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Pa.’s New Jobs Czar Fought Enviro Regs for Years

Pennsylvania’s governor has asked C. Alan Walker to promote job growth by helping companies get the permits that they need. But Walker’s personal business history raises a crucial question: How might an anti-regulation coal mogul affect the state’s environmental regulations for the Marcellus Shale?

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C. Alan Walker (Pennsylvania House of Representatives)

A version of this story was co-published with the Pittsburgh Post-Gazette.

For years C. Alan Walker, a coal industry mogul and wealthy donor to Pennsylvania's Republican Party, clashed with environmental officials who tried to regulate his companies. He described them as "vindictive," "out of control" and "the most dangerous thing" affecting the country's welfare.

In 1981 Walker even argued that the state should let someone from industry influence how environmental regulations were enforced.

Now, some 30 years later, Walker himself has been given exactly that role by the state's new Republican governor, Tom Corbett, who has accepted nearly $184,000 in political donations from Walker since 2004.

In January Corbett appointed Walker acting secretary for the state's Department of Community and Economic Development (DCED). In March he gave him authority to expedite and influence permits at any state agency, including the Department of Environmental Protection, which regulates drilling in the Marcellus Shale, one of the nation's most important natural gas fields. Walker was also appointed to the state's Marcellus Shale Commission, a multi-stakeholder group that will advise the state in developing the shale. The goal, Corbett has said, is to "make Pennsylvania the Texas of the natural gas boom" and "create jobs, not votes."

A spokesman for Corbett said that Walker's role is not unprecedented and that his influence will be tightly focused on promoting job growth while preserving environmental enforcement.

Walker's assignment has raised questions about how a businessman whose coal companies were cited numerous times for polluting streams and drinking water -- and who then fought the state's orders to clean them up -- will work with DEP officials who are tasked with carrying out environmental laws.

Walker recently assured state legislators that he will not issue permits or override environmental decisions. "I'm merely here as an expediter to make sure that permits get the proper attention," he said.

He has also defended his coal companies' environmental record. "As long as I have run those companies, not one gallon of polluted water went into a Commonwealth stream—period," he is quoted as saying in the March 24 edition of the Patriot News, a newspaper in central Pennsylvania. "I wouldn't want to live in the state of Pennsylvania if it had."

However, a review of court documents, state records, and of Walker's own statements since the late 1970s revealed at least 15 cases in which Walker's businesses polluted the state's waterways.

State records show that in the 1980s and 1990s Walker's companies were ordered to treat wastewater that was contaminating residential drinking water wells and nearby streams. In Rush Township mines drained into streams, polluting the municipal water supply for the nearby town of Houtzdale, as well as Mountain Branch, a stocked trout stream.

In an email, a DCED spokesman told ProPublica that mining is a dirty business and that Walker had met his legal responsibilities.

In 2003, Walker told the DEP that his companies, which were winding down operations, could no longer afford to treat wastewater. After he threatened to stop treating the waste sites, he reached a summary settlement with the state: He and his insurance companies contributed to a $7.2 million cleanup trust, and the state released him from his treatment responsibilities. The settlement, which he signed on Oct. 2, 2003, included a statement describing the harm his companies had done to water resources over the years. Walker said recently that he never intended to stop treating the wastewater, and that his stance at the time was merely a negotiating tactic.

"Defendants have allowed discharges of acid mine drainage to the groundwater and surface waters ... of the commonwealth," the agreement states. "Defendants' discharges of acid mine drainage have impacted adversely and are impacting adversely those surface and groundwaters. ... The defendants agree that the findings ... are true and correct."

Both Walker and Corbett declined to be interviewed about the environmental record of Walker's companies or about his new governmental duties. When asked about Walker's environmental record, Corbett's spokesman, Kevin Harley, said it doesn't pertain to his current responsibilities.

"He's the secretary for DCED -- he's not the secretary of DEP," Harley said. "All he can do is ask that the permits that have a significant number of jobs involved get expedited, as long as all the I's are dotted and T's are crossed."

Walker's appointment has been approved by the state's Democratic caucus, but no date has been announced for his final confirmation before the full Assembly.

