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Rx for the Environment

Fines aren’t enough. Send corporate polluters to jail.

Water Pollution, cleanup

Water Pollution cleanup on November 13th, 1981.

George Crouter/The Denver Post via Getty

A street hoodlum who assaults someone with a gun or a knife will normally get locked up for his crime, but the swift sword of justice hesitates when a business executive assaults an entire community with poisonous chemicals.

The reasons are obvious. Victims of environmental crime are often not immediately visible they are cancer patients a decade later or unborn children with hideous deformities. And the white-collar assailant seems so respectable, an upstanding citizen, a member of the right clubs. Usually, he will get a legal scolding, no more, for doing bodily harm to his fellow citizens.

This particular aspect of unequal justice may, however, be yielding at last to public opinion. In Los Angeles, for instance, an aggressive city attorney named Ira Reiner has taken a less forgiving approach to environmental crime: jail terms for the corporate executives who commit them.

“A burglar goes to jail, and if he only does ninety to a hundred days, that’s a vacation for him,” Reiner observed. “But the top executive officer of a business doesn’t expect to go to the slammer. It puts the fear of God in them.”

A vice-president of the Precision Specialty Metals Company learned the hard way he is now sentenced to 120 days in jail because his company found a cheap and easy solution to its problem: how to dispose of 4,000 gallons a day of hexavalent chromium, a potentially cancer-causing substance, plus other corrosive chemicals. The solution was to dump them into the city sewer system of Los Angeles.

When city inspectors got a tip from a conscientious employee and came around to investigate, the company responded imaginatively. The factory is situated right on the city-county line, so 300 feet of pirate pipe was hurriedly installed, and the dangerous chemicals were diverted. The hazardous wastes were no longer dumped into the city sewers. Now they were being dumped into the county sewers.

If Precision Specialty Metals, then a division of Plessey Incorporated, a $300 million firm traded on the New York Stock Exchange, had been a whorehouse or a stolen-car ring or an after-hours gambling joint, a police raid would have caught them in the act, and somebody would have gone to jail. Corporate crime is usually treated more gently. If plant managers get caught, they have to sign a legal agreement promising to correct the violations and to sin no more. At worst, the company might have to pay a modest fine. And a few thousand dollars in fines seems cheap compared to the cost of obeying the law. Besides, it’s written off as a cost of doing business.

In this case, however, Reiner played hardball with the white-collar criminals. Instead of filing a civil lawsuit to collect dollars, Reiner filed criminal charges. In addition to putting the veep in the slammer, the management of Precision Specialty Metals was sentenced to a deliciously appropriate program of rehabilitation: The company must buy a half-page advertisement in the Wall Street Journal in which it frankly acknowledges that what it did was wrong and endangered the public health, and that one of its executives went to jail. The city attorney must approve the text.

“We wanted the ad in the Wall Street Journal, because that newspaper finds its way into every corporate boardroom in America,” explained Reiner. “We want to put a chill in the boardrooms. We want them to understand that if they violate the law, they had best get away with it, because if they don’t, they are going to go to jail.”

The Los Angeles city attorney is one of the point men in an enormously important offensive against environmental crimes, an attempt to establish personal responsibility for the outrageous violations committed behind the cloak of corporate decision-making. So far, Reiner’s Hazardous Waste Strike Force has won four cases, including criminal convictions for a vice-president, two presidents and a board chairman. Last December, Reiner filed a 341-count criminal complaint against Todd Shipyards, one of the nation’s largest, and eleven management defendants who ranged from a maintenance foreman to a corporate vice-president at the home office in New York.

These men were all accused of complicity in the illegal disposal of six old transformers containing PCBs, the now banned coolant that has been found to cause liver damage and cancer. According to Reiner, the shipyard took bids on proper disposal of the toxic chemical, discovered it would cost $58,000 and decided on a cheaper method: It hired a junk dealer to cart the stuff off and have the chemicals burned without safeguards in the Mojave Desert. “They hauled them away as if they were so many bedsprings,” Reiner said. The company and the individuals awaiting trial deny the charges.

Case by case, in Los Angeles and elsewhere, we are witnessing the next crucial phase in the development of America’s environmental ethic. The last decade produced an extraordinary catalog of new laws covering clean air, clean water, hazardous wastes, toxic substances, coastal water and wetlands.

Now comes the hard part: enforcing these laws and convincing corporate managers, from the boardroom to the factory floor, that Americans are serious about preserving their environment. Although most business executives agree, their management decisions are defined by economic motives: to reduce costs and maximize profits. This is why criminal prosecution the imposition of personal responsibility for misdeeds is so important. When the home office tells a plant manager to cut corners in order to save money, to accept the risk of a fine or lawsuit later, that’s one thing. But going to jail for the company? No way. Nothing screws up the old résumé like a criminal conviction.

