As Defendants Brace For SEP Ban, Water Agencies Eye Legislative Fix

摘要

Lawyers representing municipal and industrial entities are bracing for the Justice Department (DOJ) to largely ban the use of supplemental environmental projects (SEPs) in enforcement settlements, with some municipal water agencies now turning to Congress to authorize the popular projects that defendants often seek in settlements to ease penalties. The water agencies' turn to Congress comes after their representatives failed to convince DOJ to soften its policy limiting use of SEPs in settlements with municipal entities. But Clark believes they are unlawful because they divert revenue that would otherwise flow to the Treasury in the form of penalties, the municipal source says. In Clark's view, only Congress has the authority to appropriate money, so any settlement money must go to the Treasury and may not be diverted to a special project, even if they are popular and have immense local benefits. While the Trump administration had already generally limited use of SEPs, Clark issued an August memo that held that a 2017 DOJ directive, issued by former Attorney General Jeff Sessions, does not allow the use of SEPs, that a 2018 water infrastructure law does not provide exemptions and that any DOJ settlements with municipal water agencies including SEPs receive top-level approval.