Throughout the Carter administration, Cecil D. Andrus as secretary of the interior and Douglas M. Costle as director of the Environmental Protection Agency tightened the rules on industrial pollution and imposed strict testing requirements on chemical and industrial wastes.
Now, in a new twist to the classic Washington story of insiders going outside to capitalize on their government expertise, they and three other former EPA officials have set up a business operating laboratories to perform the complex tests required by the rules they wrote.
They expect, Andrus said, to "do well while doing good." Industry's need for "highly qualified laboratory analysis" to comply with the new rules and protect itself against damage claims, he said, offers the new company a "red-hot opportunity."
Their company, Environmental Testing and Certification Corp. (ETC), is scheduled to open its first laboratory in Edison, N.J., Wednesday. A full-scale promotional blitz has been organized by ETC's New York public relations firm, and New Jersey Gov. Brendan T. Byrne and Sen. Bill Bradley (D-N.J) are expected to attend.
The public relations firm is part of the old-boy network of business and government contacts that underlies the new venture. ETC's chief financial backer is Dan W. Lufkin, chairman of a New York brokerage house, who was formerly environment commissioner of Connecticut. Costle worked for him there, before going to EPA, and sought his backing for the new venture shortly after leaving office last January.
Lufkin is a close friend of public relations consultant Robert W. Marston, and it is Marston who is orchestrating ETC's advance notices.
In a joint interview in the conference room of Marston's New York office, Andrus and Costle said they were confident that ETC will be a resounding success, both scientifically and financially. They said ETC will operate a network of laboratories, manned by eminent scientists, to provide objective analysis of the content of industrial and chemical wastes and waste waters, just at a time when industry is becoming increasingly dependent on such information and laboratory capacity is scarce.
Federal rules and laws require elaborate and frequently expensive tests for waste discharge permits, landfills, disposal of toxic chemical residues, and marketing of new products such as pesticides. In effect, the rules create a captive market for ETC, Costle and Andrus said.
"Our market is the corporate environmental manager, the liability officer, and the company president and directors they report to," Costle said. "No manager likes surprises," he said, and corporations seeking to comply with the law and protect themselves against damage claims will want the kind of sophisticated testing he said ETC would provide.
Even if the Reagan administration relaxes some of the regulations imposed in the 1970s or delegates regulation to the states, Andrus said, "there are tests that are going to have to be run, like it or not." To decide whether industrial waste can be safely dumped or landfilled or must be incinerated, he said, "you have to know exactly what it is and where it is. Enter ETC."
Costle, sporting a beard that he grew while vacationing with Andrus in Idaho, said that "several things motivated us to start the company." ("Aside from the profit motive," Andrus interjected.)
Costle said that when he was at EPA "we constantly felt the lack of adequate information and frustration over getting the facts." In disputes between industry and environmentalists, or in litigation, he said, "nobody ever trusted the other guy's facts." ETC will be able to provide test results that all parties to any dispute will accept, he said.
Andrus, who has returned to live in Idaho, where he was once governor, will be a director of ETC and a consultant, as well as a stockholder. Costle is chairman of the executive committee. The corporate secretary is Henry Beal, a lawyer who was director of standards and regulations for EPA under Costle, which, in Andrus' words, "means that ETC will be able to deal with clients lawyer-to-lawyer on what the reqs require, as well as chemist-to-chemist."
ETC's board chairman is Eckardt C. Beck, who headed EPA's water and waste management division under Costle. His associate director in that job, Swep Davis, a Harvard Business School graduate, is the corporate treasurer. Beal and Beck, like Costle and Lufkin, worked on environmental control issues for the state of Connecticut.
Terry Loucks, a physicist, is president of the company and its chief scientific officer. The scientific staff will comprise about 35 people at the Edison laboratory and will grow to about 190 as other labs open.
ETC is owned by its officers and directors, including Lufkin. Costle and Andrus said the corporation's initial capital is in the "multimillion-dollar" bracket. They declined, however, to specify how much money has been invested.
Before leaving office last January, Costle warned that the Reagan administration would retreat from environmental controls and give in to the "rape, pillage and burn crowd." Now, trying to turn the same people into clients, he is more conciliatory.
"Over 90 percent of the sources of industrial waste are in compliance with the air and water regulations," he said. "A handful of industries had special problems, such as steel, a big dirty industry in obsolete old plants. But the vast majority want to do the right thing."
The "right thing," he said, is to comply with the testing requirements, and he knows just the place where industry can do that.