‘This is insane!’ — ethics officials vexed by Pruitt condo

By Kevin Bogardus | 03/29/2019 01:15 PM EDT

Pruitt rented this Capitol Hill condominium from the wife of a lobbyist whose clients lobbied EPA.

Pruitt rented this Capitol Hill condominium from the wife of a lobbyist whose clients lobbied EPA. Kevin Bogardus/E&E News

EPA ethics officials went outside the agency for help after they learned about former Administrator Scott Pruitt’s lease of a lobbyist-tied condo on Washington, D.C.’s Capitol Hill.

Emails recently released under the Freedom of Information Act show last year’s struggles of career and political EPA staff as they tried to understand the ethics implications of Pruitt’s rental of an apartment linked to a lobbyist who had business before the agency. The agency would release not one but two ethics memos to explain how Pruitt’s unique lease — paying relatively low market rent of $50 per night for only the nights he spent in the condo — did not constitute a gift.

E&E News reported then about the haphazard process behind the memos, with ethics officials learning key details about the condo first from the news rather than political superiors (Greenwire, April 11, 2018).

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One year ago today, ABC News broke the story that Pruitt had lived in the condo. Scandals over his first-class travel and costly security measures had already been simmering at that point. The condo story, however, unleashed a torrent of new information on Pruitt’s mismanagement and heavy spending that eventually forced him to resign from EPA more than three months later.

The newly disclosed records show the other people consulted during the condo rental brouhaha. Kevin Minoli, then EPA’s principal deputy general counsel and designated agency ethics official, authored an initial memo that said Pruitt’s condo lease was not a gift. That document soon fell under intense scrutiny, and Minoli began work on what became a second memo, which laid out the factual analysis for his original determination.

Not ‘a get-out-of-jail-free card for Pruitt’

Before its release, a draft of that second memo was shared with Walter Shaub, the former Office of Government Ethics director who became a vocal critic of the Trump administration and joined the Campaign Legal Center.

"This confuses me," Shaub said in an email at the time. "Was the ethics analysis based on occupying one room or was it based on renting the whole residence?"

Shaub, now a senior adviser to Citizens for Responsibility and Ethics in Washington, told E&E News that Pruitt’s $50-per-night arrangement might have made sense for a single room in a house occupied by a family or other boarders, but it did not if he had a whole house to himself steps away from the Capitol. There were reports later that Pruitt had not just a room but the entire condo and that his daughter stayed with him, as well.

"Ultimately, the second memorandum Minoli issued seemed to me to acknowledge that he didn’t have all the relevant information he would have liked to have when he wrote the first memo," Shaub said in an email. "Although even this second memo was not at all the memo I would have written, I was relieved that it seemed to negate the effect of his first memo as a get-out-of-jail-free card for Pruitt."

Shaub’s dialogue with EPA ethics officials would begin earlier after he sent a list of questions to Minoli about his first memo. Shaub said he was surprised by that initial memo saying Pruitt had paid market value to rent the condo.

Shaub said he "threw a Hail Mary pass and contacted EPA’s ethics office to see if he would talk to me."

CNN first reported on Minoli’s second memo, saying it was shared with the cable news outlet by Shaub’s then-employer, the Campaign Legal Center.

Before Shaub contacted him, Minoli had concerns about how his first memo was being portrayed by EPA in the media. He wrote an email expressing his worries that it was being used to provide cover to actions by Pruitt and EPA that may have helped clients of Steven Hart, the lobbyist whose wife was Pruitt’s landlord at the condo.

"The memo from Friday in no way speaks to those actions, either by in endorsing them or calling them in the question [sic]," Minoli wrote in underlined text. "The memo cannot be cited in response to questions raised about actions other than signing the lease and living in the space consistent with the lease."

It would later emerge that Hart had contact with EPA while Pruitt stayed in the condo, including passing on requests from clients and joining a meeting with the then-administrator. Hart has disputed that he was lobbying the agency at the time.

Other ethics officials were also worried about the fallout from Pruitt’s condo scandal. Justina Fugh, EPA’s senior counsel for ethics, reached out to David Apol, OGE’s general counsel as well as its then-acting director.

