The Multinational Monitor


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The Lemonheads

ONE OF THE TOUGHEST SANCTIONS ever imposed against a major automobile company -- a 45-day suspension of Chrysler's right to import automobiles into California -- was overturned in August by an obscure state administrative board. The Department of Motor Vehicles (DMV) ordered the suspension last year, after a state judge found that Chrysler had sold 119 lemons -- cars with defects such as bad brakes and faulty transmissions.

Chrysler appealed the decision. The obscure New Motor Vehicle Board (NMVB), which spends most of its time hearing disputes between car dealers and manufacturers, threw out the DMV suspension of Chrysler. The panel found that the DMV improperly concealed documents that should have been given to Chrysler as part of the legal case, and ordered the DMV to rehear the case.

Rosemary Shahan, president of the Sacramento-based Consumers for Auto Reliability and Safety, says she is "appalled by the decision."

"It's a huge setback," Shahan says. "It makes it more difficult for the DMV to stand up for consumers."

In its decision, the NMVB said that its primary purpose was "the protection of dealers" and that the proposed penalty "will disproportionately affect dozens if not hundreds of dealers who have not been accused of any wrongful conduct." The Board cited experts estimating that the 45-day suspension could cost dealers $24 million.

But Shahan said that a secondary purpose of the board is to protect consumers, and the decision doesn't even mention consumer interests.

A Bolt of Disaster

A PITTSBURGH-BASED CONSTRUCTION COMPANY was convicted in August on charges of causing the deaths of two ironworkers in a construction collapse at the main U.S. Postal Service facility in Chicago in 1993. A federal jury in Chicago convicted Pitt-Des Moines Inc. (PDM) on charges of criminal violations of federal workplace safety and health law.

Two ironworkers, Patrick Newsome, 25, and Larry Thormeyer, 47, were killed and five other co-workers were seriously injured when a portion of the structural steel frame of the 965,000 square-foot building collapsed on November 3, 1993.

PDM crews were erecting the fifth floor of the structure when more than 60 steel beams and columns, along with metal decking and sheeting covering about 4,900 square feet, suddenly collapsed without warning.

Federal prosecutors charged PDM with willfully violating regulations specifying how structural beams must be secured and requiring employers to train workers in recognizing and avoiding unsafe conditions.

At trial, federal prosecutors presented testimony showing that six months before the collapse, a pipefitter became concerned when he noticed a beam supported by only one bolt; federal regulations require two bolts.

Prosecutors alleged that postal officials wrote a letter to Pitt-Des Moines with a copy of the regulations attached. The company wrote back saying that one bolt was enough.

"After getting these warnings, they did nothing," says prosecutor Mark Hersh. "They made absolutely no changes in the way they were doing things."

PDM faces a maximum fine of $500,000 on each misdemeanor count. In May 1994, the Occupational Safety and Health Administration (OSHA) fined the company $140,000 for the violations. OSHA then referred the case to the Justice Department for criminal prosecution.

Dirty Water Record

SMITHFIELD FOODS and two of its subsidiaries were hit in August with the largest fine ever -- $12.6 million -- in a federal Clean Water Act case. The fines stemmed from illegal levels of slaughterhouse pollutant discharges into the Pagan River in Virginia. In imposing the fine, Judge Rebecca Beech Smith said that Smithfield's violations "had a significant impact on the environment and the public, and thus in total their violations of the effluent limits were extremely serious."

The subsidiaries, Smithfield Packing Company and Gwaltney of Smithfield Ltd., each operate a hog slaughtering and processing plant in Smithfield, Virginia where the violations occurred. The treatment plants at these facilities process the waste generated during the hog slaughtering and meat processing operations.

A May 1997 ruling in favor of the United States found the company's failure to install adequate pollution control equipment and properly treat wastewater resulted in more than 5,000 violations of permit limits for phosphorous, fecal coliform and other pollutants.

These violations, which occurred for more than five years, degraded the Pagan River, the James River and the Chesapeake Bay. Another ruling found Smithfield had falsified documents and destroyed water quality records.

The plants' water discharge permits set limits designed to protect the quality of Virginia's waterways.

EPA found serious, chronic violations of discharge limits for several pollutants, including phosphorous, ammonia, cyanide, oil, grease and fecal coliform. Sampling of the Pagan River revealed excess fecal coliform levels, an indicator of the presence of intestinal wastes from warm-blooded animals.

Fecal coliform is an organism found in animal and human waste that is often associated with bacteria known to cause serious illness in humans. The Pagan River has been closed to shellfish harvesting since 1970 due to high coliform levels.

-- Russell Mokhiber

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