Despite being caught in a swirling corruption scandal, the Supreme Court continues to rule on cases and issue far-reaching decisions that shatter years of precedent to rewrite the country’s laws. For the moneyed interests who have spent big to financially influence the courts, this is very much according to plan. The court’s latest bombshell ruling shows just how handsomely the effort is paying off.
Last Thursday, in a 5-4 ruling on the Sackett v. Environmental Protection Agency case, the Supreme Court dramatically narrowed the scope of the 1972 Clean Water Act in an act of judicial activism so brazen, even the Donald Trump–appointed Brett Kavanaugh accused the court of “rewriting” the law and failing to “stick to the text.” To do so, justice Samuel Alito, writing for the majority, simply disposed of the statute’s deliberately broad coverage of wetlands that are “adjacent” to “waters of the United States,” redefining that word as meaning “adjoining” — a different word with a different meaning — and claiming that only wetlands with a “continuous surface connection” to protected waters were covered by the Clean Water Act. Environmental groups say it will take away protections for more than half of the country’s 118 million acres of wetlands.
That decision — widely criticized for its linguistic games and overturning of long-standing precedent — is directly tied up in the corruption scandal that has embroiled Supreme Court justice Clarence Thomas in particular.
A Crow’s Tentacles
First exposed by ProPublica in April, Thomas was revealed to have failed to disclose decades worth of generous gifts from right-wing billionaire Harlan Crow, the chairman and former CEO of Crow Holdings. The long-standing financial relationship between the two men — which has included not just lavish holidays and pricey private-school tuition for the boy Thomas raised as his son, but even purchase of real estate — has already led to calls to impeach Clarence Thomas.
As HuffPost reported last month, a trade group chaired by Ken Valach, currently the CEO of the development platform of Crow Holdings, was directly involved in the Sackett case, pouring cold water over Thomas’s claim that Crow’s gifts weren’t a conflict of interest because the billionaire had no business before the court. The National Multifamily Housing Council (NMHC), a trade group that counts three of Crow’s companies as dues-paying members, filed an amicus brief in the case, calling for the rollback of regulations they viewed as stifling housing construction. The NMHC has been a long-standing opponent of more expansive interpretations of the definition of “waters of the United States” (WOTUS) covered by the Clean Water Act, which among other things can hinder, delay, and or even outright block developers’ plans if they might have an adverse impact on surrounding wetlands and other local water bodies.
But this already serious conflict of interest goes even deeper. The NHMC, whose board of directors Valach has served on since 2015, is a founding member of the Waters Advocacy Coalition (WAC), an alliance of various corporate trade groups dedicated to weakening the WOTUS definition, whose members span industries ranging from fossil fuels and mining to farming and real estate.
Since 2019 alone, the WAC has spent a total of $260,000 lobbying on one thing and one thing only: “waters of US rulemaking,” or, as it put it in one filing, “federal legislative and administrative developments concerning the scope of federal regulatory authority over water bodies.” Not surprisingly, it wasted little time in, by its own words, “applauding” the Sackett ruling the day it was announced for halting “decades of attempts to expand the federal government’s power over private land.”
The organization submitted a public comment in February 2022 about the Joe Biden administration’s planned expansion of the WOTUS rule, in which its objections to the administration’s proposed changes echoed the arguments Thomas and the rest of the court’s right-wing justices used in Sackett. The new rule’s “approach to adjacency” — where federal jurisdiction applied to wetlands “with only intermittent shallow subsurface connections,” or which were simply “reasonably close” to waters already covered by the federal government — raised “implementation concerns” via its “vague terminology,” the comment stated.
The NHMC and WAC aren’t the only trade groups with links to Crow’s companies that have weighed in on the issue. Take the Real Estate Roundtable (RER), of which Crow Holdings CEO Michael Levy has been a member since 2017. The RER has likewise submitted amicus briefs to the Supreme Court on the Sackett case in the past, albeit before Levy was a member, and it collaborates with the EPA via the agency’s the Smart Sectors program, through which, in the RER’s words, it “advocates for balanced environmental regulations” on issues that include wetlands programs under the Clean Water Act “that trigger land-use permitting requirements.” The WOTUS rule is among the suite of issues the RER has consistently lobbied on from 2014 to 2019, spending millions of dollars per quarter in the process.
There’s also NAIOP, the Commercial Real Estate Development Association, a developer trade group that Crow Holdings has numerous links with. Clark Machemer, a senior managing director in the industrial group of Crow Holdings’ development arm, sits on NAIOP’s executive committee and was a trustee of its political action committee in 2022, a position that, in the organization’s words, requires pledging a yearly donation of $5,000 and allows one to “guide the agenda of the PAC and approve financial support allocated to elected officials and candidates.” Machemer has donated another $5,000 to NAIOP-PAC this year, according to an April filing, suggesting that he continues to serve as a trustee.
