albert kelly

<font size="4" face="Times New Roman">=</font><div><font face="Times New Roman" size="4">a bunch of ppl have bailled at epa, his cronies, but why did he?</font></div><div><font face="Times New Roman" size="4">
</font><div><font face="Times New Roman" size="4">https://www.eenews.net/stories/1060074935</font></div><div><font face="Times New Roman" size="4">
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</div><div><b>Pruitt's Superfund guy knows about living near toxic sites</b></div><div><b>
</b></div><div>Mike Soraghan, E&E News reporter Energywire: Wednesday, February 28, 2018</div><div>Pollution warning sign at a church in Bristow Oklahoma. Photo credit: Mike Soraghan/E&E News</div><div>The former Bristow, Okla., First Assembly of God church was built atop an abandoned refinery. Pastor Mark Evans found petroleum muck on the site in 2013. By the end of the year, Evans, his family and his congregation had moved off the site. Mike Soraghan/E&E News</div><div>
</div><div>BRISTOW, Okla. — When he's at his home here, Albert "Kell" Kelly could walk to a Superfund site in just a few minutes.</div><div>
</div><div>He might have to fight his way through thick brush. But he wouldn't have to leave his family's land.<span style="background-color: rgb(255, 255, 102);"> A family company, Kelly Brothers Business Trust, owns land all around town, including at least two parcels adjacent to the abandoned Wilcox Oil Co. refinery, which was placed on the Superfund list four years ago.</span></div><div>
</div><div>U.S. EPA Administrator Scott Pruitt, a friend and fellow Oklahoman from up the turnpike in Tulsa, last year put Kelly in charge of "streamlining" Superfund. The contamination cleanup program is a top priority for Pruitt, who has made it central to the idea that he's an environmental reformer with a "back to basics" agenda.</div><div>
</div><div>Kelly brought no professional experience in environmental policy or regulation to his new role. He'd spent most of his career running the family bank, called SpiritBank. What he did bring is a family history entwined with a <b>town of about 4,200 people that has four contaminated industrial sites, one of them on the Superfund list.</b></div><div>
</div><div>Kelly was also supposed to bring some business sense to a billion-dollar-a-year program. But Kelly's reputation for business acumen was undermined when it came out in August 2017 that the Federal Deposit Insurance Corp. had banned him from banking two weeks after he joined EPA (Energywire, Feb. 22).</div><div>
</div><div>E&E News has been seeking an interview with Kelly since November, but the EPA declined to make him available. And he has not returned messages left on his cellphone. EPA's Office of Public Affairs provided a statement from Frank Keating, former Oklahoma governor and former CEO of the American Bankers Association, calling Kelly "a man of high integrity."</div><div>
</div><div><b>Kelly has pushed to get companies to help pay for Superfund cleanups, either because they're responsible for the pollution or they want to develop the sites. Some of his recommendations amount to lowering cleanup standards.</b></div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">To Mathy Stanislaus, that sounds like doing Superfund on the cheap.</span></div><div><span style="background-color: rgb(255, 255, 102);">
</span></div><div><span style="background-color: rgb(255, 255, 102);">"You're simply not going to get private resources to address the gap," said Stanislaus, who oversaw Superfund during the Obama administration.</span></div><div>
</div><div><b>Lois Gibbs, sometimes called the "mother of Superfund," has also criticized Kelly's recommendations.</b> <span style="background-color: rgb(255, 255, 102);">But she applauds his travels to sites in West Virginia, Montana and elsewhere for focusing badly needed attention on a long-neglected program.</span></div><div><span style="background-color: rgb(255, 255, 102);">
</span></div><div><span style="background-color: rgb(255, 255, 102);">"Truth be told, he's been doing a good job," said Gibbs, founder of the Center for Health, Environment & Justice. "He's out there making things happen.</span>"</div><div>
</div><div>Told of the toxic sites in Bristow, she said Kelly's actions should be watched for signs of favorable treatment toward his hometown. But she also wondered if being a Superfund neighbor has helped him understand the worries of people living near contamination.</div><div>
</div><div>"He's been sensitive to them," Gibbs said, contrasting it with what she considered brusque treatment for neighbors in recent years. "He's just very kind and gentle."</div><div>
</div><div>Business triumphs, travails</div><div>Map of Wilcox Oil refinery Superfund site, Bristow, Okla. Photo credit: Claudine Hellmuth/E&E News;Map data ©2018 Google</div><div>[+] Wilcox Oil refinery Superfund site Claudine Hellmuth/E&E News; Map data ©2018 Google</div><div>
</div><div>In Washington, he's just another political appointee, barely noticed amid the daily gyrations of the Trump era. But back home in Bristow, Kelly's photo is literally hanging in the town square, where plaques honor the town's "Pioneer Families."</div><div>
</div><div>His family has run SpiritBank since the Great Depression, when the business was called American National Bank of Bristow. The bank is now based in Tulsa, but it still has a stately building on Main Street on the way into town.</div><div>
</div><div>Kelly's home is walking distance from the building. The bank parking lot is about 1,000 feet away from the boundary of the Wilcox Superfund site.</div><div>
</div><div>Bristow, on the highway between Oklahoma City and Tulsa, was founded as a railroad town. It boomed with the oil business in the 1920s and soon boasted several refineries at its northeastern edge.</div><div>
</div><div>Among them was the Wilcox Oil refinery, which operated from the 1920s to the '60s. Back then, crude oil was often stored in large metal tanks with no bottoms, so the oil seeped straight into the ground.</div><div>
</div><div>Kelly's grandfather, also named Albert, moved to Bristow in 1901 from Kansas, planting corn and raising hogs. Around 1920, oil was discovered on his farm. The company that drilled the well was Wilcox Oil, which owned the refinery that is now part of the Superfund site.</div><div>
</div><div>In 1933, he purchased a stock interest in American National Bank of Bristow, and later became chairman of the bank's board of directors. The name was changed to Spirit Bank in 1963.</div><div>
</div><div>That Albert Kelly had five sons. The first was also named Albert. He was killed in a car accident when his eldest son was 21.</div><div>
</div><div>Albert Kelly family historical photo. Photo credit: Mike Soraghan/E&E News</div><div>Albert "Kell" Kelly's picture is part of a plaque in Bristow's town square honoring the community's "Pioneer Families." Mike Soraghan/E&E News</div><div>
</div><div>"Kell" Kelly was named after his father. He explained at a Superfund town meeting last year near St. Louis that his parents gave him the nickname so that he wouldn't be "Little Albert."</div><div>
</div><div>SpiritBank started buying banks in nearby towns in the late 1980s, amid a rash of bank closures, and reopened them as branches.</div><div>
</div><div>"Most of their banks were located in small towns. That required good relations with the entirety of the community," said Dewey Bartlett, the former mayor of Tulsa and a scion of an Oklahoma political family. "They were really good at that."</div><div>
</div><div>Despite his lineage, Kelly didn't start out in the banking business. He got bachelor's and law degrees from the University of Oklahoma. Then he worked as a prosecutor and lawyer in private practice prior to joining the bank in 1984.</div><div>
</div><div>He served as the bank's vice president until 1990, when he became its president and CEO.</div><div>
</div><div>Bartlett, who has known Kelly for 20 or more years and considers him a friend, said his business philosophy was to take stock of the people running a business, not their books.</div><div>
</div><div>"He had a perspective that the finances speak for themselves," Bartlett said. "He felt he could make a judgment, size people up and see how committed they were."</div><div>
