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87–577 PDF 2003

S. HRG. 107–938

CRIMINAL AND CIVIL ENFORCEMENT OF

ENVIRONMENTAL LAWS: DO WE HAVE ALL

THE TOOLS WE NEED?

HEARING

BEFORE THE

SUBCOMMITTEE ON CRIME AND DRUGS

OF THE

COMMITTEE ON THE JUDICIARY 

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

JULY 30, 2002

Serial No. J–107–97

Printed for the use of the Committee on the Judiciary

(

(II)

COMMITTEE ON THE JUDICIARY 

PATRICK J. LEAHY, Vermont, Chairman 

EDWARD M. KENNEDY, Massachusetts 

JOSEPH R. BIDEN, JR., Delaware 

HERBERT KOHL, Wisconsin 

DIANNE FEINSTEIN, California 

RUSSELL D. FEINGOLD, Wisconsin 

CHARLES E. SCHUMER, New York 

RICHARD J. DURBIN, Illinois 

MARIA CANTWELL, Washington 

JOHN EDWARDS, North Carolina 

ORRIN G. HATCH, Utah 

STROM THURMOND, South Carolina 

CHARLES E. GRASSLEY, Iowa 

ARLEN SPECTER, Pennsylvania 

JON KYL, Arizona 

MIKE DEWINE, Ohio 

JEFF SESSIONS, Alabama 

SAM BROWNBACK, Kansas 

MITCH MCCONNELL, Kentucky 

BRUCE A. COHEN, Majority Chief Counsel and Staff Director 

SHARON PROST, Minority Chief Counsel 

MAKAN DELRAHIM, Minority Staff Director 

SUBCOMMITTEE ON CRIME AND DRUGS

JOSEPH R. BIDEN, JR., Delaware, Chairman 

PATRICK J. LEAHY, Vermont 

DIANNE FEINSTEIN, California 

HERBERT KOHL, Wisconsin 

RICHARD J. DURBIN, Illinois 

MARIA CANTWELL, Washington 

JOHN EDWARDS, North Carolina 

CHARLES E. GRASSLEY, Iowa 

ORRIN G. HATCH, Utah 

MIKE DEWINE, Ohio 

JEFF SESSIONS, Alabama 

SAM BROWNBACK, Kansas 

MITCH MCCONNELL, Kentucky 

NEIL MACBRIDE, Majority Chief Counsel 

RITA LARI, Minority Chief Counsel 

(III)

C O N T E N T S 

STATEMENTS OF COMMITTEE MEMBERS 

Page

Biden, Hon. Joseph R., Jr., a U.S Senator from the State of Delaware .............. 1

Feingold, Russell D., a U.S. Senator from the State of Wisconsin, prepared 

statement .............................................................................................................. 68

Grassley, Hon. Charles E., a U.S. Senator from the State of Iowa, prepared 

statement .............................................................................................................. 70

Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah, prepared 

statement .............................................................................................................. 75

WITNESSES 

DiPasquale, Nicholas A., Secretary, Delaware Department of Natural 

Resorces and Environmental Control, Dover, Delaware ................................... 29

Penders, Michael J., President, Environmental Protection International, 

Washington, D.C. ................................................................................................. 27

Sansonetti, Thomas L., Assistant Attorney General, Environment and Natural Resources Division, Department of Justice; accompanied by Timothy 

M. Burgess, U.S. Attorney for the District of Alaska, Anchorage, Alaska, 

and Leo D’Amico, Director, Office of Criminal Enforcement, Forensics and 

Training, Office of Enforcement and Compliance Assistance, Environmental 

Protection Agency, Washington, D.C. ................................................................. 4

Sarachan, Ronald A., Ballard Spahr Andrews and Ingersoll, LLP, Philadelphia, Pennsylvania ............................................................................................... 24

Schaeffer, Eric, Director, Environmental Integrity Project, Rockefeller Family 

Fund, Washington, D.C. ...................................................................................... 15

Starr, Judson W., Venable, LLP, Washington, D.C. ............................................. 22

QUESTIONS AND ANSWERS 

Responses of Thomas L. Sanonetti and Leo D’Amico to questions submitted 

by Senator Biden .................................................................................................. 43

Responses of Thomas L. Sanonetti to questions submitted by Senator Cantwell ........................................................................................................................ 52

SUBMISSIONS FOR THE RECORD 

Citizens for Pennsylvania’s Future, Harrisburg, Pennsylvania, statement ....... 54

DiPasquale, Nicholas A., Secretary, Delaware Department of Natural 

Resorces and Environmental Control, Dover, Delaware, prepared statement ...................................................................................................................... 59

Penders, Michael J., President, Environmental Protection International, 

Washington, D.C., prepared statement .............................................................. 76

Sansonetti, Thomas L., Assistant Attorney General, Environment and Natural Resources Division, Department of Justice; accompanied by Timothy 

M. Burgess, U.S. Attorney for the District of Alaska, Anchorage, Alaska, 

and Leo D’Amico, Director, Office of Criminal Enforcement, Forensics and 

Training, Office of Enforcement and Compliance Assistance, Environmental 

Protection Agency, Washington, D.C., prepared statement .............................. 98

Sarachan, Ronald A., Ballard Spahr Andrews and Ingersoll, LLP, Philadelphia, Pennsylvania, prepared statement ............................................................ 112

Schaeffer, Eric, Director, Environmental Integrity Project, Rockefeller Family 

Fund, Washington, D.C., prepared statement ................................................... 119

Starr, Judson W., Venable, LLP, Washington, D.C., prepared statement .......... 127

(1)

CRIMINAL AND CIVIL ENFORCEMENT OF 

ENVIRONMENTAL LAWS: DO WE HAVE ALL 

THE TOOLS WE NEED? 

TUESDAY, JULY 30, 2002

U.S. SENATE, 

SUBCOMMITTEE ON CRIME AND DRUGS, 

COMMITTEE ON THE JUDICIARY, 

Washington, D.C. 

The Subcommittee met, pursuant to notice, at 2:22 p.m., in room 

SD–226, Dirksen Senate Office Building. Hon. Joseph R. Biden, Jr., 

Chairman of the Subcommittee, presiding. 

Present: Senators Biden and Sessions. 

OPENING STATEMENT OF HON. JOSEPH R. BIDEN, JR., A U.S. 

SENATOR FROM THE DELAWARE 

Chairman BIDEN. The Subcommittee will come to order. Let me 

begin with an opening statement here and then introduce our first 

panel. 

Today, the Crime and Drugs Subcommittee will be addressing 

the criminal and civil enforcement sides of the Federal environmental laws. We will be asking whether or not law enforcement 

has all the tools they need to combat those who would pollute our 

Nation’s air and water knowingly and in a criminal manner. 

We recently concluded a series of three hearings on the devastating impact of the recent spate of scandals involving corporate 

America, and as part of the larger issue this Subcommittee heard 

testimony from a wide range of experts on whether or not penalties 

for white collar crime are sufficient to deter corporate wrongdoing. 

We found that there was a bit of what one might call a penalty gap 

that existed. 

I was at the White House today when the President signed the 

Corporate Responsibility Act, and the first thing he mentioned was 

the same thing Mr. Greenspan did that he thought the single 

most—I am quoting Greenspan paraphrasing the President—paraphrasing them both, actually—the most important element of the 

Accountability Act we passed were the criminal penalties—and the 

President cited this—where a CFO and a CEO have to certify when 

a document is filed before the SEC four times a year that the information contained in the document is accurate. 

If you knowingly lie in that submission, you go to jail for 10 

years, and if you willfully alter that document and still submit it, 

then you go to jail for up to 20 years. The President cited that as 

the most significant deterrent, giving investors reason to believe 

2

that the filing is accurate, at least to the best knowledge of the corporate officials. 

As Samuel Johnson once said, and I am paraphrasing, there is 

nothing like a hanging to focus one’s attention. I have found since 

my days on this committee, going back to the early 1970’s when we 

were dealing with the international bribery statutes, that when you 

have CEOs in this country susceptible to a criminal penalty if they 

engaged in responding to bribe offers from abroad, all of a sudden 

things started to change. 

So the real question here—and I have not reached a decision myself—is do we need any additional tools that we need to give the 

Justice Department and the EPA which they can bring to bear for 

those who knowingly and intentionally violate the Clean Air Act 

and the Clean Water Act, so that they know their violations will 

not be treated as merely a cost of doing business. 

I find that when an individual is held responsible, they focus a 

lot more than the corporation being held responsible. But as I said, 

and I mean this sincerely, I am not sure we don’t have enough laws 

already on the books relating to that, and the purpose of this hearing is to begin to discuss that issue. 

There are three basic questions I hope our distinguished panel 

of witnesses will address today. First, are the existing Federal environmental laws sufficient to cover a full range of potential polluting of our air and our land and our water? Have we struck the 

right balance in terms of delegating the important enforcement activities from the Federal to the State governments? And do those 

statutes set the right standard of proof, or is the current standard 

too high to hold corporate polluters criminally responsible? 

The second question is are existing environmental penalties adequate to deter polluters? For example, I understand that in many 

environmental contexts civil and criminal enforcement often overlaps. For that reason, we have an expert on civil enforcement here 

today as well. I want to ensure that we are using all the tools in 

our toolbox—tough criminal penalties, where appropriate, quick 

and forceful civil penalties, where appropriate, and in some circumstances a combination of both. 

Third, are there sufficient resources to carry out the critically important job of protecting our Nation’s air, land, and water? I know 

that the Justice Department and the EPA have incredibly dedicated and talented prosecutors who are staunchly committed to defending the environment. I want to make sure that we give them 

all the tools they need, just as we have done in the financial fraud 

cases. With the whole new emphasis, understandably, on terrorism 

and environmental terrorism, I want to know whether you have 

enough resources to do this job, as well as the new job you are 

being asked to do. 

In conclusion, the recent spate of corporate scandals has reminded us that we can’t take corporate integrity and responsibility 

for granted anymore. Likewise, we can’t take for granted that on 

the environmental side of the equation there won’t be similar activity. 

Just as we crack down on white collar crime, we have to crack 

down on so-called green collar crime. Just as Congress needs to 

make sure that pensions and investments are protected, we need 

3

to make sure that our statutory and penalty system is sufficient to 

protect the environment. 

I am very pleased that we have such distinguished panels with 

us today, several of whom have been willing to make it back to the 

committee. 

Senator Grassley, who was going to be here and who is not able 

to be here right now—I would ask unanimous consent—and since 

I am the only one here, I am sure I will get it—that his statement 

be placed in the record. 

Our first panel is Tom Sansonetti, Assistant Attorney General 

for the Environment and Natural Resources Division of the Department of Justice. Mr. Sansonetti has a long history of government 

service. He was Associate Solicitor on Energy and Natural Resource Issues in the Interior Department under President Reagan. 

He was then nominated in 1990 to be Solicitor for the Interior. He 

also is the founding partner of his law firm, which specialized in 

energy concerns. We are very glad to have him here today. 

Timothy M. Burgess is the United States Attorney for the District of Alaska. 

Thanks for making the trip. I hope you had other reasons to 

come. I hope we weren’t the only reason, but welcome. I know it 

is a long trip, having made it. 

He is a U.S. Attorney and Chairman of both the Attorney General’s Advisory Council Environmental Subcommittee and the Department of Justice’s Environmental Criminal Task Force. Mr. 

Burgess previously served as an Assistant U.S. Attorney in the 

District of Alaska, since 1989, and was an associate in the law firm 

of Gilmore and Feldman, in Anchorage, from 1987 to 1989. He received his undergraduate degree and his MB and A—you can tell 

I am from Delaware—MBA from the University of Alaska and his 

J.D. from Northeastern University. We want to thank him for coming. 

I might point out to him that when I first got here, facetiously, 

when I was in another State they would slip and say ‘‘now I want 

to introduce the Senator from DuPont—I mean Delaware.’’

Leo A. D’Amico is the Director of the Office of Criminal Enforcement, Forensics, and Training, and leads the Criminal Investigation Division at the EPA. Mr. D’Amico has been working at the 

EPA for 9 years doing criminal enforcement, and he is submitting 

joint testimony with Mr. Sansonetti, on behalf of both the Department of Justice and EPA. So Mr. D’Amico will not be testifying, as 

I understand it, but we are eager to have you respond to questions, 

if you may, since you have 9 years of experience here. We thank 

you, as well, for coming. 

With that, why don’t we begin with you, Tom—I should be more 

formal—General, why don’t we begin with you and then we will go 

our friend from Alaska and we will move from there? The floor is 

yours. 

4

STATEMENT OF THOMAS L. SANSONETTI, ASSISTANT ATTORNEY GENERAL, ENVIRONMENT AND NATURAL RESOURCES 

DIVISION, DEPARTMENT OF JUSTICE, WASHINGTON, D.C.; 

ACCOMPANIED BY HON. TIMOTHY M. BURGESS, UNITED 

STATES ATTORNEY FOR THE DISTRICT OF ALASKA, ANCHORAGE, ALASKA, AND LEO D’AMICO, DIRECTOR, OFFICE 

OF CRIMINAL ENFORCEMENT, FORENSICS AND TRAINING, 

OFFICE OF ENFORCEMENT AND COMPLIANCE ASSISTANCE, 

ENVIRONMENTAL PROTECTION AGENCY, WASHINGTON, D.C. 

Mr. SANSONETTI. Chairman Biden, I am pleased to be here today 

to discuss the Department of Justice’s environmental crimes program. 

Firm and fair enforcement of the laws is an important component 

of environmental protection. It helps ensure that, one, our citizens 

can breathe clean air, drink pure water, and enjoy our Nation’s 

natural resources; two, that law-abiding businesses have a level 

economic playing field on which to compete; and, three, that those 

who fail to comply with the law know that they will be penalized 

and will be deterred from non-compliance. 

Attorney General Ashcroft has identified protection of our natural resources through strong enforcement of the environmental 

laws as a top priority for the Department, and our environmental 

crimes program is a crucial part of those enforcement efforts. 

