Rauner, Lawmakers Face Showdown On Volkswagen Pollution Money

A rush to spend $109 million is attacked as a political grab in governor’s re-election campaign; the Illinois Senate votes to slow the process.

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This story was co-published with the Chicago Sun-Times.

Gov. Bruce Rauner’s top environmental official is pressing to spend an anti-pollution windfall in coming months, but critics say the timetable is rushed and dictated less by sound policy than the election calendar as the Republican incumbent faces a tough path to a second term.

Alec Messina, the Rauner-appointed director of the Illinois Environmental Protection Agency, is trying to speed the handout of $109 million in legal settlement money. The money is part of a $2.9 billion multistate settlement with Volkswagen over an emissions-cheating scandal involving diesel vehicles from the German automaker.

Messina says he wants to submit a final plan within a month to a national trustee and start funding projects aimed at reducing air pollution in the state as soon as August. The timing could arm Rauner, who is in a tough race against Democratic challenger J.B. Pritzker, with good public relations news to announce just before the November election.

In Springfield, Democratic lawmakers are trying to slow down and possibly alter Messina’s plans to distribute the money, which environmental advocates complain appears skewed toward helping big diesel-engine manufacturers and largely ignores spending to reduce vehicle emissions that were central to the VW scandal.

The Illinois Senate passed a bill Thursday that would require six public hearings on how the $109 million should be spent as well as the appointment of a task force to decide on a plan.

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Messina, in an interview last week, said he found it “frustrating” to be accused of playing politics with the settlement money and argued the Senate legislation, if implemented, would delay distribution by as much as a year.

“This is an important opportunity to make strides toward improvement in air quality,” he said.

Bill sponsor state Sen. Cristina Castro, D-Elgin, and others criticized Messina for holding private meetings with business leaders, including some from construction equipment manufacturing giant Caterpillar, while shutting out the public from providing input. Other states also in line for VW settlement cash, including Indiana and Ohio, have held public meetings on how the money should be spent.

A number of health, environmental and clean energy groups have asked the state EPA to put the brakes on its high-speed spending plan and make the process more transparent to taxpayers.

“Clearly, they’re in a hurry to spend the money,” said Al Grosboll, legislative director for the Chicago-based Environmental Law and Policy Center. “We certainly appreciate the administration wants to begin moving money out the door but it’s really important that we get this right.”

Other critics are more pointed about the politics.

“They realize this is a fall election opportunity,” said Jennifer Walling, executive director of the Illinois Environmental Council, a coalition of dozens of advocacy organizations.

Messina’s EPA has put together a draft plan that will need to be blessed by a national trustee overseeing the VW settlement to make sure the state is properly spending the money on fighting air pollution and not using it for unrelated purposes.

The draft has led to a philosophical fight with environmental and health groups that argue too much of the $109 million is being directed toward trains, boats and other so-called off-road projects rather than addressing the problem of air pollution from cars.

Indeed, the Illinois Manufacturers’ Association and the Illinois Chamber of Commerce praised the EPA’s draft plan, calling it a “policy that encourages business growth with smart environmental investment.”

The plan to spend a large part of the settlement money on off-road projects appears to draw from research conducted by the Diesel Technology Forum, a Maryland-based organization made up of companies with an interest in diesel fuel, including Caterpillar.

In a statement, Rauner spokeswoman Rachel Bold echoed Messina’s defense: “This plan focuses on getting the oldest, dirtiest engines out of operation, and bringing significant air quality improvements to those citizens that need it the most. We need to move forward.”

The Better Government Association has previously reported that emails it obtained through an open records request show that as the EPA developed its draft plan, Caterpillar representatives met with Messina,.

Caterpillar has reiterated its position to invest in cleaner diesel engines for locomotives and tugboats. In a six-page letter submitted to the state EPA as part of public comments, a Caterpillar official argued for spending settlement funds on locomotives and trains while knocking other ideas such as electric-generated school buses as examples of “poor cost effectiveness.”

“Caterpillar and its dealers are ready to accomplish these replacements and emission retrofits,” Caterpillar Global Regulatory Affairs Manager Rey Agama wrote in the letter.

Messina has highlighted Metra as a potential recipient of Volkswagen settlement funds. Caterpillar restores diesel engines for the commuter rail system through its Progress Rail subsidiary company. In March, Progress Rail said it may close its manufacturing plant near LaGrange.

Metra spokesman Michael Gillis said the agency is likely to replace or retrofit engines in its oldest locomotives, which are more than 40 years old.

While Messina highlighted Metra, he said he didn’t have a bias toward the commuter rail. He also said he’s been transparent about the spending of settlement dollars. He told legislators that he feared no one would show up for a public meeting on the subject.

Lawmakers said the process has to be made open and transparent.

“The process is as important as the end result,” said Sen. David Koehler, D-Peoria, chairman of the Senate Environment and Conservation Committee. “You have to make people feel like they’ve participated and that hasn’t happened. In government, You have to err on the side of being more open and transparent.”

 

Environmental reporting at the BGA is supported by Joel M. Friedman, President of The Alvin H. Baum Family Fund.

About the Author

Brett Chase

Brett Chase investigates waste, fraud and corruption in a number of areas, including the environment, housing, health care and transportation. A former reporter and editor for Crain's Chicago Business, the Milwaukee Journal Sentinel and Bloomberg News, Chase has covered government and business for more than 20 years.