</div><div>SpiritBank was often represented in court by Kenneth Wagner, a former business and law partner of Pruitt who is now another of Pruitt's top lieutenants at EPA.</div><div>
</div><div>During Kelly's tenure, SpiritBank grew, tripling assets between 2005 and 2011, expanding its mortgage business and moving its headquarters to Tulsa. Kelly was chosen to lead the Oklahoma Bankers Association. But he also ran into problems.</div><div>
</div><div>SpiritBank expanded its mortgage business even as the storm clouds gathered for the mortgage crisis in early 2008. And even as the national economy was recovering, SpiritBank still struggled. By 2013, it had suffered three years of losses.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">The bank's troubles attracted the attention of regulators at both the FDIC and the Federal Reserve. In a series of orders, they forced the bank to agree to changes in dividend payments and loan practices.</span></div><div>
</div><div>Kelly blamed the problems on the financial crisis.</div><div>
</div><div>"If you loan into your communities and you end up with some of those borrowers falling on hard times, and you likewise see a decline in property that you loaned against, then the potential for you to have troubled borrowers is certainly higher," Kelly said in a 2012 interview with Tulsa World.</div><div>
</div><div>In mid-2014, Kelly announced he was stepping down as president and CEO. He said he saw it as a good time to transition and focus on the "strategic direction" of the bank. He remained chairman of the bank's board until he joined Pruitt at EPA.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">A few months after his departure as CEO, the bank shuttered most of the SpiritBank Event Center, a 4,500-seat multipurpose arena it had acquired in 2009</span>.</div><div>
</div><div>Many in the Tulsa area point to the SpiritBank center as the prime example of the bank's problems. But Kelly's bank ban stems from a development that started just before the financial collapse in 2008. SpiritBank financed what was to be a "lifestyle center" with shops, restaurants and an outdoor amphitheater in Claremore, on the other side of Tulsa.</div><div>
</div><div>But the bank foreclosed two years later and created an unusual partnership with a new developer. Neither the FDIC nor Kelly have explained what the problem was that led to the ban, but the FDIC order linked it to an "agreement pertaining to a loan" (Energywire, Feb. 6).</div><div>
</div><div>Kelly agreed to the banking ban in May 2017, signing the FDIC order about two weeks before Pruitt announced his Superfund role. He was one of 64 people FDIC banned in that manner last year.</div><div>
</div><div>The land in Claremore is still empty.</div><div>
</div><div>According to his recently released financial disclosure form, he got a salary of $736,225 from SpiritBank until he joined EPA. He also got a cash payment for deferred compensation of $440,820.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">Amid the turmoil, Kelly was elected to be chairman of the American Bankers Association in 2011. In that role, he complained vehemently about the regulations imposed on banks by the Dodd-Frank Act and the Consumer Finance Protection Bureau.</span></div><div>
</div><div>That criticism is what many local bankers think led to Kelly's banking ban.</div><div>
</div><div>"That's the prevalent position," Bartlett said, "that [regulators] really had it out for him."</div><div>
</div><div>Political donor</div><div>Bristow Oklahoma house superfund. Photo credit: Mike Soraghan/E&E News</div><div>Roy White's house was once part of the Wilcox Oil refinery. He moved out in 2015. Mike Soraghan/E&E News</div><div>
</div><div>While he's new to environmental policy, Kelly has played a behind-the-scenes role in politics and government in Oklahoma for years.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">He was chairman of the Oklahoma Turnpike Authority, [chesapeake?] and he was also a significant political donor. Records reflect Kelly has contributed more than $200,000 over the years to federal and state campaigns, usually to Republicans. He's given about $5,000 to Oklahoma candidates since joining EPA, including $2,700 to the Lt. Gov. Todd Lamb's campaign for governor.</span></div><div>
</div><div>Kelly has known Pruitt for about 25 years, but he has not been a major contributor to Pruitt's campaigns. Kelly and SpiritBank were more involved in Pruitt's personal and professional finances.</div><div>
</div><div>SpiritBank loaned money to the Pruitt partnership that bought a minor league baseball team, the Oklahoma City RedHawks, in 2003. It also provided financing when the partnership sold the team in 2010.</div><div>
</div><div>A few months after the baseball team purchase, SpiritBank lent Pruitt money to buy a $600,000 home. It was a big upgrade from the $125,000 home Pruitt and his wife had bought after he graduated from law school 11 years earlier. Pruitt made $38,400 at the time as a state senator, but he also practiced law and ran the baseball team.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">Kelly disclosed his stake in the family company that owns land next to the Wilcox site on his recently filed financial disclosure form. But it doesn't mention what land the company owns or make any mention of the Superfund site.</span></div><div><span style="background-color: rgb(255, 255, 102);">
</span></div><div><span style="background-color: rgb(255, 255, 102);">He also disclosed ownership of less than $15,000 worth of stock in Phillips 66, which has potential Superfund liability at 31 sites around the country.</span></div><div>
</div><div>Like many of the Oklahomans Pruitt brought with him, Kelly joined EPA quietly. His April 23, 2017, appointment wasn't announced until a month later when Pruitt rolled out the task force.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">Superfund is usually overseen by a Senate-confirmed appointee. But in the year since Pruitt was confirmed, the administration has yet to nominate someone for the job, leaving Kelly, formally a "senior adviser," as the highest-profile aide over Pruitt's top priority-program.</span></div><div>
</div><div>"Nobody has a real title over there," said Gibbs, whose fight to clean up her Love Canal neighborhood in the 1970s helped lead to the creation of Superfund. "They're all 'special somethings.'"</div><div>
</div><div>Stanislaus, who was confirmed as assistant administrator in 2009, says that makes accountability more difficult.</div><div>
</div><div>"Having that person not subject to Senate scrutiny is a problem," Stanislaus said.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">Kelly hasn't testified before the Senate or the House. He was scheduled to testify before a House committee in January but canceled shortly before the hearing, citing a scheduling conflict. An EPA spokesman declined to release Kelly's schedule for that day, suggesting a request under the Freedom of Information Act (FOIA). E&E News filed a FOIA request but has not received the schedule.</span></div><div>
</div><div><b>After getting the job, Kelly's first task was a 30-day review of the program for Pruitt. That resulted in a report with 42 recommendations on accelerating cleanups</b> (E&E News PM, July 25, 2017).</div><div>
</div><div>He also travelled the country going to Superfund sites. He sought to make accessibility his calling card — literally. He put his cellphone number on his business card and gave it to whomever he met.</div><div>
</div><div>It's not clear what was going on back at headquarters while he traveled.<b> EPA attorneys have asserted in court filings that Kelly's task force of 107 agency employees didn't keep any records of its activities.</b></div><div>
</div><div><b>E&E News has requested Kelly's emails with task force members through FOIA. No records have been released.</b></div><div>
</div><div>In a visit with Kelly last year, Bartlett found that Kelly wasn't just traveling but also busy meeting EPA employees.</div><div>
</div><div>"He spent a lot of time with Superfund employees to see if they're making decisions or kicking a can down the road," Bartlett said. "He found a lot of the latter."</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);"><b>With Kelly's guidance, Pruitt has made some high-profile cleanup decisions. He's ordered expensive fixes involving digging up and hauling off waste at sites near St. Louis and Houston</b> (E&E News PM, Feb. 1). Those decisions overrode the objections of the companies on the hook to pay the bill. But Pruitt's approach to reducing the list of 1,300 toxic sites across the country remains unclear.</span></div><div>
