Ronnie Greene stories from The Center for Public Integrity

Two DOE electric car loans, two different paths

2013-05-23T16:09:18-04:00

They are two cutting-edge electric car makers, headquartered in California and backed by powerhouses of politics and money. In 2009, each secured half-billion dollar loan commitments from President Obama’s Department of Energy to help transform their clean-energy cars from drawing boards to showrooms.

But this week, the fortunes of Tesla Motors and Fisker Automotive took sharply divergent turns.

On Wednesday, the Energy Department announced that Tesla repaid the balance of its $465 million government loan nine years early. Fisker, meantime, has ceased making cars as it weighs potential bankruptcy, confronts a $171 million loan balance with DOE and, last month, faced questions from the House Committee on Oversight & Government Reform.

In October 2011, The Center for Public Integrity and ABC News explored the Energy Department’s risky $1 billion bet on two companies lauded for their innovative design, but facing warnings from experts over the marketability of cars that, in some models, carry price tags hovering around six figures.

In announcing Tesla’s loan repayment this week, the department said the risks were worth taking, coming at a time the industry itself suffered a deep downturn. “The lack of financing for the automotive industry was critical and potentially lethal,” Energy Secretary Ernest Moniz said in a statement. “Providing these loans was a calculated risk — but it was the right decision for the country.”

Yet for Fisker, whose loan was heralded by Vice President Joe Biden, the risks remain ripe. The company’s vision of developing a muscular Karma and more practical sedan faltered amid a series of setbacks from slow- moving government approvals to recalls and financial downturns involving suppliers.

DOE initially agreed to loan Fisker $529 million to help the company develop two lines of plug-in hybrids. Of that, $359 million would help the company re-open a shuttered former GM plant in Delaware, where Fisker would develop “Project NINA” — a mass-market hybrid sedan to be called the Atlantic. “The company estimates it will build 75,000-100,000 of these highly efficient vehicles every year by 2014,” DOE announced in 2009.

The remaining money would help Fisker complete its luxury Karma.

"We understood a new chapter had to be written, a new chapter in which we strengthen American manufacturing by investing in innovation,” Biden said in 2009, citing Fisker’s loan.

Yet reality collided with those projections, and Fisker Automotive has not come close to meeting its goals.

The company began drawing down on the DOE loan in 2010, and by the middle of 2011, had collected $192 million in government money, records show. But then, as Fisker encountered production hiccups, the Energy Department cut off the money spigot. DOE has recouped $21 million of the $192 million it loaned Fisker, leaving the company $171 million in debt to the government as it weighs a potential bankruptcy.

Testifying before the Oversight and Reform Committee late last month, co-founder Henrik Fisker said the company had sold 2,000 Karmas worldwide. He cited a series of setbacks that, like a domino, helped topple production of the company’s fleet.

In 2011, Fisker said, regulatory approvals for the Karma in the United States “took longer than anticipated.” Then, after the company began delivering the car to customers, two parts provided by outside suppliers had to be recalled. “The recalls generated bad publicity, diverted management attention, impacted sales, and further delayed our production schedules,” Fisker said.

Then came a bigger blow: In October 2012, Fisker’s lithium ion battery manufacturer filed for bankruptcy protection. Fisker’s exclusive supplier — another recipient of DOE funding — stopped manufacturing batteries.

“Fisker Automotive had to cease production of the Karma,” Fisker said. “We explored options for other battery suppliers, but due to large investment costs and long development cycles, we could not secure arrangements that would allow us to resume production immediately.

“This was a crippling factor in restarting production of the Karma.”

With Hurricane Sandy came more bad news. More than 330 Karmas, awaiting shipment at Port Newark in New Jersey, were “damaged beyond repair during this unforeseen natural disaster. This constituted a major share of the company's inventory and resulted in a drastic loss in revenue,” Fisker said.

Fisker’s other car, the Atlantic, has yet to go into production.

Henrik Fisker stepped down as CEO in 2012, and resigned from the board in March. Yet he told the committee the company’s technology earned honors, and said Fisker Automotive “still has the potential to build on these achievements” if it can secure financing.

“From the outset, Fisker Automotive aimed to be a new American car company, setting pioneering standards for low-emission technology and cutting-edge design,” he said. “I sincerely hope that the company can find a way to move forward and repay its Department of Energy loans.”

