This Democrat Wrote a Water Recycling Law. It Could Benefit Her Financially. – Mother Jones

Rep. Susie Lee (D-Nev.)Invoice Clark/Congressional Quarterly/ZUMA

As a member of Congress from the nation’s driest state, Rep. Susie Lee has a serious stake within the well being of the Colorado River Basin, which is at the moment enduring historic drought. “Nevadans’ entry to scrub water from Lake Mead is in peril,” she tweeted in July 2021. In workplace, Lee has pushed for federal funding for an array of “commonsense options” to the disaster—together with water recycling, a course of that permits waste water to be filtered and both returned to the surroundings or reused for different functions. Final 12 months, she authored a measure that may make a whole bunch of hundreds of thousands of {dollars} obtainable for water recycling initiatives.

However Lee’s curiosity on this problem seems to be greater than merely political. The 2-term Democrat additionally has a portion of her appreciable private wealth invested in an organization that stands to profit from the water recycling laws she has championed. In March 2020, in keeping with congressional monetary disclosures, Lee and her husband—a on line casino govt—bought between $1,001 and $15,000 value of shares in Evoqua Water Applied sciences, an organization that, amongst different issues, contracts with federal and native governments to supply filtration methods and different applied sciences utilized in water recycling.

The Lees made two subsequent purchases of Evoqua inventory, shopping for one other $1,001-$15,000 value of shares in each February 2021 and September 2021. After their well-timed preliminary funding, Evoqua’s inventory worth rose dramatically, going from $19 a share on March 6, 2020, to greater than $48 at its peak in November 2021. It has since fallen to round $32 per share.

There’s no proof that Rep. Lee supposed to personally revenue from her water laws; a spokesperson for the congresswoman says the trades had been performed by a cash supervisor with none enter from Lee. However the transactions are nonetheless troubling, a congressional ethics skilled informed Mom Jones. “Consultant Lee’s inventory trades actually would lead an inexpensive particular person to query why they had been made,” says Donald Sherman, the senior vp and chief counsel on the liberal-leaning Residents for Accountability and Ethics in Washington, which has campaigned for a ban on congressional inventory buying and selling.

“The purpose,” Sherman says, “is that we don’t wish to should ask these questions.”

Evoqua is way from the one firm Lee has invested in since coming into Congress in 2019. She and her husband—who are actually within the strategy of divorcing—have publicly disclosed a whole bunch of purchases and gross sales of inventory and have a web value within the hundreds of thousands of {dollars}. (Members of Congress are required by legislation to make such disclosures.) Lots of these transactions, together with the Evoqua purchases, had been carried out by means of a belief known as the DSL Dwelling Belief.

In a press release, Lee’s spokesperson, Zoe Sheppard, stated that Lee didn’t direct these trades. “Congresswoman Lee is just not concerned within the buying and selling selections of the DSL Belief, and this can be a joint account together with her husband from whom she has filed for divorce,” Sheppard stated. “These trades had been executed by a 3rd social gathering cash supervisor with no enter in any way from the Congresswoman.” Sheppard additionally shared a replica of a letter from an funding adviser stating that “Consultant Lee and/or her partner will not be concerned within the day-to-day administration of their account.” The letter was dated September 29, 2020, after Lee’s first Evoqua inventory buy however earlier than her second and third purchases.

The belief, nonetheless, is just not a blind belief, which means that Rep. Lee can see the contents of her investments. Based on Sherman, that sort of association can pose an issue, because it permits lawmakers to know the way laws may influence the worth of their trades. “Members ought to be banned not simply from directing trades, however from having anybody commerce on their account—except the trades are made by the trustee of a really blind belief,” he says. 

Congressional inventory buying and selling has come below elevated scrutiny in recent times—notably because the begin of the Covid pandemic, when a number of lawmakers had been accused of utilizing their data of the approaching public well being catastrophe to make financially helpful trades. Lee acquired caught up in that controversy too; in 2020, the Las Vegas Overview Journal reported that she had made a number of advantageous trades close to the start of the pandemic, reminiscent of shopping for a grocery inventory. On the time, a spokesperson informed the paper that Lee “didn’t direct any inventory trades in the course of the week of Jan. 29, when the Home acquired an unclassified briefing on COVID-19” and that “any trades carried out that week had been executed by a third-party cash supervisor with no enter in any way from the Congresswoman.”

After gaining some preliminary momentum, laws that will restrict members’ capacity to purchase and promote particular person shares has stalled in Congress.

In a press release supplied to Mom Jones, Lee stated that she supported a ban on members “directing trades of particular person shares.” However she stopped in need of backing the proposal that Sherman helps: an outright ban on lawmakers proudly owning particular person shares except they’re held in a very blind belief.

“The one option to absolutely cope with all the issues related to members proudly owning or buying and selling particular person shares is thru divestment,” says Sherman.

