Bribery Settlements Under U.S. Law Are Mostly With Foreign Countries

The following is an excerpt from an article in 

The New York Times
Tuesday, September 04, 2012

Bribery Settlements Under U.S. Law Are Mostly With Foreign Countries

By LESLIE WAYNE

A law intended to prohibit the payment of bribes to foreign officials by United States businesses has produced more than $3 billion in settlements. But a list of the top companies making these settlements is notable in one respect: its lack of American names.

The companies that have reached the biggest settlements under the law, known as the Foreign Corrupt Practices Act, include Siemens, the German engineering giant; Daimler, the maker of Mercedes-Benz vehicles; Alcatel-Lucent, the French telecommunications company; and the JGC Corporation, a Japanese consulting company. The lone American company in the top 10 is KBR, the former Kellogg Brown & Root, a subsidiary of Halliburton, the Texas oil services company. As a group, they have paid nearly $3.2 billion in settlements.

Since the law was enacted in 1977, the definition of “American” has expanded greatly to include foreign companies that are listed on United States stock exchanges, sell securities in the country or do business here. At the same time, foreign companies that turn to “facilitation payments” and other forms of under-the-table dealings with local officials in far-flung places have run afoul of the act, either because of cultural differences in business dealings or because of failure to recognize the breadth of the law.

“These big settlements are with sprawling, multinational companies,” said Andy Spalding, a law professor at the University of Richmond and a contributing editor to the F.C.P.A. Blog, which tracks the top settlements. “Yet they are based, in part, in the United States. A culture of compliance may be slower to take in other countries, and many are not aware of the rapid escalation of F.C.P.A. cases or its broad jurisdictional scope.”

The best-known case is that of Siemens, which paid $800 million to the United States and another $800 million to Germany to settle a corruption investigation. Even though the financial settlements took place in 2008, the criminal case against eight former executives continues. In December, they were charged with paying $100 million in bribes to Argentine officials, including former President Carlos Menem, to secure a $1 billion contract for Siemens. All eight executives live in Argentina, Germany or Switzerland, and none have been arrested or extradited — a long and complicated process.

The Siemens case is illustrative. The bribery took place in Argentina. The people offering the bribes were not American, and the people demanding them were Argentine officials. Siemens is a German company. The hook for the United States was that Siemens’s securities traded in the United States.

For more, visit www.nytimes.com.

News Release from EPA - Sumter Coatings

Sumter Coatings Inc. to Pay Civil Penalty for Resource Conservation and Recovery Act Violations 

Contact Information: Dawn Harris-Young, (404) 562-8421, harris-young.dawn@epa.gov

(ATLANTA - Feb. 27, 2012) — Sumter Coatings Inc. (SCI) agreed to pay a $55,000 civil penalty as part of a settlement with the U.S. Environmental Protection Agency (EPA) for a series of hazardous waste violations at its facility in Sumter, South Carolina.  As part of the settlement, SCI agreed to develop a personnel training program, develop a schedule for implementation of the training program and identify facility employees that require training. 

SCI manufactures paints and coatings primarily for the steel and farm implement industry. SCI also blends raw materials onsite to create custom coatings. The violations were observed during April 2010, when inspectors from the EPA and the South Carolina Department of Health and Environmental Control performed a Resource Conservation and Recovery Act (RCRA) Compliance Evaluation Inspection.

The settlement resolves several alleged violations that were noted during the inspection. The alleged violations  include:

• Improper management of hazardous waste containers on site;
• Failure to provide a sufficient base beneath containers which held hazardous waste;
• Failure to make a hazardous waste determination;
• Failure to inspect all areas where hazardous waste containers are stored weekly;
• Failure to develop personnel training program to ensure compliance with hazardous waste management’s;
• Failure to update information contained in the contingency plan, along with failing to make arrangements with local police and hospital authorities regarding the contingency plan and submitting copies of the contingency plan to first responders.

SCI implemented the process changes to reduce the risk of release from hazardous waste containers.  The changes include: labeling all containers with the necessary information; reducing the number of locations where short term storage occurs; changing container sizing and completing all necessary waste determinations.  SCI also applied a non-porous sealant to the base floor surface where the majority of hazardous waste containers are staged during regular operations. 

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Neither Admit Nor Deny

Excerpt from an article in The New York Times
Saturday, February 25, 2012

‘Neither Admit Nor Deny’ Settlements Draw Judges’ Scrutiny 

By EDWARD WYATT

WASHINGTON — The entrenched practice of allowing companies and individuals to settle federal regulatory charges without admitting that they actually did anything wrong is coming under growing scrutiny by the courts.

