MARCH 16, 1985

E.P.A. Said to Show Favoritism in Action On a Waste Disposer

Special to the New York Times

    WASHINGTON, March 15--The Environmental Protection Agency's relationship with the nation's largest disposer of toxic wastes is becoming a matter of contention within the Government.

    Two agency officials who have long been critics of the agency's efforts to clean up toxic wastes said in interviews that the agency was showing a pattern of favoritism toward the company, Waste Management Inc., whose leadership and legal. counsel now include former officials of the E.P.A., the Justice Department and the White House.

    But the agency says that, far from showing favoritism, it is concentrating some of its strongest enforcement weapons against Waste Management because it is the giant of the waste disposal industry. Agency officials said they were now looking at all of the company's facilities, not only to bring them into compliance with the toxic waste laws but also to compel the company to permanently adopt sound environmental and public health policies.

    The company also said it was being singled out unfairly for enforcement action and had been subjected to excessive penalties. Waste Management officers further maintained that the company's environmental record was better than those of almost all other companies in the business.
    "We have been subjected to the most intense inspection and enforcement of any company in the history of E.P.A." said Walter C. Barber, the company's vice president for environmental management, who is a former Acting Administrator of the Federal environmental agency.
    But Hugh B. Kaufman and William Sanjour, two middle level officials in the agency's toxic waste program, said E.P.A. actions had helped the company make millions of dollars rather than remove the competitive advantage they said it had gained through repeated violations of law.
    Mr. Kaufman and Mr. Sanjour cited three agency actions involving Waste Management that they said were examples of special treatment.
    One was a permit for the burning of toxic polychlorinated biphenyls, or PCBs, aboard the company's incinerator ship Vulcanus. The final permit, contrary to agency policy, included a phrase that allowed the ship to burn wastes containing dioxins from Love Canal in Niagara Falls, N.Y. A later report by the agency's inspector general found that no one in the agency would admit to inserting the phrase; to this day, agency officials say they do not know how it came to he included.
    A second action was the recent complaint issued by the agency seeking penalties. for violations at a company waste disposal site in Vickery, Ohio. Mr. Sanjour and Mr. Kaufman said their analysis showed the penalty did not come close to matching the money made by Waste Management as a result of the violations.
    The third action was the recent settlement of agency charges of violations at the company's giant disposal site at Emelle, Ala. The two E.P.A. critics said the settlement benefitted Waste Management because it waived rules restricting the company's freedom in disposing of toxic wastes.

The Vulcanus Permit

    According to the report by the agency's inspector general, "program officials responsible for issuing this permit were unable to provide an explanation or documentation as to why the change was made to include the phrase 'other organic components,' who made the change or when It was made."
    The inclusion of that phrase, the report said, "allowed the legal, although according to" Chemical Waste Management, a subsidiary of Waste Management, "inadvertent, incineration of highly toxic dioxin-contaminated wastes, which was not intended by E.P.A. to be incinerated."
    Mr. Kaufman also said that without the alteration in the permit language, the company, at least technically, would have been liable to criminal action for not reporting to the E.P.A. that it had taken dioxin-contaminated waste from the Hooker Chemical Company's facility in Niagara Falls.
    Mr. Kaufman and Mr. Sanjour said the agency should have followed up on the inspector general's report by calling for a criminal Investigation.
    Steven A. McNamara, who signed the report for the inspector general, said no justification had been found to seek criminal charges because of the permit change because it had not been determined who had altered the permit.
    Mr. Kaufman noted, however, that the State of Alabama, where the wastes bound for the Vulcanus were stored, had found the circumstances surrounding the change of language sufficiently questionable to undertake its own criminal investigation, which is still going on.
    Harold Gershowitz, senior vice president of Waste Management, said, "No one in the company knows the genesis of the change in the permit language."And Mr. Barber said: "The change seemed perfectly appropriate on the face of it. There was no intention of having it changed to burn dioxin."