Tim Burgess, as you noted, the U.S. Attorney from Alaska, is 

also the head of the Department’s Environment Subcommittee of 

the Attorney General’s Advisory Council. Of course, he will be here 

today and joining me in responding to questions that you may 

have, along with Leo D’Amico, from the U.S. EPA. As you noted, 

he is the head of the EPA’s criminal enforcement efforts. 

In my situation, the Environment and Natural Resources Division has ten sections. Two of those sections are responsible for 

prosecuting environmental crimes: the Environmental Crime Section, known as ECS, which is responsible for prosecuting individuals and corporations that have violated the major environmental 

and pollution control laws; and, second, the Wildlife and Marine 

Resources Section, which is responsible for cracking down on the 

major worldwide black market in wildlife. 

The Environmental Crime Section has about 28 attorneys that 

are devoted full-time to criminal enforcement, whereas the Wildlife 

Section has 5 full-time prosecutors. To leverage the tremendous expertise of these prosecutors and to enhance our enforcement efforts, 

we also act as a resource for the training of and the dissemination 

of information to investigators and prosecutors across the Nation. 

In this regard, we have forged partnerships with the 94 U.S. Attorneys’ offices, the Environmental Protection Agency, the FBI, and 

other Federal, State and local agencies across the Nation. Through 

law enforcement coordinating committees and environmental task 

forces developed in the United States Attorneys’ offices across the 

country, we have increased cooperation among local, State and Federal environmental enforcement offices. 

I want to emphasize to the Subcommittee that we in the Division 

share responsibility with the U.S. Attorneys’ offices around the 

country for bringing prosecutions. In fact, as a general rule, the 

5

U.S. Attorneys’ offices initially decide whether they wish to handle 

cases referred by investigators. 

Sometimes, they decide to handle a case entirely on their own, 

while in other cases they prosecute them jointly with attorneys 

from ECS. In other instances, the Environmental Crime Section 

ends up handling a case in its entirety. Regardless of which office 

ends up handling a given case, we cooperate and offer assistance 

to one another as needed. 

One example of successful cooperation very recently in May of 

this year was United States v. Ashland Oil. Ashland, which owned 

and operated an oil refining facility in Minnesota, pled guilty to 

negligent endangerment under the Clean Air Act for the draining 

of hydrocarbons into a sewer that subsequently ignited into a fire 

ball that engulfed several company firefighters, injuring one severely. 

Under the terms of the plea agreement, Ashland will pay a crimi- nal fine of $3.5 million, sponsor a workshop at a national petroleum conference dealing with the Clean Air Act’s new source performance standards for petroleum waste water, take out full-page 

notices in the two major Twin Cities newspapers acknowledging 

what happened and how it was resolved, and pay $50,000 to each 

of the three local fire departments that responded to the fire, and 

another $50,000 to their own emergency response team. They have 

also agreed to spend another $3.7 million upgrading their facility 

to help prevent similar incidents in the future and to pay restitution to the victims. The primary victim, who happens to be a 

former Ashland employee, will receive $3.5 million and medical 

coverage for him and his family. 

Cooperation with the U.S. Attorneys’ offices and other law enforcement agencies has led to the development of initiatives to address problems as diverse as vessels polluting our oceans, environmental testing laboratories engaging in systemic fraud, and the 

smuggling of chlorofluorocarbons, CFCs, that destroy the protective 

ozone layer in our atmosphere. 

I have described these initiatives in much greater detail in my 

written testimony, but I would like to take a moment to talk about 

our most recent success in our Underground Storage Tank Initiative. 

The Underground Storage Tank Initiative is an aggressive effort 

to address the problem of widespread fraud by environmental contractors cleaning up sites contaminated by leaking underground 

storage tanks and non-compliance with UST regulations. 

In another terrific example of coordination between my Division 

and the U.S. Attorneys’ offices, last week we announced that 

Tanknology International, Incorporated, has agreed to plead guilty 

to ten felony counts of presenting false claims and making false 

statements to Federal agencies. 

The guilty pleas were for false underground storage tank testing 

services performed by their employees at Federal facilities in ten 

different Federal districts; ten different States we are talking about 

here. Tanknology has also agreed to pay a $1 million criminal fine 

and restitution of $1.29 million to the U.S. 

So in connection with Tanknology, and more generally, I want to 

tip my hat to the investigators out there in the field. As in other 

6

areas of law enforcement, the environmental prosecutors depend on 

the investigators who initially develop the evidence for a case. The 

investigators in our cases are typically agents from the EPA’s 

Criminal Investigation Division and the FBI, but we also receive 

substantial support from other agencies, including the Department 

of Transportation, the Coast Guard, the Fish and Wildlife Service, 

the Army Corps of Engineers, the U.S. Customs Service, and the 

DOD’s Criminal Investigative Service, as well as State and local 

environmental protection-related officials and agencies. So it is 

these agencies, frankly, that are critical to the success of our criminal enforcement efforts. 

In conclusion, the Department of Justice takes seriously its obligation to protect health and the environment, and it is committed 

to strong enforcement of the laws. In my written testimony, I provided the Subcommittee with a big picture of how the environmental criminal prosecutions fit into the larger picture of environmental enforcement. 

Criminal enforcement is a crucial part of that picture because 

there are some individuals and companies who will always see a 

civil or administrative penalty, as you said earlier, as little more 

than the cost of doing business. We are committed to making them 

see the light regarding environmental compliance and the vigorous 

protection of public health and the environment. 

So Mr. D’Amico, Mr. Burgess, and I would now be happy to answer any questions that you may have about the Department’s environmental crimes program. 

Chairman BIDEN. Thank you very much. 

Let me ask you a question, and maybe the best place to start is 

with Ashland Oil. Did you charge individuals in the corporation 

with a criminal offense or was the corporation charged with a 

criminal offense? 

Mr. SANSONETTI. I recall offhand that it was the corporation that 

we did, and I can look up the individual details as to what happened. 

Chairman BIDEN. Do you remember, Mr. D’Amico? 

Mr. D’AMICO. I believe it was only the corporation in Ashland 

Oil. Principally, the Criminal Investigation Division in our office focuses our cases on individuals. The most recent statistics I can give 

you from 2000 show that 80 percent of our defendants are individuals, versus 20 percent being corporations, and in some of those 

cases where it is corporations, it is also corporations and individuals. 

Chairman BIDEN. Now, can you tell me—you may not know off 

the top of your head—what is the largest corporation where an individual officer in the corporation was charged with a criminal offense? 

I asked my staff that. They came up with a number of instances 

where relatively small corporations that were essentially wholly 

owned by an individual, a major stockholder, were criminally held 

accountable. Has there been any Fortune 100 company or Fortune 

500 company where a CEO or a plant manager or anybody, in the 

9-years you have been there that you can think of, crossing both 

administrations, Democrat and Republican, has gone to jail? 

7

Mr. D’AMICO. I believe so. There was a CEO that just comes to 

me right now without having anything prepared from Sable Labs 

who was one of the senior officers, either the CEO or the chief financial officer for that particular corporation. I would have to 

verify that and get back that information to you. 

Chairman BIDEN. Well, I would very much appreciate it, and 

take your time, but if you could check to see when the last time 

anyone from a Fortune 100 company or an individual was sued. 

Let me tell you, the cynics among us assume that there is not 

any difference between being criminally fined, like in the Ashland 

Oil case, and being civilly fined. As long as no one is going to jail 

and it is not coming out of anybody’s pocket—it may impact the job 

prospects for someone moving up the corporate ladder, but it is not 

their money and it is not their time in jail. 

Let me ask you a question. Mr. Burgess, you are from Alaska. 

If, in fact, you had a circumstance, for reasons relating to convenience, where a major supertanker was purging their bilges, violating the law, into the ecosystem or into the bay within the territorial waters of the United States, do we go after that outfit based 

upon the captain of the ship knowingly doing it, and criminally, or 

do we go after it based upon the civil responsibility that they have 

under the environmental laws and seek a civil penalty. 

Mr. BURGESS. Well, Senator, first, we would have to start with 

the assumption that we have got evidence to support a criminal 

prosecution. If it is there, we would certainly look to see who made 

the decisions that led to those discharges that you mention. 

Corporations don’t make decisions. People do, and corporations 

act through their employees and their officers and directors. And 

it is funny you should mention that because we just recently had 

a series of prosecutions in Alaska in which we had foreign freighters coming into Dutch Harbor that were directly discharging overboard, as you suggested, and we have prosecuted and sent to jail 

the chief engineers who ordered that misconduct and the captain 

of one of the vessels. They have all been personally prosecuted and 

they are all facing jail time. 

Chairman BIDEN. Good, good. Now, as a prosecutor, Mr. Burgess, 

would it make any difference whether or not major environmental 

criminal laws had an ‘‘attempt’’ provision in them? Right now, 

there is no attempt; we have to wait until the violation occurs before we can go after them, whereas I can be arrested for attempted 

bank robbery, I can be arrested for attempted murder, I can be arrested for attempted a lot of things. 

Would the ‘‘attempt’’ standard give you more ammunition? Is it 

necessary, is it useful, is it counterproductive? 

Mr. BURGESS. It would certainly depend upon the factual situation we were looking at in a particular case and it would be something that we would look at in making a decision on a particular 

case. I think most environmental cases almost always involve a 

host of Federal violations, not just environmental violations. 

They frequently involve false statements, they frequently involve 

obstruction, so that would be another arrow, obviously, in the quiver of prosecutors that we would take a look at in making a decision 

as to whether or not to prosecute a case or if we could prosecute 

a case. 

8

Chairman BIDEN. Yes? 

Mr. SANSONETTI. In thinking about your comment about criminal 

attempt, I think that that is definitely worth taking a look at. I 

mean, right now the laws are written in such a fashion that you 

have to have harm occur before we can really pursue them down 

that line. 

Attempted criminal violations can still be pursued, but usually, 

as I recall, under a conspiracy theory in Title 18, and it is a little 

more difficult to prove that. Particularly with conspiracy, you need 

two individuals to start with, as opposed to a situation where just 

one individual may be trying to pollute the water or something like 

that. 

So I think that it is certainly worth taking a look at. Obviously, 

we would want to work with the other U.S. Attorneys to see what 

they thought about it and, of course, with your staff, but that 

might be one to take a look at. 

Chairman BIDEN. Mr. D’Amico? 

Mr. D’AMICO. I concur with Mr. Sansonetti. It would be to our 

advantage and the environment’s advantage if we could stop the 

act prior to taking place if it is just one individual involved where 

we don’t have the benefit of using the conspiracy statutes and 

charge that individual. 

Chairman BIDEN. Now, help me out because I think average people wonder about this. A manufacturing facility has a process 

whereby the discharge into the air, the flaring of gases or whatever, is a violation of the Clean Air Act, but there is a consent decree—not a consent decree—a permit where they are allowed to do 

it under certain limited circumstances. 

But beyond those limited circumstances, they knowingly make a 

decision to flare the gases outside of the permit because the cost 

of shutting down and not flaring the gases is so prohibitive for 

their overall company that it is cheaper to pay the civil penalty 

that is a fine that is attached to flaring those gases. 

In your experience, is conduct affected, decisions like that affected, based on whether or not the manager of the plant or the 

policy of the officers of the corporation would be affected by a criminal prosecution versus a civil prosecution? 

Mr. D’AMICO. No, sir. We would take a look at the information 

provided and try to do the necessary fact-finding to make a criminal referral to the appropriate U.S. Attorney’s office or the Environmental Crime Section. 

Chairman BIDEN. Most of the enforcement of the Clean Air Act 

and the Clean Water Act is left to the States, right, or is it? 

Mr. SANSONETTI. Most of the States have their own laws, so they 

can, of course, prosecute individuals under their own laws through 

their State attorney generals’ offices. The Federal Clean Air Act is 

one that can be enforced both by the U.S. Attorneys and by Main 

Justice, and it is, but there is a lot of coordination that occurs between those different groups. 

Our Division sponsors, for instance, an annual event this last 

year where we invite in each of the States to send someone here, 

whoever their chief environmental crimes enforcer is from Delaware, Wyoming, or wherever, and we sit and actually have presentations for two, 3 days on how we are handling not only Clean Air 

9

Act cases, but Clean Water Act cases, Superfund, RCRA, things 

like that. We share tales of different trials and how you go about 

it. 

We also do that with the States. In fact, yesterday I just gave 

a talk to the Council of Western Attorneys General from the 14 

Western States on environmental crimes and how we want to work 

with the State AG offices to go ahead in the hypothetical that you 

put forward working on helping to stop the flaring. So it is a coordinated effort at this point and either can take the initiative. 

Chairman BIDEN. According to a report to Congress issued in 

April 2001 by the Environmental Council of States, between 1995 

and 1999 States conducted over 90 percent of the environmental 

enforcement actions taken by the States and the EPA combined. 

Does that sound right? 

Mr. D’AMICO. They may be speaking of facility inspections, not 

necessarily criminal investigations. 

Chairman BIDEN. In certain areas of criminal law, say financial 

fraud, the statute of limitations doesn’t begin to toll until the victim learns of the offense. Do you think that the statute of limitations for environmental crimes should be extended in cases where 

the polluter takes affirmative action to conceal the crime? 

Mr. SANSONETTI. I think that this falls into the category of your 

other comment about whether or not legislation might be valuable 

in the area of attempts. I think that certainly it is a problem. I recognize and understand where you are coming from in the sense 

where a defendant has acted to conceal his crime from the law enforcement official. 

Right now, the burden rests on the government to prove that 

there was an affirmative act of concealment. So I think that it 

would be, again, worth taking a good look at to basically put an 

additional time limit there. Of course, the question is how many 

more years. I have to see the exact language, but I think that we 

would definitely like to work with your staff on that one. 

Chairman BIDEN. In terms of judgments requiring restitutions, I 

assume there are some where you seek both a civil and/or criminal 

penalty and restitution for the damage done. Is that correct? 

Mr. SANSONETTI. That is correct. 

Chairman BIDEN. Is there anything in the law that allows, while 

the case is being taken, for a defendant to dispose of their property 

so that they are not able to pay restitution, or to shield their property or to shield their assets? Do you have any recourse in that circumstance? 

