Revolving Door: Oil & Gas Companies Hire Former Texas Regulators

Dave Fehling/StateImpact Texas

Texas has a Revolving Door law but critics say it's ineffective

There’s a flow of talent leaving Texas environmental regulation agencies, often for better-paying jobs in the private sector. In some cases, the former state employees are hired by the very companies they used to regulate.

The revolving door is obvious by looking at resumes posted on job-hunting websites by people whose experience includes stints at the Texas Railroad Commission (RRC) or at the Texas Commission on Environmental Quality (TCEQ), the big state agencies that regulate refineries, oil and gas drilling, pipelines and power plants.

Resumes Show Connections

One resume of an ex-state regulator touts his “direct connections” to Texas environmental agencies. Another resume from a guy who was an air pollution expert with the TCEQ says he investigated companies including one of the biggest oil refiners in Houston. His resume shows he quit the TCEQ and the same month began working for…the same refiner. Another resume from no less than a former chairman of the RRC says he went to work for an international oil & gas exploration company the same year he left the RRC.

Watching the Door Go Round and Round

One former TCEQ geologist, Patricia Bobeck, said she saw it happen many times in her years with the state.

Courtesy Patricia Bobeck

“I’ve seen the revolving door work for the last 20 years I was working for state government. Any number of management people move out of state government and into industry working on the same cases they were working on while they were at the TCEQ,” Bobeck said in an interview with StateImpact Texas.

Bobeck quit her job with TCEQ five years ago—not to join a private company—but rather she says because she became disenchanted with the agency. She said some decisions it made were based more on political considerations than science. The final straw for her was one of the last projects she worked on.

That project involved a company called Waste Control Specialists that had applied for a permit to operate a disposal site in West Texas for radioactive waste, a permit that in 2007 Bobeck had recommended be denied. But higher-ups in the TCEQ overruled her recommendation. Then, in a later development that critics have used in the debate for a stricter revolving door law, the executive director of the TCEQ at the time later quit and went to work for Waste Control Specialists.

A company spokesperson, Chuck McDonald, said there was nothing wrong with their hiring of the former director because there was nothing expected in return, no quid pro quo.  McDonald said the criticism isn’t fair because the former director was “about number 900 who’s done this.”

Not Illegal Under State Ethics Laws

There’s nothing illegal about any of this, assuming the state’s ethics laws are followed. And it’s only fair to let ex-agency employees and officers profit from their experience, say some politicians.

To restrict it, as was proposed last year, would “prohibit people from making a good honest living” according to Wayne Smith, a Republican state representative from Baytown quoted by the Austin American-Statesman.

But critics say the current law is too lax, encouraging a system in which state employees look at the companies they regulate less as an enforcement target and more as future employer.

“You see this a lot, where there is a revolving door…The person is supposed to regulate these industries (but) it’s obvious they’re doing everything possible to please the polluters and then the very next day go to work for them,” said Eliot Shapleigh, a former Democratic state senator from El Paso who has been a fierce critic of the TCEQ.

How Texas Regulates the Revolving Door

Under the state’s ethics guidelines, “The First Revolving Door Rule” says that board members or executive directors of regulatory agencies must wait two years before they can start lobbying on behalf of a private company that has business before the regulatory agency.

“The Second Revolving Door Rule” applies to board members and directors as well as to “upper level employees” which are defined as having made at least $36,764 in annual state salary. The rule prohibits those ex-regulators from ever getting paid to represent their new employer on any “particular matter in which he or she participated while serving in the agency.”

But the state’s guidelines say “a particular matter is defined narrowly” to mean that the ex-regulator could help a company with filing a permit as long as it wasn’t the exact permit that he or she worked on while employed at the state.

“That’s just a huge loophole that allows the industry to still have huge influence by using some of these former employees,” says Luke Metzger, a lobbyist and the director of Environment Texas, a group that advocates for clean air and water.

How the Federal Government Does It

Texas is hardly alone as a place where the revolving door issue is debated. The Obama administration addressed it at the federal level by updating rules in 2009.

Overall, the federal rules are somewhat similar to the ones in Texas. But one difference involves federal bank examiners and procurement officials. Federal rules prohibit them for one year from “any compensated employment” with banks or contractors with whom they worked with as federal employees.

It would be misleading to imply that a majority of state employees are just itching to jump ship and work for the companies they’re involved in regulating, said one ex-TCEQ scientist. He left to work for a university. He didn’t want to be quoted by name, but said when he worked at TCEQ, “There was not talk of cashing in. I’m sure there are a percentage of folks who want to go on to something bigger and better, but most were career TCEQ people.”

He said he was willing to accept lower pay in exchange for a better quality of life instead of “working 80 to 90 hour weeks as a consultant.”

The TCEQ said it provides ethics training to all employees but the agency wouldn’t provide anyone to be interviewed for this story, nor would the RRC nor oil & gas industry representatives contacted by StateImpact Texas.