[StBernard] Compliance and Enforcement News Release (Region 6): CITGO PLEADS GUILTY AND IS SENTENCED

[Westley Annis]

CITGO PLEADS GUILTY AND IS SENTENCED FOR CLEAN WATER ACT VIOLATION IN
LOUISIANA 

(WASHINGTON- September 17, 2008)  CITGO, a Delaware corporation, pleaded
guilty today and was sentenced to pay a $13 million fine for the negligent
discharge of pollutants into two rivers in Louisiana in violation of the
Clean Water Act (CWA), the Justice Department announced.  The $13 million
fine is the largest ever for a criminal misdemeanor violation of the Clean
Water Act. 

CITGO pleaded guilty in U.S. District Court in Lake Charles, La., for
negligently failing to maintain storm water tanks and failing to maintain
adequate storm water storage capacity at its petroleum refinery in Sulphur,
La.  As a result of these failures approximately 53,000 barrels of oil was
discharged into the Indian Marais and Calcasieu Rivers following a heavy
rain storm. 

In 1994, CITGO converted its lagoon waste water system into a tank system
for handling excess waste water and storm water.  In order to trim costs,
only two storm water tanks were constructed, but as early as 1998, employees
and outside contractors advised that an additional tank was necessary.
Despite being advised of the inadequate storage capacity, CITGO did not
approve construction of a third tank until 2005. 

In addition, the company failed to follow standard procedures for
maintaining the tanks.   During its operations, CITGO failed to remove oil,
sludge and solids from the tanks and failed to repair the skimming
equipment.  Failing to follow these procedures allowed for the build-up of a
significant amount of oil in the storm water tanks, which contributed
significantly to the overflow.   

Between June 19 and June 20, 2006, a heavy rainstorm overwhelmed the
capacity of the two existing tanks and forced oil that had collected in the
tanks out and into the two rivers.  The illegal discharge resulted in
limited commercial transportation on the water ways for approximately 10
days. 

Along with the fine, CITGO will implement an Environmental Compliance Plan
(ECP) by which it will take measures to ensure a spill of this type will not
occur in the future.  The ECP includes new reporting requirements within the
corporate structure regarding environmental issues and tank maintenance, the
completion of the third storage tank and the installation of new and more
effective oil removal equipment for the storm water tanks. 

"Companies cannot make economic choices that sacrifice the environment,"
said Ronald J. Tenpas, Assistant Attorney General for the Justice
Department's Environment and Natural Resources Division. "Sound business
decisions must factor in the safeguard of the environment or companies will
face consequences that in the long run are more detrimental to their bottom
line." 

"The protection of the environment is among our highest priorities," said
Donald W. Washington, U.S. Attorney for the Western District of Louisiana.
"We will not allow corporations or their employees to escape liability for
failing to do their part in preventing harm to the environment.  We fully
intend to use all the tools at our disposal, including criminal prosecution,
to punish those who pollute our air and water." 

"CITGO failed to properly maintain and operate equipment designed to prevent
oil spills," said Granta Y. Nakayama, Assistant Administrator for EPA's
Office of Enforcement and Compliance Assurance.  "Companies that harm the
environment and their community as a result of their own negligence will be
prosecuted and pay a heavy price." 

This prosecution is the result of an investigation conducted by the EPA,
Criminal Investigation Division led by Special Agent Michael Centola, and
the U.S. Coast Guard led by Special Agent James White. The case is being
prosecuted by Rocky Piaggione and Eric Heimann of the Justice Department's
Environmental Crimes Section, and Assistant U.S. Attorney Stephanie Finley
of the Western District of Louisiana U.S. Attorney's Office. 

  

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