</div><div>Taking a risk on a neighbor</div><div>Old Oil tanks Oklahoma superfund. Photo credit: Mike Soraghan/E&E News</div><div>Old tanks at the home of Roy White, formerly part of the Wilcox refinery. Mike Soraghan/E&E News</div><div>
</div><div>In addition to the Wilcox refinery, Bristow has three other toxic sites on cleanup lists. There's another long-shuttered refinery, a former Halliburton Co. site and a bare concrete site where there once stood a Kwikset plant.</div><div>
</div><div>A smaller refinery, owned by Roland Oil, was located decades ago near Wilcox on what is likely now the Kelly family's land. But it has not been included in the Superfund site.</div><div>
</div><div><b>The array of sites has fed concerns among some residents that the town has an unusually high cancer rate.</b></div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">There has been movement on the Wilcox site since Kelly took over in Washington. EPA undertook a $900,000 project in the fall to scrape the soil out of the yard of the only family still living on the site. An EPA official had seen oily sludge leaching out of the ground in a July visit.</span></div><div>
</div><div>And EPA sent a group in November to talk with property owners about how land at the site will eventually be used. Gibbs, who keeps in touch with people at numerous sites, said that's been happening frequently at other sites, as well.</div><div>
</div><div>"It seems like since [Kelly] came in, it's been more transparent," said Mark Evans, pastor of the Bristow First Assembly of God, which owns property on the Wilcox site.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">But Evans was bothered when team members suggested the agency might pave over the site and leave the toxic refinery waste underground. They said EPA didn't have enough money to remove the waste and make it clean enough for people to live there again.</span></div><div>
</div><div>"They asked me what I wanted the land to be," Evans said. "I told them I want it to be a church."</div><div>
</div><div>Wilcox had been on the radar of EPA and state officials since at least 1994. Officials knew the groundwater and the nearby creek were contaminated, and suspected toxic vapors could be rising from the soil. But for more than two decades, the site didn't make the Superfund priority list.</div><div>
</div><div>That changed in the spring of 2013 when a little boy went out to play in the creek. He came home with black goop on his hands and his shoes.</div><div>
</div><div>The boy was Evans' son. They thought the goop was mud, but it wouldn't wash off. He went down to the creek where the boy had been playing and found an oily sheen. Evans started doing research and was surprised to find out he was living atop an old refinery. When his kids found sticky tar bubbling up under their trampoline, he called state regulators. EPA officials called within hours to tell him he'd been living on a contaminated site they'd been monitoring for years.</div><div>
</div><div>Roy White had lived there since the late 1980s on land his family had owned since the early '70s. His house was a converted refinery office. He'd planted a garden and ate the cucumbers and tomatoes he grew there.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">White knew it had been a refinery. His family bought the land to salvage the leftover scrap metal. But he said state officials never warned him of the risks.</span></div><div><span style="background-color: rgb(255, 255, 102);">
</span></div><div><span style="background-color: rgb(255, 255, 102);">Now, he's suffering from blackouts and chest pains. He has high arsenic levels in his blood. His legs are numb, and he has trouble walking.</span></div><div>
</div><div>"These companies took everything from me," White, who moved off the site in 2015, said in an interview.</div><div>
</div><div>Evans didn't live there as long. He and his family lived in the parsonage next to the church for about nine months before finding the contamination.</div><div>
</div><div>By the end of 2013, Evans, his family and his congregation were off the property, and the site became a full-fledged Superfund site on the National Priorities List. Early last year, EPA sent him test results showing toxic levels of benzene and other contaminants in the air in the parsonage and the church. Some readings were two or three times the danger threshold.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">"When I arrived, people were having seizures, people were feeling sick. We thought it was something spiritual," he said. "As soon as we moved, the problems went away."</span></div><div>
</div><div>But moving away wasn't easy. The church property, previously valued at $1.3 million, was now worthless. They found a building downtown but didn't have the collateral to buy it. <span style="background-color: rgb(255, 255, 102);">Then a local banker told Evans and church leaders he was willing to take a risk on them and extended a loan.</span></div><div><span style="background-color: rgb(255, 255, 102);">
</span></div><div><span style="background-color: rgb(255, 255, 102);">The bank was SpiritBank, and the banker was Kelly.</span></div><div>
</div><div>Twitter: @MikeSoraghan Email: msoraghan@eenews.net</div></div><div><font face="Times New Roman" size="4">
</font><div><font face="Times New Roman" size="4">MT st'd</font></div><div><div class="subscriber-only" style="box-sizing: border-box; color: rgb(51, 51, 51); font-family: Lato, sans-serif; font-size: 14px; background-color: rgb(255, 255, 255);"><p style="box-sizing: border-box; margin: 0px 0px 24px; color: rgb(68, 68, 68); font-size: 20px; line-height: 28px; font-family: Yrsa, serif;">questions about the FDIC ban.</p></div><div class="subscriber-only" style="box-sizing: border-box; color: rgb(51, 51, 51); font-family: Lato, sans-serif; font-size: 14px; background-color: rgb(255, 255, 255);"><p style="box-sizing: border-box; margin: 0px 0px 24px; color: rgb(68, 68, 68); font-size: 20px; line-height: 28px; font-family: Yrsa, serif;">“I’ll tell you something and I’ve spoken to no one about this,” Kelly said at the time. “My problem with the FDIC emanated from one singular transaction in 2010. They (the FDIC) didn’t like it. The bank didn’t lose any money. The bank made money. There was nothing untoward about it. I ran out of money to oppose it. When you run out of money, you have to take the best settlement you can. You can litigate against the federal government for a long time.”</p></div><div class="subscriber-only" style="box-sizing: border-box; color: rgb(51, 51, 51); font-family: Lato, sans-serif; font-size: 14px; background-color: rgb(255, 255, 255);"><p style="box-sizing: border-box; margin: 0px 0px 24px; color: rgb(68, 68, 68); font-size: 20px; line-height: 28px; font-family: Yrsa, serif;">EPA defended Kelly’s ethics. When The Montana Standard requested confirmation from EPA’s Washington, D.C. headquarters of Kelly’s resignation, EPA emailed a statement from Frank Keating, former Republican Oklahoma governor and former chief executive officer of the American Bankers Association.</p></div><div class="subscriber-only" style="box-sizing: border-box; color: rgb(51, 51, 51); font-family: Lato, sans-serif; font-size: 14px; background-color: rgb(255, 255, 255);"><p style="box-sizing: border-box; margin: 0px 0px 24px; color: rgb(68, 68, 68); font-size: 20px; line-height: 28px; font-family: Yrsa, serif;">Keating said, “Kell Kelly is a man of high integrity. During my time as CEO of the American Bankers Association, Mr. Kelly served as my chairman and helped lead the association through a difficult period following the 2008 financial crisis.”</p></div><div class="subscriber-only" style="box-sizing: border-box; color: rgb(51, 51, 51); font-family: Lato, sans-serif; font-size: 14px; background-color: rgb(255, 255, 255);"><p style="box-sizing: border-box; margin: 0px 0px 24px; color: rgb(68, 68, 68); font-size: 20px; line-height: 28px; font-family: Yrsa, serif;">Kelly’s role as Pruitt’s banker has also been under scrutiny. Kelly told The Montana Standard last month that “there are no questionable loans by my bank to Pruitt.”</p></div><div class="subscriber-only" style="box-sizing: border-box; color: rgb(51, 51, 51); font-family: Lato, sans-serif; font-size: 14px; background-color: rgb(255, 255, 255);"><p style="box-sizing: border-box; margin: 0px 0px 24px; color: rgb(68, 68, 68); font-size: 20px; line-height: 28px; font-family: Yrsa, serif;">“If you go back and look at any loans to the administrator, without going into his privacy, they were very solid and done in a very positive way and were paid off,” Kelly told The Standard three weeks ago.</p></div><div class="subscriber-only" style="box-sizing: border-box; color: rgb(51, 51, 51); font-family: Lato, sans-serif; font-size: 14px; background-color: rgb(255, 255, 255);"><p style="box-sizing: border-box; margin: 0px 0px 24px; color: rgb(68, 68, 68); font-size: 20px; line-height: 28px; font-family: Yrsa, serif;">But various media have reported that Kelly’s bank issued a $605,000 home mortgage loan to Pruitt for an upscale house when Pruitt made $38,400 as an Oklahoma state senator....</p></div><div><font face="Times New Roman" size="4" /><div><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"></font></font></font></font></font></font></font></font></font></font></font></font></font></div><div>
