California Climate Agency Insiders Turn Into Busy Lobbyists

Lobbyists have ramped up their efforts to influence the California Air Resources Board, with a nearly 60% increase in the past five years in the number of companies and advocacy groups reporting lobbying the regulator.

The number of companies and groups looking to sway the board known as CARB jumped to 306 in 2023 from 194 in 2019, according to a Bloomberg Government analysis of state lobbying disclosures. The reports don’t specify how much money was specifically spent on the agency, but 58% more companies, trade associations and advocacy groups cited CARB among their targets last year compared with 2019. The increase is part of a record $490 million spent on lobbying in 2023 in the state.

The millions of dollars were spent lobbying CARB as the agency considers policies with the potential to reverberate nationwide, from setting car fuel standards to requiring emissions reporting from major companies.

Lobbying firms are also turning to former CARB employees to press their case. A former CARB executive officer joined a lobbying firm in September 2022 and began reaching out to his former colleagues weeks after his mandated cooling-off period ended last year, according to previously unreported emails Bloomberg Government obtained via public record request.

The increased lobbying and revolving door from the agency to the private sector is raising concerns among environmentalists that a corner of state government that has long touted its depth of scientific expertise is at risk of being outmatched by industries looking to shape the state’s groundbreaking policies. The fact that a second Donald Trump administration is poised to take office in January and has pledged to reduce federal environmental regulations adds to their concerns because California often uses its regulatory power to effectively regulate nationally by issuing rules that apply to companies doing business in the state.

“Lobbyists are running the show,” Danny Cullenward, senior fellow at the Kleinman Center for Energy Policy at the University of Pennsylvania, said about CARB.

A CARB spokesperson said the agency is committed to a robust public process, noting opportunities for Californians to comment on its work through community meetings, workshops and listening sessions.

“CARB has several efforts in place to ensure that public, community-driven feedback is included in the rulemaking process,” Lys Mendez, communications director at CARB, said in an email when asked about the increase in lobbying at the agency.

Revolving Door

Richard Corey, the agency’s former executive officer, worked at CARB for 37 years before retiring in June 2022. He left the agency earning $190,000 in total pay in 2021 and received over $620,000 in 2022 when he cashed out accrued leave and other benefits upon retirement, according to state records. In September 2022, he became a partner at AJW, Inc., a lobbying firm.

The firm specializes in energy and environmental policy, counting as clients the Renewable Fuels Association and the environmental group NRDC Action Fund. The firm also represents World Energy, which along with Air Products Chemicals Inc., is developing a biofuels refinery south of Los Angeles in the city of Paramount.

Several conservation groups have questioned the environmental benefits of biofuels as well as the safety risks to surrounding neighborhoods. A few of them sued in 2022 to block the Paramount proposal near a high school and two elementary schools, with one attorney saying the “project puts public health and safety in jeopardy.”

The lawsuit ended in a settlement in May, with the companies agreeing to certain air quality monitoring measures

State law prohibits officials from lobbying agencies where they previously worked for one year after leaving government service.

The week after his cooling-off period ended in July 2023, Corey was trading emails with a senior CARB staffer, David Ernest Garcia, about legislation on carbon capture, according to email records obtained by Bloomberg Government through California’s open records law.

That same month, Corey reached out via email to Liane Randolph, the board’s chair, with arguments against first-in-the-nation legislation that would require large companies doing business in the state to disclose greenhouse gas emissions to the agency. The email included a memo prepared for the California Chamber of Commerce, he said, and it called for a much narrower emissions reporting program targeting just a few industries. The broader bill still passed and was signed into law by Gov. Gavin Newsom on Oct 7, 2023, though CARB staff sought to narrow it significantly and have slowed its implementation.

The agency announced Dec. 5 it would not take enforcement action against companies trying to comply with the law during its first year. The law’s author, state Sen. Scott Wiener, criticized the agency in a letter the next day, writing that he was “beyond frustrated” by the lack of progress on the law and accusing it of failing to hire anyone to help implement the measure.

Emails obtained by Bloomberg Government also show Corey met with one of Randolph’s top aides at a bar near CARB’s headquarters on Nov. 1, 2023. The following day, an assistant to Randolph reached out to Corey seeking to arrange a meeting between Air Products executives and the chair.

