Former WSDOT worker sues over gas price whistleblowing claims

Mar 6, 2024, 8:00 AM | Updated: 12:12 pm

Image: The prices of various types of gas are seen at a Western Washington 76 gas station on Oct. 1...

The prices of various types of gas are seen at a Western Washington 76 gas station on Oct. 16, 2023. (Photo: Jake Skorheim, KIRO Newsradio)

(Photo: Jake Skorheim, KIRO Newsradio)

A conservative advocacy group has filed a lawsuit against the state on behalf of a former Washington State Department of Transportation (WSDOT) economist who claimed he was told to lie about the impacts of gas prices from Washington’s Climate Commitment Act (CCA).

The Citizen Action Defense Fund (CADF) is representing Scott Smith, a former transportation planner, in the lawsuit filed Tuesday in Thurston County Superior Court. Smith claims last year, he was pressured by the Governor’s Office of Financial Management (OFM) and WSDOT to change the numbers in his reports that indicated that the cap-and-trade program was significantly impacting the cost of fuel.

When Smith refused, he alleges he was forced out of state service.

More on the CCA: State officials spar over impact of Climate Act on gas prices as drivers pay up

“I did my job, refused to ‘jimmy the numbers,’ and was shown the door by an agency that I served with integrity, in a field that I’d worked in for decades. This is not right,” Smith said to reporters during a Wednesday press conference. “All I am looking for is to be fairly compensated for what the state took from me in what would have been the last few years of my career.”

CADF previously filed a complaint in Dec. 2023 against WSDOT, OFM and the governor’s office, along with a letter demanding a monetary claim from the state.

“The state has so far refused to pay the claim or present a counteroffer, and the 60-day statutory time period has elapsed, so filing the lawsuit is the next step in the process,” said CADF executive director Jackson Maynard. “The suit seeks an unspecified amount of damages, including loss of wages and pension, loss of reputation, and punitive damages.”

Former WSDOT worker: I was forced to lie about cap-and-trade fuel costs

According to Smith, at the beginning of last year, he was tasked with preparing a gas revenue and price forecast for WSDOT’s revenue forecast council.

He calculated that Washington’s cap-and-invest program — which went into effect on Jan. 1, 2023 — would lead to a 45- to 50-cent increase on every gallon of gas. But, Smith said his supervisors at WSDOT instructed him to keep that information quiet, per direction from OFM.

“On Jan. 18, 2023, I was told in a meeting with my direct supervisor that management would ‘prefer’ that I not include cap and trade surcharges in my quarterly fuel price forecast,” Smith told reporters.

Maynard also stated Smith and other staff members were also instructed to not include ‘carbon tax issues’ in any email so that the agency could avoid public record requests.

According to the claim, when Smith refused to alter the numbers of his estimates, the retaliation began.

“The Department of Transportation did everything good to drive me out of state service,” he claimed. “They went to the legislature and eliminated my position, changed my duties, denied me a promotion, refused to approve leave and remote work, and attempted to backdate and change my job performance evaluation. The last straw that broke the camel’s back was when they wouldn’t approve my leave request to visit my elderly mother out of state.”

After more than five years as a gasoline tax revenue and price forecaster for WSDOT, and more than three decades as a state government economist, Smith said he was forced into early retirement on Nov. 6, 2023. He filed a whistleblower complaint the same day.

State responds to claim over cap-and-trade effects

Smith and the Citizen Action Defense Fund claim there were instructions from multiple government agencies to lie about the CCA’s impact on gas prices. State officials said that’s far from accurate.

Mike Faulk, a spokesperson for Washington Gov. Jay Inslee’s office, said they are reviewing the lawsuit filed Tuesday.

WSDOT spokesperson Stefanie Randolph told KIRO Newsradio the department is internally investigating Smith’s allegations.

“WSDOT takes whistleblower allegations very seriously and what our agency can say is limited as this is both an investigation and a legal matter,” she wrote in a statement Tuesday night. “We expect our personnel investigation to be complete by the end of March.”

Faulk said in December, after the initial complaint, Smith’s position was not eliminated by WSDOT, but by state lawmakers who passed HB1838 last year.

