Environmental and Safety Abuses Lead to Federal Charges for Company, Managers

Dec. 16, 2003
A federal indictment charging Atlantic States Cast Iron Pipe Co. and five of its managers with flagrant violations of federal environmental and occupational safety and health laws has been unsealed in New Jersey.

The Phillipsburg, N.J. manufacturer of cast iron pipe, a subsidiary of McWane Inc. of Birmingham, Ala., was accused of regularly discharging oil and paint into the Delaware River and maintaining a dangerous workplace that contributed to the death of one employee and the maiming of numerous others.

The 35-count indictment was unsealed with the arrests of Atlantic States Cast Iron Pipe Co. plant manager John Prisque, maintenance supervisor Jeffrey Maury, engineering and environmental manager Daniel Yadzinski, and finishing superintendent Craig Davidson. The arrests took place at the plant early Dec. 15. Former Atlantic States human resource manager Scott Faubert was to surrender later that afternoon at the federal courthouse in Trenton. Each of the defendants were scheduled to appear before U.S. Magistrate Judge Tonianne Bongiovanni.

Atlantic States Cast Iron Pipe Co., in a statement released Dec 15, said, "We are dismayed to learn the DOJ has decided to take action we believe to be both unwarranted and unnecessary. The charges do not reflect the condition of our plants or the manner in which we conduct our business. Further, the charges do not accurately portray the facts, and we look forward to having the opportunity to tell our side of the story in court."

The statement commented on what the company called the "considerable progress Atlantic States and McWane have achieved in environmental, health and safety excellence through substantial investment and the efforts of management and employees."

"The matters that are the subject of these charges occurred years ago. Where there was need for improvement we took corrective action, and addressed these issues with the appropriate state and federal regulatory authorities," said G. Ruffner Page Jr., president of McWane Inc. "We have made it clear that we have done and will do what it takes to protect the environment and to provide our employees a safe workplace. We have been deeply saddened when one of our employees has suffered a serious injury or loss of life, and believe we have done our best to ensure that these tragedies are not repeated."

He said the company's management team has devoted substantial time, energy and resources to the safety and environmental programs at all of McWane's facilities in an effort to make them the standard for excellence in the industry. "We are forward-looking, as are our employees and the unions that represent them. So are the regulatory authorities. We are troubled that the Department of Justice has chosen to take this step backward."

The company claims it invested more than $150 million in safety and environmental systems at its plants since 1997. In New Jersey, specific projects have included installing a $2.1 million storm water collection system designed to avoid water runoff into the Delaware River, a new $3.5 million air emissions control system, and the latest machine guarding. The company also has raised employee awareness of workplace safety through extensive,OSHA-approved training and a comprehensive ethics and compliance policy, claims Page. McWane also has entered into cooperative initiatives with both OSHA and the United Steelworkers of America (USWA) to improve health and safety.

The indictment charges Atlantic States and the managers with conspiracy to violate federal clean air and water regulations and laws governing workplace safety, as well as obstruction of criminal and regulatory investigations by the federal Environmental Protection Agency and Occupational Safety and Health Administration.

The privately held McWane Inc. and its subsidiary companies are among the largest manufacturers in the world of ductile iron pipe with more than a dozen plants in the United States and Canada. McWane's products are used primarily for municipal and commercial water and sewer installations.

"Companies that break our nation's environmental laws and show blatant disregard for workers' safety will be prosecuted and brought to justice, as is evidenced by this indictment," said Tom Sansonetti, assistant attorney general for the Department of Justice's Environmental and Natural Resources Division.

Christopher J. Christie, U.S. Attorney for New Jersey noted the company has a notorious history of "wanton pollution" of the environment, complaining Atlantic Pipe is guilty of "evading detection at all costs, and ruling the workplace through fear and intimidation of employees, all of which is alleged in this indictment." He said the indictment "paints a picture of an anything-goes philosophy in Atlantic Pipe's pursuit of maximum worker output and profits at the cost of worker heath and safety. These were not mere accidents. Rather, the indictment charges that it was company policy to put employees in harm's way, pollute the environment and continuously cover up criminal acts."