“We are interested in a one-hour meeting with the chair as Air Products would like to add the Low Carbon Fuel Standard to the list of topics,” Corey wrote in one email arranging the gathering.

The discussion would have taken place at a crucial time as the board weighed changes to the fuel standard program, which was created with the goal of promoting cleaner transportation fuel in part by providing credits to fuel producers, including Air Products.

Cullenward estimates the program has generated about $22 billion in credits for fuel producers since 2013, with about 80% of that money going to biofuel producers.

The Low Carbon Fuel Standards was the most common issue that companies lobbying CARB, including Air Products, mentioned in lobbying disclosures over the last couple years.

The latest changes, approved on Nov. 8 by members of the 16-person CARB board, require a 30% reduction in fuel carbon intensity by 2030 and a 90% decrease by 2045, boosting alternatives like electric vehicles, but not necessarily biofuels.

The changes were controversial as critics argued it would increase gas prices for Californians already paying more per gallon at the pump than residents of any other state in the contiguous US.

While Cullenward contends the credits for biofuels also have questionable environmental benefits, the program’s credits can be valuable for some companies, including Air Products.

Corey’s role in the updated regulations has largely avoided scrutiny because he has not registered as a lobbyist. Air Products also has not reported hiring Corey or his firm to lobby on its behalf in the state of California.

Corey did not respond directly to a request for comment and his firm did not address questions about why he is not registered as a lobbyist.

In a statement, Christopher Hessler, CEO and founding partner of AJW, Inc., said: “At AJW, we believe deeply in the importance of ethical behavior. We regard compliance with existing ethics regulations as the bare minimum definition of ethical behavior and hold ourselves to higher standards.”

Air Products did not respond to repeated requests for comment.

Cottage Industry

Other lobbying firms have staffed up with former CARB officials.

Caliber Strategies, a Sacramento-based lobbying firm, has developed a bench of former officials from state environmental agencies.

Virgil Welch, former chief advisor to CARB’s previous chair, Mary Nichols, is a partner at the firm and registered as a lobbyist, as are two former members of the state Public Utilities Commission.

Business has boomed with clients paying the firm $3.1 million for lobbying in California—including at CARB—during the first three quarters of 2024, a significant increase from the $181,500 it was paid for lobbying during 2019.

The firm has attracted clients including Airlines for America—which lobbies on issues such as sustainable aviation fuel—and the New Car Dealers Association of California, which monitors vehicle emission standards.

Welch and the firm did not respond to a request for comment.

A former science and technology policy advisor at CARB, Ryan McCarthy, joined Sacramento-based firm The Weideman Group in May 2019 to work as director of climate and clean energy, the month after leaving the agency. He is now registered as a lobbyist.

The firm boasts clients including fuel cell manufacturer Bloom Energy and electric carmaker Lucid Group Inc. The two companies reported spending about $500,000 on lobbying conducted by the firm since the start of 2023, including at CARB on issues including cap-and-trade rules and the Low Carbon Fuel Standards, according to state lobbying records.

The firm is also one of two that represents Air Products, which reported paying $634,000 for lobbying in the state over the same period.

Weideman Group didn’t comment on questions about its lobbying for Air Products or McCarthy’s role.

Consultants and lobbyists argue such lobbying is key to having input taken seriously at the agency as the environment has become more challenging to be heard.

The agency’s mission has grown in recent decades and it stands positioned to fill some of the holes in federal climate policy left by threatened cuts in the coming years under the next Trump administration. But its meetings remain relatively wonkish and complex.

“Almost nobody shows up at a CARB meeting unless they’re working for an advocacy group or a nonprofit or an industry stakeholder,” Barry Vesser, chief operating officer at nonprofit environmental group The Climate Center, said.

Vesser said his organization’s comments on the updates to the Low Carbon Fuel Standards “just weren’t penetrating” as regulators considered changes to the program.

The group, along with other environmental organizations, called on the agency to cut credits for dairies and fossil fuel-based hydrogen—steps CARB didn’t take with its latest update.

The group reported spending about $40,000 lobbying in California during the first three quarters of the year—a fraction of what major companies have spent.