"I had a long chat with Dave Apol today," reads the subject line of Fugh’s email sent to her staff around midnight. The bulk of the message is then redacted.

The Ecological Rights Foundation won through litigation the release of emails cited in this story. EPA referred E&E News to those records in response to its FOIA request for documents behind the memos.

Apol would also be invited to give a speech to EPA career officials last April as ethics questions swirled around Pruitt.

"I have made an emergency request for time on the agenda in order to address the current ethics crisis facing the agency, including those included in your letter," Minoli said in an email obtained by E&E News under a separate FOIA request.

"If you are available, I request your attendance at least for the opening of the session so that you can underscore the importance of an agency’s senior leaders demonstrating their commitment to the Standards of Ethical Conduct — and particularly the importance of the role of career senior leaders," he wrote.

Request for investigation

The records also include questions from reporters and the public about EPA’s ethics memos related to Pruitt’s condo. In addition, several called for an investigation.

Jeffry Fowley, a former EPA attorney, filed a complaint with OGE, asking the federal government’s chief ethics agency to review Pruitt’s condo lease. He also shared his worries with EPA’s general counsel office and the EPA inspector general.

"It was totally ignored by the Office of General Counsel," Fowley told E&E News. "The inspector general also did not take it up. I also don’t necessarily fault them for not taking it up because they have gotten so many complaints under this administration."

Fowley also said he spoke to Apol after the then-ethics head sent a letter to EPA urging the agency to investigate the allegations against Pruitt, including those swirling around the condo.

"I was trying to put career folks like Minoli and political appointees like [General Counsel Matt Leopold] on notice that they don’t have to play along with this stuff," Fowley said about his complaint.

EPA IG spokeswoman Tia Elbaum told E&E News to submit a FOIA request when asked how the watchdog office responded to Fowley. An OGE spokesman declined to comment when contacted for this story.

EPA’s internal watchdog would investigate whether Pruitt’s condo lease was considered a gift. The IG later closed the case, saying its findings were inconclusive, since investigators did not interview Pruitt before he resigned.

In addition, the inspector general did not find in another review that EPA ethics officials were improperly pressured to render ethics opinions on Pruitt’s condo lease.

In response to written questions for this story, EPA spokesman James Hewitt referred E&E News to the two ethics memos as well as the IG’s inconclusive investigation into whether Pruitt’s condo lease was a gift.

‘Maybe I should leave my phone in my car’

What’s also apparent from the emails is frustration among EPA’s career staff in dealing with another Pruitt scandal.

At the request of senior EPA aides, Fugh would step out of a movie after work hours to give a verbal opinion on the condo lease. She would later give a written confirmation of that opinion in an email sent around 1 a.m.

Fugh also recounted the night’s events in a separate email to Minoli that early morning. "I missed the first 10 minutes of the movie, but since I’d read the book, it wasn’t hard to catch up," she joked at the end of the email.

Fugh would tell her staff that she had "a weird 24 hours" after EPA first weighed in on the ethics of Pruitt’s condo lease. She noted how she did not have all the facts.

"Over the course of today, there are new details about Pruitt being dropped, like the fact that his daughter stayed there too. This is insane!" she said in one email.

The senior EPA ethics attorney would also receive messages of support from in and outside the agency. One EPA lawyer sent her "an electronic hug" in one email.

"The problem, as we know now, is that I wasn’t given all of the facts. That’s where the trouble began," Fugh said. "Or maybe I should leave my phone in my car the next time I go to the movies."

Minoli has since left EPA and is now a partner at law firm Alston & Bird LLP.

When asked for comment for this story, Minoli referred E&E News to statements he gave last year on the process behind the two memos related to Pruitt’s condo lease. He acknowledged then that times were tense, but he felt no pressure from his higher-ups.

"I would say while the day may have been an intense one, when the time came, I am confident that the memo I wrote was my own and it was not done under the direction or the pressure of anyone," Minoli told E&E News about when he drafted the first memo.

Last year, Minoli would share E&E News’ story on the memos internally with his staff on the day it was published.

"Hi Folks- I expect there will be a lot of chatter around the office regarding the attached story, so I wanted to make sure all of the managers had it," he said in the email, adding that he was happy to discuss it.

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