COMPANY USES OLD ENGINES IN NEW TRUCKS TO SKIRT RULES
Fitzgerald trucks is made possible by a loophole in federal law that the Obama administration tried to close, and the Trump administration is championing. The trucks, originally intended as a way to reuse a relatively new engine and other parts after an accident, became attractive for their ability to evade modern emissions standards and other regulations.
The survival of this loophole is a story of money, politics and suspected academic misconduct, according to interviews and government and private documents, and has been facilitated by Scott Pruitt, the administrator of the Environmental Protection Agency, who has staked out positions in environmental fights that benefit the administration’s corporate backers.
Fitzgerald welcomed President Donald Trump at one of its dealerships during the campaign, and it sells baseball caps with the slogan “Make Trucks Great Again.”
The loophole has been condemned in recent weeks by an array of businesses and environmentalists: major truck makers like Volvo and Navistar; fleet owners like the United Parcel Service; lobbying powerhouses like the National Association of Manufacturers; health and environmental groups like the American Lung Association and the Consumer Federation of America; and some Fitzgerald competitors in Tennessee, Texas and Oklahoma, Pruitt’s home state.
“This just does not make any sense to me,” said Christine Todd Whitman, who served as head of the EPA during the first George W. Bush administration. “Everybody breathes the same air, Democrats or Republicans. It does not matter. This is about keeping people healthy.”
But the Fitzgerald family has had influential allies. In addition to Pruitt, they include Rep. Diane Black, a Republican who is a candidate for Tennessee governor, and Tennessee Technological University, a state university that produced a study minimizing pollution problems associated with the trucks.
Black introduced legislation in 2015 to protect the loophole when it was first in line to be eliminated by a stricter diesel emissions rule under the Obama administration. That bill failed, but after the election of Trump, she turned to Pruitt to carve out an exemption to the new rule — scheduled to take effect last month — and presented him with the study from Tennessee Tech.
Fitzgerald had not only paid for the study, which has roiled the university faculty and is the subject of an internal investigation, but it had also offered to build a new research center for the university on land owned by the company. And in the six weeks before Pruitt announced in November that he would grant the exemption, Fitzgerald business entities, executives and family members contributed at least $225,000 to Black’s campaign for governor, campaign disclosure records show.
The multiple donors allowed the company to circumvent a Tennessee state law intended to limit the size of campaign contributions by corporations and political action committees. The donations — many of which came through a series of limited liability companies tied to the family — represented 12 percent of the money Black had raised from outside sources through last month, the records show.
Tommy Fitzgerald, an owner of Fitzgerald, said the actions by Black and Pruitt were good public policy and not special favors to his company.
“I don’t know why anyone would want to kill all these jobs,” Fitzgerald said, referring to the several hundred people he said he employs at his dealerships, many of them in rural areas.
Chris Hartline, a spokesman for Black, said the congresswoman had stood up for a constituent and was not influenced by the campaign donations, which he said complied with state law. “There are very few companies willing to try and keep manufacturing jobs in rural Tennessee today, and Diane fights hard to support the few that do,” he said.
An EPA spokeswoman, Liz Bowman, said Pruitt remained committed to protecting clean air. But, she said, he agreed with a legal argument made by Black and Fitzgerald that the agency did not have the authority to limit sales.
“EPA is acting on behalf of anyone who sees merit in upholding and perhaps even bolstering the credibility of our laws and the role of Congress,” Bowman said.
She said the money donated to Black had no impact on the decision by Pruitt.
New trucks, old engines
The trucks sold by Fitzgerald are known as “gliders” because they are manufactured without engines and are later retrofitted with the rebuilt ones. Gliders are popular among small trucking companies and individual truck owners, who say they cannot afford to buy or operate vehicles with new engines and modern emissions controls.
The trucks, which Fitzgerald claims burn less fuel per mile and are cheaper to repair, have been on the market since at least the 1970s. But after the federal government moved to force improvements in truck emissions, with standards that were first enacted during the Clinton administration and took full effect by 2010, gliders became a way for trucking companies to legally skirt the rules.
