The Trump administration’s point man for overhauling EPA’s Superfund cleanup program has resigned, after questions grew louder about why federal regulators had banned the Oklahoma banker from his profession.
EPA officials confirmed this morning that Albert "Kell" Kelly is leaving. His departure comes a little more than a year after he started and just shy of one year after he agreed to the enforcement action that has dogged his tenure.
"Kell Kelly’s service at EPA will be sorely missed," said EPA Administrator Scott Pruitt, who brought Kelly with him from Oklahoma. "Kell has served in a way that puts the needs of the American people and communities first, while respecting the work committed to by responsible parties."
Superfund streamlining has been the centerpiece of Pruitt’s claims to be an environmental reformer instead of the corporate puppet that environmentalists make him out to be. Pruitt noted that EPA now has a nominee to run the division that includes Superfund, DowDuPont Inc. lawyer Peter Wright.
Other top aides to Pruitt have left the agency recently as criticisms of his management style have piled up.
Pasquale "Nino" Perrotta, the head of the administrator’s personal security detail, resigned from the agency yesterday (see related story).
Kelly’s departure was first reported by Axios.
Some critics have characterized Pruitt’s Superfund efforts as a facade. But other advocates have praised Kelly’s visits to far-flung and neglected sites.
"Truth be told, he’s been doing a good job," Lois Gibbs, a cleanup advocate who’s been called the "Mother of Superfund," said in February. "He’s out there making things happen."
Kelly’s banking ban, along with his property interests, are just a few of the myriad topics that have been highlighted by Pruitt’s critics, particularly environmentalists and congressional Democrats.
Two Democratic lawmakers last week called for an investigation into how Kelly was hired at EPA (E&E News PM, April 24).
In addition, The New York Times recently reported that Kelly helped Pruitt buy a house near the Oklahoma Capitol when Pruitt was a state legislator.
In a combative House hearing Thursday, Pruitt declined to say he would "direct" Kelly to answer lawmakers’ questions about the banking ban, but he said he would "encourage" him to do so (Energywire, April 27).
Pruitt also told lawmakers he didn’t know whether EPA ethics officials had looked at Kelly’s property interests. As first reported by E&E News, Kelly is part of a family company that owns land adjacent to an old refinery site that is on the Superfund priority list (Energywire, Feb. 28).
The parcel owned by Kelly’s family company in his hometown of Bristow, Okla., sits next to the Wilcox refinery, which was added to the Superfund list in 2013. The parcel itself was once home to another refinery, but it is not part of the Superfund site.
Kelly’s banking ban stems from a land deal unrelated to Pruitt in Claremore, Okla. According to documents obtained by E&E News, his family bank, SpiritBank, lent money for a "lifestyle center" shopping development just as the Great Recession hit in 2008. After SpiritBank foreclosed, it started over but made the unusual move of taking an ownership role. But that effort also faltered (Energywire, Feb. 6).
Ken Wagner, another top lieutenant Pruitt brought with him from Oklahoma to EPA headquarters, was at times listed as one of the attorneys for SpiritBank on the development.
Kelly signed a consent order with the Federal Deposit Insurance Corp. agreeing to the ban in May 2017, about two weeks after he started at EPA. But it wasn’t publicly disclosed until late August.
Kelly answered questions about the bank ban from The Montana Standard newspaper last month.
"I ran out of money to oppose it [the FDIC’s charge]," he said. "When you run out of money, you have to take the best settlement you can."
Long-standing connection
Kelly and Pruitt’s connections go back to at least 2003, when SpiritBank lent money to the Pruitt partnership that bought a minor league baseball team, the Oklahoma City RedHawks. Kelly’s bank also provided financing when the partnership sold the team in 2010.
A few months after the team’s purchase, SpiritBank lent Pruitt money to buy a $600,000 house. It was a big upgrade from the $125,000 home Pruitt and his wife had bought after he graduated from law school 11 years earlier. Pruitt made $38,400 at the time as a state senator, but he also practiced law and ran the baseball team.
Around the same time, SpiritBank issued the mortgage for a house purchased by a shell company near the Capitol in Oklahoma City. According to The New York Times, Pruitt was one of five co-owners of the shell company. The registered agent for the company was Wagner.
Kelly contributed at least $2,750 to Pruitt since he launched his first campaign for attorney general in 2010. He also contributed $1,750 in 2015 to Pruitt’s leadership political action committee, Oklahoma Strong.
SpiritBank’s PAC contributed $1,000 to Pruitt when he first ran for attorney general. Other employees contributed $3,750 to Pruitt in state races.
That was a small part of Kelly’s overall political giving. He has contributed more than $200,000 over the years to federal and state campaigns, usually to Republican candidates.
Kelly contributed $2,000 to the Donald Trump campaign in September 2016. But earlier, in 2015, he had contributed to the presidential campaign and super PAC of former Florida Gov. Jeb Bush.
Kelly hasn’t testified before the Senate or the House. He was scheduled to testify before a House committee in January but canceled shortly before the hearing, citing a scheduling conflict. An EPA spokesman declined to release Kelly’s schedule for that day, suggesting a request under the Freedom of Information Act. E&E News filed a FOIA request but hasn’t received the schedule.
Kelly skipped a meeting last month with people who live near a Superfund site in Minden, W.Va., to stay in Washington and deal with the scandals plaguing Pruitt. The Charleston Gazette-Mail quoted Kelly aide Nicholas Falvo as saying, "Mr. Kelly is there with Scott Pruitt battling the press."
