Source: https://rddjlaw.com/environmental-criminal-enforcement/
Timestamp: 2019-04-24 14:41:20+00:00

Document:
Environmental Criminal Enforcement | Ritchie, Dillard, Davies, & Johnson, P.C.
In the Southeast, many of us find ourselves defending the small company. These organizations have the most to lose from a suspension or a debarment from government contracts, and they will have a tougher fight than larger companies because they do not have the same political and/or economic influence. The worst case scenario is when the investigation into an environmental crime creates a situation where an organization is suspended, and later debarred as a result of a plea or conviction, from government contracts, and this suspension or debarment severely impacts the economic viability of the company, possibly even resulting in bankruptcy.
I. Sentencing guidelines and environmental crimes.
The above sentencing guidelines applicable to individuals convicted of or pleading to environmental crimes are inapplicable to the sentencing of corporations or other organizations convicted of or pleading to environmental crimes.5 Rather, the sentencing court is instructed to determine the appropriate fine amount by applying the provisions of 18 U.S.C. §§ 3553 and 3572.6 Therefore, a sentencing court has considerable more discretion in sentencing organizations convicted of or pleading to environmental crimes than the similarly situated individual.
II. Debarment and suspension from contracting with the federal government.
Suspension is an interim refusal to deal with a contractor pending receipt of further information. It temporarily disqualifies a contractor from receiving government contracts or having contracts renewed or extended until the basis for the suspension is resolved.”11 Debarment follows suspension – it is the formal disqualification of a contractor or a participant in government programs for a set period of time, usually one to three years but sometimes longer.12 Organizations and individuals are treated the same under the debarment and suspension regulations – they are all considered “entities” for purposes of the applicable regulations.
The debarment regulations apply to individuals who have participated in, or who reasonably may be expected to participate in, covered transactions under Federal assistance, loan, and benefit programs or Federal contracts and subcontracts.15 An individual may participate, or have the potential to participate, in Federal procurement programs as a contractor or subcontractor, an agent or representative of a contractor or subcontractor, or as an individual surety.16 The definitions of both “contractor” and “participant” have been interpreted extremely broadly in the context of debarment and suspension; in fact, in the relatively few administrative decisions dealing with the interpretation of contractors and participants for purposes of debarment, the respondent challenging his or her classification as a participant or contractor has never won.
Affiliates. Business concerns, organizations, or individuals are affiliates of each other if, directly or indirectly, (1) either one controls or has the power to control the other, or (2) a third party controls or has the power to control both. Indicia of control include, but are not limited to, interlocking management or ownership, identity of interests among family members, shared facilities and equipment, common use of employees, or a business entity organized following the debarment, suspension, or proposed debarment of a contractor which has the same or similar management, ownership, or principal employees as the contractor that was debarred, suspended, or proposed for debarment.
V. What sort of pressure can be brought to bear on an organization to aid the government in the prosecution of individual employees?
VI. With respect to individuals, can debarment affect sentencing?
VII. What happens when a state follows up?
Additionally, pleading to or being convicted of an environmental crime can result in suspension or debarment from all state government contracts. Each state has the authority to suspend and debar companies from receiving future contracts and grants with the government. In the eyes of the government, the organization is not a responsible contractor if there is the taint of a criminal plea or conviction. Suspension and debarment can occur even if there is no conviction or plea – a criminal investigation can trigger a suspension and later debarment. Be sure to keep local state debarment and suspension regulations in mind in the plea negotiation, sentencing, and debarment/suspension negotiation process.
Cooney, et al. “Criminal Enforcement of Environmental Laws: Part III – From Investigation to Sentencing and Beyond.” 25 E.L.R. 10600, 10614 (November, 1995).
Ilene H. Nagel & Winthrop M. Swenson, “The Federal Sentencing Guidelines for Corporations: Their Development, Theoretical Underpinnings, and Some Thoughts About Their Future”, 71 Wash. U. L.Q. 205, 256 (1993).
2Q1.6 (2000). 2 See U.S.S.G. § 2Q1.2, Application Note 4.
3 See U.S.S.G. § 2Q1.2, Application Notes 7-8.
4 Cooney, et al. “Criminal Enforcement of Environmental Laws: Part III – From Investigation to Sentencing and Beyond.” 25 E.L.R. 10600, 10621 (November, 1995) (citing U.S.S.G. §§ 3B1.1; 3C1.1, 3E1.1).
5 See U.S.S.G. § 8C2.1, background commentary .
6 Id .; U.S.S.G. § 8C2.10.
7 Id . (citing 33 U.S.C. §1368(a), 42 U.S.C. §706, 40 C.F.R. §15.11, 40 C.F.R. §15.12).
8 See 42 U.S.C. §7606(a).
9 42 U.S.C. § 7606; 1368(a).
10 33 U.S.C. § 1368; 42 U.S.C. § 7606.
11 Cooney, et al. “Criminal Enforcement of Environmental Laws: Part III – From Investigation to Sentencing and Beyond.” 25 E.L.R. 10600, 10626 (November, 1995).
