White-Collar Crime - Environmental Crime

Environmental crime is a serious problem for the United States, even though the immediate consequences of an offense may not be obvious or immediately severe. Environmental crimes do have victims. The cumulative costs in environmental damage and the long range toll in illness, injury, and death may be considerable.

—Theodore M. Hammett and Joel Epstein, "Prosecuting Environmental Crime: Los Angeles County," National Institute of Justice Program Focus, 1993

Environmental crime involves illegally polluting the air, water, or ground. Sometimes firms dump hazardous materials and waste. To investigate properly, local, state, national, and international agencies often need to cooperate. It is not unusual for environmental criminals to transport hazardous waste across state or international borders for disposal in places with less stringent environmental enforcement.

According to the National Institute of Justice, several obstacles exist in prosecuting environmental crime.

TABLE 7.4
Persons indicted, awaiting trial on December 31, and convicted of offenses involving abuse of public office, 1973–2004

1. Some prosecutors feel unprepared to tackle environmental cases, which are perceived as hopelessly complicated and impossible to win.
2. Some corporate defendants regard civil penalties and one-time cleanup costs as part of doing business. Many prosecutors are now turning to civil suits only when criminal remedies are not available.
3. Some judges are not well-informed on environmental laws or are not sensitive to the seriousness of the crimes.
4. Individual juries may be reluctant to convict a community's business leaders and significant employers if the alleged environmental damage does not have immediate consequences.

The more common means of enforcing environmental laws is through regulatory action by the government's responsible agencies and the application of civil penalties to those who violate the regulations.

According to the U.S. Environmental Protection Agency (EPA), in fiscal year 2001 criminal charges were brought against 372 defendants for violations of environmental laws nationwide. Those found guilty were fined some $95 million and were sentenced collectively to 256 years in prison. One example of a successful criminal prosecution in fiscal year (FY) 2001 reported by the EPA, is the case of David D. Nuyen of Silver Springs, Maryland. In July 2001 Nuyen pled guilty to violations of the Lead Hazard Reduction Act and the Toxic Substances Control Act. Nuyen, who owned 15 low-income rental properties in Washington, D.C., admitted that he failed to notify tenants of lead paint hazards in one of his buildings. Nuyen was sentenced to two years in prison and fined $50,000.

In addition, the EPA reported the settlement of 222 civil actions in FY 2001, resulting in $125 million in civil penalties plus $25.5 million in settlements shared with states, including a multi-state enforcement case involving Morton International, Inc. In October 2001 the company agreed to resolve charges of violating clean air, water, and hazardous waste laws at its Moss Point, Mississippi facility. Under the terms of the settlement, Morton International agreed to pay $20 million in penalties and to spend up to $16 million on projects to enhance the environment.

In another civil action in FY 2001, the EPA reached settlements with four major refineries—Koch Petroleum, BP Amoco, Marathon Ashland Petroleum, and Motiva/Equilon/Shell. The settlements involved a total of 27 refineries in violation of hazardous air pollution laws. The EPA did not disclose the terms of the settlements. As a result of criminal prosecutions, civil actions, and administrative penalties, the EPA reported that in FY 2001 environmental violators paid a total of $4.3 billion for pollution controls and environmental clean-up.

In March 2002 the EPA and the Department of Justice announced that they had filed a civil action against Shell Pipeline Company LP and Olympic Pipeline Company in connection with a gasoline pipeline rupture near Bellingham, Washington, in 1999. The rupture released a three-inch thick layer of gasoline over a 1.33-mile stretch of creek water, resulting in a massive explosion that caused the deaths of three people, including two 10-year-old boys. The resulting fire destroyed some 2.5 miles of vegetation and created a burn zone encompassing 26 acres.

In April 2002 the Miami, Florida-based Carnival Company, which operates some 40 cruise ships, pled guilty to falsifying oil record books on several of its ships and agreed to pay $18 million in fines. The falsification of records occurred when Carnival employees ran fresh water past oil water separators, resulting in artificially low oil concentration readings that were officially recorded in the ships' oil records books. As a consequence, bilge water with higher levels of oil concentration than allowed under the law was released, threatening surrounding ocean life.

On May 13, 2002, Ashland, Inc., of Covington, Kentucky, pled guilty to negligent endangerment under the Clean Air Act for failing to properly seal a manhole cover on a sewer used to transport flammable hydrocarbons, resulting in an explosion that injured five people, one of them severely. Ashland, Inc., agreed to pay a total of $10.7 million in fines and payments to compensate the injured parties.