Fracking New York with Another Conflict of Interest: Ecology and Environment’s Frackonomics

A major player in New York’s fracking debate has been exposed as a member of one of the largest oil and gas lobby groups in New York. Ecology and Environment Inc. was hired as an “independent consultant” by the Cuomo Administration to assess the economic impacts of fracking in New York.

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On Earth Day 2013, a letter revealed Ecology and Environment to be a member of the Independent Oil and Gas Association, a pro-fracking lobbying group. This conflict of interest calls into question the integrity of the economic assessment completed for the state in 2011.

The Cuomo Administration hired Ecology and Environment Inc. to perform an economic analysis as part of the Supplemental Generic Environmental Impact Statement (SGEIS). According to the Democrat and Chronicle, “The DEC at the time said it had not done enough to study the economic impacts of fracking and said it had decided to engage ‘independent consultants to thoroughly research these types of effects.’”

As it turns out, Ecology and Environment Inc. was anything but “independent.” The company’s 2011 assessment raised eyebrows due to its surprisingly sunny economic outlook for fracking. Anti-fracking groups criticized the results because the assessment didn’t include local economic costs on roads or hospitals. DEC commissioner Joe Martens responded, saying he would ask Ecology and Environment to expand the study – but that work was never publicly completed

IOGA Executive Director Brad Gill wrote in the letter to Cuomo, “The public can be assured that exploration for natural gas in New York is—and has been—safe, good for our environment and for our economy. Our New ‘New’ York must now join the nation and embrace the expansion of responsible natural gas development. We need your help.”

At the time the SGEIS was released, many were concerned that Ecology and Environment’s ties to the energy industry might have influenced their assessment. Adrienne Esposito, executive director of Citizens Campaign for the Environment, said “This is not an objective analysis done in the public interest. They went to someone with whom they have a work relationship and that also does work for energy interests.”

This letter proves the worries were not unfounded.

As a member of an active pro-fracking lobby organization, Ecology and Environment does not have an objective view towards fracking and should never have been hired to contribute to the SGEIS.

New Yorkers Against Fracking is calling for Governor Cuomo to throw out the SGEIS, due to this and other conflicts of interest. They are asking for a “new, truly independent study that regains the public’s trust and ensures science and facts drive your decision.”

Getty Images / Kris Radder

Getty Images / Kris Radder

#NYFrackingScandal Hits Cuomo Administration: Newly Disclosed Documents Show Conflicts of Interest

Photo from NYPost.com

With only two days before the expected release of New York’s Environmental Impact Assessment on fracking (also known by the industry term hydraulic fracturing), Governor Andrew Cuomo’s administration is at the center of a new conflict of interest scandal regarding two of his top aides.  Today, seven groups requested the Albany County District Attorney General David Soares investigate the Cuomo Administration’s conflicts of interest surrounding two staffers that hold “key positions in New York’s decision over whether to allow high-volume hydraulic fracturing.”

There are looming questions on the impartiality of Lawrence Schwartz and Robert Hallman, two top Cuomo Administration officials, who have significant influence on the Governor’s fracking decision. New documents obtained by DeSmogBlog through New York’s Freedom of Information Law (FOIL) show that Mr. Schwartz has significant stock holdings in companies that stand to benefit from fracking in New York state, and that Mr. Hallman failed to make specific financial disclosures, raising questions about his objectivity on the issue.

The two top aides, Lawrence Schwartz, Secretary to Governor Andrew M. Cuomo, and Robert Hallman, Deputy Secretary for Energy and Environment, have significant oversight within the Cuomo Administration on the issue of hydraulic fracturing. According to the groups’ letter, Mr. Schwartz supervises all state deputies and commissioners, including Mr. Hallman and the Commissioner of the New York State Department of Environmental Conservation – the agency that is tasked with studying high-volume hydraulic fracturing and developing the state’s policy regarding this extraction technique. Mr. Hallman is the state’s highest gubernatorial staff member who has oversight over the state Department of Environmental Conservation.

According to financial disclosure documents, Schwartz has substantial holdings in companies engaged in shale gas development, including ConocoPhillips, Occidental Petroleum and ExxonMobil. ExxonMobil alone holds 43,000 acres of leases for fracking in New York under its subsidiary XTO Energy Inc. Schwartz also identified “Williams Co.,” apparently a reference to “The Williams Companies Inc.,” a pipeline company that plans to build a $750 million pipeline through the southern portion of New York.

Mr. Hallman failed to specify his stock holdings in his financial disclosure forms, which seems to violate (at the very least) the spirit of N.Y. Pub. Off. § 73-a. The law states that “Public officials are required to list “EACH SOURCE” of income greater than $1,000 and “the type and market value of securities… from each issuing entity” greater than $1,000,” according to the letter from seven groups to District Attorney General Soares. Instead of disclosing each source, Mr. Hallman listed “various common stock” and “various corporate bonds.” His lack of disclosure should serve as a red flag and calls into question his impartiality on the state’s fracking decision.

Furthermore, records obtained via the FOIL request indicate that fracking companies have recently worked directly with Cuomo Administration officials.  XTO Energy Inc, a subsidiary of ExxonMobil, wrote to Mr. Schwartz and Mr. Hallman requesting changes to the state’s draft regulations on fracking in August 2012. And, The Williams Companies communicated with Mr. Hallman regarding natural gas pipelines twice in the summer of 2012.

New York state law states that public officials should avoid personal investments that could “create substantial conflict between his duty in the public interest and his private interest.” Both Mr. Schwartz and Mr. Hallman may have conflicts of interest that violate this standard.

Today during a press conference in Albany, Alex Beauchamp, Food & Water Watch Northeast Region Director, said, “We are outraged to discover that Governor Cuomo’s top aide is so heavily invested in oil and gas companies. And further, that he made these investments during the very timeframe this administration has been considering whether to allow fracking in New York. Clearly, this administration must not allow fracking to move forward under this cloud of scandal.”

Learn more at NYFrackingScandal.com.