Two federal judges have questioned such settlements proposed by the Securities and Exchange Commission and this week a third judge held up a settlement offered by the Federal Trade Commission.

Judge Renee Marie Bumb of United States District Court in Camden, N.J., blocked a proposed settlement on Wednesday between the Federal Trade Commission and a marketing company based in New Jersey on charges that the company and its chief executive made false and unsubstantiated claims that the use of açaí berry-based products, which they promoted, would result in rapid and substantial weight loss.

Judge Bumb ordered both the commission and the company to justify why she should approve the proposed $11.5 million settlement when the lack of an admission by the company and the executive of any wrongdoing left her with no facts with which to judge whether the negotiated deal was fair, adequate and in the public interest.

In doing so, she cited a much-discussed case involving the S.E.C. and Citigroup. Last November, Judge Jed S. Rakoff of Federal District Court in New York rejected a proposed $285 million settlement of securities fraud charges for the same reason: without an admission of guilt or agreed-upon facts there was no basis for an approval.

And on Friday, an S.E.C. commissioner, Luis A. Aguilar, told a group of securities lawyers that a recent attempt to tighten the agency’s policy of allowing a company to settle a fraud case while neither admitting nor denying any wrongdoing “applies in so few situations, it needs to be revised to be more useful and effective.”

While another S.E.C. case in Wisconsin, where a federal district judge in December challenged an S.E.C. settlement, was subsequently approved, the cases demonstrate that Judge Rakoff’s challenge of the “neither admit nor deny” settlement is reverberating beyond Wall Street and New York.

That is not what securities law experts expected last November, when Judge Rakoff issued the ruling.

At the time, the consensus was that the decision was unlikely to affect cases involving other regulatory agencies or in other jurisdictions.

Because the proposed settlements included a permanent injunction against further wrongdoing by the defendants, they are subject to approval from a federal judge. But Judge Rakoff argued that the judiciary should not be considered a rubber stamp to approve executive-branch enforcement cases.

Lawyers both inside and outside the S.E.C. argued that the “neither admit nor deny” settlements were perhaps the only way to get companies to settle fraud cases, because to admit wrongdoing would open them to civil damages. (Emphasis added by me.)

An appeal of Judge Rakoff’s decision by the S.E.C. is pending at the Second Circuit Court of Appeals in New York.

News Release from EPA

Tuesday, February 21, 2012
Contact: Donna Heron 215-814-5113 / heron.donna@epa.gov

Pennsylvania Company Settles Toxic Chemical Reporting Violations at Nazareth, Pa. Facility

PHILADELPHIA (February 21, 2012) -- The U.S. Environmental Protection Agency today announced that Essroc Cement Corporation has agreed to pay a $82,000 penalty to settle alleged violations of toxic chemical reporting requirements at its manufacturing facility located at 401 West Prospect St., Nazareth, Pa.

According to EPA, Essroc failed to submit three years of required reports on a regulated toxic chemical (lead) which was processed at this facility.

EPA cited the company for violating the Emergency Planning and Community Right-to-Know Act (EPCRA). This law requires companies that manufacture, use or process more than a threshold amount of listed toxic chemicals to file an annual toxic chemical release form with EPA and the state. These reports are used to compile the Toxic Release Inventory (TRI) -- a publicly available EPA database, searchable by zip code, that contains information on toxic chemical releases and waste management activities.

The multi-establishment Nazareth, Pa., plant processes lead as part of the manufacturing process for bulk and packaged cement. Lead and lead compounds are regulated under EPCRA due to the public health effects of ingestion or inhalation of lead, particularly among children, including damage to the nervous system. According to EPA, a June 2011 inspection revealed that Essroc did not submit annual reports for lead for three years (2006 through 2008) when the Nazareth facility processed lead in amounts in excess of 130,000 pounds annually -- significantly exceeding EPCRA’s 100 pound reporting threshold. (This settlement involves alleged reporting violations, not unlawful releases of toxic chemicals.)

The settlement penalty reflects the company's cooperation with EPA in resolving the alleged violations, and its compliance efforts. As part of the settlement, the company did not admit liability for the alleged violations, but has certified compliance with applicable EPCRA requirements.



In a separate matter, the United States recently announced a $1.7 million settlement of alleged Clean Air Act violations at six Essroc facilities nationwide, including the Nazareth plant.
See press release at: http://yosemite.epa.gov/opa/admpress.nsf/d0cf6618525a9efb85257359003fb69d/48aa8dd28f3ab133852579750077751e!OpenDocument.

