EPA head of the agency rejected written findings in ruling

Janet Wilson of the Los Angeles Times has the scoop on the EPA's chief:

The head of the U.S. Environmental Protection Agency ignored his staff's written findings in denying California's request for a waiver to implement its landmark law to slash greenhouse gases from vehicles, sources inside and outside the agency told The Times on Thursday.

"California met every criteria . . . on the merits. The same criteria we have used for the last 40 years on all the other waivers," said an EPA staffer. "We told him that. All the briefings we have given him laid out the facts."

EPA administrator Stephen L. Johnson announced Wednesday that because President Bush had signed an energy bill raising average fuel economy that there was no need or justification for separate state regulation. He also said that California's request did not meet the legal standard set out in the Clean Air Act.

But his staff, which had worked for months on the waiver decision, concluded just the opposite, the sources said Thursday. The sources spoke on condition of anonymity because they were not authorized to talk with the media or because they feared reprisals....

...California Gov. Arnold Schwarzenegger has vowed to fight in court to overturn the decision.

Technical and legal staff also concluded that if the waiver were denied, EPA would very likely lose in court to the state, the sources said.

But if Johnson granted California the waiver and the auto industry sued, "EPA is almost certain to win," said two sources quoting the briefing document. They advised him to either grant the waiver outright or give California a temporary one for three years.

Instead, three sources said, Johnson cut off any consultation with his technical staff for the last month and made his decision before having them write the formal, legal justification for it. "It's very highly unusual," said one source with close ties to the agency.

Normally the technical staff would be part of the final decision-making process, including briefing the administrator and writing the formal legal document before his decision. In this case, the briefings were done, but the formal finding has yet to be drafted....

...Some staff members believe Johnson made his decision after auto executives met with Vice President Dick Cheney and after a Chrysler executive delivered a letter to the White House outlining why neither California nor the EPA should be allowed to regulate greenhouse gases, among other reasons. The Detroit News reported Wednesday that chief executives of Ford and Chrysler met with Cheney last month."

Clearly the White House said, 'We're going to get EPA out of the way and get California out of the way. If you give us this energy bill, then we're done, the deal is done,' " said one staffer.

Chrysler spokesman Colin McBean said that records show that Chrysler submitted position papers on the mileage issue with the Bush administration's Office of Management and Budget about five weeks ago. Neither McBean nor a Ford spokeswoman would comment on whether company executives met with Cheney.

Jennifer Moore, a spokeswoman on environmental issues for Ford in Dearborn, Mich., said her company had no reason to question the EPA administrator's assertion that his decision was independent of the White House.

Charles Territo, spokesman for the Alliance of Automobile Manufacturers in Washington, said there was "absolutely not" any linkage between his trade group's decision to support the final version of the Senate energy bill and the EPA's decision to deny California's request for a waiver. Territo said the industry has always stressed a national mileage standard and opposed the California petition....

...Rep. Henry Waxman (D-Beverly Hills) and Sen. Barbara Boxer (D-Calif.) on Thursday announced they were opening investigations into the waiver denial and told Johnson to turn over all documents related to the decision. Waxman also told Johnson not to destroy any documents.

In response to a U.S. Supreme Court decision that the EPA could and probably should regulate greenhouse gases as a threat to public health, Johnson had promised to have his staff prepare by Dec. 31 a national proposal on how greenhouse gases from vehicles should be regulated.

Staff and other sources said the proposed standard cleared all EPA internal reviews and was forwarded to the Department of Transportation last week, before the energy bill was done.

But it is now unclear, when, if ever, such a proposed regulation will be issued.

Johnson ordered staff to stop work on the federal greenhouse gas proposal, said two sources inside and outside the agency....

...Staff and critics said delay or outright elimination of the federal regulation on vehicles spells possible trouble for regulation of greenhouse gas emissions from other major sources.

"Once EPA makes the . . . finding on vehicles, then it opens the door to standards for smokestack industries as well," said Frank O'Donnell of Clean Air Watch. "That's why the Chamber of Commerce and all the others wrote to the Senate. . . . They weren't doing it because they were worried about fuel economy for cars. They did it because they understand the legal ramifications if EPA moves forward with greenhouse gas standards."

From AGI News/Italy:

USA: CHRYSLER CLOSE TO OPERATIONAL BANKRUPTCY

(AGI) - Detroit, Dec 21 - The Chrysler car group, one of the Big Three in the USA, recently transferred from DaimlerChrysler to the private equity group Cerberus, has serious financial problems and is on the brink of bankruptcy, at least from an operational point of view. The Wall Street Journal reported this, quoting a line said by the CEO, Bob Nardelli, during a meeting with his employees this month. "Somebody asked me if we have gone bankrupt" Nardelli said. "Technically no, on an operational level yes. The only thing that keeps us from bankruptcy is the 10 billion dollars from investors entrusted to us". Nardelli then revealed to the WSJ that he had said that "to transmit a sense of urgency to the employees". Nardelli explained during the meeting that the group has to deal with a substantial loss in the order of 1.6 billion dollars this year and that he intends to sell activities to have more cash.