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Safeguards At Risk:

John Graham and Corporate America's
Back Door to the Bush White House

Public Citizen Mar01

[Complete PDF file at Public Citizen 529kb]

Executive Summary

How A Social Science Becomes Swiss Cheese

The Value of Risk Assessment and Risk Management
Diminishes With Complexity

Larger Questions = More Politics, Little Objectivity

Narrower Application = (Relatively) Better "Science"*

* Within the field of risk assessment, the quality of the data used as inputs and the nature of the default assumptions varies widely. Thus, different risk assessments will vary widely in quality and usefulness. Non-numerical values, such as non-cancer health risks, scenic views, etc., are described in the text but cannot be calculated accurately.

Graphic from p.115 of report

News reports published the week of March 5, 2001 indicate that John Graham, founding director of the Harvard Center for Risk Analysis (HCRA), was nominated by President Bush for a position as the new regulatory czar in the White House Office and Management and Budget (OMB). Most Americans have never heard of John Graham, but if the U.S. Senate approves, he will be in a position to wield enormous power, and to undercut public health, safety and environmental protections for years to come.

Graham would head the Office of Information and Regulatory Affairs (OIRA), which vets any significant or controversial regulation before it can be implemented. Over the past decade, Graham has been a prominent figure in the fight to halt or delay the issuance of protective safeguards by federal regulatory agencies, working with and receiving funds for his activities from dozens of major corporations. At OMB, he would be able to impose his will on the agencies, perhaps even on behalf of his former industry supporters, by blocking the development of standards and eviscerating the government's regulatory framework.

There are three major problems with Graham's potential rise to power within OMB. First, Graham is certain to favor the regulated industries that have handsomely supported his Center. Graham has amply demonstrated his willingness to ignore, or gloss over, his own conflicts of interest. This report shows that Graham's Center has accepted money from chemical companies, auto manufacturers, energy and oil interests, and other industries hostile to regulation. Yet, invoking the 1 prestige of Harvard University, he has consistently testified before Congress and been widely quoted by the media as though he is a neutral academic "expert," with no disclosure of the sources of his Center's funding in the article or testimony.2

As discussed in Part One: Who Is John Graham?, Graham's research has been used to lend a "scientific" veneer to corporate efforts to roll back safety and environmental standards, and to push for a top-down reorganization of the government's basic regulatory scheme. Graham's Center is funded by more than 100 large corporations and trade associations, including such known environmental offenders as Dow, 3M, DuPont, Monsanto and Exxon, in addition to the Chlorine Chemistry Council, the American Automobile Manufacturers Association, the American Petroleum Institute, and the Chemical Manufacturers Association, now called the American Chemistry Council. High-ranking 3 corporate officers from Oxford Oil, the National Association of Manufacturers, Eastman Chemical, Tenneco Inc., CK Witco Corp., and Novartis Corp. sit on the Center's Executive Board. The HCRA 4 Advisory Council includes executives from DuPont and the Grocery Manufacturers Association, and the chief attorney for environmental affairs at Exxon Chemical Americas.5

Second, Graham's methodology appears to be informed more by the wishes of his corporate backers than by anything recognizable as "science." Although he often calls himself a "scientist," Graham's field of risk analysis is a discipline within the field of public policy, and he does not in fact hold any degrees in the hard science disciplines that often form the basis for regulatory policy. As this 6 report demonstrates, Graham's research conclusions are frequently marred by his inflation of industry costs and underestimations of the public benefits of safeguards. The practice of cost-benefit analysis also omits or downplays ethical and moral factors such as justice, consent and equity, and inappropriately discounts the value of human life and the environment.

Graham's Center, acting under the auspices of the Harvard School of Public Health, churns out research in support of industries that have a keen financial interest in seeing health and environmental safeguards dismantled or delayed. In Part II, we examine three case studies of his work and show that:

The third reason Graham is unfit to serve at OMB is because of his long-standing strategic and research services to an entire network of anti-regulatory corporate interests, who would expect to call upon his sympathy. Part III: Science for Sale, explains six of Graham's public relations techniques, showing how an anti-regulation political strategy is packaged as "necessary" information about human health and the environment.

For example, Graham was a member of the EPA Science Advisory Board that reviewed the agency's risk assessment on dioxin, an industrial contaminant, in 1994 and 2000. In June 2000, the 8 EPA announced a draft of its study, which showed that exposure to the level of dioxin currently in our environment causes an increase in the average American's lifetime cancer risk to as high as 1 in 100. The EPA's reassessment also found that dioxin, even at very low levels of exposure, is linked to infertility, immune system damage and learning disabilities.9.