Mr. SANSONETTI. I guess I would have to look at the exact provisions because, of course, one way of protecting one’s assets in those 

situations is to file bankruptcy. That is a whole different area of 

the ability to discharge a potential or future penalty or fine 

through bankruptcy, but if a person is just charged and you are in 

the midst of the case, maybe there hasn’t been the final sentencing 

or final determination. To my knowledge, there is no law that 

would prevent an individual from selling his car or selling his 

house in the interim. 

If it can be, of course, shown that the activities taken were totally fraudulent in nature, so you just passed all of your property 

10

off to your third cousin to avoid restitution, I think that there is 

an opportunity to try and crack that transfer of assets. 

Chairman BIDEN. Do you have enough personnel, in light of the 

changed priorities after 9/11, to vigorously do the job? 

Mr. SANSONETTI. Right now, our resources are adequate. To give 

you a couple of numbers, we have got 400 lawyers in my Division. 

We have about 190 that are devoted to the two topics we have 

talked about today, that is civil and criminal environmental enforcement, through our civil and criminal sections and through the 

Wildlife Section. 

We, of course, interact with the U.S. Attorneys. Tim can speak 

for them, but you have to really look at this as really a big picture. 

It is not just my ECS group or Tim’s U.S. Attorneys. 

I think one of the things that has happened since post-9/11, 

which, of course, has strapped everyone’s resources, is that it is 

making us pay more attention to leveraging the cases we have got 

and the good results that we have. I am trying to take special 

pains to work with our Office of Public Affairs so that when we do 

have a winning case like Ashland or Tanknology here last week 

that we put the word out as far and as widespread as possible, because I think there is a deterrent effect, as you noted, when you 

have got a criminal case where someone has had to pay a rather 

high fine. We are going to, of course, continue to work within the 

Department of Justice and the OMB process for budget to get the 

resources that we need, but right now we are doing OK. 

Chairman BIDEN. As I understand it, the EPA Criminal Investigation Division is supposed to have an agent work force of approximately 250 agents. Last year, before 9/11, the work force was 

approximately 170, and after 9/11 approximately 40 agents were 

assigned to anti-terrorist activities. The work force has since increased to approximately 210, with the infusion of anti-terrorism 

funds. 

What is the current work force of the Criminal Investigation Division? 

Mr. D’AMICO. The number of agents today is about 220. Actually, 

a couple of years ago we were down to about 170 agents, and that 

includes me and other non-case-carrying agents that are with the 

Criminal Investigation Division and overall with the Office of 

Criminal Enforcement. 

Over the last year or so, we have been able to hire 60-plus 

agents. We are at about 200 right now, and it is a very active, very 

hard-working group of people. They not only have picked up their 

homeland security responsibilities, but they continue to provide 

leadership to the environmental task forces around this country. 

To date, Senator Biden, as of third quarter this year, we have 

100 more investigations initiated than we did as of third quarter 

last year. Our folks work very hard and they do take the opportunity to work with State, local, and other Federal agencies in a 

number of task forces throughout this country. 

Chairman BIDEN. Thank you. As I understand it, though, you 

work very closely with the FBI, as well, correct? 

Mr. D’AMICO. We do, sir. 

Chairman BIDEN. And has their diversion of agents, 572 agents, 

affected you much? 

11

Mr. D’AMICO. Where we had joint investigations with the FBI, 

some of their people have been redirected to other responsibilities 

and we and the other partners are picking up those cases. I am 

aware that the FBI is still dedicating some resources across country and it is a field office-by-field office decision as to who remains 

with environmental crimes, who can be pulled away from a particular investigation right now. 

Is it best to bring in more State people or other Federal agencies 

to contribute to an investigation along with EPA? Those types of 

decisions are being made on a case-by-case basis. 

Mr. SANSONETTI. Senator, if I may add on to that one, as I have 

noted, while between Tim’s U.S. Attorneys and my folks in ECS, 

we have got the prosecutors ready to go, you are right. If we don’t 

get the cases referred to us, there is no, as they say, grist for the 

mill. 

So I was concerned post-September 11 as to what was going to 

happen this coming budgetary year, so I actually wrote the FBI Director and said, as I understand it, you have been supplying the 

equivalent of almost 40 full-time employees to environmental crime 

referrals. Are we going to be able to sustain that or not? 

We have had some discussions. Letters have gone back and forth, 

and I am pleased to say that he has contacted me and the answer 

is yes, there is going to be a continuing——

Chairman BIDEN. So they are going to be able to sustain that effort? 

Mr. SANSONETTI. We are going to be able to sustain the FBI 

agents for this coming year, and I am delighted, because they are 

in every State, in every one of the districts in the United States, 

whereas Mr. D’Amico’s people, at the number of 220 or so, cannot 

cover the entire United States. It makes it much more difficult for 

you to do so, compared to 11,000 FBI agents. 

Chairman BIDEN. I apologize. We have a vote on and there is 

about 4 minutes left. I was going to submit questions to you in 

writing, but Senator Schumer is coming from the vote here. I ask 

whether or not your guys would stick for a few minutes. It will 

take me about 9 or 10 minutes to get back, but I authorize Senator 

Schumer, if he comes back, just to convene the hearing and ask 

those questions. 

We will recess until the call of the Chair, which I hope will be 

about 10 minutes while I go over and vote and come back. Thank 

you. 

[The Subcommittee stood in recess from 3:10 p.m. to 3:30 p.m.] 

Chairman BIDEN. The Subcommittee will come back to order. I 

indicated I would keep the first panel because Senator Schumer 

had questions. I got over to the floor and Senator Schumer had 

questions for me, not for you. He has questions for you, as well, but 

he is tied up on the upcoming amendment. He will not be here. 

Fortunately, Senator Sessions, who also had questions, is here, 

so I will yield to my friend from Alabama. 

Senator SESSIONS. Thank you, Mr. Chairman. I think you have 

raised some good questions here. 

In the matters that I faced as a United States Attorney, it was 

often difficult to make a case criminally. It was very, very frustrating, and I would like to raise a couple of issues with the panel. 

12

One of them—I guess, Mr. Sansonetti, you would be the person 

to do it, or U.S. Attorney Burgess, maybe you, but it seems to me 

there is a problem with the statute of limitations. As I recall, it is 

a 5-year statute, but that is from the commission of the crime, and 

often it may be years before this deposit or leakage is discovered 

to have occurred and by then you look at it and the statute has 

run. Most people may not know, but in a bank robbery, 5 years 

passes and if you can get away with it for 5 years, you can never 

be prosecuted for the crime. 

Do either of you have any thoughts about how we might provide 

more ability for prosecutors to prosecute cases that have gone beyond the current statute? 

Mr. SANSONETTI. First of all, Senator, I think it is a great question. Actually, we visited in the first session here today a little bit 

about some changes that might be made. The one about the proposed extension of statute of limitations on environmental crimes 

that involve concealment is certainly an area that we should take 

a look at. 

You are exactly correct. The burden rests on the government to 

prove that an affirmative act of concealment occurred. But, boy, if 

the most egregious crimes involve affirmative acts of concealment 

by the violators and allow the criminals to hide their wrongdoing 

long enough for the statutes to foreclose prosecution, then we have 

really got ourselves a problem. 

Tim, do you think that that is one worth looking at? 

Mr. BURGESS. I agree. I think that would be something we 

should look at, and I can also talk with the other U.S. Attorneys 

through the Attorney General’s Advisory Committee. 

Senator SESSIONS. Well, I remember a case in which you could 

see a brown thin line between the grass in the lower area where 

this pollution had washed and seeped over the years, and the company had gone bankrupt and they had been gone for quite a number of years. A person who has gone bankrupt or has no money 

cannot be punished with a fine, or any kind of other enforcement 

for that matter. He really needed to have gone to jail if, as it appeared to me at the time, he had deliberately allowed this toxic 

substance to be deposited outside the normal procedures. 

I could see it being done as just a flat extension. I believe we extended the statute in savings and loan cases to 7 years because 

they take so long to develop, S and L cases and bank frauds. You 

could just extend or you could focus on from date of discovery, as 

long as maybe the damage was still existing. If it was maybe biological, like sewage or something, maybe you wouldn’t want to extend it. 

Would you consider submitting me a memorandum on some 

things we might do to deal with the statute of limitations problem? 

Mr. SANSONETTI. We would be glad to work with you and your 

staff, Senator, certainly. 

Senator SESSIONS. I was talking to Mr. D’Amico as we were waiting for Senator Biden to get back from the vote. Are we satisfied, 

Mr. Sansonetti, in your mind that there is sufficient cooperation 

between EPA’s limited number of criminal investigators and the 

FBI or State attorney generals’ offices and others to investigate 

cases? 

13

I know it is easy for us to say, well, we will just give more criminal investigators to EPA and they can have a lot more. But in my 

observation, you have got FBI agents in virtually every community 

in America. They are trained criminal investigators. I think from 

what I saw in my experience, they like these cases. They are the 

kind of cases that generate community interest and they like to 

work them and they are good at that. 

Could we do a better job of working with other Federal and State 

and local investigative agencies to produce these cases? 

Mr. SANSONETTI. I think the answer is my observation, after the 

first 7 months on the job, is that the folks at EPA and the Criminal 

Investigation Division and those at the FBI do work very well together. 

Your point is well taken. There are, as I understand it, some 

11,000 FBI agents nationwide. There is no place where they don’t 

have a presence. Of course, Mr. D’Amico’s shop has got to leverage 

his 220 agents to the best of their ability. 

Without the cases being investigated and referrals resulting from 

them, Tim’s folks and mine don’t have anything to do. So it is very 

key that those referrals keep coming and that the investigations do 

as well. 

Maybe Mr. D’Amico wants to talk about his own dealings with 

the FBI. 

Mr. D’AMICO. Our dealings with the FBI, Senator, are very positive. We participate in a number of environmental crimes task 

forces throughout the country. There are about 94 such task forces, 

probably 40 or 50 active ones that we are participating in with the 

FBI, Coast Guard, and State and local investigators and regulators, 

all looking to put our best effort forward to build these environmental cases. We also charge under Title 18—not only under the 

environmental laws, but our agents and FBI agents charge under 

Title 18, such as false statements, et cetera. 

Senator SESSIONS. Well, I believe you can do that. I suspect it 

takes the driving force from EPA to make it really move because 

in the cases that I recall, we had delays in getting chemical analyses. 

Mr. Burgess, what about the cases that you have dealt with that 

you are familiar with in your area? Who are the primary people 

that did most of the work, and have you had any problem getting 

laboratory work done and does that delay investigations? 

Mr. BURGESS. We work primarily with EPA and the FBI. We also 

work on a number of cases with the Coast Guard. Those are the 

primary agencies for investigating environmental crimes in my experience. 

As Mr. D’Amico mentioned, the cases often involve not just environmental offenses, but what are more typical, Title 18 offenses—

fraud, false statements, and conspiracies. So the involvement of the 

FBI is very important. We have also been able to use not only 

EPA’s labs, but the Coast Guard’s and the FBI’s. Between those 

labs, we can generally get our lab analysis done in a timely fashion 

for prosecutions. 

Senator SESSIONS. That was a problem in my experience. Of 

course, a good false statement case is just as good as a so-called 

environmental case sometimes for putting people in the slammer. 

14

Mr. BURGESS. Absolutely. As I mentioned, invariably when you 

have an environmental crime, the perpetrator is going to try to 

cover up their activity and that leads to false statements and conspiracies. So we almost always see those types of offenses in conjunction with the underlying environmental offense. 

Senator SESSIONS. Well, I just believe that a lot of different times 

we are late identifying, or we find out the pollution has occurred, 

a company has gone bankrupt. There is material that somebody 

checks the soil and it is clearly improperly disposed. But years 

have gone by and there is nothing that can be done, except the 

criminal sanction, going to jail. They have no money, they have 

gone away. The company is bankrupt, or whatever. 

I think the public does deserve to know that there was some punishment meted out, because what really happens is the taxpayer or 

some relatively innocent person has got to come in and clean up 

the site. So we all pay for it and the person who caused it is not 

caught. 

Is there anything else that you have or would like to comment 

on? 

Mr. Sansonetti, if you have any ideas on the statute, either extending it or going from some sort of date of discovery, probably 

under the conditions that the damage is still there, it would be 

something we could think about. 

Mr. SANSONETTI. I would be glad to do so, Senator. 

Senator SESSIONS. There has been a historical basis for having 

a fairly limited statute of limitations. We don’t want to just play 

around too blithely with that historical principle, but I think in 

these cases we could extend it. 

Thank you, Mr. Chairman. 

Chairman BIDEN. Thank you very much. 

Gentlemen, I appreciate your time and your effort. With your 

permission, we will submit to you several questions in writing. 

Mr. Burgess, I thank you for making the long trip. It is a long 

way to come. I thank you for being here and I appreciate your effort, and we will look forward to working with you to see if we can 

suggest some of these changes from the possibility of ‘‘attempt’’ to 

statute of limitations and a few other things. 

Mr. BURGESS. Thank you, Senator. 

Chairman BIDEN. Thank you very much. 

[The prepared statement of Mr. Sansonetti appears as a submission for the record.] 

Chairman BIDEN. Our next panel consists of Eric Schaeffer, Director of the Environmental Integrity Project of the Rockefeller 

Family Foundation. Before that, Mr. Schaeffer worked for 12 years 

for the EPA. His last position was Chief of Civil Enforcement, a position he held from 1997 t0 2002. He resigned from the EPA earlier 

this year, citing differences with the administration’s environmental policy. We are glad to have him here and to hear his take 

on the issues, particularly the intersection between civil and criminal enforcement in the environmental area. 

Judson W. Starr is a partner in the law firm of Venable, LLP, 

where he is the head of their environmental and energy practice 

group. He is a former head of the Environmental Crime Section of 

the Department of Justice, having served in that position from 

15

1978 to 1988. He has also written books on environmental crime 

and advised the United States Sentencing Commission on environmental crime issues. We are glad to have him here as well. 

