President Reagan and the House reached a compromise agreement last night that will allow a subcommittee to review disputed Environmental Protection Agency documents that are at the center of controversy over the administration's hazardous waste cleanup program.
Rep. Elliott H. Levitas (D-Ga.), chairman of the subcommittee that had sought the documents, said the agreement "fully satisfies our vital needs" for access to the EPA records as part of his investigation into management of the $1.6 billion "Superfund" established for toxic waste cleanup.
The president, who had asserted executive privilege to protect some documents from congressional review, said in a statement that the compromise "is consistent with" that doctrine while also providing "necessary information" to Congress.
The compromise apparently averts what was shaping up as a major constitutional confrontation between the president and Congress. In December, the House cited EPA Administrator Anne M. Gorsuch for contempt of Congress when, under Reagan's orders, she withheld documents subpoenaed by the Levitas subcommittee. Last night's compromise means further prosecution of the contempt citation will be "unnecessary," Levitas said.
While the agreement may resolve the current confrontation, new questions were raised yesterday about the administration's handling of Superfund. Two other House subcommittee chairmen charged that the EPA has mismanaged the program, and they released an EPA draft audit indicating that the agency cannot account for nearly $53 million of the $180 million spent last year.
The final details of the compromise over the EPA documents were worked out on Capitol Hill last night by White House counsel Fred F. Fielding, Deputy Attorney General Edward C. Schmults and Levitas, chairman of the House Public Works and Transportation oversight subcommittee.
Schmults said the agreement will preserve the president's claim to executive privilege because it sets up a detailed procedure for protecting "the integrity of law enforcement files."
Levitas said the compromise would allow his panel to gain full access to the contested records.
The five-page agreement provides that "enforcement-sensitive" documents will be provided under special conditions, with records edited by the administration and with the subcommittee members given closed briefings on the edited portions. If necessary, two subcommittee staff members could also be briefed. But the question of providing unedited copies of the documents to the panel was left open by the compromise.
If the documents are turned over as promised, the agreement provides that the House must approve a resolution effectively "purging" the December contempt citation against Gorsuch.
The agreement reached last night would be binding only on the Levitas subcommittee. Five other congressional panels are also seeking EPA documents for investigations into charges of conflict of interest, political favoritism and mismanagement at the agency. The president also has ordered a Justice Department investigation into charges of wrongdoing.
The Levitas panel is required to maintain the "confidentiality of specific information" obtained from the most sensitive documents, and cannot ask government witnesses to divulge information that is edited from the records, according to the agreement.
But Levitas said the compromise is more favorable toward the House than a plan he had proposed on Dec. 8 that was rejected by the administration. Under it, the documents would have remained at the agency; the compromise plan will allow review of most of the documents on Capitol Hill.
Fielding said Reagan approved the compromise, and Levitas said House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) had seen the basic provisions.
Reagan did not waive his right to claim executive privilege "with regard to any document," and the subcommittee "does not acknowledge" that any of the records should be covered by executive privilege, according to the compromise agreement.
Levitas said he thinks the documents sought by his subcommittee could become available as early as next week.
In the latest disclosure of problems in the Superfund program, a draft audit by the EPA's inspector general said agency officials frequently and deliberately dipped into the fund to pay for expenses that had nothing to do with hazardous waste cleanup, including travel costs, employe fringe benefits and even telephone calls.
Rep. James H. Scheuer (D-N.Y.) said the audit reveals "unbelievably amateurish, incompetent management that has been going on for well over a year."
Rep. Mike Synar (D-Okla.) accused the agency of using the hazardous waste money as "a slush fund for EPA managers who . . . are not able to accomplish their other work with the money provided by the administration."
Scheuer and Synar head two of the Hill panels investigating EPA.
An EPA spokesman, quoting from an official agency statement, last night dismissed Scheuer and Synar's charges as "driven by the prevailing hysteria coming from a small number of politically opportunistic members of Congress."
The spokesman said the audit questioned only a small fraction of Superfund's budget, most of which remains unspent. He said that the findings involve only "the need for additional documentation" and that steps already ordered by Gorsuch "will significantly improve our ability to document, record and appropriately account for expenditures under Superfund."