Tesla, the other California electric car company backed by DOE money, repaid its loan this week.

Both companies received backing from heavyweights in business and politics. Fisker’s prime supporters included the California venture capital firm Kleiner Perkins Caufield & Byers, whose partners include former Vice President Al Gore. Tesla’s prime backers include venture capitalist and Obama fundraiser Steve Westly, and Google co-founders Larry Page and Sergey Brin.

While Fisker searches for a potential buyer to help salvage the company, Tesla has, of late, pointed to headlines: Its Model S was recently named Motor Trend Car of the Year. On its website, Tesla prices the sedan from $62,400-$87,400, depending on the model — after a $7,500 federal tax credit. Its six-figure Roadster sports car, it said, is sold out in North America.

Tesla’s $465 million loan, the DOE said, enabled the company to open a shuttered plant in Fremont, California, “and to produce battery packs, electric motors, and other powertrain components.”

In a brief interview Thursday, Diarmuid O’Connell, Tesla’s vice president of business development, said the company raised money to pay off the DOE loan this week.

Asked why the two electric car companies have forged disparate paths, he provided a concise answer.

“Fisker and Tesla have always been on different trajectories, our business models have always been different,” O’Connell said. “What we are focusing now on is building market.”

For the Energy Department, the next focus could be Fisker — and bankruptcy court, should the company take that route. On Thursday, energy officials did not respond to questions about what steps the department would take if Fisker files for bankruptcy, or how much the government anticipates recovering.

EPA adds safeguards to spotlight conflicts on scientific panels

2013-05-03T17:14:40-04:00

The Environmental Protection Agency announced new safeguards Friday to prevent conflicts of interest or bias from tainting its science, including efforts to assess the dangers of toxic chemicals.

The reforms, targeting scientific review panels selected for EPA by outside contractors, follow a Center for Public Integrity-PBS NewsHour examination revealing ties between scientists and industry on a panel reviewing hexavalent chromium, a compound commonly found in drinking water that may cause cancer.

In that case, three panelists who urged the EPA to delay potentially stricter drinking water standards had been expert witnesses for industry in hexavalent chromium litigation. The scientists denied any conflict and said their input was based on research, but the case study revealed how the EPA is unaware of potential conflicts on its own panels.

Under its own process, the Center reported, the agency turns over the job of selecting panelists to private companies, which handle conflict-of-interest reviews in secret. All information the vendors collect, including financial disclosure forms, is “considered private and non-disclosable to EPA or outside entities except as required by law,” the EPA policy says.

The changes announced Friday add more layers of review — and provide more public disclosure — to the process.

Environmental watchdogs, who had questioned EPA's existing process, say the steps are overdue.

“It brings transparency to a process that wasn’t there before,” said Francesca Grifo, a senior policy fellow and expert on scientific integrity at the Union of Concerned Scientists.

One key change: After an EPA-hired contractor selects members of a scientific review panel, “the contractor will consult with EPA to review whether the contractor followed existing conflicts of interest guidance and requirements, and identify and provide input on any issues.”

That step adds an extra layer of review by EPA.

Also, the agency said, the names of chosen panelists will be publicly posted before any meetings take place.

The new steps do not change EPA’s existing standards for assessing conflicts, the agency said, but instead add sunshine to the process.

“This process will ensure that existing conflicts of interest guidance and requirements are applied correctly and where a potential conflict of interest is identified, allow EPA to determine whether the contractor’s plan to address the conflict is acceptable,” the agency said.

The EPA’s acting administrator, Bob Perciasepe, said Friday the new steps show the agency is “committed to scientific integrity.”

“Improving the contract-managed peer review process and increasing transparency will lead to stronger science at the agency,” Perciasepe said in a statement.

Richard Denison, a senior scientist at the Environmental Defense Fund, has been outspoken about industry influence at the EPA. Denison praised the EPA for bringing more openness to the process.

“The hexavalent chromium example was the major impetus for this revision,” he said.

Hexavalent chromium, best known as the toxic chemical compound from the hit film Erin Brockovich, is found in the drinking water of more than 70 million Americans, according to the Environmental Working Group.

New animal studies published in 2008 showed that mice and rats given high doses of the compound developed large numbers of tumors. The National Toxicology Program, part of the National Institutes of Health, cited the compound as a “clear carcinogen.”