Few people contacted for this article were comfortable talking about Walker on the record for fear that it would affect their careers in state government or their business dealings in the state. Although he is not well known to the general public, Walker is described as a powerful voice in the current administration, a forceful presence in the Pennsylvania business community, and a generous donor to at least three past Republican governors.

In a 1981 interview for a public television documentary, Walker said that business leaders needed to proactively insert themselves into the governing process. "You can't separate politics and business," he said, "because today our business in particular is so heavily regulated that if you don't have a way to communicate your problems to the government people that regulate you then you've got very serious problems."

Dick Thornburgh, who was Pennsylvania's governor from 1979 to 1987 and later became attorney general of the United States, told ProPublica in an interview that in the 1980s Pennsylvania's economy was suffering, just as it is now. Walker "was pro-business, and we had a desperate need for business leaders to become involved in economic growth."

Walker answered questions at a state House appropriations hearing on March 24 about how he will carry out his new job. He offered an example of the help he gave a metallurgy company that wants to move to Clearfield County. The company, he said, plans to hire 200 welders and pay them above-average wages. But it had been told it would have to wait six months for DEP permits.

"I asked permission of the secretary of DEP to call the office and ask why the permit was being held up," Walker told the lawmakers. "I called the office of the DEP. ... The person on the phone said, 'Well, I don't have anybody here to type the permit.' So, that's the type of situation I plan to get involved in. To expedite permits that are being held up for bureaucratic reasons."

But the case Walker referred to wasn't quite so straightforward. The company, Oklahoma-based Allied Technology, is part of a Houston-based oil and gas field services conglomerate, Forum Energy Technologies. Allied submitted its permit application to the DEP on Jan. 5 and on Feb. 18 was told there were some "deficiencies" in the materials it had provided. Several people close to the process said that when Walker stepped in, the DEP was running due diligence on the company, exactly as state regulations require.

Allied's permit was expedited, as Walker had requested, bypassing other permit applications that fell further down in the stack. On March 12 an announcement was published in the Pennsylvania Bulletin, signifying that the process was moving swiftly forward.

"He gave an example of what on the surface appeared to be an absurd withholding of a permit," said Gregory Vitali, the state representative who questioned Walker in the hearing. "It was not accurate as he described it. It had nothing to do with what he was suggesting. It was legitimate procedure that needed to be followed."

Historical Resistance

Walker's family company, Bradford Coal, was founded by his father in 1935. In 1979, when Walker was the company president, Bradford was cited for air pollution violations, and the U.S. Supreme Court ruled that residents had the right to sue the company for failing to comply with regulations. By the early 1980s Bradford was producing more than 1.7 million tons of coal a year, making it one of the state's largest coal producers. Walker's holdings grew until, according to disclosure records filed with the state this year, he owned or held a substantial share in at least 13 companies, including a trucking business and a small oil and gas company.

In the years Walker has run these companies, he hasn't been shy about criticizing environmental regulators, often assailing their influence in speeches, on television and in the state's newspapers. In one TV interview he said environmental regulators were "constantly throwing more roadblocks and hurdles in."

In 1980 he told the Pennsylvania Environmental Council, a group of academic, government and industry representatives, that "the coal industry is at the mercy of its natural adversary," referring to regulators. In the speech, he proposed a new position in state government that could "act as an advocate" for industry, perhaps as deputy secretary for natural resources in the state commerce department, according to an Oct. 18, 1980, article in the Pittsburgh Press.

Walker stated his views again in a 1981 public television documentary called "A Coal Operator's Turn," produced by Penn State University. In particular, he complained about the permitting process and said regulators didn't understand the businesses they were regulating. "That's where the frustration and the anger comes in, because primarily I think it's ignorance on the part of the people we are dealing with."

In the film, Walker faces off with a group of residents from a small central Pennsylvania town called Egypt, near Walker's Bear Hill mining operation. A 1980 Notice of Violation shows that Bradford Coal had been cited by state regulators for contaminating the residents' drinking water with acid mine discharge. According to the notice, he was ordered to stop the pollution and provide replacement drinking water for the residents.

