First off, happy Presidents Day! I hope you all have a chance to commemorate this federal holiday with a day off from work to catch up on your Daily Tackle entry reading.
I bet few, if any of you, knew that polluting can send a person to jail, right?¬† Or that a corporation can be found guilty of committing environmental crimes?
Recently, a New Hampshire man plead guilty to lying to federal regulators, after the U.S. EPA discovered that in the course of his employment as an environmental coordinator at Aero Dynamics Inc., a company that performs metal finishing and metal plating for military and commercial uses, either falsified or underreported pollutant content of the company‚Äôs wastewater discharge in its Clean Water Act reports. According to U.S. Attorney John Kacavas, he is to be sentenced in April, 2010, and can face a maximum of 5 year imprisonment. He‚Äôs not alone in being charged with an environmental crime.¬† See the recent developments in other cases here, here,¬† and here.
In 2004, the Department of Justice (‚ÄúDOJ‚ÄĚ), assisted by the U.S. Environmental Protection Agency‚Äôs Office of Enforcement and Compliance Assurance‚Äôs Criminal Investigation Division, secured the single largest criminal penalty and longest jail sentence in an environmental crime to date. The case was filed against AAR Contractors, Inc., an asbestos removal company owned by Alexander and Raul Salvagno, a father and son.¬† Because of the men‚Äôs knowing disregard for human safety in exposing their workers to asbestos in more than 1,500 removal project over a ten year period in New York State, Judge Howard Munson sentenced:
Alexander Salvagno to 25 years imprisonment; ordered him to forfeit to the United States of America $2,033,457.70 in assets that were illegal proceeds resulting from their RICO activities, including multiple acts of obstruction of justice, money-laundering, mail fraud, and bid-rigging; and ordered him to pay $23,039,607 in restitution to the victims. His father, Raul Salvagno, was sentenced to 19 years in prison; $1,707,156.40 in forfeiture; and $22,875,575.46 in victim restitution. AAR Contractors, Inc. also forfeited $2,033,457.70 to the U.S. Government and was ordered to pay $22,875,567.46 in restitution.
Environmental crimes refer to the violation of laws meant to protect human health, safety, and the environment.¬† These laws govern the disposal of waste and hazardous materials and ensure air and water standards.¬†¬† But, at the heart of the matter, environmental crimes are really white collar crimes.¬† And, they‚Äôre huge business.¬† Organized crime syndicates are involved, as are small businesses.¬† Because noncompliance is more cost-effective than obeying the law, environmental crimes reach broadly across the spectrum to include:
- illegally importing restricted substances into the US,
- illegally discharging¬† pollutants,
- foregoing safety regulations during asbestos removal projects, and
- tampering with drinking water supplies.
It can also extend into other domains:
The government generally adheres to a system of carrots and sticks in promoting behavioral modification with respect to environmental standards.¬† For example, a good and proactive environmental steward may become eligible for certain tax breaks or grants.¬† That is the carrot approach.¬† The government is rewarding individuals for ushering in positive changes.
But what about that stick?¬† Generally, to discourage individuals from taking actions that maltreat the environment and ignore public safety and human health, the government institutes stiff civil penalties¬† intended to offset the financial allure of illegal activities.¬† But, where the behavior is committed with knowledge and the conduct is egregious, the government – with the DOJ acting as lead prosecutor – may pursue probation, jail time, or a combination of these punishments mixed in with the forfeiture of misbegotten profits and the payment of the previously mentioned civil penalties.
The acts that can constitute an environmental crime are far-ranging. Here is a short list of examples:
- Improper waste disposal
- Oil spills
- Destruction of wetlands
- Dumping into oceans, streams, lakes, or rivers
- Improperly handling pesticides or other toxic chemicals
- Burning garbage
- Improperly removing and disposing of asbestos
- Falsifying lab data pertaining to environmental regulations
- Smuggling certain chemicals, such as CFC refrigerants, into the U.S.
- Bribing government officials
- Committing fraud related to environmental crime
Ironically, the regulations intended to prevent such environmental crimes might actually be responsible for an increase in them.¬† And to deter environmental crimes, the USA frequently punishes its environmental criminals more harshly than other countries, with the exception of some European countries.¬† But the circle often continues unbroken.
Regulations and laws create an environment in which companies must expand more financial resources to meet federal, state, and local regulations.¬† Sometimes, it’s simply more expedient and more economical for them to circumvent the regulations. But in the long-run, companies do get caught.¬† Some business owners who fail to comply may get away with their crimes for years.¬† After all, a large portion of environmental compliance is based on self-reports and self-audits. That was true for the Salvagnos, and it proved true for the Atlantic States Cast Iron Pipe Company.
In 2009, Atlantic States was fined $8 million for environmental, health and safety offences while four of its senior managers were sent to jail for conspiring over an 8-year period to pollute air and water resources on the East Coast, for exposing its employees to dangerous work conditions, and for obstructing federal investigators. The jail terms ranged from 6 to seventy months in jail.¬† This is why environmental crimes are considered white-collar crimes.¬† They are often motivated by greed, an eye on the bottom line, and devised by upper management far removed from the actual workers committing the crimes.
Were the actions of these companies worth it?¬† How do you balance the need for environmental regulations, the protection of natural resources and the environment against the ability of a corporation to operate profitably in the United States?¬† Is it a foregone conclusion that a company that is ahead of the curve on environmental compliance must not be profitable?
Posted by Krystyna on February 15, 2010 at 10:25 am.