The EPA planned to revise its assessment of the compound in 2011, even as a trade group, the American Chemistry Council, urged the agency to wait for industry funded studies. Several members of the peer review panel also urged the EPA to wait.

One was Steven Patierno, then a scientist at George Washington University, who was a consultant on ACC studies.

Another was Joshua Hamilton, a scientist at the Marine Biological Laboratory in Woods Hole, Mass., which is affiliated with Brown University. Pacific Gas & Electric Co., the company that polluted the water in Hinkley, Calif., with chromium, hired Hamilton as a consultant in 2009.

Hamilton said that just before the EPA peer-review panel met, PG&E asked him if he would go back to Hinkley to discuss the health effects of hexavalent chromium. PG&E said it paid Hamilton $110,000 for his work in Hinkley. Hamilton said he revealed the PG&E work to the private contractor hired by EPA, Eastern Research Group, and that the firm concluded it was not a conflict.

Officials with Eastern Research Group, based in Massachusetts, have not responded to interview requests.

Meanwhile, some members of Congress are pushing potential change to support industry.

The House science committee recently approved a bill to change the rules at the EPA for setting up scientific advisory panels. It would prevent the EPA from excluding people from panels with industry ties, as long as those ties are disclosed. It would also exclude panelists whose research is incorporated in the assessment. The bill is awaiting action by the full House.

From homemaker to hell-raiser in Love Canal

2013-04-16T15:58:31-04:00

FALLS CHURCH, Va. — The woman who helped free an entire community from a toxic dump, literally rewriting environmental laws in the process, was so shy at the start of the struggle she tried to hide behind a tree when neighbors called on her.

Lois Gibbs took to the stage that day 35 years ago, in the seemingly idyllic community of Love Canal, N.Y., and began to find her voice. Transforming herself from homemaker to hell-raiser, she helped convince then-President Jimmy Carter to come to town in 1980 and remove 900 families from a 21,000-ton toxic dump. Earlier that year, Gibbs and her neighbors held two Environmental Protection Agency officials captive in a ploy to get the president’s attention. It worked.

Long before Erin Brockovich became a movie, Gibbs helped secure an environmental victory of greater heft. Love Canal’s war against the toxins under its feet prompted the federal government to create the Superfund cleanup program and earned Gibbs the Goldman Environmental Prize.

Today she is still in the fight as executive director of the Center for Health, Environment & Justice, a nonprofit squired in a third-floor corner office in a nondescript building in Fairfax County, Va., a few miles from Washington, D.C. A tiny gray sign hangs outside the door, betraying no sense of the history inside.

Aged photos cover the walls and floors alongside stacks of environmental reports. One giant picture shows Gibbs aside President Carter, moments after he announced the relocation pact. Another photo shows a 3-year-old boy wearing a T-shirt announcing: “Love Canal Guinea Pig. Used by New York State and federal government.” Another picture — published by Today’s Suburban Woman magazine in 1979, a year into the struggle — shows Gibbs clutching her daughter in front of a boarded-up building.

These aren’t museum pieces, but reminders of a journey. Across the country, other communities, sickened by pollution but bereft of know-how, ring the Center for Health, Environment & Justice.

“I see myself in the people who call,” Gibbs, 61, says today. “These women call up and say ‘Nobody understands me.’ I can relate to them. I see myself in exactly the same place. If I don’t have that connection to the people, I would just walk away. ”

From dream town to toxic dump

Gibbs began finding that connection in 1978, as she went door to door in Love Canal after learning the community sat atop a landfill of toxins. “Who would build a school on top of a dump? Who would build a playground on top of a dump? And why didn’t anyone tell me?” she asked.

The discovery ignited a woman who, growing up in Grand Island, N.Y., 15 minutes upstate from Buffalo, busied herself sewing draperies and aspiring to be a housewife. In Love Canal, her vision took root. Her husband worked at the Goodyear plant and they had two children, Michael and Melissa. This neighborhood, just miles from Niagara Falls and her childhood home, was filled with the noisy chorus of kids, two churches and mom and pop shops. Gibbs walked her children to the 99^th Street Elementary School and to the playground next door each day.

Michael was born just before the family settled into a three-bedroom home on 101^st Street in 1972. Healthy at birth, Michael started getting sick not long after they moved in, and each ailment became more serious. His asthma led to pneumonia, which was followed by a urinary tract disorder, and then a seizure disorder. Finally, a doctor told Lois her son had an immune system problem. Melissa, conceived in Love Canal and born three years after Michael, developed a rare blood disease. Gibbs searched for clues, but found none; she didn’t even allow soda in the house, but her children could not shake their sicknesses.