"To date the affected residents of Egypt have not been provided with replacement water," says the state Department of Environmental Resources letter. "Bradford Coal Company has failed to provide treatment for the acid discharges and has failed to submit a plan."

But more than a year later, when the documentary was produced, the company still hadn't complied.

"They are using blackmail to force us to put water in there for those people," Walker says in the film. "It gets back to this: Who are the regulators responsible to? They are supposed to be responsible to the people. But they become an end in themselves, and we've got a serious problem because they are out of control."

Robert Ging was one of those regulators. At the time, Ging was a state assistant attorney general in the environment department working to prosecute cases like the one against Bradford.

After months went by without action, Ging proposed that Bradford Coal forfeit the bonds it had posted with the state. But then he learned the bonds wouldn't be enough to cover the cost of fixing the contamination.

In February 1981, Ging got a court injunction to compel Walker to replace the water. Still, Walker did not comply.

That September, Ging decided to crank up the pressure. "It was controversial," Ging said in a recent interview. "Alan Walker was a bigwig in the Pennsylvania Coal Association, and Thornburgh was running for governor. Walker was a big hitter in his campaign and was working for him in Clearfield County." In fact, Walker had recently hosted and introduced Thornburgh at a campaign event.

Ging pressed on anyway. Fed up with what he described as Walker's stubborn lack of cooperation, he tried to enforce the injunction against Bradford Coal. That Dec. 4, Ging said he was granted court clearance to file a contempt action against Bradford Coal. He was also planning to deny a mining permit to another Walker company, Al Hamilton Contracting Company, because of the risk of acid mine water pollution.

On Dec. 14, Ging was summoned to his bosses' office in Harrisburg and fired. He is now an environmental attorney in southwestern Pennsylvania.

In 1983 Ging testified before the Pennsylvania House Conservation Committee, which was investigating the influence of special interests in the state's environmental enforcement. He told the committee that he had been warned not to push the Walker cases too hard and said state officials had questioned his "loyalty" and warned him not to embarrass the governor. According to his statement at the hearing, Ging's boss "stressed the governor is trying to portray coal as the energy of the future and some of the recent enforcement efforts which we had taken against surface mine violators had created an aura of overzealous enforcement." Ging testified he was criticized "for using pressure tactics on the coal company by threatening to go back into court to enforce the injunction."

Thornburgh told ProPublica that Walker was both a "generous" campaign contributor and a friend but denied favoring Walker during his administration or giving Walker's companies special treatment. Like Corbett today, Thornburgh said that even while he focused on supporting business growth, his administration's environment department rigorously enforced state and federal environmental laws.

An Agreement Brings Closure

Records show that Walker's regulatory troubles persisted throughout the 1980s and 1990s and that state regulators repeatedly pressed his companies to treat acid mine drainage and curb pollution.

When an elderly woman's basement in Clearfield County filled with muddy red acid mine drainage water and contaminated her water supply in 1991, she complained to the state environment department. Walker's company sued her, forcing her family to take out a second mortgage and pay some $15,000 in legal fees, according to news reports at the time. The suit was dismissed, but she was left to pay the legal fees. In response to her plight, State Rep. Camille "Bud" George wrote an anti-SLAPP law to protect citizens from retaliatory lawsuits meant to intimidate witnesses. Pennsylvania passed a version of the law in 2000.

In the late 1990s, three of Walker's companies -- the Shannon Land & Mining Company, Al Hamilton Contracting, and Manor Mining and Contracting -- entered into a much-publicized deal to sell land to the state for a Pennsylvania National Guard tank training facility. Though the deal collapsed, the contract contained a 5 percent nonrefundable earnest fee, and Walker walked away with more than $326,000 in taxpayer money.

Robert Casey, Pennsylvania's auditor general at the time and now a U.S. senator, audited the transaction and found that the deal had been skewed to benefit Walker's companies. Casey did not return phone calls for this story, but his audit found that the property contained "significant, long-term acid mine drainage" and 14 other unresolved title issues "that constitute a further breach of contract." The audit said that breach of contract should have caused Pennsylvania to ask for its money back.

