EPA air chief Joe Goffman repeatedly ran afoul of federal ethics requirements by wading into regulatory matters affecting companies in which he had a financial stake, the agency’s inspector general concludes in a newly released report.
In several separate proceedings, Goffman “failed to assess whether specific parties or industries that were involved posed a potential financial conflict-of-interest,” the report says. Accordingly, he did not seek an ethics “screen” “and “recuse himself from the matters pending the determination of that screen.”
Perhaps most jarringly, Goffman was initially “highly involved” in the development of stricter regulations for medical device sterilization facilities that use the carcinogenic compound ethylene oxide, despite investments at the time in three companies covered by the rules, according to the report.
The findings were released in redacted form Wednesday afternoon by Inspector General Sean O’Donnell’s office, which also flagged broader management breakdowns within EPA as a contributing factor to the violations.
Notwithstanding a financial interest in the paint manufacturer Sherwin-Williams, Goffman helped push forward a set of updated air toxics rules for the broader paint and coatings industry. He also joined in a discussion over one unidentified firm’s request for an increase in its production and consumption allowance of hydrofluorocarbons, a potent class of greenhouse gases.
Goffman’s stake in that latter company was worth more than $15,000, but the IG report punts on the question of whether his participation was “significant enough to constitute a failure to meet his ethical obligations.”
In all of those proceedings, the report does not allege that his involvement shaped the results in favor of the companies in which he had financial holdings. Nonetheless, the episode could be seen as a preventable embarrassment for EPA, where Biden administration appointees have generally avoided the ethics controversies that repeatedly flared during the tenure of former President Donald Trump.
The inspector general referred its conclusions to the civil division of the U.S. Attorney’s Office for the District of Columbia, which initially accepted them for investigation but later backed off, according to the report.
Following the referral, “we reviewed the facts underlying the matter and determined that further action was not warranted consistent with the interests of justice,” Patricia Hartman, a spokesperson for the U.S. Attorney’s Office, said in an email to POLITICO’s E&E News.
No criminal referral to the Justice Department was made because O’Donnell’s office “did not identify evidence that Goffman’s conduct was willful or that he intended to financially benefit from his participation,” the report said.
Goffman, a longtime Clean Air Act lawyer who has led EPA’s Office of Air and Radiation since the start of the Biden administration in 2021, did not reply to an email sent Wednesday afternoon seeking comment on the findings.
He had earlier disputed a preliminary version, asserting that he committed no violations and that there was no credible evidence that he had “actual knowledge” of a potential financial interest in the paint and sterilization device industry rulemakings, according to a summary of his response folded into the report.
When a potential problem slipped past the EPA screener responsible for monitoring his ethics obligations, Goffman said he took “corrective action,” either by seeking guidance or self-reporting the issue to the inspector general.
In the instance of the sterilization facility rule, the inspector general found that EPA’s ethics office “erroneously advised Goffman that he could participate.”
Recusal and investment strategies
EPA is reviewing the report and Administrator Michael Regan meanwhile remains confident in Goffman’s leadership, agency spokesperson Nick Conger said in response to written questions. The air office has also beefed up its screening for potential conflicts of interest, he added, including hiring a new chief of staff who has implemented a system for keeping centralized tabs on previously adjudicated ethics issues.
But West Virginia Sen. Shelley Moore Capito, the top Republican on the Senate Environment and Public Works Committee, said in a statement that she would continue to probe Goffman’s “concerning pattern of failure” to properly identify situations that warrant recusal.
Based on the report, Capito added, it appears that Goffman “only self-reported or sought advice on whether to recuse” from the two rulemakings when faced with potential EPW Committee oversight during last year’s run-up to a hearing on his bid to head the air office on a Senate-confirmed basis.
At the time, Capito noted that Goffman had recently reported a “potential lapse” in his ethics screening process to the inspector general.
Neither Goffman nor EPA press aides would publicly explain that possible miscue. “I take my ethical requirements extremely seriously,” Goffman then said in a written response. After serving as the air office’s acting leader for three years, he narrowly won Senate confirmation in January to the position of assistant administrator.
Unlike many federal employees who sink their money into broad-based mutual funds, Goffman is an inveterate trader in stocks of individual companies, his financial disclosures show. That investment style typically complicates compliance with ethics requirements, watchdog groups say.
Two days after taking the air office helm in 2021, for example, Goffman unloaded tens of thousands of dollars’ worth of shares in Exxon Mobil and three other oil companies, as well as PacifiCorp, an Oregon-based operator of coal-fired power plants. All tend to oppose stronger air quality and climate rules.
A recusal statement filed later that year listed more than 60 other businesses in which Goffman held a level of financial ownership that barred him from participating in any “particular matter” that might affect them. Those firms included Sherwin-Willliams, along with the three companies covered by the medical device sterilization industry regulations: Abbott Laboratories, Johnson & Johnson and Medtronic.
While at the agency, he has continued to buy and sell stock in corporate heavyweights like beermaker Anheuser-Busch and Alphabet, the owner of the Google search engine, a more recent disclosure indicates.
The Office of Air and Radiation is easily the most influential of EPA’s program bailiwicks, with a regulatory reach extending into huge tracts of the U.S. economy. The potential for ethics conflicts is correspondingly large.
During the Trump administration, for example, then-air chief Bill Wehrum came under scrutiny for alleged involvement in a policy change of direct interest to a power industry client of his former law firm.
That role led Democratic members of Congress to call for then-acting EPA Inspector General Charles Sheehan to investigate. Wehrum resigned without explanation a few months later in June 2019. If Sheehan did launch an inquiry, the outcome was never made public.
Reporter Kevin Bogardus contributed.