Atlantic States and the individual defendants were charged in connection with, among numerous other things, the following events alleged in the indictment:

  • Repeated cover ups from health and safety inspectors of crushing injuries to employees, broken bones, amputations and burns from furnaces and molten iron, including among numerous others: a December 2002 incident in which a safety device was removed from a cement mixer, which then amputated three fingers from an employee's hand; and another where an employee lost an eye and had his skull fractured by a broken saw blade with its safety guard removed.
  • The March 24, 2000 death of employee Alfred Coxe, who was run over by a forklift with faulty brakes. Before OSHA inspectors arrived, the defendants allegedly repaired the forklift, and later performed a misleading demonstration to make it appear the brakes were fully operational, and lied to inspectors about the incident and subsequently lied, under oath (Faubert and Maury), in a deposition in a lawsuit brought by Coxe's widow.
  • The pumping of petroleum-contaminated wastewater on Dec. 4 and 5, 1999, from a cement pit into a stormwater drain that led to the Delaware River, causing an 8.5-mile oily slick on the river.
  • The weekly discharge, and the subsequent concealment, of between 50 and 100 gallons of petroleum-contaminated wastewater from at least July 1996 to September 2002, and other specific instances of larger discharges of asphalt paint and oil-contaminated water into the Delaware River.
  • Using the plant's cupola - a high-intensity, multi-story furnace for the permitted use of melting scrap iron for the pipe fabrication process - for the regular incineration of tires and waste paint.
  • Routine release and concealment of high levels of pollutants into the air, including carbon monoxide, in violation of government permits and in criminal violation of the federal Clean Air Act. One method alleged in the indictment involved the pre-planned melting of plate and structural steel in the cupola, rather than scrap iron, with the effect that it produced lower pollution emissions during smoke stack tests and deceived state and federal regulators.

The indictment alleges that the company and its managers oversaw, allowed or encouraged those and other criminal acts, in an effort to maximize production of iron pipe and to minimize production costs, workers compensation claims and time off for injured employees. The conduct described in the indictment allegedly occurred between Oct. 31, 1995 and August 2003.

The indictment claims the defendants concealed health and safety violations by routinely falsifying reports to OSHA inspectors, by ordering employees to lie to them, altering existing conditions in advance of OSHA inspections, reinstalling safety devices after accidents to make it appear that they were installed at the time of accidents, and, in February 2000, by obstructing the execution of a search warrant at the Phillipsburg plant.

The company and its managers continuously concealed environmental violations through false statements to the New Jersey Department of Environmental Protection and federal EPA, the altering of pollution data and manipulation of emissions testing procedures and through obstruction of lawful on-site investigations, according to the indictment.

The government charges that the company and plant managers maintained a repressive work environment of intimidation, fear and retaliation, in which employees were threatened with termination or other discipline if they failed to follow orders that led to instances of pollution, or if they complained about safety concerns or pursued workers' compensation claims for job-related injuries.

"Flagrant violations of this magnitude will be vigorously pursued," said J.P. Suarez, assistant administrator in the EPA's Office of Enforcement and Compliance Assurance. "Enforcement of criminal environmental statutes is a top priority."

The indictment charges the company and each of the defendants with conspiracy, which for the individuals carries a maximum penalty of five years and a $250,000, and for the company carries a maximum fine of $500,000. The company is charged in all counts of the indictment. The managers are charged as follows:

  • Prisque, 54, of Bethlehem, Pa., was charged additionally with four counts of obstruction of an OSHA investigation, three of which carry a maximum prison sentence of five years, one of which carries a maximum 20 years. Prisque is also charged with one count each of violating the Clean Water Act and violating CERCLA (Superfund), each of which carries a maximum prison sentence of three years. He is also charged with one count of violating the Clean Air Act, with a maximum prison sentence of five years.
  • Faubert, 40, of Easton, Pa., is charged also with two counts of making false statements to OSHA, each of which carries a maximum prison sentence of five years, and two counts of obstructing an OSHA investigation.
  • Maury, 36, of Phillipsburg, is charged also with separate counts of making false statements to the New Jersey Department of Environmental Protection and OSHA; with obstruction of an OSHA investigation; seven counts of violating the Clean Water Act; and one count of violating CERCLA.
  • Yadzinski, 60, of Easton, Pa., is charged also with making false statements to the NJDEP and one count of violating the Clean Air Act.
  • Davidson, 39, of Nazareth, Pa., is also charged with one count of making false statements to NJDEP and 16 counts of violating the Clean Water Act.

McWane Inc., however, has brought out some big guns in its defense. "On the basis of our ongoing review of McWane plant facilities, I believe that the company, starting with its top leadership, is committed to environmental excellence and cultural change, and has already made major strides toward integrating sound and sustainable environmental practices into all of its operations," observed former EPA Deputy Administrator, Hank Habicht. He said the company is near completion of an upgrade of its existing environmental programs to include a comprehensive environmental, health and safety management system consistent with ISO 14000 that is being designed to exceed regulatory requirements.

Former OSHA Administrator Pat Tyson says McWane's present management team has demonstrated a strong commitment to safety, adding, "The company has addressed those areas that needed attention and continues to work towards becoming best in class at all of its facilities. McWane is a company that takes safety very seriously and has clearly turned the corner."

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