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Authors: Jr. Robert F. Kennedy

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They wouldn’t make the same mistake again. The anti-environmental agenda would not change, but the tactics would. The Bush White House had learned the value of stealth.

Cost-Benefit Paralysis
 

O
ne of the most moving moments in my 20 years of environmental advocacy occurred at a December 2000 press conference in Raleigh, North Carolina. I had come to announce a Waterkeeper Alliance lawsuit against Smithfield Foods, whose industrial factory farms are polluting the waterways of North Carolina. I was standing at a podium in a large conference room overflowing with local press, when people I hadn’t expected to see started filing in. They were black, white, men, women — tough and weather-beaten farmers, many in overalls, who had driven from all over the state to thank my Waterkeeper colleagues and me for standing up to an industry that had bullied them for years. Many came from families who had occupied the same piece of land for generations. Among them was 75-year-old Julian Savage from Bladen County, whose family had been in the area practically since the American Revolution. As I started to speak about the rural communities and once pristine waterways of eastern North Carolina, and how they have been ruined by industrial pollution, I was astonished to see tears flowing down so many wrinkled faces.

One of the greatest sources of frustration to America’s family farmers is public indifference to the cataclysmic struggle between traditional farmers and the industrial meat moguls. The farmers I faced that night had seen firsthand how meat barons bully vulnerable communities, trample their rights, and threaten their economic security. They understood better than anyone else that the consolidation of American food production by a tiny cabal of multinationals with no demonstrated loyalty to our nation or its laws threatens our food, our health, our culture — indeed, our very democracy.

The only hope these farmers had left was the American justice system. Over the years we have helped organize a national coalition of family farmers, fishermen, environmental and animal rights groups, religious and civic organizations, American Indians, and food safety advocates who are now fighting the hog industry in 34 states. I’m a specialist in this kind of litigation, which is why I ended up in Raleigh that day.

A year later, we finally had cause to celebrate. A Reagan-appointed federal judge ruled that the big factory farms were violating the Resource Conservation and Recovery Act (RCRA) and illegally operating without Clean Water Act permits. The legal decision sent a shock wave through the industry. But a few months after the ruling, the Bush administration intervened by issuing new regulations — written in concert with the industrial meat multinationals — that significantly weakened our lawsuit and ensured that hog factories would continue polluting rural communities across the United States indefinitely.

The demise of our case is a classic example of the White House’s stealth strategy to dismantle America’s environmental laws. Had the new rules run the gauntlet of public scrutiny, there would have been a howl of protest. Keeping the anti-environment maneuvers quiet was essential. And there was no better person to mastermind this strategy than John Graham, the director of the Office of Information and Regulatory Affairs (OIRA), an obscure agency inside the Office of Management and Budget.

Practically unknown outside the Beltway, OIRA’s power is unmatched among federal agencies. Its official charter is to review every economically significant regulation proposed by the federal government and report the fiscal impacts to the White House. Federal departments and agencies develop these new regulations through an open process, guided by expert advice and mandatory public comment. Typically this takes six or seven years. Then, at the end of this highly democratic process, these regulations disappear into OIRA — only to emerge dramatically altered or not at all.

OIRA may be the most antidemocratic institution in government. It operates in secrecy. Congress created OIRA in 1980, but the agency reviews proposed regulations under an executive order, so most of its deliberations and records are inaccessible to the public.
1
Its decisions can profoundly affect the nation’s health, safety, and environmental safeguards — unimpeded by public debate or accountability. OIRA’s role depends largely on the White House. Under President Clinton, OIRA had a light touch. But in May 2001, President Bush nominated John Graham to head up the agency. The nomination horrified the environmental community. As the founder and director of an industry-funded think tank, the Harvard Center for Risk Analysis (HCRA), Graham has a long track record of ideological scorn for the public welfare. He is a favored guru of the Wise Use coalition and has been associated with several Wise Use think tanks and front groups, including the Mercatus Center, the Advancement of Sound Science Coalition, and the American Enterprise Institute.
2
He was also on the board of the American Council on Science and Health, which employs so-called tobacco science to defend a range of dangerous industry practices.
3
Among its media releases: “Why the National Toxicology Program Cancer List Does More Harm Than Good,” “The Fuzzy Science Behind Clean-Air Rules,” “Evidence Lacking That PCB Levels Harm Health,” and, my personal favorite, “At Christmas Dinner, Let Us Be Thankful for Pesticides and Safe Food.”
4