</div><div>https://www.nytimes.com/2018/05/03/us/scott-pruitt-lobbyist-house.html</div><div>
</div><div>thehill</div><div>
</div><div>Scott Pruitt</div><div>
</div><div> once purchased a house from a top lobbyist in Oklahoma with the help of a shell company, The New York Times reported Saturday.</div><div>
</div><div><b>Two business associates involved in the 2003 purchase are now aides to Pruitt at the agency: Kenneth Wagner, a senior adviser at the EPA, and Albert Kelly, who runs the agency's effort to redesign the Superfund program.</b></div><div>
</div><div>According to the Times, the home, which was seen as a prime property because of its proximity to the state Capitol building, was purchased for $375,000 from a retiring telecommunications lobbyist.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">But that price was $100,000 less than the lobbyist, Marsha Lindsey, had paid for it just a year before. The shortfall, according to the Times, which examined the records, was picked up by Lindsey's company, telecom giant SBC Oklahoma.</span></div><div>The company, now a subsidiary of AT&T, lobbied on a number of matters including a deregulatory bill that would allow it to raise rates and an effort to reopen a decade-old bribery case. According to the Times, Pruitt sided with the company on both matters.</div><div>
</div><div>Pruitt, then a state senator, intended to use the residence as a place to stay while Oklahoma's legislature was in session. During this time he also rented out a room to another Republican state senator, Jim Dunlap.</div><div>
</div><div>Wagner, who was a partner at the private legal practice where Pruitt worked, was a co-investor in the shell company that purchased the residence.</div><div>
</div><div>Kelly wasn't involved in the shell company but ran the community bank which issued the mortgage for the residence. Kelly was later barred for life from the banking industry by the Federal Deposit Insurance Corporation (FDIC) because the agency had “reason to believe that [Kelly] violated a law or regulation, by entering into an agreement pertaining to a loan by the Bank without FDIC approval.”</div><div>
</div><div>The two now hold top positions at the EPA.</div><div>
</div><div>In 2005, the company owned by Wagner and Pruitt sold the residence for $95,000 more than it had paid just two years earlier.</div><div>
</div><div>Dunlap told the Times that he had no knowledge that Pruitt had purchased the residence from a lobbyist. He said he was under the impression that Pruitt had purchased it from a group of lawyers.</div><div>
</div><div>“This was a place where you slept and had dinner,” Dunlap told the Times. “It was all above board.”</div><div>
</div><div>The Oklahoma deal is only the latest in a series of stories raising ethics issues involving Pruitt.</div><div>
</div><div>Pruitt was reported earlier this month to have been living in 2017 in a Washington, D.C., condo partly owned by the wife of a top energy lobbyist at a rate of just $50 per night, which he and others have insisted was market value.</div><div>
</div><div>The EPA chief also came under fire after it was discovered that two top aides received raises after the White House declined to approve the pay hikes.</div><div>
</div><div>When asked about the Oklahoma house deal and Pruitt's business relationship with his top appointees, an EPA spokeswoman told the Times that the dealings "were ethical" and that Pruitt's stake in the company "was a simple real estate investment.”</div><div>
</div><div>“Mr. Wagner and Mr. Kelly left high-profile positions in law and banking in Oklahoma, to serve in the administration,” the spokeswoman said in an email to the Times.</div><div>
</div><div>“They are dedicated EPA employees who have earned the respect and admiration of EPA career employees across the country. They serve the country professionally, and transparently — and are committed to ensuring the programs they work on are successful.”</div><div>
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</font></div><div><font face="Times New Roman" size="4"><a href="https://www.nytimes.com/2018/05/01/climate/epa-kelly-perrotta-resignations.html">https://www.nytimes.com/2018/05/01/climate/epa-kelly-perrotta-resignations.html</a>
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</font></div><div><font face="Times New Roman" size="4" /><div><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4"><font face="Times New Roman" size="4">Two top aides to Scott Pruitt, the Environmental Protection Agency chief who is facing an array of investigations related to his spending and management practices, have resigned amid widening scrutiny of their roles at the agency.</font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></font></div><div>
</div><div>The departures include Pasquale Perrotta, who served as Mr. Pruitt’s chief of security and helped facilitate the costly and unusual team of bodyguards and other protective measures provided to Mr. Pruitt — measures that critics have called unnecessary.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">Also departing was Albert Kelly, a longtime friend of Mr. Pruitt’s and a former banker who received a lifetime ban from the finance industry last year following a banking violation. Mr. Kelly ran the agency’s Superfund program, which oversees the cleanup of hazardous waste sites.</span></div><div><span style="background-color: rgb(255, 255, 102);">
</span></div><div><span style="background-color: rgb(255, 255, 102);">The resignations of Mr. Kelly and Mr. Perrotta follow a string of reports of Mr. Pruitt’s lavish spending and alleged conflicts of interest, including his office’s illegal purchase of a secure telephone booth, his condominium-rental agreement with the wife of an energy lobbyist, and accusations that he demoted or sidelined E.P.A. employees who questioned his actions.</span></div><div>
</div><div>Mr. Pruitt, who is the subject of 11 federal investigations, is now seeking to establish a legal defense fund, according to four people familiar with his plans, who spoke on condition of anonymity because they were not directly involved with setting up the fund. These people said they expect Mr. Pruitt to operate the fund privately, with no E.P.A. affiliation.</div><div>
</div><div>When asked about the fund, Jahan Wilcox, an E.P.A. spokesman, said, “E.P.A. does not set up a legal expense fund for any employee.”</div><div>
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</div><div>The people familiar with Mr. Pruitt’s legal defense fund said they did not know what legal or financial form the fund would take.</div><div>
</div><div>The practice among administration officials of setting up some form of outside fund or account to help defray the cost of legal expenses dates back to at least the Nixon administration, said Robert Rizzi, a tax attorney who specializes in government ethics with the firm Steptoe. Mr. Rizzi noted that Mr. Pruitt would hardly be the first member of the Trump administration to set up such a fund. “This has come up more often in this administration than in previous administrations,” he said.  </div><div>Mr. Rizzi also said the creation of such a fund could cause further headaches for Mr. Pruitt should energy companies or other industries regulated by the E.P.A. contribute to it. “These funds raise a lot of uncertainties in the tax area and the ethical area,” he said.</div><div>
