It’s been half a decade since the Deepwater Horizon oil rig, which had been drilling the BP-owned Macondo Prospect, suffered a catastrophic blowout. Over 87 days between April and July 2010, 4.9 million barrels of oil gushed into the Gulf of Mexico.
Surveying the aftermath and the huge hit taken by his home state’s coast, Sen. Richard Shelby of Alabama decided it was crucial that monies from the inevitable federal fines and penalties be sent back to affected communities to repair the damage.
“I have always believed that, when it comes to government, putting more control in the hands of states and local communities—instead of Washington—will produce optimal results for taxpayers,” Shelby told me.
Plenty of conservative politicians have talking points that sound like that, but Shelby pushed legislation that actually did it. In 2012, Congress passed the Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States (RESTORE) Act. The law redirects 80 percent of federal fines and penalties from the oil spill to a process giving local and regional officials more control over restoring the economic and environmental damage inflicted on their communities.
According to Shelby, earlier drafts of the RESTORE Act offered by Sen. Mary Landrieu, D-La., redirected Clean Water Act fines and penalties through the congressional appropriations process. Shelby wasn’t convinced that simply moving the resources from a federal agency to federal appropriators would be particularly helpful for the Gulf Coast.
“The goal of the law was unambiguous,” says Shelby. “States and communities affected by the oil spill know better than federal bureaucrats where money is needed most for their economic and ecological recoveries.”
That’s an unusual attitude for a senior appropriator who’s in a position to score serious political points for shepherding spending projects through the appropriations process. Moving resources out of congressional spending committees means less power for Washington politicos.
Rather than leaving the policy disagreement at an impasse, Alabama’s senior senator reached a compromise to get the legislation across the finish line. The final version of the RESTORE Act ultimately put two-thirds of the spending under state and local control, while one-third essentially remained in federal hands.
Because of Shelby’s efforts, local communities will have a greater say in their own economic and environmental recovery following the oil spill. That’s an important win for the Gulf Coast.
But the RESTORE Act also is an interesting spending model that could shape the way we handle harm to local communities in the future.
Consider the Environmental Protection Agency as just one example. In fiscal year 2014, the EPA secured more than $9.7 billion in injunctive relief against polluters. Over the same period, the agency generated nearly $100 million in federal administrative and civil judicial penalties. That may not sound like a lot in terms of the federal government’s multitrillion-dollar annual budget, but those resources could go a long way to improving environmental and economic damage caused by polluters in the states.
Then there’s the Department of Justice, which recovered more than $24 billion in civil and criminal cases in fiscal year 2014. While not all cases represent localized harm, some have a direct link to a particular community. One example is the $14 million in civil penalties recovered under the Titanium Metals Corp. settlement, related to the company’s “unauthorized manufacture and disposal” of PCBs in Henderson, Nev.
Conservatives frequently wax poetic about shrinking the size of government, but regularly fail to reduce spending. The RESTORE Act shows the way to a different approach entirely. Washington’s influence over the states largely stems from the power of the purse. By shifting control over spending to the local level, Washington naturally becomes less essential.
That doesn’t mean the federal government gives up its role entirely. The RESTORE Act includes criteria to evaluate spending and sets up councils to select projects. Similar efforts could provide the basic structure for acceptable spending, while leaving specific decisions to the discretion of those closest to the harms inflicted.
“The RESTORE Act should serve as a model for future cases in which federal penalties and fines are assessed, because keeping funds closer to the community is always a better choice,” Shelby says.
It’s unusual to find a Washington politician willing to reduce his own political clout to give state and local governments more of a chance to repair, with federal funds, harms they’ve suffered; it’s even rarer to find one who’s actually done it.