But rather than acknowledging that dioxin poses an additional threat to human health, in his comments to the media Graham misleadingly downplayed the risk by comparing the EPA's findings to other types of risks, such as the risk of dying in a car crash. When compared with these risks, 10 Graham suggested, the risk posed by dioxin appears "normal."

The National Public Radio report containing Graham's comments failed to mention his position on the Science Advisory Board and failed to disclose that his Center is supported by money from 48 different dioxin producers, including incinerator companies, pulp and paper companies, cement kilns, copper smelters, PVC manufacturers, PCB producers and the petroleum industry.11

Graham's tight connections to the chemical industry have also influenced his legislative work. Graham spoke at a panel discussion held around 1994 at the Chemical Industry Institute of Toxicology (CIIT) alongside executives from Eastman Kodak, the American Industrial Health Council, Air Products and Chemicals, E.I. DuPont de Nemours, and the Chemical Manufacturers Association (now called the American Chemistry Council). 12

The topic was a Congressional bill that would have imposed rigid cost-benefit criteria on federal regulatory agencies in order to deter the development of new public health, safety and environmental protections. Graham commented on the relationship between the rollback "reform" bill and the chlorine's industry's support for institutions such as CIIT: "Those of us advocating reform could not be as effective as we have been in advocating the role of science in risk assessment if we did not have the underlying data and methodologies that were created here at CIIT," he said. All of the 13 trade associations and companies listed above are also funders of Graham's Center.14

Graham has been a critical player in a decade-long, multi-industry campaign to discredit federal agencies and to block the regulatory process, and his use of the Harvard name helped to legitimize these attempts to rewrite the rules on public health and environmental issues. As this report shows, debates over the safety of pesticides, injury prevention, pollution, second-hand smoke, toxic chemicals and contamination of our food and water have all been victims of these efforts. If Graham goes to the 15 OMB, he could serve as the back-door conduit for a new corporate assault on public and environmental health.

Health, Safety and Environmental Regulations Are At Risk

Under a standing Executive Order, a primary function of the Office of Information and Regulatory Affairs is to "review" cost-benefit calculations produced by federal agencies before new standards and rules can be issued. In theory, the OIRA director should serve as an honest broker, reviewing regulatory proposals from federal agencies and deferring to agency expertise on most technical and scientific matters.

However, the OMB's "review" process has been used in the past to block the issuance of key health and safety standards. During the Reagan-Bush I years, political appointees within OMB, in 16 conjunction with councils run by Vice President Bush and Vice President Quayle, were given broad discretion to review and block new standards created by federal agencies, often at the direct request of chemical companies, auto manufacturers and other regulated interests.

It is clear that Corporate America is expecting the same treatment from Bush II. The U.S. Chamber of Commerce told The Washington Post in February 2001 that it has drafted a presidential "executive order of its own that it hopes the new administration will use as a template for rewriting its policy on regulation." The draft order lays out the process for "how rules should be reviewed, the 17 role of the Office of Management and Budget, and the economic and scientific criteria that agencies should apply to rule-making." "If you fix [OMB], you rein in all the agencies," said Bruce Josten, the 18 Chamber's executive vice president for government affairs.19

The "fix" may be in. In 1996, Graham told political strategists at the Heritage Foundation that "environmental regulation should be depicted as an incredible intervention in the operation of society." He has said that support for the regulation of chemicals in our water supply shows the 20 public's affliction with "a syndrome of paranoia and neglect." According to news reports, Graham 21 also explained to attendees at a conference at Duke University in 1996 that he believed that "government agencies should be required to depend on expert analyses, rather than public views, in deciding which threats to regulate." 22

Graham's record on public health issues is clear. For the past decade, Graham has vigorously promoted a set of economic tools called "risk analysis" in regulatory decision-making, and has 23 pushed for omnibus legislation that would rank all activities by the federal agencies according to their cost to businesses and impose onerous, industry-favoring additional requirements on every new regulation. In 1999, Graham supported S.746, which would have invited litigation over an agency's 24 implementation of cost-benefit rules, and thus further hold up the process of establishing safeguards.