“It would eventually move the essential functions that were performed by Mr. Smith from WSDOT to the Economic Revenue Forecast Council,” Faulk said at that time.

Inslee’s office also countered other arguments Smith tried to make in the lawsuit.

“Mr. Smith claims he was denied leave to spend time with his mother around Thanksgiving, and that this denial was tied to some vendetta,” the office stated. “In reality, Mr. Smith was the expert presenter at a meeting that conflicted with his date requests.”

Faulk said the complaint in December was the first time the governor’s office was made aware of Smith or his analysis.

“The Office of Financial Management individual named in the letter has expressed surprise and no recollection of events matching Mr. Smith’s claims regarding how his analysis would be used,” Faulk wrote in a statement. “He does not recall ever talking with this individual about the Climate Commitment Act and does not recall needing to ‘approve’ or review reports from Mr. Smith.”

Additionally, Smith said he was the primary WSDOT employee charged with forecasting fuel consumption, pricing and revenues from gas taxes and fees. But state officials with the Department of Ecology (DOE) fired back.

“DOE used its own economists to conduct the regulatory analysis for the cap-and-invest program, with support from a respected independent economics firm,” spokesperson Andrew Wineke said in December. “No one from the Department of Transportation provided input on that analysis.”

Politics supposedly not at play in gas price lawsuit

Smith argued his lawsuit is not politically motivated.

“I should note that I support cap and trade programs personally,” he said. “I think it is an effective way to reduce carbon emissions by increasing the cost of fuel, and thereby decreasing demand.”

But his legal representation, the Citizen Action Defense Fund, has publicly opposed Washington’s cap-and-invest carbon pricing program. CADF has filed multiple lawsuits against the state aimed at disrupting the state’s climate policies. The group lost a case in Thurston County Superior Court in Sep. 2023 after challenging the legislature’s 2022 transportation bill, which included the nuts and bolts of the cap-and-invest program. CADF is appealing the ruling to the Washington Supreme Court.

More on Washington gas prices: Inslee says ‘we won’t stand for’ corporate greed with debilitating costs

Washington’s climate laws and gas price impacts

There is a general consensus multiple factors play a role in Washington’s gas prices at any given time. Inflation, supply and demand, the Pacific Northwest’s geographic distance from crude oil pipelines, and the state’s gas tax which is third-highest in the U.S. are all estimated to play a role. Fuel suppliers have also enjoyed historically high-profit margins in Washington, including over $1 per gallon in the Seattle area. That’s according to the Oil Price Information Service (OPIS), a Dow Jones company that collects fuel-pricing information for AAA and other clients.

But after the CCA’s passage in 2021, a war of words erupted over whether the climate policies have impacted fuel prices in the Evergreen State.

The cap-and-invest program, a critical component of the CCA, puts a cap on maximum emissions. The goal is to get to 45% below 1990 levels by 2030, 70% by 2040 and 95% below and net-zero carbon emissions by 2050. The system also charges the state’s biggest polluters for their carbon emissions, with revenue earmarked for green energy projects around the state.

“This is going to have a minimal impact. If any, pennies,” Inslee said before the CCA was implemented.

A few weeks after the laws took effect in January 2023, gas prices jumped close to 10 cents. DOE’s Andrew Wineke told KIRO Newsradio at that time, “state regulations play a relatively small role in the cost we pay for fuels. Supply and demand are the biggest drivers of those prices.”

Over the next several months, fuel prices skyrocketed statewide. Last June, Washington became the most expensive state in the country to buy gas for the first time in history.

As previously reported by KIRO Newsradio, around 50 cents of Washington’s current gas prices can be attributed to the CCA, according to multiple expert analyses, including OPIS.

More from Kate Stone: Inslee accused of dishonesty over climate law’s impact on gas prices

Inslee and other supporters of the climate laws continually argue the spike in prices is solely due to price gouging from oil and gas companies. Democratic lawmakers introduced a bill during the 2024 legislative session to increase transparency for gas prices and oil company profits. But it failed to pass.

You can read more of Kate Stone’s stories here. Follow Kate on X, formerly known as Twitter, or email her here.

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Former WSDOT worker sues over gas price whistleblowing claims