</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">Also on Tuesday, new details emerged about the lobbying of the E.P.A. by J. Steven Hart, the lobbyist whose wife had last year rented a $50-a-night condo to Mr. Pruitt. Congressional investigators on Tuesday provided The New York Times with an email in which Mr. Hart asked Mr. Pruitt for help in getting three people appointed to the E.P.A.’s prestigious Science Advisory Board. They had been recommended by Smithfield Foods, a company that was a client of Mr. Hart’s lobbying firm?, and its Smithfield Foundation, a charitable subsidiary.</span></div><div>
</div><div>The email was sent in August 2017, a few weeks after Mr. Pruitt had moved out of the apartment, but at a time when he still owed money to Mr. Hart’s wife.</div><div>
</div><div>Representative Frank Pallone Jr. of New Jersey, ?the leading Democrat on the House committee that helps oversee E.P.A. operations, ?called the email “further proof that Administrator Pruitt has consistently misled Congress and the public about the extent to which the special interests providing him with gifts have sought specific favors from E.P.A. in return.”</div><div>
</div><div>The E.P.A. press office did not respond to a request for comment. A spokesman for Williams & Jensen, the lobbying firm that Mr. Hart left last month, did not respond to a request for comment.</div><div>
</div><div>The departures of Mr. Perrotta and Mr. Kelly from the E.P.A. come as some of Mr. Pruitt’s top staffers privately have begun expressing frustration with his stewardship of the agency. When asked at a congressional hearing last week about the spending and the ethical questions hovering over his tenure, Mr. Pruitt denied knowledge of the decisions, blaming them instead on his senior staff.</div><div>
</div><div>As the investigations into Mr. Pruitt have grown, so has scrutiny of Mr. Perrotta and Mr. Kelly. Neither responded to emails or phone messages seeking comment on Tuesday afternoon.</div><div>
</div><div>Mr. Pruitt on Tuesday praised his two former aides, while Democrats seized on their resignations to renew calls for Mr. Pruitt to step aside.</div><div>...</div><div><div>Scott Pruitt should be the next to go,” Representative Donald S. Beyer Jr., Democrat of Virginia, said. “Albert Kelly was never qualified to run Superfund — his banking ban was a huge red flag,” he added.</div><div>
</div><div>Mr. Perrotta, known as Nino, is a former Secret Service agent with a background investigating the Gambino crime family. Officially, he led Mr. Pruitt’s protective detail, but he played a larger role at the E.P.A. by arguing that the security needs of the agency justified some of its spending, personnel and management decisions.</div><div>
</div><div>Mr. Perrotta’s influence placed him at the center of inquiries by the E.P.A. inspector general’s office into excessive spending and possible violations of contracting rules by Mr. Pruitt’s administration, according to senior officials at the E.P.A., who spoke on condition of anonymity for fear of retribution.</div><div>
</div><div>It was Mr. Perrotta, those people said, who pushed for the construction of the $43,000 surveillance-proof telephone booth in Mr. Pruitt’s office in Washington, over the objections of colleagues who had advocated a less expensive option.</div><div>
</div><div>Mr. Perrotta emboldened Mr. Pruitt by signing off on security enhancements or travel-related expenditures to which other agency officials had objected, said Kevin Chmielewski, a political appointee who served as Mr. Pruitt’s deputy chief of staff until ?being removed from his post this year after raising objections to some of the spending at the agency.</div><div>
</div><div>Mr. Perrotta “has been with the agency for a very long time, so he knew how to get things done for Pruitt,” Mr. Chmielewski said.</div><div>
</div><div>Of Mr. Perrotta, Mr. Pruitt said: “Nino Perrotta has selflessly served the American people for more than 23 years, beginning his career as a special agent with the United States Secret Service and then serving four E.P.A. administrators. His hard work and dedication will be missed by all those who worked with him.”</div><div>
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</div><div>The House Oversight Committee is scheduled to hear from Mr. Perrotta on Wednesday as part of its investigation into Mr. Pruitt’s alleged ethical lapses, in what is known as a transcribed interview. While staffers of the committee have spoken with at least one former E.P.A. staffer as part of their investigation into Mr. Pruitt, a transcribed interview, often conducted under oath, is a stronger step, creating a document that could be used as legal evidence.</div><div>
</div><div>The panel also plans to summon five other current and former senior agency officials for similar interviews in the coming weeks, including Mr. Pruitt’s chief of staff, Ryan Jackson, and a former top policy adviser, Samantha Dravis. In his congressional appearance last week, Mr. Pruitt blamed them for making some of the decisions he has been criticized for.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">Mr. Kelly, widely known as Kell, has longstanding ties to Mr. Pruitt in his home state of Oklahoma. The former chief executive of the Oklahoma lender SpiritBank, Mr. Kelly faced criticism in part for lacking a background in hazardous waste cleanup.</span></div><div>
</div><div>The reason for the ban has not been publicly disclosed. An order from the Federal Deposit Insurance Corporation said only that there was “reason to believe” he was illegally involved in “an agreement pertaining to a loan.”</div><div>
</div><div>Mr. Pruitt said Mr. Kelly “will be sorely missed,” adding, “In just over a year he has made a tremendous impact on E.P.A.’s Superfund program, serving as chair of the Superfund Task Force and presiding over the development of the steps necessary to implement the recommendations in the report.”</div><div>
</div><div>Mr. Pruitt had also been questioned about his financial ties to Mr. Kelly’s bank during his Oklahoma years. SpiritBank provided the mortgage for a home that Mr. Pruitt acquired with other investors, using a shell company, in Oklahoma City in 2003, as detailed in a recent New York Times article.</div><div>
</div><div>SpiritBank also provided financing for a stake in a minor-league baseball team that Mr. Pruitt acquired, along with other investors, in 2003, as well as Mr. Pruitt’s home purchase in suburban Tulsa the following year.  </div><div>
</div><div>The E.P.A., in a statement to The Times, said that Mr. Pruitt’s business dealings with Mr. Kelly were “ethical” and that Mr. Pruitt’s stake in the shell company was “a simple real estate investment.”</div><div>
</div><div><b>At the E.P.A., Mr. Kelly pushed for more intensive cleanups of contaminated Superfund sites to pave the way for investment on the reclaimed land by private developers.</b></div><div>
</div><div>Last month, Mr. Kelly acknowledged the scrutiny he has faced in an interview with The Montana Standard. “I get this tagline, ‘banker banned for life,’” he said.</div><div>
</div><div><span style="background-color: rgb(255, 255, 102);">“My problem with the F.D.I.C. emanated from one singular transaction in 2010. They didn’t like it. The bank didn’t lose any money. The bank made money. There was nothing untoward about it,” Mr. Kelly told The Standard, adding that he “ran out of money” to oppose the F.D.I.C. “There are two sides to the story, and mine rarely gets out there,” he said.</span></div><div>
</div><div>Last week, a member of Congress pressed Mr. Pruitt about whether Mr. Kelly should disclose details of his “lifetime banking ban as a matter of transparency.” Mr. Pruitt responded, “I think Mr. Kelly, if he’s willing to share that with you, he should do that.”</div><div>
</div><div>Eric Lipton, Lisa Friedman and Kenneth P. Vogel in Washington and Steve Eder and Hiroko Tabuchi in New York contributed reporting.</div><div>
</div><div>Coral Davenport covers energy and environmental policy, with a focus on climate change, from the Washington bureau. She joined The Times in 2013 and previously worked at Congressional Quarterly, Politico and National Journal</div></div><div><font size="4" face="Times New Roman">
