

Edwards said, "If he wants the support of agriculture in 2016, he's setting himself up so that [the growers] all stand up and say, 'This man's a friend of the farming industry, and he has our support.'"

An O'Malley spokeswoman declined to discuss the email brouhaha.

"The emails speak for themselves," said O'Malley's communications director, Raquel Guillory. "The governor's record on the environment and improving the health of the bay speaks for itself as well."

Perdue spokeswoman Julie DeYoung likewise downplayed the emails' significance.

"It's no secret that Governor O'Malley and Herb have been friends and known each other since they went to law school together," she said. "These emails really just show that Herb is doing his job."

What is clear is that O'Malley's efforts to court Perdue did not go unrequited.

According to The Baltimore Sun, as O'Malley sought his second term in 2010, Frerichs and his wife gave his campaign the maximum allowed, $8,000, while Jim Perdue gave $4,000. The Perdue company, meanwhile, wrote its first check to the Democratic Governors Association in 2010, when O'Malley took over as chairman.

For years, the company had only given to the Republican Governors Association. Perdue gave the DGA $10,000 in 2010 and $15,000 in January 2012, according to the Sun.

An apology and a promise

In the wake of his press secretary's comments, O'Malley in August 2010 asked Frerichs to read over a draft apology email O'Malley intended to send to Jim Perdue himself.

At the time, industry leaders were wary that O'Malley might pursue a regulatory policy known as "co-permitting," to which they were fiercely opposed.

Co-permitting had never been enacted in the U.S. poultry industry. It would theoretically require contract poultry growers to obtain water pollution permits not only in their own names but also in the names of the companies, such as Perdue, with whom they contract -- companies that own the chickens and essentially orchestrate the day-to-day chicken-farming operation, supplying feed, medicine, detailed instructions and near-daily oversight.

Strong co-permitting regulations would obviate the sort of environmental litigation that sought to hold Perdue responsible for a contract grower's water pollution violation. Under co-permitting, Perdue would, by definition, be held responsible.

In his apology message to Jim Perdue, O'Malley wrote that he had no "intention of revisiting co-permitting." He said his spokesman's comments were related to "wastewater discharge, stormwater, agriculture and septic" -- and that he appreciated Perdue's "willingness to work together" to achieve EPA's new pollution-reduction goals.

"My conclusion is that letter will not be helpful," Frerichs replied. "Jim took this very personally."

"So what am I supposed to do? Just leave it alone? Call him, what?" O'Malley responded.

Food & Water Watch's Edwards blasted O'Malley for the co-permitting concession.

"Here's a governor promising Jim Perdue that as long as he's governor, there will never be co-permitting," Edwards said. "That's not a favor to ... the contract growers. That's a favor to Jim Perdue."

Bill Satterfield, executive director of the Delmarva Poultry Industry, said that about two-thirds of chicken growers do more than just grow chickens and would oppose the potential micromanagement of their entire farm that co-permitting would bring.

"We didn't think it was reasonable for one company to be responsible for another company it does business with," Satterfield said.

Chicken versus wind

During the 2011 legislative session, O'Malley made his campaign to put wind turbines in the Atlantic off Ocean City the centerpiece of his clean-energy agenda.

When he learned of opposition from the chicken industry, a powerful statehouse lobby, he fired off a one-line message to Frerichs: "So, you guys are now actively lobbying against wind too?"

"Seriously?" Frerichs replied. "I'm supposed to be in charge now and if we are I'm doing a terrible job. Where did you hear we were lobbying against wind power?"

O'Malley explained that he heard Perdue and the Delmarva Poultry Industry were "lobbying hard" against wind. Frerichs promised to look into it.

O'Malley responded with a pitch: "It's a collective hedge against rising fuel costs. Might involve 18 cents to $2 additional a month at the outset. Meanwhile kids keep dying in the middle east."

O'Malley failed to win Frerichs over, and the turbine proposal would ultimately fail -- as it did again this year.

Explaining his group's opposition, Satterfield said in a recent interview that electric bills for chicken growers can run in the tens of thousands of dollars per month, magnifying the effect of even a slight increase in power costs in an otherwise low-margin industry.