The Vickery Complaint

    On Jan.24, the Chicago regional office of the E.P.A. filed a civil complaint against Chemical Waste Management for what it charged were improper handling and disposal of waste oils contaminated with PCBs at its disposal site in Vickery. Ohio. The complaint said the company had sold six million gallons of the contaminated oil for fuel and for road oiling and that the oil had been improperly stored at the site.
    In the complaint, the agency said that "there was a high probability of harm to human health and the environment" when PCBs were improperly disposed of, diluted and distributed from the Vickery facility.
    The agency called for a penalty of $6.8 million for the violations at Vickery and noted that it was the largest fine sought so far under the Toxic Substances Control Act. Among other things, the agency said, the penalty was intended to reduce or eliminate the competitive advantage gained by Waste Management as a result of failing to obey the law.
    But the complaint itself noted that the company saved "at least" $20 million by selling the PCB-contaminated oil.
    Mr. Kaufman and Mr. Sanjour said the penalty did not take into account money made from the illegal activities. And, saying that no criminal charges had been filed against any officer of Waste Management, they noted that in another case in which a company had been charged with illegally disposing of PCB-contaminated oils, the owner was sent to jail for nearly a year. That involved the spreading of contaminated oils on roads in North Carolina by the Ward Transformer Company, whose owner was Robert E. (Buck) Ward.
    Michael Walker, the E.P.A. lawyer in charge of the Vickery case for the Chicago regional office, said the agency had considered a number of factors in deciding how to penalize the company.
    One, he said, was that Waste Management had agreed to pay the State of Ohio a $10 million fine for the Vickery violations. Another was the company's agreement to improve the conditions at the Vickery site to bring it into compliance with toxic waste laws. The cost of these improvements was expected to range as high as $15 million, he said.
    Mr. Walker agreed that the penalty had not taken into consideration the profits made by the company by selling the contaminated oil. He also agreed that compliance with toxic waste laws would be required in any case and that the cost "should not be part of the penalty."
    But he said it was believed that the $6.8 million "was as much as we could realistically ask for" because administrative law judges to whom the complaints had been taken were not used to being asked for multimillion dollar civil penalties.
    As for criminal penalties, Mr. Mays of the E.P.A. office here said it was a matter of record that the United States Attorney's office in Chicago had confirmed that an investigation of possible criminal charges involving the Vickery site had been initiated by Justice Department officials in Ohio. That inquiry is still going on.
    Mr. Barber said that the Vickery operations had had no adverse impact on human health or the environment and that the penalty sought by E.P.A.; "is way out of line."
    James D. Range, Waste Management's senior manager far Government affairs, said negotiations were under way with the Federal Government in an attempt to settle the case against the company, and that the issue of criminal charges was one of many being discussed. He said he hoped the negotiations would be concluded in a few weeks.

The Emelle Settlement

    On Dec.19, the E.P.A. signed an agreement with Chemical Waste Management under which the company must pay penalties totaling $600,000 for illegal storage of PCBs and other violations of the toxic waste laws at its huge landfill in Emelle, Ala. Under the agreement, the company also undertook a number of technical and administrative actions to correct deficiencies at the site. The agency estimated the cost of these actions at $1.5 million.
    In return, the agreement restored the company's permit to dispose of PCBs. It also waived, without explanation, a requirement that the bottoms of landfills storing toxic wastes be at least 50 feet from "the historical high water table." And the agency agreed not to sue the company for any civil violations at the site based on facts known to the agency and its employees prior to Oct. 12,1978.
    Mr. Kaufman and Mr. Sanjour contend that the settlement was a windfall for the company, rather than a penalty for evasion of the law. They said the waiver of the 50-foot requirement alone would save millions of dollars for the company in me future.

