DOJ Reduces Indictments Against Koch Industries

22 January 2001 00:00  [Source: ICB Americas]

By Don Richards

Department of Justice (DOJ) has reduced the counts from 97 to nine in its indictment of Koch Industries Inc., a subsidiary and four employees. The moves are considered an admission of a weak case by defense attorneys, but a strengthening of the litigation by DOJ.

Last October, a federal grand jury in Corpus Christi had returned the initial indictment against Koch, charging the company with environmental crimes, chiefly regarding benzene emissions, at Koch Petroleum Group's West Plant refinery in that city (CMR, 10/9/2000, pg. 8).

The defendants are charged with violating federal air and hazardous waste laws. The charges also include conspiracy and making false statements to the Texas Natural Resource Conservation Commission (TNRCC).

Employees indicted include Vincent A. Mietlicki, John C. Wadsworth and James W. Weathers Jr. and former Koch employee David L. Lamp. The company could face $48.5 million to $352 million in fines, and each employee could face fines of up to $1.25 million and a maximum of 25 years in prison.

The government's reduction of environmental charges against Koch Industries from 97 to nine represents a stronger case, not a flawed one, according to DOJ spokesperson Christine Romano.

Why federal authorities presented the 97-count indictment initially is not clear, Ms. Romano concedes. However, she maintains that the core allegations--that Koch employees allowed too much benzene to be released in the air and attempted to cover up those alleged violations--"are still there."

At the outset, US District Judge Janis Graham Jack in Corpus Christi had proposed whittling down the indictment because some charges seemed to be duplicated.

Koch spokesman Rich Tuttle says that after more than four years of investigating and now a second version of allegations, "the government's case is still as confusing as the complex federal regulations on which it is based. The government got it wrong before, and they're wrong again."

Dick DeGuerin, Mr. Lamp's attorney, says he is unsure why the indictments against his client increased despite a sharp reduction in the overall count.

Mr. DeGuerin maintains Mr. Lamp has not committed a crime. He asserts, "Nobody had any criminal intent. This case doesn't have any reason to go to criminal court."

The case stems from Koch's refinery operations in 1995, when its government-mandated limit on benzene releases was six metric tons for the year. Court documents note that in January, 1996, Sally Barnes-Soliz, a Koch employee who measured benzene releases at the site, told management that the plant had released 91 metric tons of benzene, well over the limit.

Ms. Barnes-Soliz had been assigned to prepare a report for the TNRCC. When she discovered the report that was submitted did not reflect the data she had collected, she complained to company officials, who allegedly responded by transferring her and giving her a poor evaluation.

She then told TNRCC of the false report. The information was relayed back to Koch officials, who, it is alleged, retaliated by various means until she left her job in 1996. A 1997 wrongful termination suit was settled last year for an undisclosed amount.

The Corpus Christi action is similar in some circumstances to a case in Beaumont at the end of 1999, where Jeffrey L. Jackson, former plant manager and Michael Peters, former environmental manager of Huntsman Chemical's Port Arthur olefins plant, were convicted on federal criminal charges for violating the Clean Air Act (CMR, 12/13/99, pg. 5).

The men, who are appealing the verdict, were convicted on three counts of operating an illegal tank, conspiring to withhold information on emissions and filing a false statement to the Environmental Protection Agency. They face fines of up to $250,000 and five years in prison for each count.

Houston Roundup

MTBE SHORTAGE: Reformulated gasoline supplies are tightening in the Gulf and are expected to run short this spring in the East because of cutbacks in output of methyl tertiary-butyl ether (MTBE) due to high feedstock prices.

MTBE makers cite a quadrupling of natural gas prices for production cuts. For example, Valero Refining Company's Corpus Christi refinery is slashing MTBE output by 6,000 barrels daily.FIRES: A January 16 fire at an operating unit of ExxonMobil Chemical's Baton Rouge, La., plant lasted from 9 a.m. until 2 p.m., injuring one employee, who was treated on site. Normal activities resumed by 11:30 a.m.

A fire on January 15 at the Deer Park plant of Rohm and Haas caused sulfur dioxide emissions, some of which crossed the fence. The neighboring OxyVinyls plant was alerted for a time. There were no injuries.

A fire on January 13 at Chalmette Refining LLC's refinery in Chalmette, La., in a gasoline and diesel fuel processing unit was contained after some 50 minutes. No one was hurt. ExxonMobil Corporation owns the company.

On January 9 a processing unit at the Houston Lyondell-Citgo refinery caught fire. The blaze was extinguished in less than 30 minutes. No one was reported injured.

A flash fire January 8 in Aristech Chemical Corporation's La Porte polypropylene plant seriously burned one employee and damaged a processing unit. He was injured when process solvent hexane was exposed to the atmosphere, resulting in the fire, which was extinguished in 20 minutes.

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