Pruitt's Low-Rent Apartment in 2017 Raises New Ethics Questions

Environmental Protection Agency Administrator Scott Pruitt appeared to pay well below market rate for an apartment he rented in Washington, D.C., last year, putting him in possible violation of federal ethics rules.

Pruitt rented an apartment in the Capitol Hill neighborhood of Washington from a health care lobbyist in 2017, as first reported by ABC News. A Government Executive review of housing rates in that area show the EPA chief may have received a favorable deal, which could put him out of step with the gift requirements of federal employees’ standards of conduct requirements.

Tim Burr, a manager at Yarmouth Management, a property management company that specializes in the Capitol Hill neighborhood, said he recently rented out a two-bedroom condominium in the same complex as Pruitt’s rental for $2,800 per month. The administrator’s rental, per multiple reports, was also a two bedroom. Pruitt was spending $50 per night, which would amount to a $1,500 monthly rate, though he was only paying for the nights he actually slept at the residence. He paid an average of about $1,000 per month for the time he spent at the property.

“This almost sounds like an Airbnb type thing,” Burr said of Pruitt’s arrangement, “but that’s real cheap for Airbnb.” Burr noted the condo his company had rented could have been in better shape than Pruitt’s.

The condo where Pruitt stayed, which is co-owned by Vicki Hart, a health care lobbyist and wife of J. Steven Hart, is in a prime location, less than a block away from congressional office buildings. J. Steven Hart is chairman of lobbying firm Williams and Jenson, which has represented, among other clients, Norfolk Southern, a company that has racked up more than $12 million in EPA environmental violations since 2000, according to the watchdog group Good Jobs First; and Cheniere Energy Inc., which owns the only liquid natural gas export plant in the United States, according to E&E News.

Last December, Pruitt promoted American liquid natural gas exports on a trip to Morocco that is now under scrutiny by lawmakers on the House Oversight and Government Reform Committee due to the high travel costs incurred by Pruitt and his staff.

Steven Hart could not immediately be reached for comment, but in a statement to the Associated Press, "Hart said Pruitt is a casual friend from Oklahoma who moved into the building in early 2017. Hart said he had no contact with Pruitt for many months, other than a brief exchange at the National Prayer Breakfast in February," the AP wrote.

The EPA initially said Pruitt stayed in just one of the bedrooms and did not have full run of the house. ABC News later disputed that claim, saying that Pruitt’s daughter spent a few months in another bedroom of the condo while she interned at the White House and that the two shared the condo.

“If they had the house entirely to themselves, it becomes a little less likely that $50 per night is market rate,” said Walter Shaub, former director of the Office of Government Ethics.

A survey of the first 10 listings on Airbnb for private rooms within a home in the vicinity of where Pruitt stayed revealed one listing for $57 per night, while the rest ranged from between $75 to $115. A similar look at two-bedroom units ranged from $103 to $179 per night.

Vicki Hart told ABC News that she was not informed of Pruitt’s daughter’s tenancy, and the rental agreement did not permit it. The EPA did not respond to Government Executive’s requests for comment.

Shaub said ethics officials would have to examine three factors to determine if Pruitt was in violation of the standards of conduct. If the administrator received approval from agency ethics staff in advance of the arrangement, it would give him a “get-out-of-jail-free card” even if the deal was later found to be a violation. Bloomberg has reported that Pruitt did not receive such advanced approval. Second, ethics officials would verify that the rental was in fact below market rate and therefore constituted a gift. Further investigations would likely examine the terms of the agreement and not just the value. As the Airbnb listings suggest, renters typically pay a premium when renting on a nightly basis.

Finally, Pruitt could avoid wrongdoing if he could prove he holds a personal friendship with Vicki Hart. Shaub cautioned that the onus would be on Pruitt to prove such a relationship existed, and ethics officials would ask how long the two had known each other, how often the two socialized and communicated, and whether they had exchanged large gifts in the past. Recently fired David Shulkin came under fire while secretary of the Veterans Affairs Department after an inspector general report found he accepted tickets to a tennis tournament from someone with whom he claimed to have a personal relationship. Auditors cast doubt upon the assertion that the two were actually close enough to warrant the gift exception.

“It’s not a question of whether someone is a casual acquaintance,” said Shaub, now at the Campaign Legal Center. “It would be legitimate for someone to say we don’t know the answer so maybe an IG or somebody should look into this.”

EPA’s inspector general has not yet initiated such a probe, but declined to rule one out.

“The OIG has only just been made aware of the allegations related to the administrator’s living arrangements,” said Jeffrey Lagda, a spokesman for the IG.

Vicki Hart co-owns two condominiums in the building where Pruitt stayed last year. It is unclear whether she routinely rents out the properties, but PoliticalPartyTime.org, a website run by the nonprofit Sunlight Foundation, has documented a 2013 fundraiser hosted there for Sen. Ted Cruz, R-Texas. And on March 9, 2017, during Pruitt’s tenure in the building, a breakfast fundraiser was held for Rep. Bill Huizenga, R-Mich.

On Friday, Rep. Don Beyer, D-Va., who sits on the House Natural Resources Committee, called on Pruitt to resign.

“From the first, Scott Pruitt has conducted himself terribly, without regard for environmental protection or public safety,” Beyer said. “[The] latest outrage is the news that Scott Pruitt secretly worked out a special deal on condo rent with an industry lobbyist who represents companies regulated by the EPA. He apparently did not report the details of his arrangement to ethics counsel at the EPA beforehand, nor to the public. As he has done over and over again, he showed contempt for transparency, ethical guidelines, and the public interest.”

If Pruitt is found to have violated the standards of conduct, his case would go before President Trump for potential discipline. Punishment could range from a reprimand to termination. Under a rule Shaub instituted while OGE director, Pruitt could technically fall in line with requirements but still have to justify how his arrangement passed the eye test.

“You still have to stop and ask yourself if accepting the gift would raise questions, if a reasonable person would be concerned about your impartiality,” Shaub said. “The reporting has raised enough questions that we’re now owed some answers.”

EPA Senior Counsel for Ethics Justina Fugh told Bloomberg—before the revelation of Pruitt’s daughter also staying in the apartment—that Pruitt’s deal with Hart was a routine business arrangement that did not constitute a gift.

The Washington Department of Consumer and Regulatory Affairs said on Friday it was investigating whether the limited liability company under which Hart made the rental maintained the required Transient Housing License.