Graham earned his stripes with his Wise Use allies by becoming the dark soothsayer in the occult art of cost-benefit analysis, a relatively new science that attempts to compare the costs of a proposed new law against its benefits to society. The first and most important environmental law, NEPA, requires that every government agency assess the costs and benefits of its actions and publish them in an environmental impact statement. But Graham takes this concept to extremes — reducing each cost and benefit to a number and then using a formula to determine public policy.

Even at its best, cost-benefit analysis has enormous potential for bias and distortion, allowing people like Graham to support almost any preordained conclusion. Graham’s critics, including his academic colleagues, accuse him of routinely using discredited calculations and crooked methodologies to issue antiregulatory studies and pronouncements. “Figures don’t lie,” as the saying goes, “but liars figure.” Graham, for example, often uses industries’ own cost estimates, despite reams of studies showing that these numbers are grossly inflated.
5
His formulas almost always add up to the same thing: Industry wins, the public loses.

The usefulness of cost-benefit analysis is especially limited when it comes to environmental regulations. Cost-benefit analysis cannot possibly put monetary amounts on all the values of a healthy ecosystem. On the Hudson River I’ve seen the power industry use mathematical formulas to justify massive fish kills by measuring the value of the fish by the price of a fillet in a local grocery store. Since many species aren’t fish that we typically eat, their destruction by the billions is valued at zero.

Such formulas also cannot calculate the way our community character is enriched by our environment. They cannot place a value on the Hudson River’s 350-year-old commercial fishery, for example, which connects our children to their colonial and Algonquin heritages. Nor can they measure the aesthetic or spiritual dimensions of an unspoiled river. Patriotism, love of country, the sight of a bald eagle, the experience of a child catching fish, wading in the river and feeling the clean mud between her toes — all these things are connected to a wholesome environment. How do you put a value on human life, an unspoiled ecosystem, an unimpaired brain, and robust health without being subjective? OIRA’s formulas mostly ignore the fact that human beings have other appetites besides money, and that if we don’t fill them, we will never become the kind of beings our Maker intended. It’s absurd to believe that one can reduce these things to numbers that are plugged into algorithms to dictate rational public policy.

Nor can cost-benefit analysis weigh the violation of basic human rights that are associated with environmental injury. The PCBs that we all now carry in our bodies, courtesy of Monsanto, General Electric, and Westinghouse, may or may not cause injury to a particular person. But each of us has the right to be free of that chemical trespass. My own PCB levels measure 1.83 parts per billion — well above average. No one has the right to put these chemicals in my body — or steal the air from my children’s lungs — no matter how much they may profit by doing so.

John Graham’s influence derives mainly from his exploitation of the Harvard name, which endows him with the gravitas and credibility that has eluded his fellow antiregulatory junk-science sorcerers. After publishing a risk-assessment study of automobile air bags in the early 1980s, he landed a job as an assistant professor in Harvard’s School of Public Health, and soon big polluters found that they had a friend at Harvard.
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“It turns out he was for sale,” recalls Karl Kelsey, one of Graham’s Harvard colleagues. Graham was so successful at using Harvard’s name to push a corporate agenda that a deluge of industry money began flowing in. He launched the Harvard Center for Risk Analysis in 1989 and served as its director until 2001.
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“It’s horrifying,” recalls Kelsey. “The man created this economic center that was funded up the wazoo, and you know, industry has been trying for years to buy out Harvard, and Graham was the first guy who would do it.” Dean Harvey Fineberg pushed to grant Graham tenure and “the faculty had to go along,” says Kelsey. When Graham was nominated to OIRA, Kelsey refused to sign a letter to the Senate by several of his colleagues opposing his confirmation. But after seeing the damage Graham has done to federal science since his appointment, Kelsey now regrets not having come forward earlier.
8