Important regulations are at risk. Graham recently joined a group of economists who argued to the Supreme Court that EPA action under the Clean Air Act did not pass muster on cost-benefit grounds. Their argument was found meritless by a unanimous Court, but at OMB Graham could 25 impose the same requirements the Court struck down, behind closed doors and out of public view. In 1997, Graham announced that passenger air bags were not cost-effective, and in 1999 he supported the passage of a "reform" bill that likely would have prevented any air bag regulation from being developed, if the law had been in place at the time a rule was considered. According to government 26 records, the air bags rule alone has saved 6,733 lives to date.27

If Graham is approved by the U.S. Senate for OIRA Director, he will be in the catbird seat; overseeing the entire executive regulatory process. Only the independent regulatory agencies, which are considered an arm of the Congress, will be outside his direct regulatory reach. No significant safety, health, environmental or any other proposed or final rules can be issued without approval through this office in the OMB. Nor, under the Paperwork Reduction Act, can any government agency gather information from ten or more entities, a move which often is essential for the research that justifies regulation, without approval from OIRA.

Through these mechanisms, OIRA can slow, stall, weaken or stop regulatory proposals and final rules that the regulated industry opposes. Graham's first move at OIRA would likely be to draft a new executive order that could immobilize the issuance of new health, safety and environmental safeguards. Graham's prescriptions on the application of risk analysis have been sweeping; it appears that there is little agency action that would remain beyond his purview. And Graham's "comparative 28 risk" approach could easily drown the agencies in a sea of red tape. In short, Graham would become the new master of "paralysis by analysis."

Graham's philosophy, well demonstrated by his years of advocacy for industry interests, is that federal agencies must wait to impose rules until near-perfect estimates of the precise causes and effects of the hazards to be regulated are known. But regulators often know that a substance or product is dangerous long before they can measure the exact magnitude of the harm, extent of the exposure, or exact mechanism by which a substance acts on the human body or environment. Collecting this secondary information can take years - years during which the public will continue to be exposed.

At the same time that OIRA under Graham's direction could impose endless analytical requirements on government agencies, another office within the OMB undoubtedly will be cutting the already paltry agency budgets, essentially making it impossible for them to keep up with the public needs for industry oversight and law enforcement. The combination is a sure recipe for public health and environmental disasters.

Given his public statements on the subject and his efforts over the past decade, Graham would likely quash any safety or health rule that his numbers indicate is not the most economically "efficient" option. As were Vice President Dan Quayle's "Council on Competitiveness" and Vice President Bush's "Task Force on Regulatory Relief," the OMB would once again become a black hole into which our national safeguards disappear. For all of the reasons documented by this report, Graham should not be approved by the U.S. Senate to head the Office of Information and Regulatory Affairs in the Office of Management and Budget.

ENDNOTES

1. HCRA funders are listed within this document and on the HCRA Web site at www.hcra.harvard.edu .

2. Quotations in the media are at least partially listed in the conflicts chart at the end of Part One. For examples of his testimony before Congress without disclosure of funding sources for HCRA, see, e.g., Testimony of John D. Graham before the Senate Energy & Natural Resources Committee on Risk Analysis in Environmental Policy-Making, Nov. 9, 1993; Testimony of John D. Graham, before the House Government Affairs Committee on Regulatory Revision, Feb. 15, 1995 (Graham said only "In response to requests from federal agencies, state agencies and private industry, I have offered advice on the importance of risk analysis to sound decision making"); Testimony of John D. Graham, before the Senate Governmental Affairs Committee, Hearing on S. 981, "The Regulatory Improvement Act of 1997," Sept. 12, 1997. In his testimony before Congress, Graham has repeatedly said that his comments represented his own opinion and not those of Harvard. Therefore, his failure to disclose could be viewed as less problematic. However, the subject of his testimony often involved highly specific discussions on topics such as air bags, MTBE additives to gasoline, etc., and regulations regarding which would directly impact his funders. See, e.g., Testimony of John D. Graham before the Senate Committee on Regulatory Affairs on S. 746, April 29, 1999. In his comments to the media that are analyzed within this report, no such qualification on his part was reported. Indeed, he was widely represented by the media as a neutral "expert" from the Center or the Harvard School of Public Health.

3. See www.hcra.harvard.edu/unrestricted.html ; www.hcra.harvard.edu/restricted.html .

4. See www.hcra.harvard.edu/executive.html .

5. See www.hcra.harvard.edu/advisory.html

6. See Testimony of John D. Graham before the Senate Committee on Governmental Affairs on S. 746, the "Regulatory Improvement Act of 1999," April 21, 1999 (Graham said: "I earned my BA and MA degrees in public policy from Wake Forest University (1978) and Duke University (1980), respectively).