Then, one day in 1978, the Niagara Falls Gazette published a story about toxic dump sites cluttering the region. Love Canal was one, and the news screamed from the page: 21,000 tons of toxic waste had been buried next to the school property, underneath the playground. The now-defunct Hooker Chemical Co. had sold the site to the school board 25 years earlier, for $1. “Oh, my God!” Gibbs thought, reading the Gazette. “Every single day I took my children to the playground to play.”

Pressing to move her son to another school, Gibbs won an audience with the school board superintendent. The school chief settled into an oversized leather chair behind a broad, shiny wood desk. He seated Gibbs in a school desk normally used by kids. Sunken in her seat, she slid two doctors’ notes across the desk saying her son’s sickness could be tied to the dump, she said.

The superintendent glanced at the notes, then slid them back. “‘We’re not going to do that because of one hysterical housewife with a sick kid,’ ” he said, as Gibbs recalled it. “ ‘Well, if your kid is so sick, why don’t you go home and take care of him? Why are you running around to City Hall and the school board?’ ”

Tears streamed down Gibbs’ face. “All of a sudden, I became the bad guy.”

At home, her Irish-Catholic temper began to burn. Raised on Love Road in Grand Island, one of six children of a stay-at-home mom and union dad, Gibbs was taught to vote at election time and fly the American flag. Now, as she raised two sick children in a town smothered in waste, the government had turned its back. “After I got sad, I got mad,” she says, recalling the conversation that helped propel her on a lifetime of activism. “Don’t ever tell me I’m a bad mother.”

When neighbors answered her knock, Gibbs opened up about her children’s illnesses. In living room after living room in Love Canal, neighbors shared that they also had sick children. “It wasn’t until I went door to door that they started saying, ‘My son has asthma too, or my daughter has epilepsy,’ ” Gibbs said. “Women talked to me about birth defects.”

Residents began paying closer attention to evidence before their eyes. One couple grew squash so huge it could win prizes at a community fair; now they worried toxins bulked it up. Kids dubbed a local creek “Beverly Hillbillies” — after the show about a family that struck riches in black gold — because they could stick a piece of wood in the water and it would come up slimy black. Rocks on the ground were so explosive they would pop like firecrackers if kids threw them against a wall.

One afternoon, a child stuffed rocks in his pocket and began running home when, suddenly, the rocks caught fire and burned him severely, Gibbs said. With each story, the community began to absorb the larger picture.

“She was like a hurricane and we just kept going,” said Luella Kenny, a fellow Love Canal resident-turned activist who serves on the board of the Center for Health, Environment & Justice. “She was a housewife, and there’s nothing wrong with being a housewife, and she did not have all of this shall we say Wall Street and Washington know how the politicians had and the Wall Street investors had.”

Instead, Kenny said, Gibbs possessed a “hidden talent she wasn’t even aware of. But when push came to shove and your children are being threatened, I think you find that energy that you are going to protect them, for heaven’s sake.”

Her son, Jon Allen Kenny, the only of her three children born at Love Canal, died at age 7 in 1978 from kidney failure.

Another day, Kenny was showing health officials her backyard when a bird flew into the creek, sipped some water, and plopped down dead, she said.

Among the toxins brewing in the underground cesspool: A mix of halogenated organics, pesticides, chlororbenzenes and dioxin, according to EPA records. The community linked the chemical waste to failing health, producing charts showing high rates of miscarriages, crib deaths, birth defects, kidney and urinary failings — and nervous breakdowns.

As the evidence mounted, Gibbs pressed for answers, thinking back to the preaching of her father, a war veteran and bricklayer for Bethlehem Steel. “‘The system will work, if you play by the rules.’ ”

In the spotlight

As she made the rounds, Gibbs kept searching for someone to emerge as the face behind the neighborhood’s mission. “Where’s the leader?” she wondered. “I’m a housewife of sick kids. My job is not to become a community leader.”

On Aug.2, 1978, the spotlight found her. That day, after gathering hundreds of signatures on a petition demanding that the state close the 99^th Street School, Gibbs and a neighbor piled into Gibbs’ green Cutlass Supreme convertible and drove five hours to the capital in Albany.