For more information on TRI and the TRI searchable database, go to: www.epa.gov/tri.

For more information on lead and its health effects, go to: See http://www.epa.gov/lead/index.html.

$10 Million Settlement with Mining Company

News release from EPA Region 9:

For Immediate Release: Feb 16, 2012Media Contacts: Mary Simms, 415-947-4270, simms.mary@epa.gov, Rusty Harris-Bishop, 415-972-3140, harris-bishop.rusty@epa.govDept. of Justice: (202) 514-2007                    

    U.S. EPA, Dept. of Justice reach $10 Million settlement with Department of the Interior, Northern California mining company for cleanup costs and transfer of land to Elem Indian Colony

SAN FRANCISCO -- The U.S. Environmental Protection Agency has finalized a multi-party agreement to settle cleanup costs for seven mining sites in three states. The parties to the agreement include the U.S. Department of the Interior, the U.S. Forest Service, the Bradley Mining Company, the Worthen Bradley Family Trust and the Elem Indian Colony of Pomo Indians.

Under the settlement, the Bradley Mining Company and Bradley Trust will transfer nearly all of their land holdings at the Sulphur Bank Mercury Mine to a new trust created to retain the lands pending EPA cleanup. The Elem Indian Colony will receive approximately 380 acres of uncontaminated land - adding to its current holdings of 50 acres - as compensation for natural resource damages from mining operations by the Bradley Mining Company.      


Nearly $7 million in federal funds will be used to reimburse EPA’s costs for cleaning up contamination at the Elem Indian Colony and the access road to the Colony.


“This significant settlement took three years to hammer out. The result is a win for Clear Lake and a win for the Elem Colony,” said Jared Blumenfeld, Regional Administrator for EPA’s Pacific Southwest region. “This settlement will help the Clear Lake ecosystem recover, including reducing the risks due to mercury in fish. It also demonstrates EPA’s strong commitment to supporting the environmental cleanup of tribal lands.”


In addition to the land transfers relating to the Sulphur Bank Mine, the proceeds from insurance policies and any future income from the Bradley Mining Company will be divided among the seven mine sites for future cleanup, with the Bradley Mining retaining a share of the proceeds.


The Sulphur Bank Mercury Mine Superfund Site is located at the southeastern end of the Oaks Arm of Clear Lake. The site includes the Elem Indian Colony which is located directly adjacent to the mine property. The site initially was mined for sulfur from 1865 to 1871. Mercury ore was mined intermittently by underground methods from 1873 to 1905, and open-pit mined from 1915 to 1957. The mine, once one of the largest producers of mercury in California, has been inactive since 1957.


Approximately three million cubic yards of mine wastes and tailings remain on the mine site. Mercury is present in the bottom sediments in Clear Lake, and mercury has bio-concentrated in the food chain of Clear Lake. The levels of mercury in fish from the lake led the State to issue an advisory to limit consumption of fish. Clear Lake is the source of water that the Clear Lake Oaks Water District provides for municipal drinking water for 4,700 people.


This cleanup effort is one of several tribal land cleanups in the Pacific Southwest Region. EPA is currently overseeing the investigation and clean up of contamination on Hopi and Navajo lands throughout the southwest.


The settlement, lodged in U.S. District Court for the Northern District of California, is subject to a 30-day public comment period and final court approval. A copy of the settlement document will be available on the Department of Justice website at: www.usdoj.gov/enrd/Consent_Decrees.html


For more information please visit: www.epa.gov/region9/sulphurbankmercury

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Settlement to Require Eaton Corporation to Address TCE Contamination