As Lee’s investments in Evoqua deepened, so too did her official assist for water recycling. In June 2021—after the Lees’ second funding within the firm however earlier than their third—Rep. Lee launched laws that will considerably broaden federal funding for water recycling initiatives. 

Beforehand, the one federal program devoted to funding water recycling schemes was the bureau of reclamation’s Title XVI program, which gives cash for the planning, design, and development of such initiatives. This funding supply was tiny: In 2021 the bureau solely gave out $9.5 million in Title XVI cash, and in 2020 the bureau gave out simply $16.6 million. With water recycling changing into a coverage precedence—the EPA says that because the local weather modifications, recycling “gives an alternate supply of water that may be extra dependable than conventional uncooked water sources”—the dearth of funding may pose a critical bottleneck. The WaterReuse Affiliation, a commerce group representing the trade, estimated that demand for Title XVI cash outstripped provide by greater than $700 million. 

Lee’s laws was designed to shut the hole by allocating $750 million to a brand new federal grant program that will subsidize parts of large-scale water recycling initiatives. In contrast to Title XVI grants, which may solely present important assist to comparatively small initiatives, Lee’s program could be reserved for big water recycling initiatives that price greater than $500 million. “Wastewater recycling is the kind of innovation that we have to deal with this disaster, and it’s going to take a serious funding,” Lee stated in a press launch saying the laws.

A model of Lee’s invoice was in the end integrated into the bipartisan infrastructure invoice, which handed in November 2021. The ultimate package deal dramatically elevated funding for water recycling, allocating $450 million for Lee’s new aggressive grant program for big initiatives, in addition to $550 million in extra funding for the already present Title XVI grant program.

“I’m so proud that my invoice, the Massive-Scale Water Recycling Venture Funding Act, has made it into the bipartisan infrastructure laws that I’ve labored on for months,” Lee stated in August 2021. “This invoice will pave the best way for elevated funding in such regional water recycling initiatives that may create dependable, nearly drought-proof water provides.”

Evoqua may benefit from Lee’s laws. The corporate’s enterprise mannequin, in keeping with its SEC filings, contains “tailor-made companies and options” associated to the “recycle / reuse” of water. In November 2021, it introduced new environmental and sustainability targets, which included making water reuse and water recycling a higher a part of its technique going ahead. Within the third quarter of 2021, Evoqua lobbied lawmakers on the infrastructure invoice and on “water re-use and different remediation points,” in keeping with federal disclosures.

Evoqua’s lobbying efforts included a dialog with a consultant from Lee’s workplace. “Our legislative staffer who lined water points met with a consultant from Evoqua final 12 months,” stated Sheppard. “This staffer met with dozens of teams with pursuits in water coverage, as a part of her common job duties.” She added that Lee “was not made conscious of this assembly because it was a routine assembly.” Evoqua’s director of company communications, Sarah Brown, stated that the corporate “educates many stakeholders, together with congressional members, with a view to make selections on a variety of points,” however she declined to remark additional.

Starting in February 2018, Evoqua was a accomplice in a pilot model the Central Coast Blue venture in Southern California, which goals to purify waste water after which inject that water into the area’s groundwater basin, the place it is going to assist stop saltwater intrusion into the water provide. The Central Coast Blue venture is one in every of simply 64 initiatives eligible for Title XVI funding by means of the Bureau of Reclamation. The venture utilized for a Title XVI grant in March, stated Jorge Garcia, the assistant metropolis supervisor of Pismo Seashore; the outcomes of the grant competitors haven’t but been introduced. (The Central Coast Blue Venture is estimated to price $85.3 million, which is nicely below the $500 million minimal for large-scale initiatives supported by Lee’s laws.)

Whether or not water recycling initiatives are, on common, an environment friendly use of taxpayer cash is a matter of some dispute. Greg Fogel, the director of presidency affairs and coverage at WateReuse, factors out that water recycling is a longtime know-how that can be utilized to perform a wide selection of environmental targets or meet demand for water. It’s additionally embraced by Nevada water officers.

However not everybody is totally bought. “Water recycling may be an efficient, focused answer,” says Colin Sturdy of the World Assets Institute. Nevertheless, “continuously less expensive or nature-based options may ship the identical outcomes. Water recycling is without doubt one of the costlier and technically demanding options and will solely be thought of as one instrument inside a bigger toolbox.”

For her half, Lee stays an enthusiastic booster of water recycling. 

“I do not know what her intentions are,” says Sherman. “This might be a coincidence. However actually a cynical particular person may ask whether or not she’s making selections in her authorities job which can be per and doubtlessly to the profit [of] her monetary pursuits.”

“These questions will maintain coming till Congress takes motion to ban all members from shopping for and proudly owning particular person shares,” Sherman provides. “It is a dying by 1,000 cuts for the establishment.”