</font></div><div><font size="4" face="Times New Roman">=</font></div><div><div><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 255);">... tout record eg ~ cpp</font></div><div><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 255);">
</font></div><div><p><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);">Only one of the five items on Pruitt's list sounds like an achievement on behalf of the environment and human health: "Cleaning up contaminated sites."</font></p><p><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);">He's referring to EPA's Superfund program. Despite his rhetoric, Pruitt showed his true commitment to cleaning up the most polluted communities in the nation when he picked his friend and former banker, Albert "Kell" Kelly, to run the Superfund Task Force. Kelly has zero experience in the areas of environmental cleanups, policy, science or law and federal banking regulators have <a href="https://theintercept.com/2017/12/28/scott-pruitt-failed-banker-running-epa-superfund-program/" target="blank" style="text-decoration-line: none;">banned him for life</a> from working in the banking industry.</font></p><p><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);">Among Pruitt's other "achievements" are gutting a critical program to curb industrial and agricultural pollution in streams, which an EWG analysis found could imperil the drinking water for up to 117 million Americans.</font></p><p><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);">"On behalf my colleagues in the environmental community, I express my sympathy to the dedicated EPA staffers who have to walk by Pruitt's banners every day," said Cook. "I guess he didn't want to fall behind Interior Sec. <a href="https://www.ecowatch.com/national-parks-zinke-2526263781.html" style="text-decoration-line: none;">Ryan Zinke</a> in the <a href="https://www.washingtonpost.com/politics/wheres-zinke-the-interior-secretarys-special-flag-offers-clues/2017/10/12/68672476-aeb2-11e7-9e58-e6288544af98_story.html?utm_term=.db319167dfe1" target="blank" style="text-decoration-line: none;">self-aggrandizing</a> flag competition."</font></p><p style="background-color: rgb(255, 255, 255);"><strong><font size="4" face="Times New Roman">EWG has come up with its own list of the most significant "achievements" of Pruitt's first year.</font></strong></p><p style="background-color: rgb(255, 255, 255);"><strong><font size="4" face="Times New Roman">...</font></strong></p><p style="background-color: rgb(255, 255, 255);"><font face="Times New Roman" size="4"><b><a href="https://www.ecowatch.com/scott-pruitt-epa-achievements-2528833654.html">https://www.ecowatch.com/scott-pruitt-epa-achievements-2528833654.html</a></b></font></p></div></div><div><font size="4" face="Times New Roman">=</font></div><div><font size="4" face="Times New Roman">ref intercept</font></div><div><font size="4" face="Times New Roman">
</font></div><div><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><span style="box-sizing: border-box; background-color: rgb(255, 255, 102);"><font size="4" face="Times New Roman">EPAgency has tasked a banker who was banned from the banking industry for life with oversight of the nation’s Superfund program.</font></span></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);"><span style="box-sizing: border-box;">In May, the Federal Deposit Insurance Corporation fined Oklahoma banker Albert Kelly $125,000. According to a </span><a href="https://www.documentcloud.org/documents/4336500-2017-11-17-08-59-12.html" style="box-sizing: border-box; outline: none; text-decoration-line: none;">consent order</a><span style="box-sizing: border-box;">, which The Intercept obtained through the Freedom of Information Act, the FDIC had “reason to believe that [Kelly] violated a law or regulation, by entering into an agreement pertaining to a loan by the Bank without FDIC approval.”</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><span style="box-sizing: border-box; background-color: rgb(255, 255, 102);"><font size="4" face="Times New Roman">Two weeks later, EPA Administrator Scott Pruitt appointed Kelly to lead an effort to streamline the Superfund program. In July, the FDIC went further, banning Kelly from banking for life. The “order of prohibition from further participation” explained that the FDIC had determined Kelly’s “unfitness to serve as a director, officer, person participating in the conduct of the affairs or as an institution-affiliated party of the Bank, any other insured depository institution.”</font></span></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;"><b>But Pruitt, who had received loans from Kelly’s bank, apparently didn’t find Kelly’s unfitness to serve in the financial industry as disqualifying his longtime friend from serving as a top official at the EPA.</b> </span><span style="box-sizing: border-box;">Since May, Kelly, or Kell as he was known in Oklahoma, has led the effort to streamline the Superfund program — </span><span style="box-sizing: border-box;">which oversees remediation of some of the country’s most toxic sites</span><span style="box-sizing: border-box;">.</span></font></p><blockquote class="stylized pull-right" data-shortcode-type="pullquote" data-pull="right" style="box-sizing: border-box; font-weight: 700; margin: 2em -170px 2em 0px; padding: 0px 0px 0px 2em; box-shadow: none; line-height: 1.125; float: right; max-width: 75%;"><font size="4" face="Times New Roman">Kelly would become a senior adviser in the federal environmental agency despite having no previous experience with environmental issues.</font></blockquote><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><span style="box-sizing: border-box; background-color: rgb(255, 255, 102);"><font size="4" face="Times New Roman">Pruitt earned only $38,400 as an Oklahoma state senator. Even with a $35,000 profit from selling his previous home, that was not enough on its own to buy a house in the Lakes at Indian Springs community in Broken Arrow, the suburb of Tulsa that Pruitt represented in the legislature.</font></span></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><span style="box-sizing: border-box; background-color: rgb(255, 255, 102);"><font size="4" face="Times New Roman"><b>Yet in 2004, Pruitt purchased a sprawling ranch house in the upscale gated community for $605,000.</b> Located on a half-acre corner lot in the Lakes, his stately Tudor looked out on a manmade lake and had a stone fireplace, parking for five cars, and a <b>storm-safe room.</b></font></span></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);"><span style="box-sizing: border-box;">To help pay for it, Pruitt </span><span style="box-sizing: border-box;">turned to SpiritBank — a community bank that Kelly’s family had run since the 1930s. SpiritBank gave Pruitt and his wife three mortgage loans: one for $81,000, another for $359,000, and a third for $533,000. His wife, Marlyn Pruitt, has reported no assets or income.</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><span style="box-sizing: border-box; background-color: rgb(255, 255, 102);"><font size="4" face="Times New Roman">The year before, SpiritBank had also loaned Pruitt money to help buy a share of the Oklahoma City RedHawks, a minor league baseball team. That deal was made in partnership with a local businessman named Robert Funk, co-founder of an employment company.</font></span></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);"><span style="box-sizing: border-box;">On May 22, Pruitt returned the favor to the Oklahoma banker with his </span><a href="https://www.epa.gov/newsreleases/epa-announces-superfund-task-force" style="box-sizing: border-box; outline: none; text-decoration-line: none;">announce</a><span style="box-sizing: border-box;"><a href="https://www.epa.gov/newsreleases/epa-announces-superfund-task-force" style="box-sizing: border-box; outline: none; text-decoration-line: none;">ment</a> that he would be creating the Superfund task force — and appointing </span><span style="box-sizing: border-box;">Kelly to head it.