7. See letter at the end of Case Study #2.

8. On the SAB, Graham criticized the EPA draft report. See "Science Advisory Board Questions Major Parts of EPA Dioxin Report," Air Water Pollution Report, May 22, 1995.

9. Dioxin is the name given to a group of highly toxic chemicals that are produced when chlorine is burned. Dioxin is produced during incineration, the manufacturing of paper, metal smelting and refining, the manufacturing of chlorinated chemicals including pesticides, herbicides and polyvinyl chloride plastic, petroleum refining and industrial and utility oil and coal combustion. The draft EPA risk assessment, released in 2000, showed that, even at very low levels of exposure, dioxin is linked to cancer, infertility, immune system damage and learning disabilities. More than 90 percent of dioxin exposure comes through the food we eat, especially fish, meat and dairy products. The US EPA has been finalizing its reassessment of dioxin since 1995.

10. Noah Adams, "EPA Report on Dioxin is Released and Confirms a Cancer Risk Exists to All Americans," All Things Considered, National Public Radio, June 15, 2000.

11. See the conflicts chart at the end of Part One for a list of HCRA funders that are dioxin producers.

12. The settlement requires the documents to be available at www.pmdocs.com , and are searchable by "bates" no, the number used to mark legal documents. The citation is therefore: Bates no. 2050240317.

13. Bates no. 2050240317.

14. Bates no. 2050240317. CIIT does not directly fund HCRA. But CIIT is itself supported by many of the same companies that fund HCRA, such as Air Products and Chemicals, BASF, Celanese, Chevron, Dow Chemical, E.I. du Pont de Nemours, Eastman Chemical, ExxonMobil, General Electric, Lyondell, Rohm and Haas, Texaco, Union Carbide and Unocal. See  www.ciit.org/SUPPC/suppc.html .

15. For just one example, in 1995 Margaret Kriz wrote in the National Journal that "[s]ome conservative think tanks, including the Cato Institute and the Competitive Enterprise Institute, say they hope that today's risk assessment debate will pave the way for a revolution in environmental policy. They suggest eliminating all federal environmental laws and substituting a system of personal responsibility." Margaret Kriz, "Risky Business," National Journal, Feb. 18, 1995.

16. The OMB analyzes the agencies' "regulatory impact analyses" or RIAs. Clinton's Executive Order 12866 requires RIAs that are, for the most part, cost-benefit analyses and the OMB's OIRA produces a "Best Practices" document that provides guidelines for the RIAs.

17. Cindy Skrzycki, "Lining Up to Lobby for Rule Recision," The Washington Post, Feb. 6, 2001.

18. Id.

19. Id. The Post wrote that his comments reflected "the sentiment of the business community that the agencies have been over-aggressive regulators over the past eight years."

20. "Risk-Expert Graham as Political Guru," Air/Water Pollution Report's Environment Week, Feb. 2, 1996 (emphasis added).

21. John D. Graham, "Making Regulatory Reform a Reality," Heritage Foundation Reports, Jan. 31, 1996.

22. "Excessive Reports of Health Risks Examined," The Patriot Ledger, Nov. 28, 1996, at 12.

23. See Case Study #1 on Philip Morris.

24. See Testimony of John D. Graham before the Senate Committee on Governmental Affairs, Hearing on S. 981, "The Regulatory Improvement Act of 1997," Sept. 12, 1997; John D. Graham, "Making Sense of Risk: An Agenda for Congress," in Risks, Costs and Lives Saved (Robert W. Han, ed., Oxford University 1996).

25. Brief of Robert E. Litan, Counsel of Record for the AEI-Brookings Joint Center For Regulatory Studies, in the case American Trucking Associations, Inc., et al,. v. Carol M. Browner, Administrator of the EPA, On Writ of Certiorarti To the United States Court of Appeals (for Cross Petitioners, the American Trucking Association).

26. See discussion of S. 746 at the end of Case Study #3.

27. According to the Insurance Institute for Highway Safety, NHTSA records show that air bags have saved 6,377 lives through Dec. 2000.

28. In 1997, Graham advocated for a sweeping requirement that would have imposed a formal risk assessment, including a "peer review" by committees likely to be staffed with industry-friendly "experts" and centralized clearance through the White House Office of Science and Technology Policy for all risk-related determinations - even if the federal agency was merely sharing information on a hazard which had not been not part of any formal rulemaking.

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