Besides this, Matt Kurucz, a managing director at the same development platform of Crow Holdings, is described as an “active member” of the NAIOP National Forums Groups — a networking platform for commercial real estate professionals that convenes twice a year — as well as a member of its Chicago chapter. Meanwhile, NAIOP’s Massachusetts chapter counts among its member companies Trammell Crow Residential, Crow Holdings’ multifamily development firm, and Crow Holdings has been one of the “grand sponsors” of its New Jersey chapter’s annual commercial real estate awards gala every year since 2019.
NAIOP similarly wasted no time in “commend[ing]” the Supreme Court’s ruling in Sackett, which it called a “victory for NAIOP” members, while noting it had been “an issue on which NAIOP has been active on behalf of commercial real estate.” This was despite the fact that frequently changing the WOTUS definition was one of its main gripes in its own 2022 public comment.
NAIOP, too, has spent a cumulative total of millions lobbying on issues that include the WOTUS definition and federal jurisdiction over wetlands, from the first quarter of this year going all the way back to the first quarter of 2014, when it also lobbied for bills outright barring the EPA and the US Army Corps of Engineers (USACE) from expanding the scope of protected waters without Congress’s say-so.
But even besides this public paper trail, that Crow and his businesses will benefit from this ruling is hardly a secret. Crow Holdings’ projects have often faced delays and regulatory obstacles due to their possible impact on local wetlands and other water bodies.
As reported by HuffPost, last year the industrial branch of Crow Holdings applied for authorization from the US Army Corps of Engineers under the Clean Water Act to build a one million-square-foot warehouse facility in Gordon County, Georgia, which was tipped to cause “cumulative adverse impacts to 6.87 acres of wetland.” A search of the USACE permitting database shows that Crow Holdings Industrial has another permit pending, applied for in Chicago by NAIOP member Matt Kurucz, for water quality certification under Section 401 of the Clean Water Act, which determines whether or not a project that may cause discharge into waters of the United States can get a permit.
In 2020, Crow Holdings Industrial also requested an approved jurisdictional determination from the USACE on whether the water bodies on New Jersey’s Raccoon Island fall under the WOTUS definition. The final decision determined that eleven wetlands making up nearly 136 acres that are adjacent to protected water bodies fall under federal regulation, with eight of them directly abutting those water bodies or artificially separated from them by roads — something that may have disqualified them from federal protection under the court’s rewriting of the Clean Water Act last week. Since then, development of the site appears to have passed on to another company, Floodgate Road LLC, which is planning a series of warehouses on the land.
This is far from the first time Crow Holdings has had to navigate regulatory hurdles surrounding wetlands to get its projects off the ground. A proposal by the firm to create speculative warehouse space in Oak Creek, Wisconsin, last year faced opposition in part due to the numerous wetlands on the proposed space, with the local planning department pointing to this when recommending against the project’s approval. An ultimately successful apartment complex project in 2008 that involved filling 4,800 square feet of wetlands was delayed by a legal challenge from locals over its environmental impact.
Similarly, a development proposed by Trammell Crow Residential was voted down unanimously in 2006 by a local planning board, which pointed out that the company’s site plan sat on a wetland buffer zone and was likely to drain water from the wetlands. Little wonder, then, that both Trammell Crow Residential and Commercial have been clients of Wetland Studies and Solutions, Inc., a consulting firm that helps companies with Clean Water Act permits — and which is listed as a “benefactor” of NAIOP’s Northern Virginia chapter. (Firms that donate $6,500 qualify as “benefactors” to the organization).
Whether through quicker approval of projects, fewer regulatory restrictions to wade through, or by neutering the ability of local residents to oppose controversial projects, it’s not difficult to see how the Supreme Court decision that Clarence Thomas just provided a pivotal vote for will end up serving his benefactor’s business interests.
Bang for Buck
As former conservative activist Rob Schneck outlined to Politico, the purpose of lavishing Supreme Court justices with expensive gifts and opulent dinners isn’t to sway them toward a particular political philosophy. Clarence Thomas was a conservative long before he met Harlan Crow for reasons entirely unrelated to the billionaire’s thinly veiled bribery.
The point, Schneck explained, was to create what Politico termed an “ecosystem of support” that would encourage them to be bolder in their judicial activism. Sometimes that would benefit the benefactors by opening the door to imposing their personal, regressive social vision on others. Sometimes it would benefit them by directly assisting their personal business interests, as it has in the Sackett case, which will make it easier for Crow’s companies and other real estate developers to disrupt and damage wetlands without legal or regulatory challenge.
Yet the clear, monumental conflict of interest involved in Sackett and the obvious unseemliness of ultrarich donors plying justices with luxurious gifts should not just raise questions about the legitimacy of this ruling. It should also feed further questions about the legitimacy of an entire Supreme Court mired in ethics issues.