Mr. RONALD A. Sarachan is a partner in the law firm of Ballard 

Spahr Andrews and Ingersoll and a member of the firm’s environmental group. Before that, Mr. Sarachan was the Chief of the Environmental Crime Section of the Department of Justice from 1994 

to 1997. Prior to that, Mr. Sarachan worked as an Assistant United 

States Attorney and chief of the major crime section in the Eastern 

District of Pennsylvania. He is a graduate of Brown University and 

Michigan Law School. We look forward to his testimony as well. 

Michael Penders is President and CEO of Environmental Protection International, an environmental consulting firm. He is a graduate of Cornell University and the Seton Hall Law School. He 

brings to us experience in two areas: first, as a New Jersey State 

prosecutor for 5 years who had to enforce laws on a daily basis. 

Second, he worked for EPA for 8 years, most recently as Director 

of Legal Counsel in the Office of Criminal Enforcement. We look 

forward to his testimony as well. 

And an old friend of mine, Nicholas DiPasquale, is the Secretary 

of the Delaware Department of Natural Resources. Mr. DiPasquale 

is a graduate of the State University of New York at Brockport and 

Washington University. He previously worked in the Missouri Department of Natural Resources, and for the last 9 years has worked 

with DNREC in our State. I have known and worked with Nick for 

a long time, and can tell you he is a smart enforcer and knows the 

circumstances well in my State. I am delighted to have him here 

today. 

I understand that Mr. Schaeffer has a 4:30 departure time. Is 

that correct? 

Mr. SCHAEFFER. I think maybe I can make it quarter of five. It 

is a six o’clock flight. 

Chairman BIDEN. Well, no. We can work it out. 

Why don’t we begin with each of you in the order I have called 

you with your opening statements. If you can keep them to 5 minutes, we would very much appreciate it, and then we will go to 

questions. 

Mr. Schaeffer, thank you for being here. 

STATEMENT OF ERIC SCHAEFFER, DIRECTOR, ENVIRONMENTAL INTEGRITY PROJECT, ROCKEFELLER FAMILY 

FUND, WASHINGTON, D.C. 

Mr. SCHAEFFER. Thank you, Mr. Chairman and Senator Sessions, 

for the chance to testify, and I will take you up on the invitation 

to summarize and ask that my statement be included in the record. 

Chairman BIDEN. It will be. 

Mr. SCHAEFFER. I want to start by thanking you for just having 

the hearing and asking some of these important questions. Whether or not we end up agreeing, I think the kind of objective and critical oversight that you can bring to the enforcement program can 

do a lot for both EPA and the Justice Department, and I do hope 

you keep asking questions. 

I am going to bring a civil enforcement perspective to the table. 

I understand you are focusing a lot on criminal authorities and reVerDate Mar 21 2002 12:23 Jun 18, 2003 Jkt 087640 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 C:\HEARINGS\87577.TXT SJUD4 PsN: CMORC
16

sources for the criminal program, but I think we have to answer 

a threshold question first for some of our more important problems. 

If we can’t prove that a violation occurred in the first instance, 

we don’t even reach the issue of whether the conduct was intentional or knowing, whether it rises to a criminal standard. That is 

the kind of problem I want to focus on. 

Very briefly, I think we have extremely poor monitoring in some 

areas of the law, especially under the Clean Air Act. I would like 

to speak to that quickly. The ability of EPA and States to challenge 

that monitoring, to act as a check, to perform an oversight function, is hamstrung by lack of resources. 

We have a major loophole in the law that allows some companies 

to repeatedly have the same accident over and over again, to 

flare—I think you are familiar with that problem—over and over, 

in the hope that they can claim an exemption under the Clean Air 

Act, and I will speak briefly to that. 

First, to the monitoring issue. I would just send you to the attachment, the last page in my testimony, which compares, in one 

area where we were able to get out and do some agency inspections, what companies reported to what EPA inspectors found. 

In this instance, we are talking about fugitive emissions. These 

are volatile organics and toxic compounds that leak from equipment, sometimes at very high rates. That amounts to half of our 

air pollution burden. It is a very significant source of our problem. 

Chairman BIDEN. Say that again. Half of the air pollution is attributable to what? 

Mr. SCHAEFFER. I am talking in terms of the volume of emissions, and that is a ballpark estimate. 

Chairman BIDEN. What are the emissions you are referring to 

again? 

Mr. SCHAEFFER. I am talking about criteria pollutants, but also 

I think that is accurate for toxic chemicals, as well. By criteria pollutants I mean sulfur dioxide and nitrogen oxide from industrial 

sources, not including utilities, and volatile organic compounds, in 

particular, which are smog-forming. 

In general, if you leak above a certain amount at a valve or a 

pump or a flange, you are required to fix that leak so it doesn’t 

keep recurring. That is a critical requirement in the law. Companies, if you look at this chart, will generally report that somewhere 

between a half percent to one-and-a-half percent of the valves and 

pumps that they monitor are leaking. EPA found the true number 

was between 5 and 10 percent. That is a substantial difference, in 

some cases an order of magnitude between what the company reported and what EPA found when it went onsite. 

I want to emphasize this isn’t one or two data points. This is an 

intense evaluation of refineries by EPA’s National Enforcement Investigation Center. This is data that was checked off and seconded 

by companies. They had to follow EPA around and approve the results. 

Now, why did the problem occur? The law says you have got to 

take a wand to measure the emissions, and hold it at a prescribed 

distance above the leaking equipment for 30 seconds. You have to 

take a reading before you move that wand. It turns out a lot of 

companies had contracts for people to do this scratch-and-sniff test 

17

and these contractors were paid by the valve. So the faster they got 

through the monitoring, the more they made money. So what do 

you think they did? Of course, they just passed the wand over the 

area they were supposed to monitor quickly and moved to the next 

valve, because that meant cash to them. 

I think the companies themselves were interested in fixing this 

problem when we presented them with it, but it is an illustration 

of something we see very frequently in the air program—very poorquality monitoring data. You can’t decide whether or not the conduct is criminal if you can’t establish that there is a violation in 

the first place. 

The second problem is resources: I have also attached to the testimony a set of statistics from the agency about the number of industries and transactions that both Federal and State programs 

are supposed to cover. For example: there are 100 million acres of 

wetlands in the lower 48 States but only two States have authority 

to run that program. The rest of it is managed by EPA. I am talking about enforcement to keep people from illegally filling wetlands. We have about 30 people in the agency to do that job. 

There are over 300,000 sources the EPA is expected to monitor 

to make sure fuel standards are met, for example, that the fuel is 

oxygenated or is low in sulfur content. Two dozen staff do that job. 

We are just not able to get out there. I apologize, I keep saying 

‘‘we,’’ and I’ve left EPA. EPA is not able to get out there with the 

resources they have. 

I have heard the statistic about States conducting 90 percent of 

the enforcement actions coming from a study by ECOS. I take issue 

with that, and don’t think it is accurate. There is no question that 

States do most of the inspections, but if you get into the major 

cases that involve substantial injunctive relief and the expenditure 

of millions of dollars of pollution control equipment to get companies back into compliance, I think you will find EPA is carrying 

more like half the load. 

That is no knock on States. I think some States have excellent 

enforcement staff, very aggressive enforcement staff, and Delaware 

is certainly one of those. It is just not true everywhere, and there 

are a large number of programs for which EPA is the only authority, and that is something that can’t be overlooked. 

So whether you have a dozen or two dozen people chasing 

300,000 fuel stations or 100 million acres of wetlands, your chances 

of finding a violation are pretty remote. The kind of statute of limitations issue that I think Senator Sessions rightly raises becomes 

a problem. You are not catching up with problems when you 

should. You are not on the case when you should be. You can’t even 

make good regulatory decisions because we don’t know what we 

have out there. 

The last point I want to make is to speak to the flaring problem, 

something we have seen in refineries, but which also occurs in 

other industries. Sometimes in the middle of the night, sometimes 

during the day, it goes off with a boom. Big flares turn on and understandably upset and agitate neighboring communities. 

Often, you will see hundreds of tons of sulfur dioxide come off 

these flares in really a short period of time, contributing to asthma, 

and creating other problems for the neighboring communities. I 

18

think at the Premcor plant in the Port Arthur area, over 400 tons 

of sulfur dioxide in a 3-month period were released just from these 

so-called accidents. 

One question is how can the same accident occur over and over 

at the same facility? At what point do we stop calling it an accident 

and say that this results from some kind of negligence? 

The problem embedded in our regulations is that we recognize an 

exception for malfunctions, and that has become lodged, I think, in 

some industry heads as an entitlement to continue to have these 

flaring incidents without any enforcement or any liability. That 

should be challenged, and I think the agency has started challenging it. 

The law says if that kind of accident is reasonably foreseeable 

and could have been prevented, it is not an accident, and we need 

to start stepping in, doing some analysis, and establishing when 

these kinds of problems could have been seen and avoided. If you 

look at some of the settlements EPA has with Motiva, as one example, I think you will see some examples of the relief that can be 

obtained when we do that. 

I think a second problem that I think would require a statutory 

solution is if you spill a million barrels—or let’s call it more realistically 10,000 or 100,000 barrels of oil into a bay or a river, you 

pay by the volume. That spill can happen in a three- or 4-hour time 

period, but we recognize that is a lot of oil. You pay by the volume; 

you pay in relation to the hazard you have created. 

If you have a flaring event, it can cause an evacuation, it can require people to be sheltered in place, it can result even in injury 

and death. And under the law, we are limited to a single penalty 

for a single day’s violation. That is $27,500. That just plainly seems 

inadequate. 

Senator SESSIONS. That is the maximum? 

Mr. SCHAEFFER. That is the maximum, yes, sir. It may have adjusted up slightly for inflation, but that is the maximum. So there 

is no relationship between the harm and the sanction at this point. 

Even if you get over the malfunction defense, you face that singleday limit on penalties. 

Chairman BIDEN. Can a malfunction defense be offered if you 

end up malfunctioning 12 days out of 20? 

Mr. SCHAEFFER. I think that is an excellent question. When I 

was at EPA, and I think this is still shared, our investigators didn’t 

think so. Our investigators think if you have a problem that is repeated, then you are obligated to get on it and fix it. 

Chairman BIDEN. Let me ask you a question. At refineries, the 

flaring that you are referring to which puts sulfur dioxide into the 

air, which seriously affects those who are asthmatic and many others—and studies done show it shortens life expectancies and the 

like—if you have a contract with another company that, rather 

than flare this, they are going to process this by-product and in effect contain it, producing a second product, and you know them to 

be incompetent in that they are constantly having malfunctions—

in every other endeavor, if I contact with a supplier or I contract 

with a second party and I know them to be incompetent based 

upon the track record, I am able to be held liable under a contract 

or I am able to be held liable in other ways. 

19

Why isn’t that the case with EPA? Why isn’t that the case under 

the law now? Isn’t there some responsibility with the outfit you 

contract with that you, the oil refinery, have reason to believe that 

they are able to do the job? 

Mr. SCHAEFFER. I am not sure that isn’t the law today; in other 

words, that you cannot contract away your environmental liabilities, at least when you are dealing with such an obvious connection between the plant and the contractor, where the contractor is, 

say, just across the river and you are sending your waste right 

across the State line to that contractor and there is clearly a repeated pollutant. I would like to give you a more thoughtful answer, but I don’t see that as a loophole even today. 

Chairman BIDEN. Well, I don’t want to turn this into a particular 

concern, but in the neighborhood I grew up in there is an outfit 

that is flaring hundreds of tons of sulfur dioxide into the air, and 

the fines are a cost of doing business. It is going to cost them $35 

million to do this in-house and they haven’t spent the money to do 

it. In the meantime, my old neighbors are choking. 

I am very upset about it, so part of the reason for this hearing 

is to try to figure out how we strengthen the laws to not only go 

civilly, but maybe the Chairman of the board of that company or 

the CEO goes to jail. That is what I am looking to do. I hope they 

hear what I just said because I mean it. 

Mr. SCHAEFFER. I understand. 

Chairman BIDEN. At any rate, I interrupted your testimony. 

Mr. SCHAEFFER. I think I have taken at least my 5 minutes and 

then some. 

Chairman BIDEN. Well, in the interest of your schedule, do you 

have any questions for Mr. Schaeffer? He can stay as long as he 

wants, then, and we can let him go, maybe. He is the only one that 

has this very tight time constraint. 

Senator SESSIONS. Mr. Schaeffer, it seems to me that the meshing of the civil enforcement team and the criminal could be better. 

In other words, civil is out there all the time. There are a lot of 

them in a lot of different places. It seems that as soon as they identify something that could be potentially criminal, it needs to be 

looked at by the criminal investigators, and the United States Attorneys’ offices. Most U.S. Attorneys’ offices are quite eager to prosecute environmental cases. 

Do you think there is some way that we could move it quicker 

from the civil to the criminal side for a criminal evaluation? 

Mr. SCHAEFFER. I think that is a really good question. I wasn’t 

really very satisfied with it when I was there in the agency. I 

thought we could improve it. I think from a civil enforcement perspective, we would say if criminal is going to decline the case, we 

would like to get the case back before it is too stale. So it is a twoway street. 

The problem we struggled with—and you might help the agency 

think through this—is making sure not to taint the criminal case. 

As you well know, you have grand jury proceedings and you have 

issues of confidentiality in the criminal program that to a degree 

you may not have in the civil. So there is always that concern 

about maintaining a Chinese wall, and that is something I am sure 

20

the agency is still struggling with. Could it be better, though? Sure. 

I wouldn’t want to argue with that. 

Senator SESSIONS. I think that is a bit exaggerated, that fear. If 

done properly, it should not be a problem, or if it is, you should be 

able to anticipate it in advance, maybe, and make a call one way 

or the other. 

How many civil enforcement people does EPA have? Do you 

know? 

Mr. SCHAEFFER. I would say if you added up the resources in the 

field, around 1,200, outside of Superfund. 

Senator SESSIONS. And maybe 200 are criminal. 

Mr. SCHAEFFER. Right. 