The conflicts of interest at the HCRA are mind-boggling. From the start the center was funded by big polluters and trade associations representing the oil, chemical, auto, drug, agribusiness, and mining sectors with gripes against government regulations. They currently include Monsanto, Dow Chemical, E.I. DuPont, Exxon, General Electric, Union Carbide, Boise Cascade, the American Petroleum Institute, and the American Chemistry Council.
9
The HCRA’s Advisory Council includes executives from DuPont as well as David Sigman, chief attorney for environmental affairs at Exxon Chemical Americas.
10
High-ranking officers from American Electric Power, the National Association of Manufacturers, Eastman Chemical, and Tenneco, Inc., sit on the HCRA’s Executive Council.
11
Needless to say, consumer and environmental groups are not represented on the council.

As director of the HCRA, Graham played a central role in undermining support for many of the country’s vital environmental protections through his “research” papers. His testimony before Congress and work with the media helped to endow anti-environmentalism with scientific gloss. The center’s bimonthly journal,
Risk in Perspective,
for instance, routinely featured articles discounting the risks of children’s exposure to pesticides or power plant emissions, almost always without disclosing the abundant funding it had collected from pesticide manufacturers and utility companies.

Graham’s close working relationship with Philip Morris is a perfect illustration of the way in which he blatantly offered research assistance to companies that agreed to fund his organization. In the mid-1990s, while apparently collaborating with Philip Morris to undermine an EPA risk assessment of the cancer-causing effects of secondhand smoke, Graham accepted a $25,000 donation to the HCRA. He subsequently returned that check on the purported basis that HCRA was prohibited from accepting money from tobacco companies. In his letter enclosing the check, Graham suggested that the tobacconeer reissue the check from the account of one of its subsidiaries, Kraft Foods. Philip Morris happily complied. Graham’s actions appear to have been aimed at hiding the fact that he received tobacco money. But the Kraft donation may have given Philip Morris more bang for its buck: Soon after receiving Kraft’s money, Graham not only continued to work on the secondhand-smoke issue, but began soliciting Kraft’s help for his work opposing restrictions on pesticide residues on foods.
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But even the Harvard name couldn’t always protect Graham from his own fuzzy math. In March 1997, Graham argued in news appearances and before the National Transportation Safety Board that a new, unpublished HCRA report had convinced him that passenger-side air bags were not cost-effective since they cost $399,000 for each year of life saved.
13
After harsh criticism from auto safety advocates, Graham’s study was peer-reviewed, resulting in a dramatic recantation by Graham in the
Journal of the American Medical Association;
it turned out that the true cost was $61,000 for each year of life saved.
14
Graham was forced to acknowledge that his own data revealed that air bags were a worthwhile investment. To this day, Graham refuses to disclose the amount of unrestricted funding from the auto industry to the HCRA.

Graham suffered a major embarrassment during his confirmation hearings for OIRA. He claimed in his résumé that a study on the cost-effectiveness of regulations was the primary basis for his reputation “as a scholar.” The 1996 study, which included the examination of 90 environmental regulations, claimed that 60,000 lives could be saved if the government abandoned certain rules and reallocated resources more efficiently.
15
Graham had stated in appearances before Congress and elsewhere that his data showed that these federal regulations were guilty, in his own words, of the “statistical murder” of 60,000 Americans every year.
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Thanks to Graham’s aggressive promotion, his conclusion became a sacred tenet of industry, and his “statistical murder” statement was endlessly repeated by the radical right and routinely quoted by opponents of regulation. It is this study that established him as an expert and ushered him onto the national playing field.

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