Names In the News

Pentagon, et. al. Pollution

A Pentagon plan billed as a way to protect active military ranges from environmental lawsuits would also shield private defense contractors from liability for their pollution of groundwater and soils, according to agency specialists represented by Public Employees for Environmental Responsibility (PEER).

The proposed legislation, officially unveiled in March, not only exempts munitions and weapons systems from hazardous waste laws, but also the chemical "constituents" inside the munitions as explosives or as propulsion or rocket fuel.

The most widely known such chemical is perchlorate (C104), the main ingredient in solid rocket fuel.

Several of the nation's fastest-growing states, such as Nevada, Texas and California, are currently facing potentially crippling water shortages due to groundwater contamination by perchlorate.

Perchlorate interferes with iodide uptake into the thyroid gland, the key event leading to changes in development or tumor formation.

PEER says the Pentagon proposal would:

ï Allow Lockheed Martin, Boeing, Kerr McGee, General Dynamics and other defense contractors to release perchlorate, royal demolition explosive, TNT, dioxane, trichloroethane and other highly toxic chemicals into the soil;

ï Prevent state governments and citizens from using anti-pollution laws to stop contamination or force responsible companies to clean up polluted sites because the chemicals would no longer be categorized as hazardous waste; and

ï Limit U.S. Environmental Protection Agency response to only those very few cases where the defense site sits directly on top of a drinking water source under the standards of the Safe Drinking Water Act.

Condemning the proposal, PEER Executive Director Jeff Ruch says, "The whole point of national defense is to protect Americans, not poison them."

Enron Fallout Continues

The Enron fallout continues.

Two Enron executives, Kevin Howard and Michael Krautz, were arrested in March on warrants filed in federal court in Houston, Texas, charged with securities fraud, wire fraud, conspiracy and making false statements to FBI agents.

The charges stem from the defendants' involvement in the generation of $111 million in fraudulent earnings relating to Enron's contract with Blockbuster, the retail video store chain.

The charges are the latest in a series of criminal charges filed in connection with Enron's collapse. In June 2002, Enron auditor Arthur Andersen was convicted of obstruction of justice.

Meanwhile, Merrill Lynch agreed in March to pay $80 million in disgorgement, penalties and interest to settle Securities and Exchange Commission (SEC) allegations that the company and its former executives aided and abetted Enron earnings manipulation.

Federal officials alleged that Enron used Merrill Lynch-assisted transactions to add approximately $60 million to its fourth quarter of 1999 income and to increase its full year 1999 earnings per share from $1.09 to $1.17.

The four former Merrill Lynch executives named in the complaint are contesting the matter.

One of the allegedly fraudulent transactions under SEC scrutiny is an asset-parking arrangement whereby on December 29, 1999, Merrill Lynch bought an interest in certain Nigerian barges from Enron with an express understanding that Enron would arrange for the sale of this interest by Merrill Lynch within six months at a specified rate of return. The SEC alleges that Merrill Lynch and the named executives knew that Enron would misleadingly record $28 million in revenue and $12 million in pre-tax income in connection with this transaction.

BP: Thousands of Violations

Southern California's air quality agency filed a civil lawsuit in March seeking $319 million from BP/ARCO for thousands of air pollution violations over an eight-year period at the company's Carson refinery.

"This is by far the largest penalty ever sought by the South Coast Air Quality Management District (AQMD)," says the agency's Barry Wallerstein. "We are seeking more than $300 million from BP/ARCO because the company committed thousands of violations involving excess air pollution while routinely submitting records to AQMD that showed no violations."

The AQMD complaint charges BP/ARCO with submitting false inspection reports and failing to maintain a required inspection and maintenance program for floating roof tanks at the company's Carson oil refinery between 1994 and 2002. The inspections and any required maintenance were meant to prevent the leakage of volatile organic compound (VOC) vapors. VOCs combine with oxides of nitrogen to form ground-level ozone, a harmful pollutant responsible for Southern California's dubious reputation as smog capital of the nation.

AQMD inspectors found that more than 80 percent of the tanks inspected violated pollution rules, due to numerous leaks, gaps, torn seals and other defects that caused excess violations.

- Russell Mokhiber