"We were concerned that these higher electric bills could hurt our members financially," he said.

Satterfield cited the higher-margin car business as an example. When costs go up, manufacturers can raise the price of the vehicle. "Chicken growers do not have that option," he said.

Environmentalists, however, lambasted the industry's cost concerns.

"Eighteen cents a month to keep kids from dying in the Middle East was, apparently, a price too high to pay for the industry," Hauter wrote on her blog.

A competing energy proposal

Edwards suggested another motive for the poultry industry's opposition to wind power: that chicken growers were laying the groundwork for a competing "renewable" energy proposal -- a plant that would convert chicken litter to energy.

The Delmarva Poultry Industry initially, at least, opposed the litter-to-energy idea, according to the emails.

Today, however, Perdue awaits approval from the state of Maryland to build a biomass boiler facility that would be fueled in large part by poultry litter.

Proponents, including O'Malley, pushed for such a project as a beneficial use of litter that might otherwise wash into the Chesapeake Bay. Edwards, however, suggested that the proposal would simply result in more dirty emissions and represents a capitulation to the poultry industry.

"There are all these truly renewable energy sources that should be pushed, and here's Maryland pushing burning chicken poop as a renewable energy, instead of wind," he said. "I don't see manure-to-energy as doing something for the environment. I see manure-to-energy as a way to offload all the tons of manure on the Eastern Shore because they don't want to clean up after themselves."

Growers dispute that there's a surplus of manure on the Eastern Shore, because it is considered a valuable -- albeit pollution-rich -- source of fertilizer.

Frerichs seems to pre-empt Edwards' criticism in a March 2011 message listing the various reasons industry was opposed to the idea at the time: "This will represent a large Maryland taxpayer subsidy. Concern that when that is figured out, it is possible poultry industry will be held accountable for added expense to taxpayers."

Later, in November 2011, Frerichs bristled in response to a one-line email from O'Malley accusing Perdue of opposing poultry waste-to-energy.

Frerichs wrote that he was "put off" by the email and proceeded to vent: "Besides doing more to save agriculture in the state of md than the secretary of ag. We were working with [redacted] until they lost interest ... and stopped talking to us. Then we reached out to [redacted] and are currently trying to work with them," he wrote. "I will tell you that the ag community is still generally against the project but we are willing to give it a go. I don't no [sic] where you get your info but I would be interested."

"Don't be put off," O'Malley responded. "When I hear rumors that don't' seem to square, I contact you right away. ... Hope you can find a way to make it happen."

O'Malley sides with Perdue

Twelve days later, environmentalists got what they considered another slap in the face from the governor.

O'Malley immediately made headlines with a letter he wrote to the University of Maryland law school dean, Phoebe Haddon. The governor sharply criticized the school's environmental law clinic for its involvement in the March 2010 lawsuit attempting to hold Perdue responsible for pollution emanating from the family owned contract farm on the Eastern Shore.

State lawmakers from the region had repeatedly criticized the school for assisting the Waterkeepers, the plaintiff environmental group whose national organization is headed by Robert F. Kennedy Jr., in their suit against Alan and Kristin Hudson, the family farmers named as defendants alongside Perdue.

In his Nov. 17 letter, O'Malley blasted his law school's involvement in helping "deep-pocketed litigants." O'Malley called the effort "costly litigation of questionable merit" and a "state-sponsored injustice and a misuse of taxpayer resources."

O'Malley highlighted some of the perceived weaknesses of the plaintiff's case, including a state environmental investigation that failed to conclusively link the water pollution to the Hudsons' farm. Still, the letter shocked many environmentalists and prominent members of the academic and legal community, who questioned why O'Malley felt compelled to insert himself so publicly in the case.

Later that month, former Maryland Attorney General Stephen Sachs (D), whom O'Malley had tapped to lead an unrelated independent investigation in 2008, published an op-ed in the Sun, taking the governor to task for political meddling in the law school's affairs.

"It is not uncommon, of course, for politicians to tinker with the judicial process in order to achieve their goals," Sachs wrote. "Fortunately, these efforts usually fail."

The day the news broke, however, Frerichs offered a different take in an email to the governor: "Very nice."

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