Judge fines Indiana company for Clean Air Act crimes

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GreenGavelBy Eric Freedman

A Portage, Indiana, chemical manufacturer has been fined $325,000 for making false statements concerning its Clean Air Act permit.

After six years of negotiations, Calumite Company LLC, already had pleaded guilty to two felonies.

The sentence imposed by U.S. District Judge James Moody includes two years of probation and a requirement to implement an environmental compliance plan with an annual training program, according to the U.S. Attorney’s Office in Hammond.

“It is widely recognized that the operation and maintenance of air pollution control equipment is a costly budget item that almost invariably lessens rather than adds to a company’s profitability,” the prosecution said in a sentencing memorandum. “The only way to ensure that companies avoid the temptation to cut corners on such maintenance in order to save money is if companies that are issued permits and their employees understand that the intentional failure to comply with permit requirements has serious consequences.”

In court papers, the company called the sentence “a fair and just resolution to this case” and said it has developed and is implementing a new environmental monitoring system.

“Calumite acknowledges that clean and dust-free air is in the public interest and is necessary to ensure public health and welfare,” the company said in its sentencing memorandum.

Calumite faced a maximum fine of $500,000 for each of the two violations,

The facility, which is close to the Lake Michigan shore, makes a non-hazardous powdery additive used to produce glass.

“The company collects slag, a waste product of the steel industry, dries it in a hot gas oven, crushes it into a fine powder and then ships it off-site to glass manufacturers, who use it as an additive to lower the temperature at which glass can be produced,” the U.S. Attorney’s Office said in its statement announcing the sentence.

The Portage facility has a Clean Air Act operating permit issued by the Indiana Department of Environmental Management (IDEM). Under the permit, the company must maintain and monitor “baghouses” used to control and minimize emissions of fine particulates from the site.

The government charged the company with failing to properly maintain one of the baghouses and that its monitoring pressure gauge was broken from December 2008 through July 2009.

During that period, prosecutors said, “Calumite employees also knowingly continued to routinely fill out daily logs that falsely reflected gauge monitoring readings that were within the range allowed by the permit and caused false information to be submitted to IDEM in the company’s quarterly reports.”

Those employees included the plant supervisor, according to legal documents. No individuals were criminally charged.

Investigators from IDEM and the U.S. Environmental Protection Agency conducted the criminal probe.

As far as the six years it took to resolve the criminal case, IDEM public affairs officer Dan Goldblatt said the U.S. Justice Department and U.S. Attorney’s Office “handled the prosecution of this case.  Once filed it was out of our hands. IDEM did everything it could to move this case along.  It was a federal/state task force case that ran its course.”

In addition, Goldblatt said, “We have had several civil enforcement actions against the company as well.”

Agency records show violations at Calumite facilities in Portage, East Chicago and Burns Harbor as far back as the late 1990s.

In the criminal case, Calumite’s sentencing memorandum said the company hasn’t earned profit “for years” and lost hundreds of thousands of dollars “in each of 2011, 2012 and 2012.” Its owners will pay the fine or borrow the money to do so, the memorandum said.

“Further, Calumite and the government agree that although there were complaints of dust emissions from the plant, neither are aware of any injury or loss resulting from the company’s conduct and thus there are no victims who might be entitled to restitution,” the memorandum said.

The government’s sentencing memorandum said, “The effectiveness of the Clean Air Act at maintaining and improving the quality of the air we breathe is critically dependent on good faith efforts by regulated companies to comply with permit requirements and honestly self-report violations. Neither the state of Indiana nor the EPA has the resources needed to directly monitor emissions of air pollutants from the many industrial facilities located across the state and the country.”

“The effectiveness of federal and state statutory and regulatory programs aimed at preserving and enhancing air quality, therefore, is almost entirely dependent on good faith efforts by companies,” the memorandum said.

Defense lawyer Richard Zuckerman of Detroit declined to comment on the case, saying “I’m not in a position to discuss the matter.”

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