With the GOP in control of the White House and Congress, conservatives are finally poised to mount a coordinated attack on federal environmental regulations — but some of their strength is being sapped by a nasty fight inside one of the movement’s key advocates.

The Free Market Environmental Law Clinic, which gained notoriety for challenging a host of Obama-era rules, was founded in 2011 and has been home for several pro-Trump figures.

But they’re now feuding amid allegations of extortion, lying to the IRS, harassment and other mismanagement that threatens to shutter the law clinic just as it should be providing muscle for President Trump’s push to free the economy of burdensome regulations.

One side of the fight is led by Chris Horner, a conservative attorney perhaps best known for exposing former Environmental Protection Agency chief Lisa Jackson’s use of secret non-government email addresses. He also served on the Trump administration’s EPA transition team.

On the other side is David Schnare, a veteran EPA employee who led the law clinic until early last year, when he again accepted an appointment at the agency. His second stint at the EPA lasted just two months amid widespread reports of deep disagreements with EPA Administrator Scott Pruitt.

After he left the law clinic, his former colleagues said they discovered a list of improprieties. In court papers they say Mr. Schnare abused the organization’s tax-exempt status, misappropriated funds and tried to use the organization’s assets as his own, and later tried to extort the group, demanding a huge cash payout to hide his actions.

Free Market says it may need to close up shop as a result of the dispute. Such a move would represent a major blow to the conservative legal world.

“Schnare threatens and is attempting to saddle Free Market with further financial consequences of his behavior, in furtherance of his express threats to drain Free Market’s assets if interested parties did not agree to his demands,” the court filing reads. “Schnare’s multiple errors and mistakes, to which he has admitted, have caused Free Market irreparable harm in that it may no longer fulfill its mission and must be dissolved as a result. Schnare’s continuing behavior is causing Free Market further and continuing repetitional and financial harms and is placing the organization at risk.”

Mr. Schnare denies all of the allegations, and in an interview with The Washington Times he said the lawsuit against him, filed in Fairfax County, Virginia, is wholly unnecessary.

“It’s filed as pure harassment. The basis for the argument is a mistake on their part … It’s the most inefficient way to resolve a dispute,” he said, adding that Mr. Horner is seeking to use the court system as a way to secure funds for himself.

“There were mistakes about understanding what our structure was … or what we thought it wasn’t,” he continued. “Chris [Horner] decided he could exploit them, the purpose of which was to solve the personnel problem by dissolving the organization and giving all of the money to Chris Horner and a new organization he was forming.”

The plaintiffs in the case, of course, dispute that charge and say Mr. Schnare’s own words prove otherwise.

On Jan. 27, Free Market’s newly elected chairman of the board, Matthew Hardin, met with Mr. Schnare. In an audio recording of the meeting reviewed by The Times, a man purported to be Mr. Schnare states that he has the legal capability of taking action to claim all of the group’s assets as his own.

“If I did, all that money in the bank is mine — personally,” the man says.

The situation first began to unravel a year before that meeting, in early 2017, when Mr. Schnare took his new post inside Mr. Pruitt’s EPA. Before leaving, he handed over executive director duties to attorney Chaim Mandelbaum, though the two sides tell a different story on whether he made the appointment before or after giving up day-to-day operations of the group.

At the same time, Matthew Hardin, the group’s newly elected chairman of the board, and other board members began looking into the group’s financial records. The discovery of the Mr. Schnare’s alleged false statements to the IRS sparked a turf war for control of the organization.

“Instead of resolving this conflict, even after he was informed of his original errors, Schnare kept this as his secret, paying himself from Free Market’s assets … and letting a hire he made, former Executive Director Chaim Mandelbaum, in on his secret, providing Mandelbaum large raises while maintaining control of the organization’s finances himself, even after purporting to have resigned,” Free Market said in its court filing.

In the Jan. 27 meeting, the man purported to be Mr. Schnare asks Mr. Hardin whether he wants a “sh*t storm” — a statement Free Market officials interpreted as a threat.

They say Mr. Schnare demanded the organization’s financial assets — just under $900,000 as of January — be given to him and Mr. Mandelbaum.

Mr. Schnare argues the money is contractually obligated, and that claiming he was trying to extort the group is pure fantasy.

“We had two contracts with staff, the Mandelbaum contract and the Horner contract, both of which would require us to give payouts,” he said. “There are salaries to be paid and there’s legal fees that have to be paid, and there’s a series of costs.”

“If Chris Horner wants to have an adult conversation, this could all be resolved,” Mr. Schnare continued.

The two sides are scheduled to appear in front of a Virginia judge in August.

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