</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;">The appointment was notable in that Kelly would become a senior adviser in the federal environmental agency despite having no previous experience with environmental issues. </span><span style="background-color: rgb(255, 255, 102);"><span style="box-sizing: border-box;">A business major with a law degree and a 200-head cattle ranch, Kelly listed motivational speaking and political activity among the core competencies on his</span><a href="https://www.documentcloud.org/documents/3729025-Albert-Kelly-Redacted.html" style="box-sizing: border-box; outline: none; text-decoration-line: none;"> <span style="box-sizing: border-box;">resume</span></a></span><span style="box-sizing: border-box;"><span style="background-color: rgb(255, 255, 102);">. </span>The descendant of a long line of bankers and Republicans, Kelly had worked at his family’s bank for the previous 33 years.</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><span style="box-sizing: border-box;"><font size="4" face="Times New Roman">It is unclear whether Spirit’s loans to Pruitt violated the bank’s lending standards, both because those standards aren’t public and because Pruitt may have used assets and income as collateral that don’t appear in public records. Pruitt, Kelly, and the EPA declined to comment or answer questions for this story.</font></span></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><span style="box-sizing: border-box; background-color: rgb(255, 255, 102);"><font size="4" face="Times New Roman">For Kelly, who has contributed to Pruitt’s campaigns on at least three occasions, the appointment came just as he found himself in need of a job. Few knew at the time that the banking scion was already well on his way to being forced out of his family business, which had been run by his uncle and grandfather before him — and being banned from banking altogether.</font></span></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;"><span style="box-sizing: border-box; font-weight: 700; letter-spacing: 0.1em; box-shadow: rgb(255, 255, 255) 0px 1px 0px, rgb(17, 17, 17) 0px 4px 0px; text-transform: uppercase;">THE FDIC’S ORDER</span> of prohibition against Kelly provided a few more details about what the banker had done to get himself banned from banking for life — a dubious distinction that befell 96 bankers in 2016. (The 2017 figures are not yet available.) The FDIC has been known to levy this penalty on certain bankers convicted of criminal fraud. And the federal regulator has also issued lifetime banking</span><a href="https://www.americanbanker.com/opinion/failed-bank-settlements-may-bring-unwelcome-surprise" style="box-sizing: border-box; outline: none; text-decoration-line: none;"> <span style="box-sizing: border-box;">bans</span></a><span style="box-sizing: border-box;"> for some leaders of failed banks.</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;">According to the order Kelly signed, his violation “</span><span style="box-sizing: border-box;">of law or regulation, unsafe or unsound practice, and or breach of fiduciary duty” caused the bank financial loss or other damage. It had also involved his “willful or continuing disregard for the safety or soundness of the Bank.”</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><span style="box-sizing: border-box;"><font size="4" face="Times New Roman"><span style="background-color: rgb(255, 255, 102);">Despite repeated FOIA requests from The Intercept, the FDIC has declined to release more information about the particular violations that led to Kelly’s fine and lifetime ban from banking. </span><span style="box-sizing: border-box;">But public records show that SpiritBank suffered significant losses under his leadership, going at least as far back as 2007. At its peak, the bank had $1.5 billion in assets, according to Kelly’s resume, which does not indicate when that was the case. Today, it has less than half that amount — just over $700 million.</span></font></span></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;">Clearly some of its troubles had to do with making bad mortgages — home loans that borrowers were unable to pay back. The “troubled asset ratio” is a number that approximates a bank’s stability by comparing the amount of troubled assets to its holdings that bank regulators consider solid. Generally, the higher the measure, the more stress a bank is under because of lenders who are not paying on time. In 2007, SpiritBank’s</span><a href="https://banktracker.investigativereportingworkshop.org/banks/oklahoma/tulsa/spiritbank/" style="box-sizing: border-box; outline: none; text-decoration-line: none;">troubled asset ratio</a><span style="box-sizing: border-box;"> reached 34, meaning just over one-third of its holdings were troubled. Nationwide, the median troubled asset ratio for banks at the time was 12.</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);"><span style="box-sizing: border-box;"><b>In March 2009, SpiritBank received $30 million from the Troubled Asset Relief Program,</b> a federal effort to breathe new life into troubled banks by buying up some of their bad loans. SpiritBank decided to participate in the program “because we see it as an opportunity to help Oklahoma,” Kelly</span><a href="http://www.tulsaworld.com/business/tulsabusiness/business_news/henke-rusco-promoted-at-american-bank-trust/article_07380231-99ae-5c1d-afa4-55909822f158.html" style="box-sizing: border-box; outline: none; text-decoration-line: none;"> <span style="box-sizing: border-box;">said</span></a><span style="box-sizing: border-box;"> at the time. “</span><span style="box-sizing: border-box;">Because SpiritBank is one of the state’s strongest banks and because of our unique position in providing home mortgage financing across the state, we are well-positioned to deploy this money to stimulate the Oklahoma economy.”</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);"><span style="box-sizing: border-box;">Yet SpiritBank’s finances only got shakier in the years after it received the federal bailout funds, which the bank used to make even more mortgages. “The added capital resulted in approximately $400 million of additional residential mortgage loans funded in 2009,” as the bank made clear in a </span><a href="https://www.documentcloud.org/documents/4336506-SpiritBank-SigTARP-Survey-2009.html" style="box-sizing: border-box; outline: none; text-decoration-line: none;">report</a><span style="box-sizing: border-box;"> to the Treasury that year. In 2010, the bank made </span><a href="https://www.documentcloud.org/documents/4336502-SPIRITBANK-SigTARP-Survey-2010.html" style="box-sizing: border-box; outline: none; text-decoration-line: none;">more mortgages</a><span style="box-sizing: border-box;">and its troubled asset ratio climbed to over 60.</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;">The next year, as SpiritBank </span><a href="https://www.documentcloud.org/documents/4336503-SPIRITBANK-SigTARP-Survey-2011.html" style="box-sizing: border-box; outline: none; text-decoration-line: none;">continued</a><span style="box-sizing: border-box;"> to make mortgages, Kelly was named chairman of the </span><span style="box-sizing: border-box;">American Bankers Association. Tom Coburn, then one of the state’s senators, commended Kelly on the appointment, describing him as “the most influential nonpolitician in Oklahoma.”</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;">Once he became chair of the ABA, Kelly spoke out against the federal regulation of banking, a position Pruitt shared out of concern, he said, for community banks. Kelly was also chair of the Oklahoma Turnpike Authority, a powerful entity in charge of building</span> <span style="box-sizing: border-box;">the state’s roads.</span></font></p><blockquote class="stylized pull-none" data-shortcode-type="pullquote" data-pull="none" style="box-sizing: border-box; font-weight: 700; margin: 2em 0px; padding: 0px; box-shadow: none; line-height: 1.125;"><font size="4" face="Times New Roman">FDIC’s order of prohibition against Kelly provided a few more details about what the banker had done to get himself banned from banking for life — a dubious distinction that befell 96 bankers in 2016.