Home > Uncategorized > Murphy Diversion Of $69 Million Of Volkswagen Funds Illustrates Blunder By Green Groups

Murphy Diversion Of $69 Million Of Volkswagen Funds Illustrates Blunder By Green Groups

“Keep It Green” initially opposed dedication of NRD funds, later opposed dedication of cost recovery and enforcement penalties

Acting DEP Commissioner McCabe’s testimony to the Assembly Budget Committee this week revealed that $69 million in Volkswagen enforcement fines would be diverted to the General Fund (see NJ Spotlight story).

Actually, the DEP response to Office of Legislative Service (OLS) questions let that cat out of the bag. DEP replied as follows to an OLS question about the Volkswagen money:

Question: In October 2017, New Jersey reached a separate settlement agreement, totaling $69 million, with Volkswagen for violations of State law. How does the department plan to spend this money? Has the department sought, or will it be seeking, input on how to spend the money? What requirements and restrictions does the settlement agreement impose on how the money can be spent?

Answer: The settlement was negotiated by the Attorney General’s office for violations of the Air Pollution Control Act and the Consumer Fraud Protection Act. The $69 million penalty was directed to the General Fund, consistent with the disposition of all penalty receipts.

I find it appalling that DEP apparently had no role in negotiating the Volkswagen settlement, which McCabe blames on the Attorney General. I guess that answers troubling questions I asked about the AG’s rubber stamp of Gov. Christie’s paltry settlement with Big Oil on massive groundwater pollution:

Murphy’s Acting DEP Commissioner McCabe is an attorney and former US Justice Department natural resource lawyer, so surely she understands the legal and policy weaknesses of the Christie NRD legal policy and DEP program.

So why on earth did Murphy AG Grewal (and DEP McCabe) rubber stamp the Christie draft settlements BEFORE conducting a policy review and public process of reform, including promulgating DEP NRD regulations that the courts have found necessary?

But, more importantly, the Volkswagen diversion exposes a major error made by the Keep It Green Coalition and Legislators in the recent Constitutional Amendment to dedicate Natural Resource Damage (NRD) settlement monies. i.e. revealed in McCabe’s phrase “consistent with the disposition of all penalty receipts.”

In an effort to close a loophole and strengthen the proposed Constitutional Amendment to dedicate revenues from Natural Resource Damage (NRD) settlements, in a November 1, 2016 email to the sponsor Senator Smith (and post) I warned of exactly this problem and recommended the following amendments to dedicate enforcement penalty receipts like Volkswagen:

3. Expand the scope to include all enforcement revenues

The SCR is not precise regarding the settlements and revenues covered. For example, would a Water Pollution Control Act or Freshwater Wetlands Act settlement be included within the scope of the SCR? It appears not.

To promote the policy objectives of the SCR, all DEP enforcement revenues could be dedicated.

The other kind of settlements an revenues I asked for precision on include not only enforcement, but cost recovery and the Hazardous Discharge Site Cleanup Fund, which collected over $105 million in the last 2 years (FY’17 and FY’18, see attachments) and are not Constitutionally dedicated NRD funds.

But Senator Smith – and NJ Spotlight – were listening exclusively to the Keep It Green Coalition (KIG) and failed to amend his Resolution.

NJ Spotlight failed to even mention the issue in its cheerleading coverage.

The KIG coalition was simply too stupid to even understand the distinction between NRD settlement money, cost recovery, HDSCF and enforcement penalty receipts.

That was the second huge blunder by the KIG folks, who initially OPPOSED constitutional dedication of NRD money:

 [KIG] don’t want the public to figure out what a HUGE mistake they made by opposing dedication of Natural Resource Damage (NRD) settlement funds and expanding that NRD dedication to ALL cost recovery and enforcement settlement agreement funds.

The original introduced version of SCR84 included the NRD funds dedication. That provision could have been expanded by a simple amendment. Instead of seeking that amendment, the KIG fools OPPOSED IT ALL!

Idiots.

But in a Green version of the Peter Principle, they are swimming in millions of dollars of Foundation grants.

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