Company in West Virginia chem spill receives 'symbolic' fine
Feb. 04, 2016
CHARLESTON, W.Va. (AP) — A bankrupt chemical company responsible for a spill that contaminated a West Virginia river and fouled the drinking water supply of 300,000 residents was fined $900,000 on pollution charges Thursday, with a judge noting that Freedom Industries likely could never pay it.
"I might as well enter the maximum fine," U.S. District Judge Thomas Johnston said. "It's all symbolic anyway."
Johnston said there were millions more in claims against the company than the listed assets of $2 million to $2.5 million. He said the fine would be collected only if those other claims are processed in full.
"There's no way that fine will ever be paid," he said.
The company also received five years' probation.
The January 2014 spill of a coal-cleaning agent into the Elk River got into a water company's intake and prompted a tap-water ban in nine counties for up to 10 days.
Freedom filed for bankruptcy eight days after the spill. Last October, a federal bankruptcy judge approved a liquidation plan for the company that will distribute more than $2 million to residents and businesses affected by the spill.
The plan also provides $1.4 million to the West Virginia Department of Environmental Protection and environmental firms for continued cleanup work. Freedom's parent, Chemstream Holdings, is adding $1.1 million for the cleanup under an agreement with the agency.
The plan's funding sources include about $2.7 million in sale escrow fund proceeds, $300,000 from a settlement with convicted ex-Freedom President Gary Southern and $3.1 million from a settlement with Freedom's insurer, AIG.
At a separate hearing Thursday, former plant manager Michael Burdette became the third Freedom official to be fined and sentenced to probation. The 61-year-old Burdette was fined $2,500, with Johnston citing his cooperation in the federal investigation, undisclosed health issues and the fact that he's unemployed.
Johnston also noted Burdette had asked his superiors to repair a retaining wall at the site but was turned down for financial reasons.
"You are probably the least culpable defendant of all," Johnston told Burdette.
Both Burdette, who also was placed on three years' probation, and an attorney representing the company apologized for the spill at the separate hearings.
Burdette's voice shook briefly as he explained that he was born in South Charleston and his family lives in the area downstream from the spill site.
"I have learned some valuable life lessons at a significant personal cost," Burdette said.
An environmental consultant and a former Freedom owner were sentenced earlier this week. Southern and two other former company officials will be sentenced later this month.