***

A few weeks ago, William Ruckelshaus, the new administrator of the Environmental Protection Agency, was pounding the table and complaining to his staff that the EPA’s field investigators were not producing enough action. Why were complaints so low? Why weren’t they catching more polluters? “On the basis of what I have seen here in the last few months, there may be more pussycats in the tank than tigers,” Ruckelshaus said.

His complaint was sincere but a trifle disingenuous. Ruckelshaus knows perfectly well that his predecessor, Anne Gorsuch, as well as other regulators in the Reagan administration, spent two years scandalously discouraging enforcement. The word went out from Washington to lay off businesses, and field investigators got the message. The number of civil complaints declined drastically. The new EPA administrator promises to change that. “If the signals aren’t clear enough,” he said, “by God, let’s clear them up right now.”

The Reagan administration has made one genuine contribution to the field of environmental enforcement for which it has not received due credit (nor are we likely to hear the Gipper bragging about it in campaign speeches). Reagan’s EPA is actually sending more polluters to jail than the Carter administration ever did. For the first time, the EPA has its own criminal-investigations section, staffed with twenty-three law-enforcement officers who are now working on about 120 cases around the country. (I should add that the investigative unit was created only after constant badgering from congressional overseers who budgeted the money and insisted that it be spent.) Last fiscal year, twenty-eight polluters were convicted on criminal charges, though not all of them got jail terms; only eleven were convicted in the last fiscal year of the Carter administration.

This is a modest effort, but it represents an important beginning. In the long run, the EPA will need many more detectives before its criminal enforcement will be taken seriously by corporate managers.

So far, most of the criminal action has focused on the most flagrant episodes of illegal dumping of hazardous wastes. Judges and juries understand that. Last year in New Hampshire, the A.C. Lawrence Leather Company and five executives were indicted for dumping chemical refuse in the Ashuelot River and falsifying compliance reports to the EPA. Nobody went to jail, but the fine of $475,000 was one of the largest in that state’s history and the first successful criminal prosecution under the Clean Water Act and hazardous-wastes law. In Detroit, Lawrence Welch was sentenced to two years in jail (all but four months suspended) for dumping drums of old paint and varnish in rural counties. In Jacksonville, Florida, Lynwood Holley received a $25,000 fine and two years’ probation after pleading guilty to the illegal dumping of PCBs.

In the present political environment, the question is whether federal investigators will take on the big boys, the corporate executives who hire the dumpers and don’t ask too many questions about where and how the garbage is being dumped. Peter Beeson, a former Justice Department lawyer who helped set up the EPA detective force, said the cases on their investigative docket include a number of Fortune 500 companies — “names everyone would recognize.” In general, however, the most flagrant violations have come from smaller companies, where cost margins are tighter.

Beeson does not make expansive claims for the effects of prosecuting environmental crimes. But he thinks prosecution may discourage white-collar executives more than it does pedestrian criminals like burglars or drug dealers. “Deterrence,” he suggests, “works best on people who have not had contact with criminal justice and for whom prosecution or even investigation will have severe personal consequences.”

Indeed, one problem the federal prosecutors have had is convincing judges that these corporate criminals ought to go to jail. “For many courts, it is clearly a painful decision,” Beeson said. “The judges are often facing people who have been otherwise upstanding and productive. It’s not something society is used to doing.”

In the New Hampshire case, the Justice Prospects are excellent that a citizen lawsuit will win a court order compelling the company to clean up its act and pay a fine. Department lawyers urged a prison term for the corporate executives, insisting that their misdeeds were “no different nor any less serious than the conduct of one who has been convicted of the more traditional felonies. The government was willfully cheated and the public betrayed . . . by educated, privileged people who abused their positions and knew better.”

The judge demurred. The defendants before him were unblemished Rotarian types, and apparently, the judge couldn’t picture them behind bars.

The public, however, takes a much sterner view. This was confirmed in a recent study by the Justice Department’s Bureau of Justice Statistics, which asked 60,000 citizens to rank various crimes in order of their severity. The bombing of a public building in which twenty people are killed was ranked first. In seventh place, after murder but ahead of heroin smuggling and skyjacking, was this crime: “A factory knowingly gets rid of its waste in a way that pollutes the water supply of a city. As a result, twenty people die.”

Even when pollution crimes do not actually kill people, the public still regards them as heinous. According to this survey, factory polluters are worse than a mugger robbing someone at gunpoint or a corporate lobbyist who bribes a public official or a teenage boy who beats up his mother. Selling marijuana or cheating on welfare are way down on the list of crimes the public feels strongly about. Lenient judges are clearly out of step on this issue, and it is possible we may see more decisions along the lines of a Kentucky case a few years back.

In that instance, a federal judge there, Charles M. Allen, sentenced a polluter to prison with these words: “If the reckless disposal of pollutants is allowed to continue unchecked, it is this court’s fear that irreparable damage to our planet will result. Contamination will result in the eventual and predictable disappearance of viable land, water and other natural resources, causing an ecological imbalance which could result in the death of our world as we know it.

