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Probe Broadens into Allegations of White House Pressure on EPA in Cabrillo Port Flip-Flop

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Waxman gave EPA just five days to turn over two documents that were requested earlier but not provided, as well a list of 12 additional e-mails, memos and notes that his investigators believe exist.

One of the documents is an EPA memo entitled "Talking Points, Proposed LNG Deep Water Port Offshore Ventura County, Calif." Another is handwritten notes taken by White House appointee Jeff Holmstead during a conversation with a high-ranking EPA smog administrator in 2005.

In a second letter sent Friday, Waxman told BHP Billiton's president he wants copies of all communications from within the Australian company, its Houston subsidiary and its agents "that reference the White House, White House officials or personnel, the EPA headquarters in Washington, or EPA personnel."

Existing public files are full of scores of letters sent by BHPB to regional officials in San Francisco, but Waxman's letter is asking for records about conversations the company and its agents had about EPA officials and the White House. Billiton has spent millions of dollars on public relations firms in Washington and Sacramento, and the terms of the congressional probe appear to include their documents as well.

BHP Billiton president Chip Goodyear, an American who works out of the company's Australian headquarters, was given two weeks to supply those documents and e-mails to congressional researchers.

A public relations firm executive working for BHPB said neither company had seen the letters Friday morning, and could not yet comment.

In the letter to EPA, Waxman said what he has learned so far has convinced him that EPA's decision in 2005 to grant BHPB what amounts to a smog rule loophole for Cabrillo Port "is likely to result in degraded air quality in California." Waxman also said documents already sent to him by EPA indicate that EPA officials had "sound policy and legal basis" for the tough stand they took in 2004 and 2005 in analyzing BHP Billiton's request. But the agency's tentative ruling, Waxman said, was reversed after intervention from a political appointee who may have been acting after consultation with the White House.

Waxman is chair of the House Oversight and Government Reform Committee, the powerful house investigations committee that has been rejuvenated after he assumed that post in January. The committee is also investigating the role of Attorney General Alberto Gonzales in the firing of eight U.S. attorneys, the Valerie Plame affair, and other high-profile probes.

The BHP Billiton investigation was started after a Malibu newspaper reported in 2005 that, after two years of strongly insisting that Cabrillo Port abide by strong on-shore smog regulations, EPA staffers abruptly said they would "use our discretion" to tentatively decide to allow the LNG terminal 13.8 miles off Malibu to be built under lesser air pollution standards.

The company still contends that its 484 tons per year of emissions are not subject to onshore Ventura County smog rules, because the county in 1992 exempted two small federal generators on Anacapa and San Nicolas islands from the tougher rules. The Ventura regulation in question says the smog exemption applies only to emission sources "on" the islands, and EPA officials steadfastly said the Cabrillo Port ship was not an island until that 2005 reversal.

Lawyers for the Environmental Defense Center filed a Freedom of Information Act request, and found a chain of documents between Billiton, the White House and EPA showing that regional EPA officials in San Francisco were pressured to adopt what the White House called "the Anacapa rules."

Five EPA officials in the San Francisco have been asked to appear before House investigators for interviews with a court reporter present, Waxman revealed in his letter to EPA Friday.

Included in the five was Amy Zimpfer, the EPA official who told a Malibu reporter in 2005 that the EPA's reversal had come after BHP Billiton had lobbied for it.

In several official letters in 2004 and early 2005, Zimpfer and her boss, Gerardo Rios, had told BHPB that EPA would not grant the Anacapa exemption to Cabrillo Port. EPA several times told the company it was expected to follow the Clean Air Act and local provisions, which would require the company to purchase and retire air pollution offset credits in order to gain permits to build the LNG ship.

Ventura County smog officials have said it is likely that there are not enough smog offset credits available in their air basin at any price to allow the port to operate, meaning the EPA ruling could block construction of the $800 million terminal.

After news of the EPA reversal was published, more than 12,000 people sent protest form letters to the agency, and officials said it would reevaluate the tentative finding. A final decision on the Anacapa exemption issue may come this summer, after other licensing decisions are already made, EPA officials have said.

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