News Release from EPA Region 7

U.S. Environmental Protection Agency, Region 7 901 N. Fifth St., Kansas City, KS 66101 Iowa, Kansas, Missouri, Nebraska, and Nine Tribal Nations Settlement to Require Eaton Corporation to Address TCE Contamination at Vehicle Group Plant in Kearney, Neb. Contact Information: Dave Bryan, 913-551-7433, bryan.david@epa.gov Environmental News FOR IMMEDIATE RELEASE (Kansas City, Kan., Jan. 12, 2012) - EPA Region 7 and the Eaton Corporation have reached a settlement through which the company has agreed to conduct certain activities to address trichloroethylene (TCE) contamination in groundwater at its Vehicle Group Plant and surrounding areas in Kearney, Neb. Eaton Corporation has owned the 57-acre site at 4200 Highway 30 East, in Kearney, since 1969. TCE was used as a degreasing agent in the manufacture of automotive and heavy-duty engine valves and gears at the site. TCE is a colorless liquid which is most commonly used as a solvent for cleaning metal parts. TCE is a known human carcinogen that has been found in concentrations in groundwater at and near the site that exceed the drinking water standard. According to an administrative order on consent, placed on public notice today by EPA in Kansas City, Kan., TCE contamination in groundwater at the Eaton Corporation Vehicle Group Plant site in Kearney was first detected in 1986, the result of an apparent leak from underground storage tank lines. Since that time, the company has installed and modified a series of systems to extract TCE from groundwater at the site, and monitoring wells to track its movement underground. Currently, Eaton Corporation operates two groundwater extraction systems – one on-site, another off-site – in an effort to contain the underground TCE plume. Contamination from the site has in the past impacted private drinking water supplies. EPA’s administrative order on consent requires Eaton to operate and maintain on-site and off-site groundwater extraction systems to contain and reduce TCE contamination in the groundwater at and coming from the site. Operation of the extraction systems will continue as long as needed to prevent significant contaminant plume migration. The order also would require Eaton Corporation to conduct a review of the remedy’s performance after five years, submit a remedy completion report to EPA, and maintain a series of institutional controls at the site. The proposed settlement is subject to a 30-day public comment period. EPA will consider all comments received, and may modify or withdraw its consent to the settlement if comments disclose facts or considerations indicating the settlement is inappropriate, improper or inadequate. As provided by the federal Resource Conservation and Recovery Act, commenters may also request a public meeting to be held in the affected area. Copies of the proposed order will be available for public inspection at the Kearney Public Library, 2020 1st Avenue, Kearney, Neb., 68847, and at the EPA Region 7 Records Center, 901 North 5th Street, Kansas City, Kan., 66101. A copy of the proposed settlement may also be obtained from the Regional Docket Clerk, EPA Region 7, 901 North 5th Street, Kansas City, Kan., 66101. Persons submitting comments should reference EPA Docket Number RCRA-07-2011-0024. # # #

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$1.7 Million Penalty to Resolve Clean Air Act Violations

Excerpts from EPA News Release:

News Releases from Headquarters

 

Essroc Cement Company to Pay $1.7 Million Penalty to Resolve Clean Air Act Violations/$33 million investment in pollution controls to reduce smog and asthma causing emissions by more than 7,000 tons per year

Release Date: 12/29/2011
Contact Information: CONTACTS: Stacy Kika Kika.stacy@epa.gov 202-564-0906 202-564-4355 Cathy Milbourn Milbourn.cathy@epa.gov 202-564-7849

WASHINGTON – The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice (DOJ) announced that Essroc Cement Company has agreed to pay a $1.7 million penalty and invest approximately $33 million in pollution control technology to resolve alleged violations of the Clean Air Act (CAA) at six of its Portland Cement manufacturing plants. The settlement will protect Americans’ health by reducing more than 7,000 tons of harmful nitrogen oxides (NO_x) and sulfur dioxide (SO₂) pollution each year that can lead to childhood asthma, acid rain, and smog. Essroc has also agreed to spend $745,000 to mitigate the effects of past excess emissions from its facilities.

Under the settlement, Essroc will install state of the art pollution control technology to control SO₂ and NO_x at five of its plants and demonstrate a selective catalytic reduction system (SCR) system at two long wet kilns in its Logansport, Ind. plant. If successful, this will be the first SCRs used on long wet kilns anywhere in the world. Essroc will also permanently retire its sixth plant, located in Bessemer, Penn. This plant is currently out of operation and its permanent retirement will ensure that the facility does not restart without proper permitting under the CAA.

The settlement also requires Essroc to spend $745,000 on a mitigation project to replace old engines in several off-road vehicles at its plant sites. The replacement engines are estimated to achieve approximately a 50-80 percent reduction in nitrogen oxides in each engine.

Reducing air pollution from cement plants is one of EPA’s National Enforcement Initiatives for 2011-2013. Sulfur dioxide and nitrogen oxides, two key pollutants emitted from cement plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog, and haze. The pollutants are converted in the air into fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts, and premature death. Reducing these harmful air pollutants will benefit the communities located near the Essroc plants, particularly communities disproportionately impacted by environmental risks and vulnerable populations, including children.

The states of Indiana and West Virginia, and the Commonwealths of Pennsylvania and Puerto Rico, are also signatories to this consent decree.

The settlement was lodged today in the U.S. District Court for the Western District of Pennsylvania, and is subject to a 30-day public comment period and final court approval.