Is Big Green running things in President Obama's Environmental Protection Agency? Wake up and smell the corruption.

A virulent 2009 sue-and-settle lawsuit, WildEarth Guardians v. Jackson (as in Lisa Jackson, former EPA administrator) is an outrageous sweetheart deal rife with collusion and manipulation to create arbitrary regulations, along with the EPA takeover of state regulatory programs and a price tag of more than $2.5 billion -- all aimed against the domestic fossil fuel industry.

William Yeatman of the Competitive Enterprise Institute discovered the details after a Freedom of Information Act request produced 659 pages of EPA emails.

"WEG's lawsuit centered on the EPA's regional haze program to improve visibility, which was created by Congress, which gave the states, not EPA, primacy to choose their own standards and controls for regional haze," Yeatman told me. "A federal court confirmed that authority, so how did EPA take it away from them?" he asked.

Buried in hundreds of EPA emails was the backroom story. Beginning in 2009, 10 green groups including the Sierra Club and WildEarth Guardians filed lawsuits against EPA alleging that the agency had "missed the deadlines pertaining to the regional haze program."

Rather than defend these cases, EPA simply chose to settle and sign a consent decree agreeing to new enforcement deadlines negotiated with the green groups, not the states, which weren't even notified. WEG's case dealt with the south-central states including New Mexico -- EPA Region 6 -- where the administrator was Al Armendariz, the man later forced to resign after a video became public of him expressing admiration for how the Roman legions used random crucifixions to enforce obedience among Roman subjects.

But CEI's EPA emails revealed a timeline that stank of collusion and corruption. Armendariz came straight from WildEarth Guardians, where he had worked on regional haze issues with Jeremy Nichols, director of WEG's climate and energy program (Nichols' main job was "to fight fossil fuels").

In June 2009, WEG filed its lawsuit against EPA; on Nov. 5, 2009, Armendariz was appointed Region 6 administrator; on Nov. 10 EPA settled new deadlines with WEG and presented a consent decree to the U.S. District Court for Northern California. Armendariz wouldn't be at his desk for another three weeks, but his connections in government and Big Green were well-known.

The point is that an activist who worked on regional haze for a plaintiff suing EPA switched sides to become an official of defendant EPA, and a settlement was reached in less than a week.

It gets worse. Once settled in, on Dec. 8, 2009, Armendariz emailed Nichols, "I've been on board exactly 1 week, and my life is already crazy. But if I can grab a free 15 minutes sometime soon I'd like to call and talk politics."

The "politics" was spending the next year manipulating the negotiated deadlines to trap the states and steal their authority -- evidently with Armendariz thinking that negotiating legal settlements with former colleagues isn't a conflict of interest.

On Nov. 4, 2010, he emailed an EPA colleague about a different lawsuit offering that "If needed, I can call Jeremy [Nichols] at WEG and grab R6 [EPA Region 6] an extended deadline."

An alarmed EPA lawyer had to inform him that he was recused from the WEG case -- a year late.

Yeatman said, "Then it was Washington politics at its worst. On the eve of the deadlines, the agency refused to approve the states' submissions or allegedly inadequate cost estimates (produced by the same contractor green groups used). There was no time for the states to fix things. EPA took control. Its new rules cost the states $2.5 billion for almost undetectable results."

The revolving door between EPA and Big Green then flipped Armendariz into a comfy spot at the Sierra Club.

Washington Examiner Columnist Ron Arnold is executive vice president of the Center for the Defense of Free Enterprise.