Senator SESSIONS. So if they worked more as a seamless web in 

which as soon as the civil finds something is tipping into criminal 

and criminal has an opportunity to review it, it might work better. 

Mr. SCHAEFFER. Right. To be fair to the agency—and that question, I am sure, you will direct to them—a fair amount of that does 

go on. I did see civil cases move quickly to the criminal side. Could 

it be improved? I can’t argue with that. 

Senator SESSIONS. Thank you, Mr. Chairman. 

Chairman BIDEN. How far off are we in terms of the monitoring 

capability? It seems to me there is this gigantic discrepancy? It is 

like having one meat inspector for the United States. In proportion, 

how far off are we, and how much do you then rely on the States 

to fill this void? 

I assume you monitor and the States monitor, right? 

Mr. SCHAEFFER. Right, and EPA tries to divide the work. Sometimes that works better, sometimes maybe not so well. But I think 

the States will tell you for the most part they are under the same 

kinds of pressures, have lots and lots of ground to cover, and are 

often forced to do inspections that are too quick. I know that was 

true at EPA because they have got so much territory to cover. Also, 

the States cover issues like septic tanks and open burning and real 

environmental problems that aren’t under Federal law. So they 

have got their own workload. 

It is worth some analysis. The General Accounting Office 2 years 

ago—actually, just last summer—said EPA really needs a work 

force analysis before making the kinds of cuts the administration 

has been proposing. They need to step back, look at the work, figure out how much States can reasonably cover, how much EPA is 

going to do, and match the resources against the problem. That 

would be well worth doing. 

Chairman BIDEN. A last question and then we will get to the rest 

of the panel. In my experience, the fines that are levied by States, 

particularly in air pollution cases, are considerably less under their 

State laws, whether it is Pennsylvania, New Jersey, Delaware, or 

Maryland, than for violations of the Clean Air Act under Federal 

law. 

For example, in my State, under the Clean Air Act violations im- posed where the State moves, the maximum State fine is $10,000 

a day. We have federally $27,500 a day. 

Mr. SCHAEFFER. That is right. 

Chairman BIDEN. Does any State ever yield to you guys? They 

may monitor it and find the violation. What do they have to do? 

21

Do they have to come to you and say you take the case over? Explain how that works? 

Mr. SCHAEFFER. It is not, I am sure, as smooth as it could be, 

but generally there is a planning cycle where EPA regional offices 

will sit down with States and try to shake out the workload and 

divide the labor. Sometimes, the States will refer cases to EPA and 

say, please do this. 

Increasingly, EPA will find a multi-State violator, somebody that 

is spread across six or seven States, and then it is EPA’s job to get 

the States to work together with the agency, and vice versa. EPA 

has to be sensitive to what the States need. 

The problem you are referring to, the $10,000 a day penalty 

limit, is the minimum required in the Clean Air Act. I am doing 

this from memory, but I believe Title 5 of the Clean Air Act, which 

speaks to what enforcement authorities States have to have, says 

$10,000 a day. There is a disconnect between that and the Federal 

dollar amount, which also by law has to be indexed for inflation. 

So you see the Federal dollars go up, while the State numbers stay 

relatively low. 

One important fact is—again, this is guesswork—EPA probably 

gets 10 to 15 cents on the dollar typically in a settlement. It may 

be $27,500 a day. If it were a flaring incident and you were only 

getting a single day, hopefully you would get the maximum. But for 

a major violation that may run for several years, in order to get 

a settlement, and in part because the agency will lack sometimes 

the resources to go to trial and in part because the agency is balancing litigation risk, the EPA will settle for 10, 15, 20 cents on 

the dollar. 

So I guess you could raise the statutory authority for States, the 

limit. That may be a good idea. You do need the resources and the 

will to take that to a limit when you think you have got a good 

case, and that is going to vary State by State. 

I have to put in one plug for Delaware because I think I have 

noticed penalties work best where EPA and the State team up. The 

company understands there is not going to be any forum-shopping, 

there is not going to be any bait and switch. The federal and state 

governments come to the table together, know what they want, and 

insist on an adequate penalty. 

In the experience I had with one company, the State od Delaware 

was stronger than EPA as far as their demand for penalties. So I 

want to recognize that and say sometimes you will see a push from 

the other direction. Typically, if you look at penalties recovered, I 

think there is no question that Federal penalties are larger. 

A little bit of a long-winded answer, but it’s kind of a complicated 

issue. 

Chairman BIDEN. No, no. It is a very important answer and I appreciate it because part of the confusion here with the public at 

large is whose responsibility is this, especially when you have a circumstance where it is coming across a State line or when you have 

one facility in one State and the polluting side of that facility in 

another State. I think it is very confusing to people, and occasionally to me. 

22

Mr. SCHAEFFER. That is a classic case for EPA, again working 

with the States, when it crosses State lines and when you have a 

multi-State actor. 

Chairman BIDEN. Well, again, you are welcome to stay. I know 

your time is tight. 

Mr. SCHAEFFER. Thank you. I appreciate that. 

[The prepared statement of Mr. Schaeffer appears as a submission for the record.] 

Chairman BIDEN. I will now, with the permission of my colleague, ask each of the following four to stick to your statements. 

We will hear everyone and then we will go to questions. 

Please, Mr. Starr. 

STATEMENT OF JUDSON W. STARR, VENABLE, LLP, 

WASHINGTON, D.C. 

Mr. STARR. Senator Biden, good afternoon. Thank you very much 

for your kind invitation to be here this afternoon and to express my 

perceptions and observations about the Federal environmental 

crimes program. 

Senator Sessions, it is particularly nice to see you again. I remember fondly, when I was with the Justice Department and you 

were the U.S. Attorney in Birmingham, working with you. I should 

say that while I can’t remember the particular case, I do remember 

the barbecue. 

As you mentioned, Senator Biden, in the kind introduction, I 

have spent a good deal of time working in the field of environmental crimes, over a decade at the Department of Justice, first as 

the Director of the Environmental Crimes Unit, and then as chief 

of the Environmental Crimes Section. 

Since I have left the Justice Department, most of my work has 

been in the field involved with environmental crimes, whether it is 

advising clients on management compliance systems or whether it 

is in representing individuals or corporations who are the focus of 

a problem by the Federal Government. 

During this period of time, I have watched or participated in all 

the growing pains that have gotten the environmental crimes program to the point where it is today. You referred to them as the 

tools, Senator Biden. I have watched as Congress has upgraded 

each of the environmental statutes from misdemeanors to felonies, 

which caused attention to be given to environmental cases which 

up to that point hadn’t been given by judges, U.S. Attorneys’ offices, and investigative agencies. 

I have seen the responsible corporate officer doctrine be refined 

as it as wound its way through the courts of appeals. And particularly in today’s environment focusing on corporate responsibility, I 

have seen the responsible corporate officer doctrine become a very 

significant tool in how the Government pierces the corporate veil 

to determine individual officer liability. 

I have seen the application of the Sentencing Guidelines since 

1987. Up to that point, judges traditionally thought or expressed 

through their sentencing that environmental crimes were no more 

than mere regulatory violations. The Sentencing Guidelines have 

changed that by imposing strict and severe penalties on individuals 

who have been convicted of environmental offenses. 

23

I have seen EPA agents get law enforcement authority, when 

they didn’t have any and were treated as a poor stepchild within 

the investigative community. After a lot of hard work and a long 

fight they got law enforcement powers. I have seen their training 

at the Federal Law Enforcement Training Center and elsewhere go 

from none to a very sophisticated component. 

I have also seen the prototypical defendant in these cases go 

from the mom-and-pop company to a household name company, as 

the investigative capabilities have been developed and prosecutions 

have focused less on those who were operating outside the regulatory system and more on those who were operating within in. 

Last, I have seen what I would call the political baptism of environmental crimes, when over a lengthy period Congressman Dingell, through his oversight committee, held hearings on how cases 

were handled at the end of the Bush administration and the beginning of the Clinton administration. 

However, my observations about where it is today cause me great 

concern. I believe it is my perception, and the perception, I think, 

across the country from those with whom I have been in contact, 

those in the business and those in the field, that the perception is 

that there has been a change since 9/11. 

I am concerned about the direction of the environmental crimes 

program, particularly whether the definition of villain has changed 

from something that it was to something else after 9/11 and environmental crimes is not within the definition of villainous. 

I understand obviously that the redeployment of resources post9/11 had to occur. We have heard in the earlier session about the 

dependency on the Coast Guard and on the FBI by the EPA and 

the Justice Department in the development of these cases. It is 

very obvious to anybody that the Coast Guard and the FBI have 

had to reprioritize their resources, and I am wondering what effect 

that will have on the environmental crimes program and whether 

there will be a reprioritization. 

But if so, I think that will be a wrong step. When I say that I 

am taking the perspective of those people who day-in and day-out 

do environmental compliance work within corporate America. Within the regulated community, that person generally is a vice president for EHS. He may be in headquarters, or she may be in any 

one of the facilities for any large corporation. 

Environmental compliance, I think, is critically related to antiterrorism and internal security in ways that I think Congress 

should examine. Most companies, when they beefed-up after 9/11 

their compliance programs, did so to affect anti-terrorism and internal security issues, but they did so on the backs of the environmental compliance programs and units within the various corporate structures. 

Policing pipelines or ports or terminals or hazardous waste transportation is an extension of environmental compliance; it is not a 

departure. The chemical industry itself has put out several publications post-9/11 which are all directed to how you can extend your 

environmental compliance program to ensure that you are also protecting yourself and others from anti-terrorist activity. 

People who work in the field of compliance are not a profit center 

themselves. They do not derive their powers within the corporate 

24

structure by virtue of anything other than the power that they 

have because of the threat of criminal enforcement. It is the threat 

that if they don’t do their jobs well, their bosses may be charged 

with a crime. So it is the importance that I place on the power and 

effect of a good environmental crimes program that also empowers 

those individuals. 

Case selection is my last point, and then I want to turn it over 

to my colleague, and also former chief of the Environmental Crime 

Section, Ron Sarachan, who will speak more about the selection of 

cases. 

I think all the resources in the world—no matter how many investigators you have, no matter what kind of system you have for 

developing cases or prosecuting cases, if you are not selecting cases 

that pin-point and have a point and have a message, then all else 

fails. 

The Department of Justice has been criticized, sometimes with 

justification, sometimes while I was there, and sometimes by me 

for its case selection process. The wide discretion that prosecutors 

have in the field of environmental crimes is just that, wide and 

deep, probably wider and deeper than any other field of criminal 

enforcement. 

If the goal is to get better compliance and if it is not just to get 

more pelts, more fines and more jail time with individuals, then 

case selection is the key. And I know my colleague, Ron Sarachan, 

is going to talk more about case selection. 

Thank you very much and I would be glad to answer any questions. 

[The prepared statement of Mr. Starr appears as a submission 

for the record.] 

Chairman BIDEN. I might add when they put two family members in Philadelphia in handcuffs and took them out, I promise you 

in every board room in America people paid attention. It was instantaneous. It was case selection, but it was instantaneous. Had 

that same company been fined $4 million, it would have been a 

yawn in every board room in America. 

Mr. Sarachan, please. 

STATEMENT OF RONALD A. SARACHAN, BALLARD SPAHR ANDREWS AND INGERSOLL, LLP, PHILADELPHIA, PENNSYLVANIA 

Mr. SARACHAN. Good afternoon, Mr. Chairman. Thank you for 

this opportunity to speak on this very important issue today. 

I would like to keep my remarks brief and talk on two issues. 

One is the one that Senator Sessions brought up about meshing 

criminal and civil. There were questions about whether resources 

are sufficient. I think it is also important to talk about the use of 

the resources that there are, and case selection is at the heart of 

that. Then I would also like to address the ‘‘attempts’’ provision 

that there have been questions about. 

I have written testimony, and also I have brought an article on 

the criminal negligence prosecutions under the Federal Clean 

Water Act, and I would ask if those might be made part of the 

record. 

Chairman BIDEN. They will be placed in the record. 

25

[The article referred to appears as a submission for the record.] 

Mr. SARACHAN. Case selection is obviously very important in this 

area because there aren’t a great number of criminal environmental cases being brought every year. The way the case selection 

process should work is part of a coordinated, integrated enforcement process, and there are two reasons for that. 

One, obviously EPA has a broad range of enforcement tools, everything from education and compliance assistance, to administrative enforcement, civil, and then ultimately criminal. When there 

is a violation, the agency should be looking at that full array and 

deciding which of those tools are the right ones to bring. And when 

there is an enforcement initiative, like a Clean Air Act initiative, 

the planners should be getting together and be deciding what is the 

best way to use each of those tools to maximize the impact and to 

get the greatest compliance. 

It is especially important to have an integrated, coordinated system in the environmental area because of the nature of environmental regulation. The environmental regulatory program is based 

in significant part on self-monitoring and self-reporting. It depends 

on the honesty of the regulated community. 

The agency and the State agencies cannot have inspectors at 

every facility everyday watching what is going on. They have to depend on the honesty of the regulated facilities, and when there is 

dishonesty, when there are intentional violations and falsehoods to 

hide them, that undermines the entire system and that is when the 

criminal program comes in. It is their job to go after those intentional violations and to police the integrity of the system. 

There was a former U.S. Attorney who used to refer to it as, the 

criminal program in the environmental area goes after lying, cheating, and stealing, just like in other white collar crime. For that to 

work, you need an integrated system. The regulatory program people need to identify the weaknesses in their program and they need 

to provide that information to the criminal program. They need to 

make those referrals so the criminal people can put resources in 

those areas. 

Unfortunately, in large part that is not the way the system has 

worked. Most of the criminal cases that have been brought through 

the years have not come from within EPA. One of the most common sources of criminal cases is a disgruntled former employee. 

That employee calls EPA-CID or the FBI to complain about the 

company. He has been fired. He may have been denied benefits. He 

has got a grudge. It may not really reflect the seriousness of the 

environmental conduct of the company. 