As they arrived, petitions in hand, light bulbs went off and commotion filled the air. “Are you Lois Gibbs? Are you Lois Gibbs?” reporters asked.

Serendipitously, New York health officials were holding a press conference, declaring a state of emergency in Love Canal and ordering the 99^th Street School closed. The state health commissioner was recommending relocation for pregnant women or parents with children under two living on the two streets nearest the landfill. New York directed Niagara County to clean the site. The state said it would help residents find temporary housing — but not pay for it — and families could return after the cleanup.

Back in Love Canal, the state’s announcement ignited fiery protests. Why move just the closest streets? What about parents with sick three-year-olds? “It was a kind of running joke,” Gibbs recalls. “If you get pregnant, you get out. It’s pretty pathetic.”

When she returned from Albany that night, neighbors were burning mortgages in a barrel. As Gibbs stepped from her Cutlass, homeowners called her to the stage. She tried to hide behind a tree. Spotting her brother-in-law, she sought advice. His counsel: Call a meeting. Gibbs gathered her strength, took to the stage and — making the first public speaking appearance of her life — announced that everyone would meet in the following days.

At that meeting, the community elected Lois Gibbs president of the Love Canal Homeowners Association. Suddenly, she felt the burden of 900 families on her back. It was one thing to fight for your own children, but another to know your decisions impacted thousands. “Here’s this huge burden,” she said.

Her solution: To make the homeowners association the most democratic organization on earth, with 50 street representatives, each responsible for fanning out to different corners of the community. Church leaders took on some roles, activists others. No decision was made unless the majority agreed. This democracy was her blanket — and helped shield her when, a year into the struggle in 1979, some neighbors, frustrated at the slow pace of reform, pressed for a new leader.

In a meeting room packed with 500 residents, one group shouted to replace Gibbs. Another said she should stay. The session threatened to veer into hysteria. Sitting at the head of the room, Gibbs thought: What would my mother do? She imagined two children fighting and pictured a mother taking away the toy at the heart of the struggle.

She took the microphone. “My first question is, how many people like blue?” she asked. Bewildered looks filled the hall. Slowly, a few hands reached upward.

“How many people like red?” she asked. Another cluster raised theirs.

“Look,” Gibbs said. “Everybody has a different opinion.”

Her tactic worked. The room settled into calm. Turning to her blanket once more, Gibbs cited the association bylaws, which laid out the process the homeowners needed to follow in order to elect a new leader. It never happened.

Instead, the residents pulled closer. “I just thank God that we had Lois at the time,” said Kenny, her former neighbor. “You just had never heard of people being able to take over and be able to win and to beat the government.”

A new face comes to town

As the fight evolved, a new face arrived in October 1978: The state tapped Stephen Lester, a Harvard-trained environmental scientist, to be a technical adviser to the residents of Love Canal.

Lester heard stories about the shy housewife who had never spoken publicly before. But now, sitting before him was someone entirely different. His first impression of Gibbs: “Hotheaded.”

“She was a fiery fighter,” Lester recalls. “She was very emotional, very opinionated, very active in the community. One of the very first things she told me was that the state of New York was lying to the public and they were hiding information and I couldn’t trust them. So I needed to listen to her and to the community.

“When I met the state Health Department, I was told Lois was very emotional and she lies to the public and makes things up. These two sides clearly don’t like each other. I decided I wouldn’t take sides.”

A month into his assignment, Lester said, “I quickly realized that Lois was telling more of the truth than the state people were.”

Evidence of harm continued to shake the community.

In 1980, the EPA issued a study showing that the chemicals in question could trigger genetic damage for future generations. In other words: That the community’s children could be sickened, and their grandchildren too. Yet the federal government still resisted pleas to move everyone out.

“That was the straw that broke the camel’s back,” Gibbs said. Her neighbors “just went crazy.” Housewives in pink hair rollers rocked cars in the streets one Saturday, she said. Neighbors poured gasoline on one lawn, spelling E-P-A, and lit it afire. “That’s when you knew you no longer had control,” Gibbs recalls. “It was scary.”

As the lawn smoldered, two EPA officials were holed up in a hotel nearby. Gibbs invited them to come to an abandoned home, where residents were meeting, to talk about their study.