Dealers like Fitzgerald buy truck bodies from Peterbilt, Freightliner and other manufacturers, and typically install 1990s-era engines, recovered from salvage yards, that its employees rebuild. The used engines and other remanufactured parts allow dealers to claim that the new trucks predate emissions requirements, and therefore should be exempt.
Nationally, an estimated 10,000 glider trucks were sold in 2015 — or about 4 percent of all new heavy-duty truck sales — up from fewer than 1,000 in 2010. Fitzgerald is the industry’s largest dealer in retrofitting the trucks by selling so-called glider kit trucks, for about $130,000. Modern trucks, which also include collision avoidance equipment, cost between $145,000 and $170,000, dealers said.
“I hate government mandates,” said Paul Bailey, a state senator and the operations manager at CB Trucking in Cookeville, Tenn., which hauls everything from building supplies to mustard in its fleet of 60 glider trucks, two-thirds of which were purchased from Fitzgerald.
The glider trucks take advantage of other regulatory loopholes. Since most of the engines were manufactured before 1999, the trucks are exempt from a federal law that went into effect in December intended to prevent accidents caused by fatigued drivers. The law requires commercial truck drivers to use an electronic logging system to track how many hours they spend behind the wheel, and to take mandatory breaks. The law covers truck engines manufactured after 1999.
The glider trucks, in some cases, also are not subject to a 12 percent federal excise tax imposed on truck sales, because they are not considered new trucks. Black intervened with the Internal Revenue Service last year, along with three other members of Congress, to protect that tax break.
A Fitzgerald salesman boasted last week that all 150 trucks on the company’s Crossville lot had been sold as trucking companies rushed to avoid the Obama-era emissions standards and the electronic tracking rule.
“We cannot build them quick enough,” said the salesman, Cody Poston. A second Fitzgerald salesman said the company had pending customer orders for 300 more and had about 2,000 glider trucks on the way to his sales lot.
Matt Moorehead, who helps maintain trucks at the CB Trucking garage in Cookeville, said glider trucks allow small companies and individual drivers to compete with big trucking companies.
He said the trucks are easier to repair and, by some accounts, burn less diesel fuel per mile. And by avoiding the electronic tracking system, drivers can continue to use paper logs, which can be more easily manipulated to allow flexibility in driving and rest times.
“When you got a load of eggs and milk to deliver, these rules can force you to stop driving when you are just a few miles short of your destination,” he said of the electronic tracking.
After EPA officials during the Obama administration saw a surge in the number of glider trucks being sold, the agency moved to prohibit any company from manufacturing more than 300 of them per year, effectively killing the industry that had emerged to help sidestep the rules.
Fitzgerald, with Black’s help, submitted a petition in July asking Pruitt to suspend the cap and declare that all gliders made by Fitzgerald and at least two other dealers be exempted because the new emissions requirements applied only to “new motor vehicle engines.”
To bolster their argument, Fitzgerald submitted the 2016 Tennessee Tech study. The study, which Pruitt cited in the EPA’S November announcement of the rollback, concluded that emissions from the company’s trucks were as clean as those with modern systems.
The push by Fitzgerald had started by May, according to a calendar of Pruitt’s visitors, when Pruitt and his chief of staff met with executives from Fitzgerald and Donald Shandy, an Oklahoma lawyer who knows Pruitt from his tenure as Oklahoma’s attorney general.
By September, to keep up the momentum, Fitzgerald had hired its first full-time federal lobbyist — a former aide to Black.
‘Super-polluting trucks’
Terry Dotson, president of Worldwide Equipment Enterprises, a Kentucky-based chain of truck dealerships that sells vehicles with modern emissions controls, said he remembered going into repair garages years ago when it was hard to breathe because of soot.