There have been a lot of good cases that have come from that, 

but we don’t have confidence that those were the best cases for the 

maximum impact. One of the experiences when I was prosecuting 

these cases that we would commonly have is we would go and talk 

to the field inspectors while we were building the case, and it 

would be a case against company x. The inspector would say, why 

are you prosecuting company x? Company y down the street is far 

worse. 

Well, the simple answer was the call we got from the disgruntled 

employee was from company x. Because there wasn’t an integrated 

system, we didn’t know about company y. 

26

Chairman BIDEN. When you say integrated system, so it doesn’t 

sound like Washington-speak——

Mr. SARACHAN. Sorry. 

Chairman BIDEN. No, I am not being critical. I mean that sincerely. But to someone listening to this hearing, do you mean why 

didn’t the inspector in the field pick up the phone and call the 

Criminal Division? 

Mr. SARACHAN. No. 

Chairman BIDEN. What do you mean? 

Mr. SARACHAN. There is that that goes on, and that is what happens in task forces and it is a good thing, a good channel between 

usually State and local inspectors and Federal special agents and 

Federal prosecutors. 

What I am really talking about is not that system, but within 

EPA itself, the program people, the regulators, the managers who 

run those systems making it a point to sit down with the criminal 

managers to screen cases, to screen them early to make joint decisions about how to use the different enforcement tools, to coordinate the civil enforcement, the administrative, and the criminal. 

That is what has not been happening enough. 

There have been steps, a lot of hard work to go in that direction. 

For example, at DOJ there was an integrated enforcement policy 

passed in 1999 to avoid the Chinese wall problems that Mr. Schaeffer and Senator Sessions were referring to a moment ago. In EPA, 

there have been attempts to do this kind of screening, but it has 

varied a lot individual by individual, from region to region. 

Today, generally it is still true, I believe, that if a case begins 

on the civil side, if it happens to enter the agency on that side, it 

will stay civil, and the criminal cases are cases that began on the 

criminal side. So you don’t have enough communication. 

I would also like to address the ‘‘attempt’’ provision for a moment. This was an area that we discussed when I was chief of the 

Environmental Crimes Section and it grew out of a specific experience. There were two EPA agents who were conducting surveillance of a truck that had a bunch of friable asbestos in it, and the 

driver of the truck took that to a wooded area, a forested area—

there are a lot of those in Pennsylvania—and was about to dump 

it. And if he had succeeded in dumping it on the ground, there 

would have been a crime, but the agents couldn’t let that happen 

and so they stopped him right before he dumped. 

It was an attempt, but it wasn’t a completed crime, and under 

the statutes as they exist there was no prosecution that could be 

brought. Because of that specific experience, those sorts of experiences, we talked a lot about an ‘‘attempt’’ provision. 

Reflecting on it, it seems to me that that sort of situation where 

you have a clear attempt and where it is halted by law enforcement 

officers, that is a clear case where, had they not interceded, that 

attempt would have been completed. It is one where I think everyone is frustrated that the criminal case could not be brought. 

I also had experience when I was prosecuting as chief of major 

crimes, not only environmental crimes, but bank robberies. We had 

a lot of bank robberies in Philadelphia at the time. We prided ourselves on our very high conviction rate, but the one set of cases 

27

that we consistently had problems with was attempted bank robberies. 

Even though from a prosecutor’s point of view it seemed clear to 

me that this bank robbery was a clear attempt and there should 

have been a conviction, juries had problems with those cases. What 

I took from that is they were telling us that when you don’t have 

the completed crime, it is open to interpretation; it is open to different interpretations. There are a lot of ambiguities. It interjects 

a lot of subjectivity. 

So a broad ‘‘attempt’’ provision is something that I think should 

be looked at, but looked at with a good deal of caution. A narrower 

provision that is tailored around the law enforcement officer interceding, to me, makes a lot more sense. 

Thank you, Mr. Chairman, and I am prepared to answer any 

questions. 

[The prepared statement of Mr. Sarachan appears as a submission for the record.] 

Chairman BIDEN. Thank you. 

Mr. Penders? 

STATEMENT OF MICHAEL J. PENDERS, PRESIDENT, ENVIRONMENTAL PROTECTION INTERNATIONAL, WASHINGTON, D.C. 

Mr. PENDERS. Mr. Chairman, thank you for this opportunity to 

testify on the subject of environmental law enforcement at this critical time of the Congress considering the accountability of individuals and corporations under the law and reassessing the Federal 

Government’s role in fostering environmental protection and security. 

I am the President of Environmental Protection International, a 

consulting firm which conducts internal environmental investigations, audits, and vulnerability assessments, and designs environmental management and security systems. 

About a year-and-a-half ago, I was the Director of Legal Counsel 

of the EPA’s Office of Criminal Enforcement. I was at EPA from 

a time when there were 45 agents, in 1992, to 200 nationally in 

fulfillment of the Pollution Prosecution Act of 1990, signed by 

President Bush that same year. 

If you look at the legislative history of the Pollution Prosecution 

Act, they drew on the DEA example of having Federal expert 

agents facilitate State and local cooperation and investigating cooperatively environmental crimes in a task force setting. It was a recognition that with the limited resources on the State and local 

level, and even with 200 agents, it was critically important to work 

together to make these cases, particularly the big cases against big 

companies under complex statutes like the Clean Air Act, where 

one or two agents won’t be able to get at the culpable individuals 

behind the corporate structures. 

The deterrent of criminal sanctions imposed in practice is wellknown to this committee. The Senate recently voted unanimously 

to enhance the criminal sanctions for corporate fraud in a bill 

signed into law by the President today. I don’t think it was mere 

coincidence, as the Chairman has noted, that the stock market 

turned around the same day that Adelphia officials were led away 

in handcuffs. 

28

In recent years, standards for auditing, reporting, and managing 

environmental compliance, environmental risk and liabilities, have 

been subject to similar concerns as auditing in a financial context, 

including concerns about how these environmental liabilities are 

reported as part of SEC filing. 

Just last week, Assistant Attorney General Sansonetti announced that Tanknology, the Nation’s largest tester of underground storage tanks, pled guilty to ten felony counts of falsifying 

test results in several different States. This is an example of the 

Federal case selection that is important for EPA and the Department of Justice to be able to bring. 

The integrity of the environmental laws themselves depends 

upon the capacity to detect and investigate false reporting, and 

there needs to be a credible national presence and scope that proceeds fully in partnership with State and local officials. Without 

adequate capacity and agents, you cannot make the bigger cases 

which are more appropriate for Federal prosecution of environmental laws. 

Criminal enforcement has had a powerful impact in achieving 

compliance with environmental laws over the last 20 years in the 

United States. The real prospect of criminal prosecution of individuals and corporations has been a principal driver of safer and more 

secure environmental management practices, including the current 

generation of environmental management systems which reduce or 

prevent pollution at the source. 

As this committee considers changes to the criminal law and 

other committees consider next-generation environmental legislation, it is critical to preserve direct accountability for individuals 

and entities that knowingly violate environmental laws, particularly where there is risk of harm and economic benefit to violators. 

This requires the capacity to detect violations, investigate complex technical requirements, and enforce these laws fairly and consistently across the Nation. Otherwise, those who pay costs associated with environmental compliance in one area will be put at a 

competitive disadvantage to violators. 

At the same time, in order for the criminal enforcement deterrent to have maximum impact, it must be made as clear as possible 

what an individual or organization must do to avoid criminal liability after discovering a compliance issue, other environmental risks, 

or historical contamination through a voluntary audit, assessment, 

or other means. 

I would note a couple of points in closing that have been addressed previously; for example, the ‘‘attempt’’ provision. In 1996, 

the Environmental Crimes Act which Mr. Sarachan alluded to was 

the considered work of dozens of career professionals in environmental law enforcement. The ‘‘attempt’’ provision was included 

with a couple of clear examples in mind, one of which now has resonance in the homeland security context; that is, hazardous waste 

or chemicals crossing national borders illegally as precursors to 

acts of terrorism or environmental crimes. If a shipment is stopped 

at the border, it would not constitute a crime until it was illegally 

disposed of or used as a weapon of destruction. The ‘‘attempt’’ provision will be important to be able to stop and prosecute such shipments before the harm occors so long as there was a specific intent 

29

to use them illegally. Importantly, that bill also provided a mechanism for funding State and local law enforcement, who are often 

the first responders, as part of settlements and fines. 

Mr. Chairman, thank you. I just remain available for questions 

and submit the testimony into the record at this point. 

[The prepared statement of Mr. Penders appears as a submission 

for the record.] 

Chairman BIDEN. Mr. DiPasquale? 

STATEMENT OF NICHOLAS A. DIPASQUALE, SECRETARY, 

DELAWARE DEPARTMENT OF NATURAL RESOURCES AND 

ENVIRONMENTAL CONTROL, DOVER, DELAWARE 

Mr. DIPASQUALE. Mr. Chairman, thank you very much, and 

thank you for the generous comments in your introductory remarks 

earlier. 

I would like to share some experiences as a practitioner. I am not 

an attorney. I have been responsible for environmental enforcement 

for the past 15 years in a variety of capacities and I kind of fancy 

myself as a street cop that is out there bringing the cases in and 

having the attorneys prosecute them. 

I also would like to clarify a comment earlier about 90 percent 

of the enforcement actions being taken by States. To clarify, that 

included everything from notices of violation to administrative actions, civil complaints, as well as criminal cases, and it is a number 

count. I think Eric Schaeffer made the point that EPA and DOJ 

typically get more involved directly in criminal cases or high-profile 

cases, and sometimes do so cooperatively with the States, but just 

to put that number in perspective. 

As was mentioned earlier, some of the financial scandals of recent months have raised questions about corporate integrity and 

responsibility in accounting and reporting practices. I think similar 

questions can be raised about corporate responsibility for environmental compliance. In the first instance, such practices put shareholders’ financial health at risk. In the latter, the public’s physical 

health is placed in jeopardy. 

Fortunately, this type of behavior involves only a small percentage of the corporations that do business in the United States. 

There is a myth, however, that compliance among large corporations is inherently better than that of small and medium-size corporations that may lack adequate resources, expertise, or the will 

to comply with the country’s complex environmental requirements. 

It has been my experience in administering these programs over 

the last one-and-a-half decades that large corporations, with more 

than sufficient resources and expertise, routinely are found to be 

in violation of our environmental laws. There are a number of reasons for this. 

Corporate mergers and acquisitions can create incentives to 

delay maintenance and repairs and making other needed capital 

investments. In the petroleum refinery business that we have 

talked about several times today, industry competition and the 

need to keep national refineries operating at near full capacity 

often creates a situation where it is easier and cheaper for the company to pay a fine than it is to limit or interrupt production to comply with environmental requirements. 

30

The fines that are levied against these companies are considered 

a cost of doing business. You have heard that several times today 

and it is a fact. Fines alone are not sufficient to get the attention 

of plant managers and corporate executives who are focused almost 

exclusively on the bottom line. Other mechanisms to hold these 

managers and executives directly accountable and responsible for 

their actions, or for their failure to act in many cases, need to be 

considered, and I appreciate the fact that you are holding these 

hearings to explore some of those possibilities. 

Another observation I would like to share with you is that the 

Nation’s environmental laws do not reach into the industrial processes themselves. Typically, we regulate at the end of a pipe or at 

the top of a smoke stack. We impose emission or discharge limitations that have to be exceeded in order for us to take action. That 

point was made earlier. 

By and large, these laws and requirements do not impose standards for inspection, maintenance, or repair of the industrial process 

equipment itself, and I am talking about things that are integral 

to the manufacturing process—pumps and valves and motors and 

those sorts of things. We do have a leak detection and repair program that attempts to identify emission sources, but we don’t have 

a program that goes to the maintenance and repair of equipment 

that is absolutely vital and when it breaks down results in a release and an environmental violation. 

In Delaware, for example, an accident that you are very familiar 

with at a petroleum refinery that resulted from an explosion and 

a catastrophic collapse of a tank and the release of sulfuric acid 

was not covered under any State or environmental program. The 

tank itself, an above-ground storage tank, contained material that 

was not a regulated substance until after it was released. So we 

couldn’t regulate the tank. We have moved forward in Delaware to 

pass an above-ground storage tank regulation that will give us the 

authority to do that, but by and large our environmental laws don’t 

reach into the industrial processes themselves. 

In this particular case, the company admitted that the tank had 

a history of corrosion problems. Work orders for repairs had been 

submitted and the work simply had not been initiated. The tank 

collapse and release, as you aware, killed one worker and injured 

eight others, and caused widespread contamination at the facility. 

We went back and looked at the compliance history of this facility and we determined that approximately 70 percent of the environmental violations and releases that this company had had over 

the last 6 or 7 years could be directly attributed to the lack of an 

effective maintenance and repair program for the industrial process 

equipment. We were essentially powerless to do anything about it. 

The Governor did, however, say as a condition for continuing to 

do business in the State of Delaware that that company had to undertake a mechanical integrity audit of its complete facility, and 

also pay for a refinery expert, a consultant who is an expert in refinery systems and operations, to work for the State to review their 

programs and determine where those deficiencies occur. But we 

didn’t have the ability to require that directly under any of our 

statutes. 

31

[The prepared statement of Mr. DiPasquale appears as a submission for the record.] 

Chairman BIDEN. You know, that confuses me. You can walk in 

and shut down an automobile dealership if they have overhead 

doors that aren’t functioning right. You can walk in and shut down 

a grocery store if it has a circumstance that is unsafe for the customers. 

When it is clear that some companies, because of their financial 

circumstance, are not maintaining the facilities, why can’t you go 

in and say this is an unsafe circumstance, that this tank is corroded? I thought that was covered, that you guys on the prosecutorial side of the equation for EPA or Justice could go in and enforce basic standards. Is that not the case? 

Mr. SARACHAN. What you are addressing is occupational safety 

and health as much as environmental problems, and I am not an 

expert in that area and I don’t know. It may be that OSHA inspectors do have some of those powers. 

Chairman BIDEN. But from an environmental standpoint, you 

don’t? You know there is a pipeline coming from the Delaware 

River for crude oil into a refinery in Marcus Hook, Pennsylvania—

I mention that because you are in Philadelphia—or at the port of 

Philadelphia. You know, because you have checked it out, that the 

pipe is corroded; it could burst at any time, it could leak any time 

and you could have significant environmental damage, with thousands of gallons of oil seeping into the Delaware, into the marshland. 