When the officials stepped in, a communal brainstorm built up: Let’s hold them hostage. Standing shoulder-to-shoulder, the residents blockaded the EPA spokesman and scientist from leaving.

The FBI swooped into Love Canal and shut off outside access to the phones. The scene put the spotlight just where the community wanted it — upon President Carter, deep in a rough re-election campaign. The nation would see what the sitting president would do.

Six hours later, residents let the EPA men go, but they gave the president four days — until noon Wednesday — to act. Or else. Gibbs and her neighbors never knew what “or else” was. They prayed their spur-of-the moment deadline would work.

Convinced the FBI would lock them up for taking federal officials hostage, some residents went to bed fully clothed. “I didn’t want to go to jail in my jammies,” Gibbs said.

The feds never stormed their homes. But two days later, the White House agreed to temporarily relocate all Love Canal families.

“This is not an ordinary situation,” an EPA official announced May 21, 1980. “This case presents special circumstances warranting this extraordinary action. The studies completed to date are sufficiently suggestive of a threat to public health … ”

On Oct. 1, 1980, Carter came to town to cement a permanent relocation. As Carter spoke, Gibbs stood in the audience. There was a problem. Interest rates had skyrocketed, and homeowners worried they’d be underwater in their new homes. They pressed Gibbs to get the ear of a president flanked by Secret Service agents.

For a moment, Gibbs sat quietly. Then she made her move. Secret Service agents stopped her. “I’m not going to go away, and if you take me away I am going to scream,” she recounted. “How’s that going to look, Lois Gibbs taken out screaming because they wouldn’t let her talk to the president?”

The officials let Gibbs to the stage, where she turned to the president and whispered: “Can we talk about low interest loans?”

He turned to the activist, and said yes, they could talk about loans. He asked if she had heard of the Superfund program. That moment, captured in a giant black and white picture, is a keepsake Gibbs keeps on display today, leaning against the wall at the CHEJ.

In all, more than 900 families were moved out, 350 homes were demolished and the school torn down. The fight helped spur the Superfund program, in which government dollars clean up toxic sites across the U.S.

Carter lost his re-election bid to Ronald Reagan. But in his final State of the Union address in 1981, he cited Love Canal’s resonance. “The regulations establish comprehensive controls for hazardous waste and, together with vigorous enforcement, will help to ensure that Love Canal will not be repeated,” he said.

In 2004, Love Canal was officially removed from the Superfund list, though some residents still raise environmental concerns. "Love Canal taught us that we needed a mechanism to address abandoned hazardous waste sites, especially those that posed a threat to people's health," Jane M. Kenny, EPA's Regional Administrator, said at the time. "Decades later, Love Canal has become a symbol of our success under Superfund.”

A new mission

Gibbs formed the Center for Health, Environment & Justice in 1981, and in the years since has traveled to every state except Alaska. The group’s goal is to help communities face off against industry and government — and to flee pollution, just as people in Love Canal had. The organization has produced a 43-page guide — Relocation: Getting Organized and Getting Out (Go Go) — that offers how-to advice for communities new to the environmental battleground.

Victories don’t come easily in a landscape where industry flexes political muscle, governments move slowly and communities have little more than their wits.

In every stop, she asks: “What can you do to make them uncomfortable? I try to convince them that the more people you have the more power you have. At Love Canal we won because we turned out 550 people at every meeting.”

The Center’s science director is Stephen Lester, the same expert hired by New York to work in Love Canal. He is also Gibbs’ second husband. Married in 1984, they have two children along with Gibbs’ two children from her previous marriage.

“Lois is most comfortable in the communities,” said Lester. “She’s got eight balls in the air, and she’s going to a community on a weekend when she doesn’t have to. Her response has always been, ‘If I don’t go to these communities, then I can’t do this other stuff that keeps this organization going.’ ”

Recently, she traveled to Texas — to visit a row of refineries in Corpus Christi and discuss children’s school health concerns in Austin. Later she was in Annapolis fighting hydraulic fracturing.

In February 2012, Gibbs traveled to Wilmington, N.C., at the request of activists fighting to block construction of a cement plant proposed in the coastal city.

Gibbs visited for 24 hours, making three presentations. Her main message to organizers: To empower the citizens most likely to be harmed by the cement plant. Until then, the prime organizers were pushing the fight largely by themselves. But now, here was the mother of Superfund saying the larger power came from the people.