Dotson says he voted for Trump and is a strong backer of the coal industry, which relies on his trucks for mining operations. But he does not agree with the administration’s carve-out for glider trucks.
“I want Mr. Fitzgerald to make a fortune and be a happy man,” Dotson said. “But everybody ought to play by the same set of rules.”
Truck manufacturers, as well as shipping companies, fear that a permanent loophole would encourage other truck dealers to enter the glider business, further undermining efforts to reduce health hazards associated with diesel exhaust and creating unfair competition for them. The National Association of Clean Air Agencies, representing state regulators, and the attorneys general from 12 states have joined in protesting the rollback.
Chet France, former director of assessment and standards at the EPA Office of Transportation and Air Quality, says there are enough truck engines in salvage yards to support the glider market for decades.
“We are talking about super-polluting trucks that are going to put the health of thousands of people at risk,” said France, who worked at the EPA for 30 years under Democratic and Republican administrations and is a consultant to the Environmental Defense Fund. “And for what?”
The EPA estimates that over the life of every 10,000 trucks without modern emissions systems, up to 1,600 Americans would die prematurely, and thousands more would suffer a variety of ailments, particularly in cities with air pollution associated with diesel-powered trains, ships and power plants.
The health threats are caused by nitrogen oxide and tiny particles of dust and soot that create haze in the air.
In November, just days after Pruitt said he would eliminate the glider cap, staff members at the EPA submitted an analysis to the agency’s rule-making docket that contradicted the conclusions from Fitzgerald and Tennessee Tech that glider trucks created no more pollution than trucks with updated emissions systems.
The analysis said EPA tests found that the Fitzgerald trucks emitted nitrogen oxide levels during highway operations that were 43 times as high as those from trucks with modern emissions control systems. The air pollution from these glider trucks was so bad that one year’s worth of truck sales was estimated to release 13 times as much nitrogen oxide as all of the Volkswagen diesel cars with fraudulent emissions controls, a scheme that resulted in a criminal case against the company and more than $4 billion in fines.
When testing the glider trucks in stopand-go traffic, the EPA report said, the testing equipment shut down because of the extreme level of particulates.
“The filters were overloaded with particulate matter,” said the report, which included a photograph of the white filter that had turned pitch black.
In recent weeks, other questions have been raised about the accuracy of the Tennessee Tech study, the role engineering experts at the university played in it, and the relationship between Fitzgerald and the university.
The signature of Tennessee Tech’s president, Philip Oldham, appeared on the study, which was included in the petition Fitzgerald submitted in July to eliminate the cap. In April, Oldham was photographed with Tommy Fitzgerald at the Bristol Motor Speedway, where Fitzgerald sponsors the Fitzgerald Glider Kits 300, a NASCAR Xfinity Series stock car race. Oldham presided over an event at the university in August, where Fitzgerald announced it would build a new academic research center for the university.
Some faculty members say the university appears to have been used by Fitzgerald as part of its lobbying campaign.
“Our reputation has recently been damaged because of a study funded by Fitzgerald Glider Kits and used to influence federal policy,” said a faculty senate resolution passed last month. Christy Killman, president of the faculty senate, said the results of the study “raised a red flag.”
Oldham did not respond to a request for comment, but he sent a letter to Killman this month confirming that a “misconduct in research” investigation had been started, at the faculty’s request, adding that he wanted to ensure the university’s reputation as an “honest broker of knowledge.”
The public comment period on Pruitt’s intention to repeal the annual cap on glider trucks has passed. Bowman, the EPA spokeswoman, says the agency is reviewing the comments before Pruitt announces a final decision.
“Continuing to improve air quality is a stated priority of Administrator Pruitt’s,” Bowman said. “Any comments received that raise concerns with the ability to maintain that goal are closely considered and analyzed.”
At Fitzgerald’s sales lot, employees said there was no need to worry about pollution from the trucks, adding that they had emissions test results to prove it.
“They are just as clean,” Poston said of the gliders, compared with modern trucks, “if not cleaner.”