EPA couldn’t do anything about that, Justice couldn’t do anything about that, or is that OSHA? 

Mr. SARACHAN. There is also the Office of Pipeline Safety. The 

criminal program on the environmental side is dealing with those 

catastrophes after the fact. In that particular case, it wouldn’t be 

an intentional violation. It would be an issue of, if that accident did 

occur, was it a criminal negligence case under the Clean Water 

Act? There have been not a lot, but a few of those cases brought, 

typically I think tanks that have been extremely corroded, that 

there was information that they were about to fail, and nothing 

was done. 

Chairman BIDEN. That would constitute criminal negligence, 

wouldn’t it, if you could prove that? 

Mr. SARACHAN. You would have to look at the particular facts of 

that case. You would have to look at what information did the people have, what was the standard of care, what were they told by 

engineers. You would have to look at all the evidence case by case. 

Chairman BIDEN. I find our lack of resolve kind of incredible. I 

used to be a criminal defense lawyer. If a guy is driving a tractor 

trailer carrying ‘‘x’’ thousand gallons of some contaminated substance legally and he has no brakes and he knew he had no 

brakes—he knew he hadn’t had his truck inspected or falsified the 

records for the inspection—and he has an accident and that stuff 

is released, he is in real trouble. 

Yet, you can have a tank on your property that you own, knowing you didn’t maintain it, having been given warnings, just like 

you can by the State trooper. You are given warnings that you 

didn’t get your brakes inspected on your tractor trailer. 

32

Am I missing something here? 

Mr. STARR. Senator, there is a process is in place, and as was referred to earlier about the tension between civil and criminal enforcement and the Chinese wall or the wall that has to be erected 

between them, I think that has been lowered to a certain degree 

over the years and I think that is appropriate. 

One of the things that occurred at the Justice Department when 

I was there, and I am sure is still in effect, is the first action is 

to, if there is harm likely or certain to occur, stop it. Don’t wait on 

the nicety of making a criminal case if that is going to take place, 

but stop the harm from occurring. 

There is a system in place for that, and while I am not an expert 

on civil environmental enforcement, they are in court day in and 

day out seeking injunctive relief on likely harm reasonably certain 

to occur. So I do think that it may be a question addressed to the 

wrong people. 

Chairman BIDEN. I misspoke. Assuming that there is a circumstance where there has been negligence in maintaining a part 

of the process, part of your facility, whether it is a storage tank, 

a pipeline, a holding basin, whatever, and then an accident occurs, 

how often would you guess is that turned into a criminal violation? 

My experience of observing it is seldom is it turned into a criminal 

prosecution. It is viewed as an accident and there is a civil case 

brought and there is a fine imposed. 

Mr. SARACHAN. In the environmental area—this is actually what 

this article is about—the number of environmental criminal negligence cases that have been brought is extremely small. We are 

talking about a number between 100 and 150 throughout the history of the Clean Water Act, since 1987. 

Chairman BIDEN. Yes. 

Mr. SARACHAN. I think there are a number of reasons for that. 

Chairman BIDEN. Well, I would like to know what they are. 

Mr. SARACHAN. Part of it is that, again, the focus of the criminal 

statutes is to go after the intentional violators, the people who are 

falsifying things, the people who are deliberately violating the law. 

In the case of an accident—and you gave us the given that there 

is negligence here. Well, when you are talking about a corporation, 

it gets complicated quickly. What did they really know? In hindsight, after an accident, it is very easy to come in and say this was 

going to happen and somebody should have done something about 

it. 

In fact, when you come into a facility, particularly an old facility, 

there are levels of risk with almost everything going on at that facility, especially if it is a refinery or something where danger is inherent. So you have to look at the individuals involved, and there 

may be cases where you have a facility that has problems. You may 

have individuals who come to that facility new and they are trying 

to repair it. 

You may have situations where they are trying to fix things according to a schedule. You may have situations where they sit 

down with the government agencies and say, look, we have a problem that we need to be fixing, we need to improve our maintenance, we need a year, we need 2 years to get back up to speed. 

33

Chairman BIDEN. I got that part, but I tell you what, you go up 

a 12-story building and the elevator hasn’t been expected 15 times 

and it is clear it hasn’t been inspected and the elevator collapses 

and there was reason to believe that the elevator hadn’t been expected. I tell you what, we go after that person criminally, the guy 

who owns the building. That is the record in most States. Why 

don’t we do that with a refinery? 

I am not being critical of you guys, in particular, but I am concerned. Why don’t we do that more often? This gets down to the 

cost of doing business. The part that bothers me about this—and 

I am having trouble getting my hands around it. I don’t want to, 

one the one hand, start making a populist argument here. I want 

to be reasonable and rational and very, very thorough about this. 

But the flip side of this is what I am observing is these repeated, 

chronic violations that are always chalked off as, hey, we had a 

malfunction. One of the reasons you had a malfunction is you 

wouldn’t spend the money. 

Let me give you my observation and ask you to comment. And 

this is not directed at you. I am expressing my frustration here. Finally, when things collapsed with Enron and WorldCom, we said, 

you know what? There is a systemic problem here. The systemic 

problem is that—and I am going to overstate it in the interest of 

time—CEOs get summoned up to Wall Street and they sit down 

with a group of four or five young analysts who say, what does the 

next quarter look like? And they say, well, it is going to be as good 

as last quarter. They say that is not good enough; if you don’t do 

better, then we are going to downgrade your stock. 

So what does the CEO do? He or she either goes back and says 

we have got a new product on the shelf that is going to bring in 

more revenue, we go back and we cut costs, or we expense this 

stuff. 

So as I said earlier in a different context, the nuns used to say 

avoid the occasions of sin. They usually were talking about girls 

when you are in grade school. What you are talking about here is 

we provide these, as the nuns would say, the occasions of sin. The 

system builds it in so that what happens is the CEO goes back and 

says, hey, look, I need a pay raise, but, God, if I do a pay raise directly and expense it, it is going to make the bottom line look 

smaller again. So what we will do is we will give me a stock option 

and I don’t have to expense it. 

Why do you think there is a ballooning in these stock options? 

It is estimated that 20 percent of the bottom line, and as much as 

40 percent of the bottom line of the top 100 corporations in America would be reduced if stock options were expensed. I mean, this 

isn’t rocket science. The same thing is happening with these companies who are having pressure put on them. 

Let’s take Amtrak. I am trying to get money for Amtrak to keep 

them running. Guess what? We nickel and dime them to death, so 

they don’t maintain the tracks. They are $5 billion behind in maintenance, because it is so heavily toward maintenance costs because 

it is such a heavy industry. So they put the money into operating 

costs. 

Well, what happens to the corporation that is sitting there and 

they look? What do they do? They say, look, the maintenance of 

34

this facility is going to cost us another $2, 7, 20, 50, 100, 200 million. Oh, let it go, Charlie; don’t inspect the elevator this week. Let 

it go. 

I respectfully suggest, until we start to put somebody in jail for 

that, you are going to find out that there is no incentive. What is 

the incentive to spend the big bucks? For example, I will be very 

blunt with you. There is a company called Motiva in Delaware. 

These guys come along and the people who ended up purchasing 

this facility are saying to me, hey, look, we came along as good 

guys, we tried to do the right thing, we inherited this mess. 

I take it for granted. Let’s assume that is the case, but how 

many cases are there where there isn’t any of that, where there 

isn’t any change of hands? Same outfit, same proprietor, same corporation continues to milk every single ounce out of that facility instead of maintaining it and there is ample evidence that, in fact, 

that they have not maintained the facility, and then a catastrophic 

accident occurs. 

Do you think it bothers a CEO—it probably bothers them; I 

shouldn’t be so callous—if the bottom line is the corporation pays 

a fine? It is the stockholders that get nailed. Put him jail and that 

gets his attention. Why is it we don’t do more of that? 

You guys prosecuted these cases. It is like complicated white collar crime that prosecutors don’t want to do. Hear me: You all don’t 

want to do it. I have been doing this for 30 years. They don’t want 

to do it. It is really hard. It really is difficult. It really is a hard 

case to make. Is that the reason why this doesn’t happen, or is it 

because there is a mindset that this is civil, this is business, these 

aren’t bad guys like drug dealers, these aren’t bad guys like bank 

robbers? What is it? 

Mr. STARR. Senator, you anticipated my answer to your question 

and your frustration, which I can understand, by saying is it a 

mindset? There is an expression that has often been used in this 

case. Where the case first starts is where it is going to end up, and 

if it happens to catch up on the criminal, if it happens to land on 

the criminal investigator’s desk, it generally stays in that channel. 

However, in those so-called accident situations, which in the fact 

pattern that you have given a criminal investigator would love to 

have and would love to put in the grand jury—who knew what, 

when, about that facility and those particular problems? And you 

are right, it is very difficult and it takes a great deal of tenacity. 

I have always seen the unfettered approach at the Department 

of Justice where pressure is not put on people just to close cases 

if it takes time to do that. I think it is one of the proud attributes 

of that institution to not monkey with that if something is going 

to take a long period of time. 

I think the problem is in the mix. You have State and Federal 

entities, both EPA and the State and local levels, and at the Federal level you have the criminal and you have the civil side. And 

there is no time, no place, where one sits down and says how is 

this case on these facts best handled? If it is a good case, everybody 

is going to want it and the information may not be shared. If it is 

not a good case, or a tough case, I should say, then they are going 

to take the easiest route to get there. 

35

Chairman BIDEN. Well, again, I am not only revealing my frustration, but my ignorance here as well. I have almost spent half my 

life sitting in this seat. I will be 60 years old. I got elected when 

I was 29 years old. I have spent 95 percent of the time I have been 

here dealing with the criminal justice system. 

The one place I have not gained any expertise or spent a whole 

lot of time—it has mostly been on the violent crime side of things 

and it has mostly been in the white collar crime relating to organized crime connections and the banking industry. It has not been 

here on the environmental side of the equation. 

So part of what you are observing is also my lack of knowledge 

about practically how this works. I know practically how drug cases 

work. I know practically how major conspiracy cases work. And I 

am having difficulty getting my hands around dealing with this. 

I will end with this and invite any comment. If I were sitting 

here today wanting to have the single most significant impact I 

could have on making sure that corporate America understood 

that—and they are not bad guys, by the way. They have got a lot 

of pressure on them. There is overwhelming pressure on a lot of 

these folks. 

But if, in fact, I could find—just as what this administration did, 

by the way; the reason they went for Adelphia quickly is to make 

a point. You have been prosecuting and you know why they went 

to Adelphia. And guess what? It is a useful thing to do. 

I would be looking for the biggest case I could make to find the 

biggest guy I could find, representing the most significant environmental violation I could find, and put someone in jail, were I the 

Attorney General of the United States. So you had better hope we 

don’t have a Democratic administration and I become Attorney 

General. Well, I wouldn’t accept the job. 

But all kidding aside, I wonder why it has not been—and by the 

way, this is Democrat and Republican. I am not making a comment 

about the Bush administration or the Clinton administration. I 

mean, when was the last truly high-profile criminal case relating 

to an environmental crime that has occurred, other than what happened with the Valdez? 

You don’t have to be a detective to figure if you are cutting corners on making sure you don’t expense your stock option, you sure 

in the devil are likely cutting corners in dealing with the maintenance of facilities that are complicated, expensive, and hard to detect and prove. 

Mr. SARACHAN. Senator, I think you have put your finger on a 

number of points when you asked the question about whether the 

legal tools are there to prosecute executives. In fact, as the law exists right now, executives who have knowledge of violations and 

simply fail to act when they have the power to act are liable under 

the statute. So the legal standards are extremely strong for the 

prosecution. 

Part of the problem, and I think you also put your finger on it, 

is these are hard cases. Part of the problem, as I mentioned earlier, 

is the lack of integrated enforcement. If you have all the parties in 

the agencies looking at things, they can graduate the responses up 

as violations continue. 

36

You are frustrated by repeated violations. You begin with administrative, then civil and you work your way up. That is fairer to the 

defendant. It saves resources because most people will respond before you get up those steps, and it is a good use of criminal because 

you are using it when you know you need it because you are using 

it against people who are recalcitrant. 

Chairman BIDEN. If you are sitting in my chair and we switch 

roles here, what do you do? What do you propose? Is there anything you can do from the congressional side or is this purely an 

executive judgment to be made by the executive department as to 

how to go about doing this and there is nothing we can do to 

prompt it? 

Mr. SARACHAN. I think there is one other factor here, and I 

should disclose, by the way, that I represent one of the managers 

at the Motiva facility. The question you ask, shouldn’t people be 

held responsible, which is a natural reaction when there is a horrible accident like that and someone is killed—but when you look 

at the individuals, then you have to ask, who is it? 

It is not somebody who didn’t have knowledge of the specific 

problems. It is not somebody who came to that facility trying to fix 

things and make them better and work with the agencies. Part of 

the reason why I think there is not as much of the prosecutions as 

you would like to see and it seems frustrating is because of these 

problems in the system and people’s reluctance, but part of it is 

that prosecutors are exercising discretion. 

When they look at the detailed facts, they see that sometimes responsibility gets dispersed and you can’t identify a single individual 

or group of individuals who are responsible, even if it is a terrible 

accident. 

Chairman BIDEN. I wasn’t talking about Motiva at all in this. I 

don’t know enough about who is responsible or what. I am not talking about Motiva, in particular. 

If, in fact, I walk in and I take over a facility—I purchase a bar, 

a nightclub, a liquor store, a casino, and I get in there and find out 

that it is corrupt and I say, look, we are going to try and work this 

thing out. I inherited this thing and I am going to try to work it 

out. Look, I want you selling less cocaine here now; slow this process down. You will put my rear end in jail. 

I walk in and buy a company and I find out that this tanker, this 

ship I just bought—my God, it has holes rusted through it and if 

I carry one more load of crude oil in this thing, it may burst. I will 

try to fix it. I am going to try to fix it, but in the meantime we 

are going to do one more shipment. You say, well, that guy was trying to do the right thing. 