Possible Leak Is Disputed

    They also said the agency had information that the Emelle site might be leaking, which would be reason not to grant the waiver.
    A memorandum by Mr. Sanjour to a deputy state attorney in Alabama said that because of the information that the site might be leaking, the E.P.A., under its own rules, should have prohibited the site from taking in wastes from other dumps that were being cleaned up under Federal laws. Mr. Sanjour said that two indicators from monitoring wells at the site suggested the site was leaking and that, under agency procedures, a site was presumed to be leaking when there were two such indications.
    Mr. Range said that while indicators did show that "molecules" of chemical pollutants were getting into water beneath the site, it was incorrect to describe the site as "leaking" because the water would not migrate away from the site for at least 10.000 years. The possibility of leakage is being studied by the State of Alabama as part of its inquiry.

Company Cites a Loss

    The agency also found in its initial complaint against the company at Emelle that the company stored PCB wastes for longer than the one year permitted by law.
    But Waste Management officers said, and E.P.A. officials concurred, that the Emelle site continued to take the PCBs because the company had been led by the agency to believe it would soon be given a long-term permit to burn the wastes aboard the Vulcanus.
    Waivers of the rule prohibiting a landfill within 50 feet of underground water are routine, said Terrell Hunt, an agency enforcement official. Half of the applications for such waivers are granted, he reported. In the case of Emelle, the water near the waste site was a "saturated zone," not an aquifer, so the wastes did not threaten drinking water, he said.
    Mr. Gershowitz of Waste Management said that, far from making money by storing the PCB wastes at Emelle, the company had lost money because it had been envisioned that the wastes stored at the site would be "turned over" several times a year as they were taken to the Vulcanus and incinerated.

    Here we are sitting with the same consignment for two and a half years," he said. "The assertion that this has been a money-making proposition for us is outrageous."

    Mr. Kaufman, Mr, Sanjour and some other critics say Waste Management, because of its political and legal influence, is able to obtain what Mr. Kaufman called "sweetheart deals" from the agency that enable it to flout toxic waste laws at relatively little cost.
    Competitors of Waste Management also said the company had been getting preferential treatment.
    Richard Fortuna, executive director the Hazardous Waste Treatment Council, which represents 35 companies engaged in the management of toxic wastes, said, "There is a shared concern in the commercial treatment industry that E.P.A. sanctions against Chemical Waste Management are grossly inadequate and frequently amount to little more than a business surcharge. rather than an effective deterrent to noncompliance."
    But agency spokesmen and the company disagree.
    Richard H. Mays, senior enforcement officer for the E.P.A., said it was "irresponsible and totally untrue for Mr. Kaufman and others to say we have any kind of cozy relationship with Waste Management -- to the contrary." He said the agency was looking at Waste Management facilities all over the country with the intent not only of correcting violations and seeking penalties "but addressing corporate policies, or lack of them, that are the cause of the violations."
    "Waste Management thinks we are picking on them, but it is not true," Mr. Mays said. "We are expanding our corporate policy to other companies. We are just starting with Waste Management."
    In a settlement such as the one reached a t Emelle, Mr. Mays said, the agency has obtained more than it could have by simply punishing companies by forcing them to adopt policies that would protect the environment over the long run.

We Are Not satisfied

    Terrell Hunt of the E.P.A. said the company was "required to obey the law and the fact is they are doing it poorly now." He added, "We are not satisfied and we are trying to get them to do better.
    One high-ranking agency official who has been involved with the regulation of Waste Management and who asked not to be identified spoke for many at the agency in saying: "Historically, Chemwaste was regarded as one of the few generally responsible companies in hazardous waste, and it is fair to say that to some extent we wanted to encourage them. In the past we didn't scrutinize them the way we should."
    Mr. Barber, the company's vice president said: "The company's compliance today with the law is clearly among the best in the country with regard to the disposal of hazardous wastes. We see what the rest of the industry is doing. We have been subjected to the most intense inspection and enforcement of any company in the history of the E.P.A."
    While there are still "areas of concern," Mr. Barber said, the company is investing many millions of dollars in improved facilities to comply with the law.

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