Walker's environmental record resurfaced as an issue in 2002. That's when Walker, who wanted to wind down his businesses, notified the state that he would no longer treat pollutants from at least 15 properties that the state had ordered him to clean up over the years. In effect, he was threatening to send millions of gallons of toxic water into streams.

"That obviously got our attention," said David Hess, who headed the state environment department at the time. "He was a tough businessman."

Hess got an injunction to keep Walker from abandoning his treatment facilities. The following year, under then-Governor Ed Rendell, the DEP reached a settlement agreement with Walker to resolve all of his companies' outstanding treatment responsibilities.

The text of that agreement provides details on how each of Walker's toxic water treatment sites was handled over the years. In some of the cases, Walker's companies complied immediately, agreeing to treat the water. But he fought the state on four cases, filing appeals -- sometimes repeatedly -- and drawing them out for years before a plan was agreed on to treat the water.

The plan stipulated that to cover part of the cleanup costs, estimated at more than $7 million, Walker and his insurance companies would forfeit nearly $3.8 million in bonds that he had posted with the state. The balance would be delivered to the state in the form of 2.34 million pounds of unmined coal at the Manor #44 mine.

A spokeswoman for the DEP declined to answer questions about the mine, the settlement agreement, the status of the cleanup trust, or about Walker's influence on the permitting process. Federal records from the Department of Energy do not show regular production from the mine after 2000, and state documents indicate the mine is part of a remediation program. Pictures show it flooded, and apparently abandoned, raising questions about how difficult it would be for the state to cash in its value.

Hess, the former DEP secretary, said it is not unusual for the state to take assets as compensation, but that it is a last resort. "It happens when the state is party to bankruptcy and those types of things," he said. "Does it happen every day? No, obviously you prefer cash, and you take whatever bonds or guarantees were posted."

As part of the 2003 agreement, Walker was personally released from all liability, meaning his assets could not be claimed if the state ran out of money to clean up the mines. Robert Ging said such an agreement ran against the intent of the state's clean streams laws, which were written explicitly to enable individuals to be held accountable. He said no case he settled during his tenure had that kind of provision.

"It tells me," said Ging, "that this man received special treatment unlike anybody else that I have ever had to deal with."

ProPublica's Nicholas Kusnetz contributed to this report.

Correction (April 11, 2011): This story originally stated that the Pennsylvania governor was Tom Ridge in 2003 when the DEP reached a settlement agreement with Walker to resolve all of his companies' outstanding treatment responsibilities. In fact, Ed Rendell was governor at the time.

This paragraph is inaccurate.  Gov. Rendell (D) was Governor when the consent order was signed, not Gov. Ridge.

“Mr. Hess got an injunction to keep Mr. Walker from abandoning his treatment facilities. The following year, under then-governor Tom Ridge, the DEP reached a settlement agreement with Mr. Walker to resolve all of his companies’ outstanding treatment responsibilities.”

—David Hess, Former Secretary of DEP

I have a strong feeling that I being misled by the pargraph’s surrounding this issue and the paragraph in particular. ~“On Dec. 14, Ging was summoned to his bosses’ office in Harrisburg and fired. He is now an environmental attorney in southwestern Pennsylvania.”
    So… Mr. Ging was just doing his job as he was supposed to, then was fired ?? What am I missing here. Was Mr. Ging acting in a manor which validated his firing ? Or, is there more to the story ? I tried to look this up on the internet to find the details but I couldn’t find anything. I would suspect if Mt Ging was “fired” for doing his job, wouldn’t he sue for damages ? I would suspect the DEP has laws in place protecting the rights of it’s workers. Especially, When you consider the implications of their actions, I would have to believe it would be impossible for such an agency to exist if it’s members were fired anytime the state didn’t agree with their actions.
    Maybe you can point me in a direction to better understand these circumstances or better explain to me why it was exactly he was fired. As this articles stands, the story reflects that Mr. Ging was doing his job to stop this terrible & evil polluting industrialist, of which, Mr. Ging had standing evidence to support, but was fired because of his efforts. Working for an agency protecting the environment, but being fired for protecting the environment, just doesn’t add up. Not with out some legal implications or foul play being involved. Maybe I Am wrong.