If it was carrying cocaine and I didn’t know it, but I find out and 

I go, well, wait a minute, we will just get this one more load and 

we will take this in, we will be OK and then I am going to clear 

the house here—we just seem to think differently about these 

things. 

With your permission, I have a very quick call I have to answer 

here that is an emergency. I am going to recess for 2 minutes. I 

am just going right to this room. 

[The Subcommittee stood in recess from 5 p.m. to 5:03 p.m.] 

Chairman BIDEN. I appreciate you all giving me this much time. 

37

Let me phrase it a different way here because I am trying to get 

a sense of how we seem to as a Government and Government agencies view environmental damage differently than we view other 

things. Let me give you an example. 

I as a businessman purchase a trucking company and I have 40 

trucks. It is an ongoing business. I get in there and because I didn’t 

do due diligence, I find I own a company that, out of my 40 trucks, 

28 of them have serious maintenance violations. They have the 

records; they are sitting on my desk. They are such serious maintenance problems that they could cause a serious accident on the 

road—brakes, lights, undercarriage, whatever they happen to be. 

But I have a business. I have ‘‘x’’ number of loads I have to pick 

up. I have got customers relying on me. I am going to cost people 

jobs if, in fact, I shut this thing down, and I don’t have the resources immediately and I don’t have the time. 

But guess what? If, in fact, in my State one trooper pulls over 

one of my trucks and pulls the records and they find out that there 

is a problem, then they go look at my whole company and they 

shut the company—they don’t say, look, that is OK, we got it, we 

know you have problems, run all 40 trucks until you get time and 

enough money to fix it. 

I am oversimplifying it, but that seems to me what we do with 

the Clean Air and Clean Water Act. We seem to say, you know, I 

realize you bought this outfit and it is in bad shape. You didn’t 

know it at the time. We have a problem here. 

It is like Metachem. You have a problem here. I misspoke when 

I said Motiva. I meant to say Metachem, in Delaware. You have 

a problem here, but you know what? If you shut us down until we 

fix it, we don’t have the money to fix it all right now. All these people are going to lose their jobs. Granted, something bad can happen 

here. Granted, we are going to do environmental damage while we 

continue to work, but it is OK, let us keep going. 

Or there is no disclosure, no consent decree entered into. They 

just keep going, and in good faith try to fix it while they are going. 

They are trying to be good guys, but they keep it going, so you have 

dioxin leaching into the ground. So you have an unsafe condition 

where you are putting the stuff into the air and you are not reporting it in a timely way, or you are reporting it after the fact. 

I sit there and I say, you know, it is a lot cheaper for me to pay 

this fine than it is for me to shut down. I lose my whole investment 

here. And we seem to say, well, you know, you are right, we sure 

don’t want to move on this guy criminally. He is a good guy. He 

didn’t do this. He didn’t fail to maintain it. It is beyond his control 

now. 

Am I missing something? 

Mr. PENDERS. Senator, one of the obstacles you identified is the 

environmental laws themselves were not integrated. The Clean 

Water Act, the Clean Air Act, and the waste laws developed separately in separate programs to regulate discreet problems without 

addressing the relative risks involved in the management of chemicals or allowing an integrated approach to analyze risk, much less 

legislate on that basis and require that. 

In recent years, advances in environmental management, a holistic, risk-based approach of the facility, have found emissions and 

38

risks that are not regulated at all. There has been a bill introduced, the Chemical Security Act, and other measures that have 

been mandated by the executive branch. 

Now, to do vulnerability assessments to look at all of the statutes, but actually prioritize and measure the relative risks from 

regulated and unregulated aspects that are important from a security perspective and develop a plan for implementing measures to 

reduce that risk—that is something that can be addressed legislatively. There have been bills introduced. 

It has been part of the new focus on vulnerability assessments 

to look at the risk in a holistic way and begin to take measures, 

and perhaps require measures, as some of the bills introduced have 

done, to address the risks in a measured way. 

Mr. SARACHAN. Senator, I think the facts that you posit, an 

owner who knows that a facility is continually violating the environmental laws——

Chairman BIDEN. Only after he buys it. I mean, he didn’t know 

it beforehand. 

Mr. SARACHAN. But he knows now. 

Chairman BIDEN. He knows now. 

Mr. SARACHAN. And he knows that day after day it is polluting 

the environment, that he is in violation of the law, whether it is 

a permit or a regulation, and he knows that. 

Chairman BIDEN. Or he knows that there is a disaster about to 

happen. Nothing has happened yet, but he knows that the pipeline 

is seriously corroded. He knows that some other aspect of the operation could never pass inspection and is about to blow up. He 

doesn’t have the money to fix it. He keeps going, in the hope that 

he gets it done. And it goes, and we say, OK, there is a fine, it 

caused all this environmental damage, instead of saying, hey, you 

are criminally negligent. You knew this. Even though you tried 

your best, it still blew up. You should have shut the sucker down. 

You should have taken your loss. You should have gone bankrupt. 

We do that in every other business. 

Mr. DIPASQUALE. Mr. Chairman, again, I am not a practicing attorney. I am not an attorney by training, but there is this growing 

body of Federal case law that is helping to define what is referred 

to as the responsible corporate official doctrine where an individual 

who, by virtue of his or her position, should have known that these 

situations needed to be corrected could be found criminally liable, 

and that would include fines and imprisonment. 

I think in this case, what I would suggest is that we look at that 

standard of proof and that it be reduced to simple negligence and 

that the fines be increased, the penalties be increased. I think if 

the managers and the corporate executives know that they are 

going to be held liable for these failures, they are going to pay a 

lot more attention to what is going on and not making decisions 

based on, well, we have to put off this capital investment, we can’t 

make these repairs right now, we will run the risk and we will see 

what happens, and then only having to pay fines if there is some 

kind of a release. 

I think they need to understand that they face criminal prosecution if they fail to address problems. Whether or not they knew it, 

by virtue of their position in the corporation they should have 

39

made it their business to know and they should have made it their 

business to get it corrected. 

Chairman BIDEN. I am going to sound counterintuitive here. I 

am very reluctant to do that. Maybe I did too much defense work, 

but I think there has to be not a negligence standard to find someone criminally liable, but criminal negligence is a term of art and 

that is different. 

My question really is why do you not have more prosecutors deposing, seeking records, going in with truckloads, pulling out all 

the records and uncovering whether or not the CEO had reason to 

know. I am not looking for a negligence standard. I am wondering 

why we don’t go at this more. 

I think one of the reasons we don’t is it is just a lot easier to 

fine them. It doesn’t take nearly as much work. But to go in and 

indict them, padlock their offices, confiscate the books, and look at 

all the records, just like we do in other major white collar crime 

areas—we don’t seem to do that on the environmental side, is I 

guess my only point. Maybe we do and I just don’t know about the 

cases. 

Mr. STARR. A couple of points, if I may, Mr. Chairman. One is 

that in environmental prosecutions, criminal negligence is simple 

negligence, and so the standards can’t get any lower. So the tool 

is there, in keeping with our theme. 

The second thing is I think those cases are prosecuted. Putting 

the padlock on the door is always a harsh remedy, I think, in part 

because you are not busting a cocaine lab when you are doing this. 

You have an ongoing organization that may be producing something that is of great benefit, and oftentimes in the government 

contracting field that is the case. 

Second, you have that tension that you always have in these 

cases of where and what and who did the particular act and when 

did they do it. But I am confident that the Justice Department 

hasn’t changed, Ron, since you were there or since I was there and 

they are looking and would take that case. 

Without sounding at all like I am patronizing, one of the ways 

to get that done, Senator, is to do just what you have done here 

in holding this hearing and focusing on environmental criminal enforcement. I know from my experience over a decade in the Justice 

Department that it does listen to these kinds of issues and these 

kinds of questions that you ask, and I wouldn’t be at all surprised 

to see within the next 6 months to a year your question being answered by a case just like you describe. 

Chairman BIDEN. Well, I am just getting started. I have got a lot 

to learn. I am just getting started in this area. I have not drawn 

many conclusions yet, but I am just getting started. 

I used to say to my mother, can I go down and hang out at 

Buffington’s, hang out on the corner with the guys? And she would 

say, you know those guys down there; everybody knows they are 

trouble. And I say, I am not like them, mom, I am not going to do 

anything. And she would say, you know, if it looks like a duck and 

walks like a duck and quacks like a duck, it is a duck. You go down 

there and you are duck. 

Well, let me tell you I just can’t imagine that in the environment 

we are in today—no pun intended—in the environment we are in 

40

today, with all of the difficulties that are being faced, there isn’t 

a lot more that we can and should be doing because of the extent 

of the damage being done to the environment that right now is 

thought of as basically a cost of doing business; that we could not 

begin to change the environment, literally, if we were more aggressive. 

My only question is do we need any more laws, or do we just 

need more resources or a change of attitude, or all of the above in 

order to begin to change the way in which we are approaching. 

White collar crime prosecutions and criminal referrals are way 

down, by the way. Is anybody telling me white collar crime is way 

down? Is anybody telling me that the damage done by white collar 

crime to the economy is way down? 

All the other indicia out there you would look at would suggest 

it is probably up, not down, and yet prosecutions are down. It either means they have gotten a lot smarter and more sophisticated, 

it isn’t happening, we are not pursuing it, or the standard that has 

to be met is so high, it is too difficult. That is the part I haven’t 

figured out yet, but it is a duck. I figured that part out. I just don’t 

know how to go about it yet. I am just not sure where the weakness is. 

It is a little bit like we used to do when I first got involved in 

this business with organized crime. I am not compared corporations 

to organized crime. At the FBI, we had a guy named J. Edgar Hoover when I got here. That is how long I have been here. J. Edgar 

Hoover was in charge when I got here as a United States Senator. 

He didn’t like to fool with organized crime. Remember why? You 

guys are prosecutors. 

Mr. STARR. It was too hard. 

Chairman BIDEN. Too hard, and it would corrupt his agents, so 

he didn’t want them involved. So it took me 8 years, but I started; 

not just me alone, but just speaking for myself, I started. The attitude changed. We started to break up some of the organized crime 

families. We have new organized crime families now, but it was an 

attitude. It wasn’t that they were bad guys. There weren’t dishonest people at the FBI. It wasn’t that enforcers were afraid of 

the Mafia, but it was hard and it was dangerous. That is the systemic kind of thing I am talking about. 

I just, for the life of me, have not put this little Rubic’s cube together here about why we are not doing a whole lot more in an increasingly fragile environment, with increasingly devastating results to the environment, with knowledge on the part of operators 

of those facilities, and the cost clearly being less than the cost it 

would take to fix it. 

Without getting into specifics, one of the outfits out our way can 

pay that fine for a lot longer before it equals the amount of money 

they have to spend to see to it that they don’t have to engage in 

the action that pollutes the air. 

You are sitting there and what are you going to do? We hope 

they are all moral. One of the things I have found out is they are 

just like politicians, priests, doctors, rabbis, housewives. They are 

like everybody else. I don’t ask a lot of human nature. I don’t ask 

a lot of people who have a fiduciary responsibility to produce one 

thing for their stockholders and themselves, and maybe that might 

41

be at odds with what is in the interest of the community at large. 

I don’t want to make it hard for them to make the right decisions. 

You have all been kind with your time. My staff is perplexed because they had at least three or four very good, pointed questions 

for each of you. But very bluntly, I am going to submit the questions to you in writing. It will not take much time. 

Until you get by the first layer here of how do we better coordinate and organize this—unless, as I said, someone can come along 

and tell me don’t worry, Joe, the environment is getting better, people aren’t polluting as much, the problems we face with degrading 

infrastructure are not a problem, people are going to take care of 

that, that is going to be their first priority—convince me of that 

and I will feel a lot better. 

That is not your obligation, but if I am convinced of that, that 

is one thing. But I don’t get that sense at all. There are a lot of 

disasters waiting to happen here, and the incentives are not sufficient, it seems to me, to promote the kind of vigilance that is needed in order to make sure that I can breathe cleaner air and drink 

cleaner water. 

Would anyone like to make a closing comment on anything at all 

you would like to speak to? 

Mr. PENDERS. Just one thing, Senator. There have been big cases 

against companies like BP in Alaska, where there were very real 

limitations on what one EPA agent or other agencies could do in 

managing hundreds of thousands of documents between them, trying to make the case against individuals and other organizations. 

So resources are certainly a part of the equation and a practical aspect. 

Chairman BIDEN. It seems to me they are a big part. It seems 

to me there is resources, will, commitment, coordination. Just the 

ability to monitor what is going on is staggering. So in every other 

area where that occurs on the criminal side, what do people do? 

They pick out, they pick out. 

There are a couple of ways to do this. One is have the resources 

to be able to monitor all these facilities, which means we are not 

doubling or tripling or quadrupling, but we are increasing by a factor of 100, 150, 500. It is like meat inspectors. There aren’t a whole 

lot of them and you can’t possibly inspect them all. So what do they 

do? They pick facilities and they go in and they just pick them. 

Mr. STARR. Case selection. 

Chairman BIDEN. It is case selection. 

Well, you have all been very, very helpful. Again, I am not being 

solicitous when I say this: I want the record to show I have made 

no judgment and have no opinion at this moment about any company that has been mentioned here or about any culpability on the 

part of any individual or any single company. I am speaking in generic terms. 

At any rate, I thank you all very much for your participation. I 

have, as I said, several questions in writing for each of you, if you 

wouldn’t mind submitting them for the record. 

Senator Hatch would like his statement inserted in the record at 

this point. 

[The prepared statement of Senator Hatch appears as a submission for the record.] 

42

Chairman BIDEN. With your permission, I may come back to you 

and ask you for some more input before this is over while I try to 

digest where this is going. Thank you all very much. 

We are adjourned. 

[Whereupon, at 5:23 p.m., the Subcommittee was adjourned.] 

[Questions and answers and submissions for the record follow.] 

[Additional material is being retained in the Committee files.]

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