13 See 41 U.S.C. § 253b(c); Executive Order 12549 (Feb. 18, 1986); Executive Order 12689 (Aug. 16, 1989); 40 C.F.R. § 32.115(a); 48 C.F.R. § 9.402(a).
14 48 C.F.R. § 9.406-1(b).
15 In the Matter of James Longenbach, Respondent Determination, EPA Case No. 95 0114 01, 1997 WL 1248808 (E.P.A. 1997) (citing 40 C.F.R. § 32.110(a); 48 C.F.R. §§ 9.400(a)(1) and 9.403).
16 Id . (citing 48 C.F.R. §§ 9.403 and 9.405(a)).
17 In the Matter of Thomas W. Mariani Respondent Determination , EPA Case No. 92 0034 01, 1995 WL 1212897 (E.P.A. 1995); see also In the Matter of George E. Washington Respondent Determination , EPA Case No. 96 0005 02, 1997 WL 1248801 (E.P.A. 1997) (finding that respondent was a potential participant in government programs and potential contractor in government contracts by virtue of his previous business experience and the wide range of government contracts and programs); In the Matter of James Traynor Spaulding Respondent Determination , EPA Case No. 93 0088 11, 1994 WL 1148098 (E.P.A. 1994) (“[G]iven his business expertise, it is reasonable to expect that Respondent may participate in a covered transaction directly, or as an agent or representative of business entity that is a participant. Furthermore, reasonably may be expected to conduct business with the Government as a contractor or an agent or representative of another contractor [because of his prior business experience in telemarketing]. Therefore, [Respondent] is a participant within the definition of 40 C.F.R. §32.105(m) and a contractor within the definition of 48 C.F.R. § 9.403).
18 40 C.F.R. § 32.100 (executive departments and agencies participate in a government-wide system for nonprocurement debarment and suspension and debarment or suspension of a participant by one agency shall have governmentwide effect); 40 C.F.R. § 32.105 (a party excluded from contracting with the government is also excluded from participating in government programs).
19 48 C.F.R. § 9.406-2(a)(5).
20 See 48 C.F.R. § 9.406-2(c); 40 C.F.R. § 32.305.
21 Seravalli and Brookchester, et al. , HUDBCA No. 84-952-DB, 1985 WL 17604 (HUDBCA 1985).
22 Id . (citing Schlesinger v. Gates , 249 F. 2d 111 (D.C. Cir. 1957), cert. denied, 355 U.S. 939 (1958); Stanko Packing Company, Inc. v. Bergland , 489 F. Supp. 927, 949 (D.C.C. 1980); 46 Comp. Gen. 651, 568-59 (1967).
24 See 48 C.F.R. § 9.406-1.
25 48 C.F.R. § 9.043.
26 See Seravalli , supra.
27 See 40 C.F.R. § 32.115.
28 See 40 C.F.R. § 32.215.
31 See 40 C.F.R. § 32.313.
32 See 40 C.F.R. § 32.320.
33 See 40 C.F.R. § 32.320.
34 Cooney, et al. “Criminal Enforcement of Environmental Laws: Part III – From Investigation to Sentencing and Beyond.” 25 E.L.R. 10600, 10627 (November, 1995).
35 See U.S.S.G. § 8C2.10, 8C2.1 (indicating that sentencing guidelines with respect to environmental crimes are inapplicable to organizations). Because the sentencing guidelines are not applicable to organizations, the sentencing court will have a significantly greater amount of discretion in determining the sentence, and debarment and/or suspension, particularly a debarment or suspension that will force an organization into bankruptcy, could be argued to be a mitigating factor for the court to consider in determining a fine pursuant to the statute.
36 See Holder, Eric J., Deputy Attorney General, “Federal Prosecutions of Corporations” June 16, 1999.
39 See United States v. Cowden Gravel & Ready Mix, Inc ., 33 F.3d 60, 1994 WL 441831, **1 (9th Cir. 1994) (holding that possible debarment is not an appropriate basis for a downward departure from the Sentencing Guidelines); United States v. Reilly , 33 F.3d 1396 (3rd Cir. 1994) (finding that possible debarment and suspension from government contracts and programs is not an appropriate basis for a downward departure from the Sentencing Guidelines); United States v. F.J. O’Hara & Sons, Inc ., 1991 WL 286175, *1 (finding that debarment from government contracts and programs does not serve as a basis for downward departure); contrast with United States v. Leon , 2 F.Supp. 2d 592, 595-96 (D.N.J. 1998) (finding that no downward departure for debarment and resultant bankruptcy is appropriate unless the defendant can somehow demonstrate that the debarment and bankruptcy resulting from the criminal conviction was atypical, or out of the ordinary in kind or degree).
40 Cooney, et al. “Criminal Enforcement of Environmental Laws: Part III – From Investigation to Sentencing and Beyond.” 25 E.L.R. 10600, 10614 (November, 1995).
41 Id . at 10619.

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