“Job creation” appears to be the current cover for big business to take prominent positions in government as witnessed by Mr. Walker in Pennsylvannia and Jeffrey Immelt of GE on the Obama Job Creation Council. As the poster above has noted, there is quite possibly more to the story surrounding the dismissal of Mr. Ging.

This article was already written a few weeks ago to try and discredit Mr. Walker.  What’s next, the Post-Gazette teaming up with the Communist Party to denounce capitalism?

Pennsylvania’s Department of Environmental Protection claims Mr. Walker treated every gallon of water they requested.  You can read the facts here:

http://www.pennlive.com/midstate/index.ssf/2011/03/officials_clear_corbett_aide_i.html

so what else is new. this will be the eventual downfall of this country and it’s ineffective 2 party system, which is really one party that is driven- bought and paid for by special interest. This is why the water aquifers and potable wells are being contaminated by the race to frac for gas in Penn. Who cares if it destroys the environment and pollutes our wells, it’s all in the name of profits for big industry- besides, what do they care, they don’t have to live there.
What difference do new jobs make if you can’t live in your community any more because it’s contaminated.
“JOBS”, “TOUGH ON DRUGS”, “IN GOD WE TRUST”- all conservation republican double speak for “SHOW ME THE MONEY”.

Stephanie Palmer

April 11, 2011, 2:41 p.m.

But this must be alright.  The people of Pennsylvania voted for Corbett.  Surely they think he has great judgment.  And while I do live in PA, I didn’t vote for him.

Dr.Stephen R.Keister

April 11, 2011, 2:59 p.m.

At aged 90 I have seen a lot of wrongdoing and corruption in this country. One has a sense of hopelessness at the moment. The above story is a mere bit of the total moral breakdown that has befallen us in a society that is based on greed and personal profit. The current group of Republicans, locally and nationally, exceed the “Know-Nothings” of years past. Obama as a leader recalls Neville Chamberlain at Munich granting the wishes of the opposition in the guise of negotiation. Perhaps, just perhaps, the progressive Democrats can mobilize the stultified populace and attempt to find a few, honest, truly progressive, determined candidates to run in the primaries including president. Time grows short ! We follow the piper to a modern day feudalism.

It is my opinion that gas campaign money and gas news media control got Mr Corbett into office, not the people. He currently is not honoring the sworn in promise to uphold our constitutional rights which guarantees the right to clean air and water for the people of the Commonwealth of Pennsylvania. He has also taken on the role of dictator by not going through the legislative process to make changes and needs to be confronted by concerned citizens. Are you interested in taking a stand? ...before irreversable damage to our Eco system occurs?

Log on to wfte.org or any Frack coalition. For web organizations on the move and links telling the truth, call 215-257-7389.

There can be no job creation, because there are no value added jobs, they’re all in China.

Corbett is a bought and paid for hack that was put there by the likes of the Koch brothers. Corbett’s pay back is to let Haliburton, Koch et.al.  destroy the envoronment without paying the price to do so or making it too expense to do so.

Rendell is at fault here as well. He groomed no one. Rendell was no liberal but he wouldn’t allow situations to get out of control which is now the case.

The 1% of the population that controls this country has given up on it, except that they like the lifestyle here and have the police to protect their interests. Once the police step aside, tghey will bew taking their cash and moving somewhere else.

The only way that this will change short of complete ruin is a revolution by whatever means necessary because these people, as has been proven since Obama was elected,  will stop and nothing.

In my memory the only time that the best candidate lost a Pennsylvania election was the November, 2010 Senate race. What does this tell you about the residents of Pennsylvania, are they just too stupid to see their impending fate.

I had worked for DER for about 10 years when Bob Ging was terminated.  If Bob Ging caused morale problems, it was only for those people that had to acquiesce to the demands of the Governor.  For those DER employees committed to protecting the health of the citizens of the Commonwealth and the environment we live in, he was a bit of a hero.  He was and is a good attorney and was fired for not only believing in and defending Article 27 of Pennsylvania’s constitution, but for standing up to those who would ignore it for political gain.

Fred W. Wilson

April 11, 2011, 7:13 p.m.