President Reagan said of the audit findings yesterday: "It would disturb me if it was true. But that's what we've said we're going to find out, if there's anything supporting any of those charges."
The audit by Inspector General Matthew N. Novick said the EPA's bookkeeping was so poor that the agency could not adequately document whether nearly 30 percent of the money actually spent under Superfund last year was for purposes related to the cleanup program.
Of the $53 million in charges questioned by the auditors, the report said that about $20 million was used for salaries, travel expenses and fringe benefits that may be unrelated to Superfund.
For example, the audit found that $10,549 for telephone bills at the EPA's Cincinnati research center was improperly charged to the Superfund account.
In Kansas City, the agency used $1,880 to buy a "laboratory meat saw." The EPA's Chicago office used $127,820 in Superfund money to pay for apparently unrelated travel expenses, including $750 for four unused tickets.
Although an earlier EPA audit found similar problems with Superfund last year, Scheuer and Synar said Gorsuch had failed to take any remedial action.
The current audit found "many instances" where employes' payroll costs were charged to Superfund, even though the employes were working for other programs. Conversely, some payroll costs that should have been charged to Superfund were assigned elsewhere.
The auditors found that, while some of these errors were due to weak administrative controls, in many cases they were deliberate. They said some agency officials admitted that they decided to charge expenses to Superfund because their budgets ran short.
One regional EPA office, for example, charged Superfund $15,085 in payroll costs for 11 employes who worked in other programs. Scheuer said EPA officials were "raiding" the fund, which Congress created in 1980 to clean up hundreds of toxic dumps across the country.
The congressional panels are also investigating charges that the timing of Superfund cleanup announcements was manipulated last fall for political purposes. Several EPA officials have said that certain cleanup projects were placed on an "election track" to speed announcements that could benefit Republican candidates and delay those that might help Democrats.
At a news conference last week, Gorsuch said: "We operate in a political atmosphere in all of our decision-making, but political considerations have never driven any decisions over Superfund."
Further evidence came to light this week, however, that Gorsuch and Rita M. Lavelle, former chief of the hazardous waste cleanup program, went to great lengths to time the announcement of Superfund grants for key projects. While most presidential administrations have allowed incumbent congressmen to announce grants in their districts, they went one step further and bestowed the favor on congressional challengers, some of whom did not hold any office.
Three days before the 1982 election, for example, Rep. James J. Florio (D-N.J.) got word that a hazardous waste site in his district would finally get Superfund money--and that EPA had arranged for his Republican opponent to announce it.
Florio, the primary author of the Superfund law and chairman of one of the panels now investigating EPA, had criticized the agency that week for failing to release the funds. But without notifying Florio's office, Lavelle scheduled an Oct. 29 appearance in New Jersey with Florio's opponent, John Dramesi, to announce the commitment of $3.2 million for preliminary work at the Bridgeport Rental and Oil Services site. Florio tried to take the edge off Lavelle's appearance by putting out his own announcement a day before.
"This was part of a whole political effort over the six months before the election," said Florio. "I wish it had not taken an election to prod the administration into doing something. I might not even mind if they actually did something, but they still haven't spent the money."
The 12-acre lagoon in Florio's district contains an estimated 50 million gallons of benzene, toluene, vinyl chloride and other toxic wastes.
Last July, Gorsuch went to Freehold Township, N.J., to announce a Superfund grant with Marie Muhler, the Republican candidate opposing Rep. James J. Howard (D-N.J.), chairman of the House Public Works and Transportation Committee. A Howard spokesman confirmed that the EPA did not notify the congressman about the funding for the Burnt Fly Bog site, even though "normally that would go through our office."
"Any party in power uses things like this for its political advantage," said a spokesman for New Jersey Gov. Thomas H. Kean (R), who appeared twice with Gorsuch for Superfund announcements. "That's the way the system works." CAPTION: Picture 1, Reps. James H. Scheuer and Mike Synar charge EPA can't account for nearly $53 million in cleanup money spent last year. By James K.W. Atherton -- The Washington Post; Picture 2, Reps. James H. Scheuer and John D. Dingell are chairmen of two of the five congressional panels investigatin the EPA. UPI