“The court considered at length the question of probation as against imprisonment . . . it was and is the opinion of this court that businessmen and industries who pollute our environment are guilty of grave crimes against man, nature and themselves. Such crimes, if allowed to continue, will soon reach the point where their effects are irreversible by any known technology. . . . The offenses committed by the defendant were of such a serious nature that it would unduly deprecate or depreciate their seriousness if a sentence of probation were imposed.”

Still, the American Bar Association has set up a task force on environmental criminal statutes, which suggests that corporate lawyers who normally deal with contracts and negotiations are waking up to the fact that, if their clients aren’t more careful, they may be representing common criminals.

***

Violation of our environmental-protection laws is commonplace; thousands of American corporations are routinely pumping illegal refuse into our air and water and earth, and nothing much happens to them. Corporations themselves routinely report their violations to state and federal environmental-protection agencies, but most of these self-reported violations just sit there in the files, no action taken, because government regulators are either too overworked or too timid to do anything about them. This was true even before Ronald Reagan came to town and his appointees tried to gut civil enforcement. There are simply too many violations; the enforcement officers only have time to concentrate on the biggest and most obvious cases.

Now, some inventive public-interest lawyers have devised a way to deal with this national scandal: it’s called “citizen enforcement.” Anyone can go to the local offices of state or federal environmental-protection agencies and demand to see the compliance reports. With a little tutoring, it’s easy to read the reports and spot the worst violators not the temporary or petty excesses, but companies that exceed the legal limits by substantial margins every quarter.

If the government isn’t doing anything, anyone can get a lawyer and sue. The prospects are excellent that a citizen lawsuit will win, at minimum, a court order compelling the company to clean up its act and to pay a fine to the federal treasury as well as the legal expenses of the citizens who brought the suit.

This approach is being pioneered by Trial Lawyers for Public Justice, a public-interest law firm in Washington D.C., launched by 400 prominent trial lawyers, the litigators who win those huge cash verdicts in personal-injury cases. For years, Ralph Nader had accused the lawyers of using their skills for the big bucks and ignoring cases of social conscience. These leading trial lawyers apparently took Nader’s scolding seriously and launched a nonprofit law firm to pursue citizen enforcement of environmental-protection laws.

Trial Lawyers for Public Justice filed twelve cases against companies in New York and New Jersey for violating the Clean Water Act, using as evidence the companies’ own reports. There was no contest on the question of violations. Seven firms promptly settled and, in lieu of paying fines, agreed to contribute about $100,000 to projects protecting the environment. They accepted court-supervised schedules for compliance, which, if they aren’t met, will produce more financial penalties. They also paid about $60,000 for the plaintiffs’ research and legal fees. Four other cases are being contested. One was lost because the company was bankrupt.

Anthony Z. Roisman, executive director of Trial Lawyers for Public Justice and a former Justice Department official during the Carter administration, predicts that citizen-enforcement lawsuits will spread and eventually alter corporate mentality about what business can get away with. “One of the weaknesses of environmental regulation is that it depends on voluntary compliance,” Roisman explained. “The Internal Revenue Service would be doomed if it had to depend on individual audits to collect taxes. But people have decided that it would be more painful to get caught than to comply and pay taxes. We have to convince management that the same thing applies to environmental laws.”

***

If business leaders had a deeper sense of their own self-interest, they would support criminal enforcement of environmental laws and send more of their peers to jail. Instead, the Business Roundtable has lobbied, with considerable success, against tough criminal provisions in the federal laws.

Business interests complain endlessly about the nightmare of complexity in the new environmental laws, the overlapping requirements imposed by different statutes, and the fine-print regulations that seem to govern every valve and nozzle in a modern factory. They have a point the regulations are horribly complicated but they refuse to face up to the reason behind this nightmare: public distrust. The widespread assumption is that, left to their own judgment, many companies would simply dump the poison in the sewer.

I know, I know. Some businessmen believe in clean air and water, too. But when was the last time you heard a business leader denounce his peers for irresponsible or even criminal offenses against the environment? Until businessmen begin to build an opposite presumption namely, that most of them are obeying the law and the violators are being caught and punished the regulatory laws will continue to be complex and onerous. One way to build that trust is to send more polluters to jail. Another is to clean up the backlog of wholesale violations that are now being tolerated. If the public begins to see that the punishment fits the crime, then citizens might begin to assume that most company managers can be trusted to do the right thing. I know, I know. Some businessmen believe in clean air and water, too. But when was the last time you heard a business leader denounce his peers for irresponsible or even criminal offenses against the environment? Until businessmen begin to build an opposite presumption namely, that most of them are obeying the law and the violators are being caught and punished the regulatory laws will continue to be complex and onerous. One way to build that trust is to send more polluters to jail. Another is to clean up the backlog of wholesale violations that are now being tolerated. If the public begins to see that the punishment fits the crime, then citizens might begin to assume that most company managers can be trusted to do the right thing.

In This Article: Coverwall, Crime

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