The senator has yet to make a public statement about his opposition, although his spokesman said Thursday night that Manchin wanted to “avoid taking steps that add fuel to the inflationary fire.”
But climate advocates on Friday morning were quick to point to Manchin’s longtime ties to the coal industry.
Manchin, whose vote is critical to passing President Joe Biden’s domestic policy priorities in an evenly divided 50-50 Senate, had stakes in 2021 worth between $1 million and $5 million in Enersystems, Inc., the business for a coal brokerage he founded, according to a recent financial disclosure form.
In 2021, he made more than $536,000 from his Enersystems holdings, the filings show. That’s more than three times his annual Senate salary of $174,000.
“Manchin is a walking conflict of interest,” Craig Holman, a lobbyist for the liberal watchdog group Public Citizen, told CNN earlier. “And what makes it even more troubling is that he is the 50th Democratic senator, which gives him enormous influence on climate change policy.”
The debate over Manchin’s coal interests also highlights what critics say are lax congressional ethics rules that give federal lawmakers broad leeway to regulate industries in which they have financial interests. In addition to his primary role on the domestic policy bill, Manchin helps shape U.S. energy policy as chairman of the Senate Energy and Natural Resources Committee. He has been a member of the committee since entering the Senate in November 2010 after winning a special election to replace the late West Virginia Sen. Robert Byrd.
Congressional rules also allow federal lawmakers to trade individual stocks — as long as they disclose the transactions and don’t benefit financially from insider information.
“We have a system where a member of Congress can be heavily invested in, say, the coal industry and then be in charge of overseeing climate policy,” Delaney Marsco, senior ethics counsel at the nonprofit, said in 2021 Campaign Legal Center. .. “There’s no point.”
In a written statement in October, a spokesman for Manchin said the senator “is and has been in full compliance with Senate ethics and financial disclosure rules.”
“He continues to work to find a path forward on important climate legislation that maintains America’s leadership in energy innovation and critical energy reliability,” the statement added.
The new focus on Manchin’s energy interests comes as Biden and Democrats race this week to finalize a framework for a domestic policy bill that includes many of the president’s economic and climate priorities. To avoid a Republican showdown in the Senate, Democrats rely on a budget process that requires the support of all 50 senators who sit in a caucus with them. That gives Manchin, a moderate member of the caucus, enormous leverage over the negotiations.
Manchin has opposed climate provisions since the earliest days of work on the bill — including the so-called Clean Energy Efficiency Program, which was a cornerstone of Biden’s climate plan aimed at rewarding utilities for switching to clean energy sources. such as wind and solar power and penalizing those who rely on coal and gas.
Manchin signaled in October that he would not support that program, saying he did not support a program that would make utilities move to clean energy faster than they already are. Manchin also cited concerns that the shift to clean energy sources could mean that energy will be more unreliable than the continued use of fossil fuels.
“The transition is already happening,” Manchin told CNN recently. “So I’m not going to sit back and let somebody speed up whatever the market changes.”
Even without the clean power program, Manchin couldn’t get behind climate provisions in the latest version of an economic package — including tax credits for clean energy and electric vehicles — citing increased federal spending as a major driver of inflation.
Energy interests
Manchin has never hidden his coal ties. He is a former governor of the nation’s second-largest coal-producing state and founded Enersystems before entering politics.
The senator also has a stake in another firm run by his son, Farmington Resources Inc. Its services include “ancillary activity” to coal and metals mining and oil and gas well drilling, according to corporate filings with the West Virginia Secretary of State’s office. Between 2011 and 2020, the Democrat made between $4.9 million and $5.1 million from coal-related ventures, according to an analysis by Open Secrets, a nonprofit that tracks money in politics.
The organization also estimates Manchin’s net worth between $4.3 million and $12.8 million. Legislators are only required to disclose their assets and liabilities in a wide range, making it impossible to determine exact values.
Manchin’s Senate campaign has also benefited from an influx of political contributions from the energy industry in recent months. He took more than $400,000 from energy interests in the fundraising quarter from July to September 2021, according to a CNN review of that filing with the Federal Election Commission.
Donors during this period included billionaire oil magnates Harold Hamm, chairman of Continental Resources; Richard Kinder, executive chairman of the energy infrastructure company, Kinder Morgan; and Trevor Rees-Jones, who founded Chief Oil and Gas.
He also received donations from numerous energy-related political action committees during those months, including those associated with ConocoPhillips; utility companies such as Exelon and Dominion Energy; and Texas-based oil producer Pioneer Natural Resources.
Manchin, who is not up for re-election until 2024, took in nearly $1.6 million in the third quarter of 2021 — as he and another centrist Democrat, Arizona Sen. Kirsten Simena, emerged as key players in negotiations on the sweeping internal elections of their party policy proposals.
A mosaic of ethical laws
Manchin’s energy holdings — and his actions that benefit the coal industry — are legal under rules that control potential conflicts of interest in the Senate.
The rules vary dramatically by branch of government.
Executive officials, for example, are generally required to recuse themselves from decision-making when their financial interests conflict with their official duties. They face potential criminal and civil charges for failing to do so. Those appointees must also abide by additional ethics rules established by the president — such as not participating in decisions involving their former employers. Executive appointees may seek and receive exemptions from the ethics rules in limited circumstances.
It is against the law for federal judges to hear cases in which they have a legal or financial interest, but the law does not impose penalties for violations.
In Congress, meanwhile, lawmakers must refrain from taking formal action only in a narrow set of circumstances: if they or their immediate family members are in a small group that would benefit from legislative action.
But a lawmaker who owns a dairy farm, for example, can still make policy decisions that affect the entire dairy industry because those actions “also have a broad, general impact on his state or nation,” according to the Senate ethics manual.
And requiring lawmakers to walk away from decisions that benefit certain industries could end up hurting their constituents, “who have the right to have their elected representatives represent them through voting and full participation in all aspects of the legislative process,” the guide added.
Watchdog groups are calling on Congress to revise its conflict-of-interest standards.
A bipartisan measure created by Democratic Rep. Abigail Spanberger of Virginia and Rep. Chip Roy of Texas would require House members, for example, to place a wide range of shares in blind trusts. Investments in widely held funds, such as mutual funds and government bonds, will be exempt.
“The rules right now are insufficient to meet the challenges, especially when you consider that the American people really see corruption as a huge problem,” said Dylan Hadler-Gaudet of the Project on Government Oversight. His group supports the blind trust bill.
“The appearance of impropriety is just as bad as the real thing,” he added, “because it determines how people feel about politics and government.”
This story has been updated with more information.
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