US oil conglomerate indicted on environmental charges

Koch Industries Inc, its subsidiary, Koch Petroleum Group, and four corporate employees were charged on 28 September for committing environmental crimes at the West Plant refinery, conspiracy, and making false statements to Texas environmental officials, the US Department of Justice announced.

The conglomerate and its petroleum subsidiary face either a maximum statutory penalty of $48.5 million, or fines worth twice the pecuniary gain from the criminal offences committed, which would amount to $352 million, officials said. The four employees, who were all in managerial positions at the West Plant, face prison sentences ranging from 20 to 35 years and fines of up to $1.75 million.

However, Koch, which employs 11,500 people worldwide, denies the allegations and vowed to stand by its employees, calling the government’s announcement “based on unsupportable claims” and “irresponsible”.

The charges centre on Koch Industries and Koch Petroleum Group’s actions concerning at least 91 metric tons of uncontrolled benzene in the liquid waste streams at the West Plant, some 15 times above the legal limit, which they were allegedly aware of.

The Department of Justice has charged the conglomerate and its subsidiary with violating the Clean Air Act by failing to install required emission control devices in 1995 on certain waste management units, such as its oil-water separators, wastewater sewers, and oil and wastewater tanks.

Additionally, it is alleged that a device Koch Petroleum Group installed in January 1995 to destroy benzene fumes from two oil-water separators could not handle the high levels of benzene routed to it, causing it to shut down for extended periods of time. When this occurred, instead of the refinery also closing, the West Plant allegedly continued to operate and large amounts of untreated benzene fumes were intentionally emitted into the atmosphere through a bypass stack. These releases went unreported, violating the Comprehensive Environmental Response, Compensation and Liability Act.

The Department of Justice also alleges that the four defendants made “false and misleading statements” to the Texas Natural Resource Conservation Commission to conceal the extent of the refinery’s non-compliance with the Clean Air Act, and falsified the refinery’s compliance with the benzene regulations. The employee facing the most serious charges is West Plant’s Environmental Manager, Vincent A. Mietlicki, who is charged with conspiracy to violate the Clean Air Act and conspiracy to make false statements to Texas environmental officials, and faces a maximum 35 years imprisonment and $1.75 million in fines. The three other defendants, all high-ranking employees including Koch Petroleum’s Vice President of Texas operations, face similar charges, but with lower sentences and fines.

“Companies that produce dangerous pollutants simply cannot focus on profit and efficiency at the expense of a community’s health,” said Lois Schiffer, Assistant Attorney General in charge of the environment at the Justice Department. “We will continue to find and prosecute those who would flout our environmental laws.”

However, Jay Rosser, a Koch spokesman, insisted that, “the government has got this one wrong” and promised to “strenuously defend their good names”. “Air quality monitors near our facility and years of scientific data confirm that the health and safety of our employees and neighbours were never compromised,” he said. “Data from air monitors outside the facility shows that benzene levels have remained well within safe levels. This air quality information is available from the Texas Natural Resources Conservation Commission and has been reviewed by industry, regulators and neighbours through local community groups.”

Koch says that the Department of Justice’s allegations stem from a 1996 investigation which was a result of the company’s own self-report of the benzene problem, and that it had already implemented a compliance solution by early 1996. “The government is trying to portray a Koch that does not reflect who we are or the record of good performance we’ve achieved,” said Rosser. “This facility – besides having effectively addressed these 1995-era issues – has a solid history of operating safely, cutting emissions and making cleaner fuels for customers. We are confident that the legal process will confirm what we already know: that Koch and these individuals acted responsibly.”

In a statement, the company trumpeted its environmental record at the West Plant, including emissions “well below the industry average” according to Environmental Protection Agency (EPA) data, and investing more than $200 million to reduce emissions and waste since the early 1990s.

The case was the result of investigations by the Texas Environmental Enforcement Task Force, comprised of federal and state agencies, including the FBI, the EPA’s Criminal Investigation Division, and the Texas Natural Resource Conservation Commission’s Special Investigations Unit.