</font></blockquote><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;">Yet even as Kelly’s public profile rose, his bank continued to falter. In the first quarter of 2012, Spiritbank’s troubled asset ratio topped 70 and the FDIC stepped in to try to stabilize it. That year, in a </span><a href="https://www.documentcloud.org/documents/4336507-2012-Consent-Order-FDIC.html" style="box-sizing: border-box; outline: none; text-decoration-line: none;">consent order</a> <span style="box-sizing: border-box;">with the FDIC and the Oklahoma State Banking Department, the bank agreed to 25 improvements to its practices. Among the changes to be instituted were requirements that loans “be supported by current credit information and collateral documentation” and that loans to bank executive officers, directors, and principal shareholders “be thoroughly reviewed.” The order also specified that the bank “shall retain qualified management” and that it come up with a policy for overseeing the business and entertainment expenses of its directors, officers, and employees, which had apparently gotten out of hand.</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);"><span style="box-sizing: border-box;">At the peak of the subprime crisis, the median troubled asset ratio of banks nationwide was 15.1. By the end of 2012, even after the infusion of federal dollars, SpiritBank’s troubled asset ratio had reached 75. While</span><a href="https://projects.propublica.org/bailout/list" style="box-sizing: border-box; outline: none; text-decoration-line: none;">most</a><span style="box-sizing: border-box;"> banks paid the Treasury back for the funds they’d gotten through the TARP program with</span><span style="box-sizing: border-box;"> interest</span><span style="box-sizing: border-box;">, SpiritBank was unable to reimburse the government for more than $21 million of the $30 million it had received. Taxpayers lost</span><a href="https://www.sigtarp.gov/Quarterly%20Reports/October_26_2016_Report_To_Congress.pdf" style="box-sizing: border-box; outline: none; text-decoration-line: none;"> <span style="box-sizing: border-box;">70 percent</span></a><span style="box-sizing: border-box;"> of the money they laid out for SpiritBank, making it one of TARP’s worst investments.</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><span style="box-sizing: border-box;"><font size="4" face="Times New Roman">Most bankers who failed to repay TARP funds were not penalized for their financial irresponsibility — and it is unclear whether this was the reason for Kelly’s forced exit from banking. Yet, some Oklahomans did pay a price for the bad loans.</font></span></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;">“Minorities were disproportionately affected,” according to Angela Gobar, an academic who has</span><a href="http://coas.howard.edu/centeronraceandwealth/reports&publications/032012-oklahoma-mortgage-lending-patterns.pdf" style="box-sizing: border-box; outline: none; text-decoration-line: none;"> <span style="box-sizing: border-box;">studied</span></a><span style="box-sizing: border-box;"> the mortgage crisis in Oklahoma. Gobar found that most subprime loans were made to borrowers in the middle and upper income brackets — people who might have qualified for loans that were on more favorable terms.</span></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><span style="box-sizing: border-box;"><font size="4" face="Times New Roman">“One of the things that was so illuminating to me was income didn’t” determine who banks targeted for unfavorable loans, said Gobar, whose study found elevated foreclosure rates in census tracts with higher concentrations of residents of color. “African-Americans who could have afforded a prime loan were steered by these institutions to get subprime loans.”</font></span></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><span style="background-color: rgb(255, 255, 102);"><span style="box-sizing: border-box;">When he was Oklahoma attorney general, Pruitt</span><a href="http://www.tulsaworld.com/news/local/facing-foreclosure-couple-s-case-drags-on/article_6e2bddde-7467-5d3b-befb-ed86658c19de.html" style="box-sizing: border-box; outline: none; text-decoration-line: none;"> <span style="box-sizing: border-box;">opted out</span></a></span><span style="box-sizing: border-box;"><span style="background-color: rgb(255, 255, 102);"> of a federal program that would have helped some of these foreclosure victims.</span> In 2012, when the federal government and 49 state attorneys general launched the National Mortgage Settlement to offer relief to people who lost their homes in the crisis, Oklahoma became the only state to reject its share of $1.5 billion earmarked for individuals. Pruitt, who had been elected the state’s attorney general in 2010, declined more than $10 million that would have gone to foreclosure victims in Oklahoma on the grounds that it penalized financially responsible homeowners.</span></font></p><div class="img-wrap align-center width-fixed" style="box-sizing: border-box; margin: 2em 0px 2.25em; line-height: 1; max-width: none; width: 1024px;"><font size="4" face="Times New Roman">[<a href="https://theintercept.imgix.net/wp-uploads/sites/1/2017/12/albert-kelly-house-1514408952.jpg?auto=compress%2Cformat&q=90" style="box-sizing: border-box; outline: none; text-decoration-line: none;">
</a></font><p style="box-sizing: border-box; line-height: 1; margin: 0px; letter-spacing: 0.01em; display: inline;"><font size="4" face="Times New Roman" /></p><p class="caption" style="box-sizing: border-box; line-height: 1; margin: 0px; letter-spacing: 0.01em; word-spacing: -0.25em; display: inline;"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman">A January 2016 Google Street View shows Scott Pruitt’s home in Tulsa, Oklahoma.</font></font></font></font></font></font></p><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"> </font></font></font><p class="caption source" style="box-sizing: border-box; line-height: 1; margin: 0px; letter-spacing: 0.01em; word-spacing: -0.25em; display: inline;"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman">Photo: Google, Inc.]</font></font></font></p></div><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;"><font size="4" face="Times New Roman">At least one recipient of a questionable loan survived the mortgage crisis unscathed. In 2012, Pruitt sold his house in the Lakes at Indian Springs. He lost $62,000 on the deal, a modest setback considering the magnitude of the financial crisis that was then barely in the country’s rearview mirror.</font></span></font></font></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman" style="background-color: rgb(255, 255, 102);"><span style="box-sizing: border-box;">The same year, while the FDIC was trying to stabilize SpiritBank, Pruitt bought an even bigger and grander house — a stone mansion with more than 5,000 square feet of living space and three chimneys. By then, Pruitt was already Oklahoma attorney general, a job that pays $132,825 a year. </span><span style="box-sizing: border-box;">Still, he needed another loan. This time, he got an $850,000 adjustable rate mortgage from the Bank of Oklahoma. Though Pruitt now lives in Washington at an undisclosed address, he still owns his home in Tulsa. The interest rate on his mortgage is due to shoot up in 2022.</span></font></font></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><span style="box-sizing: border-box; background-color: rgb(255, 255, 102);"><font size="4" face="Times New Roman">Now, the program under Kelly’s guidance is having money problems of its own. Although Scott Pruitt claims he is making Superfund a priority, he has also proposed cutting its budget. </font></span></font></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;">“There’s a total lack of congruence between what they say they’re going to do and what’s happening to the agency’s staffing,” said Tom Voltaggio, who </span><span style="box-sizing: border-box;">directed the EPA’s Superfund hazardous waste cleanup program in the Mid-Atlantic states</span><span style="box-sizing: border-box;"> for more than two decades. “It’s all just B.S.”</span></font></font></font></p><p style="box-sizing: border-box; line-height: 1.5; margin: 0px 0px 1em; letter-spacing: 0.01em;"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><span style="box-sizing: border-box;"><font size="4" face="Times New Roman">For his part, Kelly is doing all right. At the helm of the program his friend Pruitt holds up as evidence that he cares about the environment, the banished banker now earns $172,100.</font></span></font></font></p></div><div><font size="4" face="Times New Roman"><font size="4" face="Times New Roman"><font size="4" face="Times New Roman">==</font></font></font></div></div></div></div></div></div></div>