This article absolutely nailed it.  The Walker family made millions over the years from their coal operations. They tried to hoodwink the state to buy disturbed and unreclaimed land for a target range. When the coal business was no longer profitable they closed down all of their operating entities and stuck the state and the surety companies with the bill.  The taxpayers of Pennsylvania will bear the cost of water treatment from abandoned mining sites for decades to come.  That’s not how an ex Eagle Scout and College Board Trustee should conduct their affairs.  Governor Corbett you should demand his resignation immediately before you and the state are victims of further embarrassment at the hands of Mr. Walker.

Richard Hughes

April 11, 2011, 8:53 p.m.

Mr. Wilson -

How exactly does one become an ex Eagle Scout?

Sincerely,
Richard Hughes

Fred W. Wilson

April 12, 2011, 8:52 a.m.

Great question, Richard.

In theory…..never.

In practice…....when one fails to abide by the laws of the land, protect the environment they swore to protect, and keep the wealth he obtained while exploiting the citizens of the Commonwealth of Pennsylvania.

The oil and gas industry did their homework years ago and have methodically ousted moral employees from positions of importance and replaced them with personnel favoring their plans. Likewise in congress, state and national officials favoring clean environment have had obscene volumes of money vilifying them out of office. Good legislators still exist, but the uphill battle is not unlike what our President faces on a daily basis. Check out the bills introduced, support the legislators with good bills and chastise those with bad ones. It is easy, except with Dictatorships and that is what we have with Corbett.

Water is now our most endangered commodity. PROTECT IT OR LOSE IT. THAT IS THE BOTTOM LINE. What taints the upstream will taint the downstream. Each fracked well renders 3 millions of gallons (1st fracking) of permanently destroyed water. My opinion is we can’t afford this waste.

I think it’s time for the citizens of PA to rise up and demand a recall of this “bought and paid for” governor and his “czars.”  It’s apparent to me that Pennsylvania is and will go down in flames if this continues to be allowed in that state.  Where are all the responsible people who are outraged by this action?  Why don’t they rise up and do something….are they afraid of this governor and his cronies?  If enough people stand up and complain….maybe something could be done.  It’s a sad day when people can’t drink the water or fish in the rivers in the state that they live in.  It’s also unconstitutional!!

When Corbett was AG he would have indicted Rendell for corruption if Rendell appointed a political hack to strategic office affecting millions of people’s lives.  Little wonder PA won’t tax the frackers; would like to know how much oil and gas companies contributed to campaign for Corbett…Besides, not all Pennsylvanians wish to work for oil and gas.  Many of us LOVE farming which fracking proves to pollute, some of us enjoy inventing new technology that doesn’t harm the environment to gain more energy resources and many of us actually think outside the box when it comes to fuel.  Has anyone figured out what PA will do when the next large earthquake hits the fault line running through Western PA.  Last large quake was 250 years ago at an estimated point 8; with all the abandoned mines and fracking I guess PA will sink to the center of the earth.  Thanks for the jobs that we didn’t want at that point!

Georgia, according to followthemoney.com Corbett & his Lt received $1,042,116 from oil and gas interests.

Mr. Wilson:

According to article below written by the Harrisburg Patriot News, Mr. Walker was in full compliance with DEP regulations.  Thus, in both practice and theory you are wrong.

http://www.pennlive.com/midstate/index.ssf/2011/03/officials_clear_corbett_aide_i.html

Sincerely,
Richard Hughes

Mr. Wilson and Mr. Hughes, please read “the settlement agreement” cited about 7 paragraphs from the bottom of the article, noting especially paragraphs HH, II, and JJ on pages 11 & 12 and the signature of Mr. Walker on page 24, and then one of you report that, perhaps, you may have been misinformed.  Did anyone else read this enormous document?  It’s right there in black & white, no media people to put a spin on the facts.

This article is part of an ongoing investigation:
Fracking

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The country’s push to find clean domestic energy has zeroed in on natural gas, but cases of water contamination have raised serious questions about the primary drilling method being used. Vast deposits of natural gas, large enough to supply the country for decades, have brought a drilling boom stretching across 31 states. The drilling technique being used, called hydraulic fracturing, shoots water, sand and toxic chemicals into the ground to break up rock and release the gas.

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