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Former WSDOT economist accuses state leaders of retaliation for refusing to lie about gas prices

A state economist says he had to resign after suffering retaliation for his analysis that the state's cap-and-trade policy would significantly increase gas prices.

OLYMPIA, Wash. — A former state economist has filed a legal claim against two state agencies and the Office of the Governor for allegedly retaliating against him for refusing to keep quiet about his economic forecast on the state's gas price.

For the last five years, Scott Smith of Tumwater was a transportation planner for the Washington State Department of Transportation (WSDOT). He was the primary WSDOT employee tasked with forecasting fuel consumption, pricing and revenues from gas taxes and fees. After 35 years working as a public sector economist, Smith said his career was ruined for his refusal to lie about how a new state policy, according to his mathematical calculations in early 2023, would jack up prices at the pump by 45 to 50 cents per gallon. He said the retaliation and pressure were so great he felt forced to resign.

“I tried to do the right thing, and they eliminated my job,” Smith said. “I didn’t want to quit. I’m an economist. That’s the way I think. I’ve been damaged. I’m 64 years old. I’ve got nowhere to go. They left me no other choice.”

Cap-and-trade program report

Trouble started for Smith after the state ushered in a new state policy in January aimed at fighting carbon emissions and climate change. The cap-and-trade program, a component of Washington’s Climate Commitment Act passed by the legislature in 2021, puts a cap on maximum emissions and issues allowances. The system charges the state’s biggest polluters for their carbon emissions. The money is then spent on initiatives to reduce the state’s reliance on fossil fuels.

State leaders told consumers not to worry: the cap-and-trade system wouldn’t add much to the price of gas. Two months before the policy went into effect, a top official at the Dept. of Ecology said drivers wouldn’t notice.

“I don’t think it’s going to be noticeable,” said the Dept. of Ecology’s Climate Policy Section Manager Joel Creswell in November 2022.

In March, another Ecology manager echoed the sentiment.

“All in all, over time, we don’t think we’re going to see a big impact on prices at the pump, on customer prices,” said Ecology’s Climate Commitment Act Implementation Manager Luke Martland.

On Ecology’s website, the agency featured a prediction that the Climate Commitment Act’s impact would be “very modest” and that Ecology had “evaluated prices under a range of potential market strategies.” That web page has since been removed.

“That (analysis) flies in the face of reality,” Smith said. “It’s really sixth grade math.”

Economist's lawsuit alleges he was 'instructed not to include' key details in report

In a legal claim filed against WSDOT, the Office of Financial Management (OFM) and the Office of the Governor Thursday, Smith alleges he was pressured in January to keep quiet about his calculation that cap-and-trade would lead to a 45- to 50-cent increase on every gallon of gas. He also says he was instructed not to write emails about it to avoid having to turn over the documentation if someone requested public records on the topic.

Smith provided KING with emails he says he wrote to himself at the time to memorialize the conversations with his boss. In an email dated Jan. 18, 2023, Smith wrote: “At 10:30 today (my temporary supervisor) called me and instructed me, per OFM, not to write any emails about cap and trade because of a potential public records request. I was also instructed tentatively not to include any cap and trade adjustments in my gasoline price estimate.”

On Jan. 20, 2023, Smith wrote a follow-up email to himself.

“(My supervisor) also informed me on the 18th that Amber (a WSDOT manager) would “prefer” no adjustments for Climate Commitment Act surcharges. I informed (the supervisor) that under no circumstances would I 'jimmy' the numbers. He agreed that would be inappropriate.”

In an email dated Jan. 24, 2023, Smith wrote: “(The supervisor) tried to restate his instructions about the price estimate. He stated that “’We would prefer if you would keep your assumptions (on gas prices) unchanged from November.’”

Smith said this was a first in his nearly four-decade career.

“I was a bit horrified; I was aghast. I’ve never had anyone tell me to jimmy the numbers, to come up with some artificial number, never,” Smith said. “I wouldn’t do it. It just wasn’t right.”

Representatives from the Office of the Governor, WSDOT, and OFM told KING revenue forecasting is a complex process. A WSDOT representative said they don’t take claims like these lightly.

“The Washington State Department of Transportation takes whistleblower allegations very seriously and what our agency can say is limited as this is both an investigation and legal matter,” wrote Kris Abrudan, WSDOT communications director.

An official from the Office of the Governor said KING shouldn’t be reporting on this story.

“It’s clear as we gathered information today about this, just how complicated the forecast process is and all the pieces that go into it. It would be prudent for (KING) to truly understand this process before drawing conclusions and reporting on claims that have not yet been investigated,” wrote Mike Faulk, deputy communications director for the Office of Governor Jay Inslee.

Economist details 'unrelenting' retaliation he faced

The economist, Scott Smith, said after he included projected gas price increases from the cap-and-trade policy in his quarterly report dated March 2023 to the Transportation Revenue Forecast Council, he was retaliated against. His complaint includes allegations such as his duties being “scaled down or eliminated,” managers trying to “change and backdate his employee evaluation,” and a boss refusing to let him “visit his elderly mother over the holiday.”

“I was obligated as part of my duties to produce price forecasts. So I had no way to escape, nowhere to hide. And I had to, I guess for lack of a better term, I had to walk the plank,” Smith said. “The constant malice wears on you. The constant, unrelenting malice wears you down.”

Jackson Maynard, executive director and counsel for the Citizen Action Defense Fund, a nonprofit that aims to hold local and state governments accountable, took on Smith’s case and filed the claim today on his behalf.

“He’s a brilliant economist. And then to be treated this way, just, he had had enough,” Maynard said. “The message to the state of Washington is that you cannot bully state employees. You cannot force them to lie to support a political narrative for powerful people – that they have a voice, and they have protections under that law.”

Faulk, of the Governor’s Office said the state will work to get to the bottom of the accusations.

“Today was the first time our office was made aware of this individual or these assertions, and we have not had the opportunity to review them. There will be independent investigations to determine whether they can be substantiated. We rely on and expect our agencies to provide thorough, credible analysis based on the best data available,” Faulk wrote.

Smith’s complaint asserts he has suffered the loss of his salary, benefits and “reputational damage.” He’s requesting damages in the amount of $750,000.

Smith stressed the case is not about politics but about getting punished for “doing the right thing.”

“This is not about climate change. This is not about carbon taxes, whether they’re good or bad. I’m kind of for them. It’s about a regular guy who was doing a good job and then got crushed.”

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