Koch Pleads Guilty to Covering Up Violations at Oil Refinery

April 12, 2001
Koch Petroleum Group pled guilty Monday to covering up\r\nenvironmental violations at its oil refinery in Corpus Christi,\r\nTexas.

Koch Petroleum Group pled guilty Monday to covering up environmental violations at its oil refinery in Corpus Christi, Texas.

Under the plea agreement, Koch will pay a total of $20 million dollars: $10 million in criminal fines and $10 million for special projects to improve the environment in Corpus Christi -- a record amount imposed in an environmental prosecution.

The plea agreement, filed in U.S. District Court in Corpus Christi, also requires that Koch successfully complete a five-year term of probation and adhere to a strict new environmental compliance program.

Federal grand juries returned an indictment against the company in September 2000 and a superceding indictment in January 2001, and a jury trial on the federal charges began Monday in Corpus Christi.

The company was charged with criminal violations of the Clean Air Act as well as conspiracy and making false statements to the Texas Natural Resource Conservation Commission.

"Environmental crimes are real crimes that must be identified and prosecuted," said John Cruden, acting attorney general for the Environment Division at the Justice Department. "Significant results such as today''s conviction should deter other corporations from violating the law. This result is a tribute to the State of Texas and federal investigators who developed this case."

The company''s West Plant refinery is subject to Clean Air Act regulations that limit emissions of benzene, a hazardous air pollutant.

Under the Act, the West Plant was required to comply with the federal benzene standards by April 1993, but Koch applied for and received a compliance waiver until January 1995.

According to the original indictment, a whistleblower revealed that Koch''s West Plant had at least 91 metric tons of uncontrolled benzene in its liquid waste streams in 1995, some 15 times greater than the 6 metric ton limit that applied to the refinery.

Koch admitted that it concealed its noncompliance with the requirements of the Clean Air Act in 1995 by, among other things, failing to control emissions from certain waste management units at the refinery.

Specifically, in January 1995, Koch certified that it had installed equipment necessary to control benzene-contaminated wastewater and then, without notifying the State of Texas or EPA, disconnected a critical oil-water separator used to control benzene emissions.

Koch then constructed a line to bypass the control equipment and built a stack to vent benzene vapors from the oil-water separator into the atmosphere.

In addition, in April 1995, Koch filed a report that concealed the fact that the separator was venting benzene vapors to the atmosphere and falsely stated that the company had tested for benzene in certain waste streams.

"The Texas Natural Resource Conservation Commission (TNRCC) takes very seriously its responsibility to enforce all environmental laws to protect public health and the environment," said TNRCC Executive Director Jeff Saitas. "We will continue to work closely with state and federal task force members on environmental criminal matters."

by Virginia Sutcliffe

About the Author

EHS Today Staff

EHS Today's editorial staff includes:

Dave Blanchard, Editor-in-Chief: During his career Dave has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. In addition, he serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2021), which has been translated into several languages and is currently in its third edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

Adrienne Selko, Senior Editor: In addition to her roles with EHS Today and the Safety Leadership Conference, Adrienne is also a senior editor at IndustryWeek and has written about many topics, with her current focus on workforce development strategies. She is also a senior editor at Material Handling & Logistics. Previously she was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck?, which made the Cleveland Plain Dealer's best sellers list.

Nicole Stempak, Managing Editor:  Nicole Stempak is managing editor of EHS Today and conference content manager of the Safety Leadership Conference.

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