Five hours before Environmental Protection Agency Administrator Anne M. Burford resigned yesterday, two congressmen released EPA documents showing that she had been warned by her agency's inspector general last April of damaging evidence against her friend and influential EPA aide, James W. Sanderson, but failed to take any action.
Matthew N. Novick, who was fired as EPA's inspector general two weeks ago, told Burford in an April 20, 1982, memorandum of "troublesome or embarrassing" evidence that Sanderson may have been involved in several conflicts of interest while acting as both an EPA official and an attorney for clients affected by EPA actions.
Burford resisted White House attempts to fire Sanderson last spring, according to administration officials, and the issue came back to haunt her when the Justice Department recently expanded its investigation of Sanderson to include new conflict-of-interest allegations.
Sanderson, a Denver attorney who was a paid, part-time adviser to Burford at the EPA from March, 1981, until he resigned voluntarily in June, 1982, repeatedly has denied any wrongdoing.
Reps. James H. Scheuer (D-N.Y.) and Patricia Schroeder (D-Colo.) said in a letter to President Reagan that the inspector general's memo "raises serious new questions about the EPA Administrator's involvement in the conflict of interest investigation of her special assistant Sanderson ." Even after Sanderson left the EPA, they said, he continued to have access to Burford and other senior agency officials.
Novick also notified White House counsel Fred F. Fielding about the possible conflicts of interest. But he did not provide Fielding with the specific evidence that he sent to Burford.
Scheuer and Schroeder said the memos raise new questions about the independence of the inspector general's office. They said Novick did not interview Burford as part of his investigation, but had no hesitation about briefing her on the confidential details. Contrary to assurances given to Congress, they noted, Novick gave Burford the names of EPA employes who had made damaging statements about Sanderson.
While Sanderson took pains to "wall himself off" from EPA decisions affecting his legal clients, Novick said in his memo to Burford, "It was not always evident to others that he was not commingling his private business with his public employment."
For example, Novick wrote, "Sanderson frequently did work for clients on days he was employed at EPA," claiming to have worked 10 to 14 hours a day. Sanderson did not report the time he worked at the EPA, was paid on five occasions for days he didn't work, and may have tried to circumvent agency conflict-of-interest rules for consultants employed for more than 60 days, according to Novick.
Sanderson's attorney had acknowledged that "It is possible that Sanderson used his EPA staff to schedule meetings with clients and may have used a government car for personal business," Novick wrote to Burford.
Several EPA employes told investigators that Sanderson appeared to have participated in agency discussions on whether to lower water quality standards in Colorado, which would have benefited one of his private clients, the Denver Water Board, according to Novick's memo.
It said one employe told investigators that Sanderson had called Steven Durham, EPA's regional administrator in Denver and another friend of Burford from her days in the Colorado Legislature, to urge the lower standard, which was never adopted. Durham did an about-face on the water standards after Sanderson's call. The employe said Durham told him that he was following instructions from Washington, but Durham denied this.
While a consultant at the EPA, Sanderson also called Colorado health officials on behalf of another client, Adolph Coors Co., to lobby for proposed state legislation that also would have lowered Colorado's water standards, according to Novick's memo. The measure would have allowed Coors to discharge partially untreated water into a nearby ditch.
Burford had proposed Sanderson for the agency's No. 3 job, but he withdrew from consideration after the Justice Department investigation of his activities, which continues, had begun to drag on for months.
At a hearing yesterday before a House Public Works subcommittee, EPA general counsel Robert M. Perry said Sanderson occasionally visited the EPA after his departure.
"He was a close friend of the administrator, a friend of mine . . . . He had many friends at the agency," Perry said.
EPA officials have said that Sanderson was present at several meetings last year on landfill regulations, which affected another of his clients, Chemical Waste Management Inc., a subsidiary of the nation's largest hazardous waste disposal firm. In January, Sanderson returned to Washington to talk to Burford and other EPA officials about a permit for Chemical Waste Management to burn hazardous wastes at sea. The EPA later speeded consideration of the permit.
Perry testified yesterday that Sanderson "came to our office and asked about the nature of a special or general permit on some . . . ocean incinerator projects." He said the discussion was "very generic in nature."
Asked by Rep. Guy V. Molinari (R-N.Y.) if he knew that Sanderson represented Chemical Waste Management, Perry said, "Yes, sir, I probably did."
Sanderson's lawyer, Paul Cooper, has said that while Sanderson had engaged in discussions of broad EPA policies that might affect all landfill operators such as Chemical Waste Management he did not participate in any specific agency decision affecting only his client firms.