Cathy Stepp

Former DNR secretary Cathy Stepp has been appointed to run the EPA region that includes Wisconsin, which the federal agency has been pressing in an effort to improve environmental enforcement. 

Cathy Stepp may soon be in a position to loosen the grip of federal pollution regulations she saw as strangling Wisconsin businesses when she was head of the state’s environmental enforcement agency.

Stepp has been appointed to take charge of the U.S. Environmental Protection Agency region that includes Wisconsin at a time when the federal agency has been pressing for tougher environmental protection at a state Department of Natural Resources she aimed to make more flexible.

After Stepp became DNR secretary in 2011, the EPA Region 5 office in Chicago pushed her to fix deficiencies in clean water protections that affect lakes, streams and drinking water.

The regional office was formally petitioned this year to investigate complaints that the DNR set a policy that ignores significant sources of air pollution despite being told by the EPA that the policy was flawed. The region also had been seen as a major hurdle for controversial plans Stepp pushed when she was DNR chief to shift responsibility for the state’s efforts to control agricultural pollution to an agency with little enforcement experience. And EPA regional regulators have stepped in to take enforcement action against water pollution when the DNR did not.

Gov. Scott Walker appointed Stepp to make the DNR friendlier to businesses, and under her tenure the department sought fewer penalties against polluters.

In August, Stepp departed to become deputy administrator of the EPA regional office in Kansas City. The EPA administrator, Scott Pruitt, announced last week he was moving her to the top job in Chicago overseeing Indiana, Illinois, Michigan, Minnesota, Ohio and Wisconsin.

Wisconsin business leaders applauded the move, but conservationists sounded alarms about what it meant for continued federal pressure on the DNR.

“She is hardly going to be a fair and impartial decision maker,” said Bill Davis, executive director of the state Sierra Club chapter. “She’s already made her preferences pretty clear.”

Wisconsin Dairy Business Association lobbyist John Holevoet cautioned against jumping to conclusions about how she’ll handle disputes over environmental enforcement in the state.

“Former secretary Stepp understands the issues in Wisconsin because of her experience here in a way that very few other people could,” Holevoet said Friday. “She walks in with a lot of background knowledge that someone else wouldn’t have.”

In October, the DNR settled a dairy business association lawsuit by agreeing to back off on requiring tighter pollution controls the EPA had said were needed to prevent water pollution from large agricultural operations. Conservation groups have sued to overturn the settlement.

Going national with Wisconsin ways

Stepp didn’t respond to requests for comment, but when she left the DNR she told department employees she would bring “some of the reforms we’ve been able to put in place here in Wisconsin to the national stage.”

The former Republican state senator worked publicly on Donald Trump’s successful presidential campaign. She told the Wisconsin State Journal she hoped Trump would make “business-based decisions,” relax “strangling” regulations and allow Wisconsin to work with polluters toward creative solutions.

Stepp won’t have a free hand. She will face obstacles similar to those she encountered at DNR. EPA attorneys, scientists and other professional staff will make sure she knows what is required under federal law. Changing the way EPA operates can be difficult because regulations are well defined and significant administrative actions are documented, Davis said.

Another concern for conservationists may be federal funding that flows through the EPA regional office for state cleanups like the ones that have removed toxins and restored wildlife habitat in Great Lakes harbors, including Superior, Sheboygan and Milwaukee, said Nancy Larsen, who worked as a DNR watershed protection supervisor before retiring in 2016.

Stepp will be in charge at the EPA regional office as the Taiwan-based manufacturer Foxconn begins building a huge factory to build liquid-crystal display screens that are made with a variety of toxic compounds that will need to be kept out of the air and water, said Ryan Billingham, a spokesman for the Wisconsin League of Conservation Voters.

“Her decisions and her understanding of these highly complex environmental rules will be very important to the future of the Great Lakes,” Billingham said.

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‘Working collaboratively’

The EPA announcement of Stepp’s new job included accolades from state environmental regulators in Ohio and Minnesota, along with Walker and representatives of two major Wisconsin business organizations.

“No problem is too big for Cathy Stepp,” said Wisconsin Realtors Association spokesman Thomas D. Larson. “Her enthusiastic, can-do attitude, combined with her tireless energy and superb problem-solving skills make her the perfect choice to serve as the Regional Administrator for EPA’s Region 5.”

Walker lauded her for “a strong focus on customer service and common sense.”

Walker spokesman Tom Evenson and DNR spokesman Jim Dick didn’t address questions about how the governor and his new DNR secretary Dan Meyer viewed the prospects of Stepp changing the EPA’s stance toward the state’s regulatory performance.

“The Wisconsin DNR has a history of working collaboratively with EPA Region 5 on issues and initiatives,” Dick said. “We look forward to continuing that working relationship with the new administrator.”

In Stepp’s first year at the DNR, the EPA issued a letter listing 75 deficiencies in state water protections, including many that predated her. On her watch, though, it took the DNR years to make significant progress on the list. About half of the problems are now settled. Fifteen others await approval by EPA. The rest still require state action.

The deficiencies are among the issues raised by the Madison-based Midwest Environmental Advocates, citizens from around the state and former DNR employees who petitioned the EPA to take away the state’s authority to administer the Clean Water Act unless it made serious changes. The EPA has been investigating. Typically, states make needed changes, and the EPA takes no action.

Another citizen petition filed by MEA was aimed at remedying widespread contamination of drinking water by dairy manure in several counties around Green Bay. At the EPA’s urging there were months of talks and study. In the face of persistent opposition by industry groups, the DNR proposed tighter regulations. Approval by the department policy board was recently postponed until next month.

EPA acts as backstop

When state regulators are slow to enforce standards, the EPA can step in as it did in the case of Hall’s Calf Ranch.

The Kewaunee County feedlot in 2011 didn’t have a DNR permit even though its dairy herd of 4,800 was well over the limit for operating without a permit, said Midwest Environmental Advocates attorney Sarah Geers. Permits for large dairy operations prohibit discharging manure and other pollutants.

MEA complained that the DNR was allowing the operation to pollute East Twin River, a Class 1 trout stream the DNR had designated an “outstanding water resource.”

After the EPA investigated, the DNR in 2012 issued a permit, but then failed to enforce it, prompting the EPA to take enforcement action to stop the bacteria, nutrients and other pollutants from contaminating the river, Geers said. The EPA documented wastewater flowing into the river in 2011 and 2013, and fined Hall’s $42,000 in 2015.

In Madison, persistent citizen complaints about air pollution from the Madison-Kipp Corp. die-casting plant in Madison have led to EPA scrutiny of DNR enforcement. After East Side neighbors complained, the EPA came in and found the company had been violating its state permit for five years by incorrectly reporting pollution. A 2015 settlement required tests of company smokestacks.

The EPA has also been involved in an extensive investigation of cancer-causing toxins in the soil and ground water around the plant. The state recently settled its enforcement action against the company with conditions for further cleanup.

EDITOR'S NOTE: This story has been changed to correct the name of the organization Ryan Billingham represents.

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