“She just changed the way we viewed our citizens,” said Sarah Gilliam, coordinator of the Stop Titan Action Network, who had invited Gibbs to Wilmington. “It was really just a giant light bulb going off for me.”

When she speaks to communities, Gibbs paces in front of the podium, speaking in common sense prose. “This is a big company. They’ve got lots of money and you don’t,” she told the residents in Wilmington.

Gilliam had studied Love Canal’s story while an environmental policy student in the Master’s program at UNC-Wilmington. Now, with the community’s struggle hitting dead-ends, she turned from the history books to the real thing.

“Before she came down here I had her up on this fake pedestal,” Gilliam said. “And when I met her she was just so real. … We’ve got this new mantra where we’re channeling Lois.”

Louisiana sinkhole shatters calm, prompts buyouts on the bayou

2013-04-16T16:30:19-04:00

BELLE ROSE, La. — Tim Brown eases his john boat from his back yard dock into his daily therapy: The Bayou Corne that courses through this patch of southern Louisiana like a lifeline. Brown powers past the Tupelo Gum, Cypress Moss and Swamp Maple trees that drape the bayou in a frame, and steers to the spot where he reels catfish and collects thoughts.

“If I had to actually leave this place and go back to a house on dry land, I’d probably be dead in two years,” says Brown, 65 and retiring next year. “I guess you can say it’s a totally different life out here.”

But now that life, for Brown and 350 other residents in a neighborhood with “Crawfish Crossing” signs and roads named Gumbo, Jambalaya and Crawfish Stew Street, has been shattered by discovery of a 14-acre sinkhole that fractured the community’s calm and may bury its dreams.

The sinkhole, triggered by a collapsed cavern operated by salt mining operator Texas Brine Company LLC, swallowed trees and fouled the air when it appeared August 3. Its discovery sent the Bayou Corne community here in Belle Rose into a state of emergency: Assumption Parish and Louisiana officials ordered a still-in-effect evacuation as state officials scrambled to unearth what happened.

“Initially the concern was, that first day, you have a sinkhole … and you don’t know what caused it. All you know is a 400-by-400 section of marshland just got converted to a muddy pit. Trees were sinking into it and not coming back. It was like quicksand,” said Patrick Courreges, a spokesman for the Louisiana Department of Natural Resources.

Natural gas filtered into the aquifer, and crude oil floated to the top of the sinkhole, about a third of a mile from the nearest homes anchored on each side of Highway 70. Louisiana officials feared explosion hazards and “potentially toxic constituents of crude oil and other hydrocarbons,” though the state said continuous monitoring has detected “no hazardous concentrations.” Yet earlier this month, sampling by Texas Brine found two homes with “concentrations of natural gas below the structure foundations that were above normal background levels,” Assumption Parish officials reported.

“That is just too close to the community to take any chances with what comes next,” Courreges said.

Eight months later, what comes next roils a community so close-knit it hosts its own Mardi Gras parade: The prospect that the entire Bayou Corne neighborhood, all 150 homeowners, will be relocated and not come back; that this haven for retirees and working class Louisianans will be, symbolically, swallowed by the sinkhole.

What’s happening in Belle Rose has played out in dozens of communities threatened by environmental hazards so dire residents feel compelled to demand that industry or government move them out. But as Bayou Corne’s experience shows, winning buyouts is never easy, and leaving is often painful. The community’s travails reveal the human cost of pollution.

“It’s been an ongoing, really to me, like a science fiction novel. You have this big hole that caves in and then it keeps growing and growing and growing,” said Marylee Orr, executive director of the Louisiana Environmental Action Network, an advocacy organization based in Baton Rouge. “Mysterious bubbles. It’s like watching the crawfish pot, bubbling the crawfish pot.”

Bayou Corne “is really a little piece of heaven,” Orr said. “It’s a paradise to them. They could go out, be on a boat, it’s absolutely beautiful. But now a lot of people think it’s ruined forever.”

Many residents have pushed for buyouts from Texas Brine. Last month, after pressure from Republican Gov. Bobby Jindal and parish political leaders, Texas Brine began contacting individual homeowners to begin the process of assessing their property values and, ultimately, making offers. How much the company will pay is unknown, leaving Jindal to tell residents, during a press conference in Bayou Corne last month, that Louisiana will “make them do it again” if the first offers are too small.

“The finger is pointed at us, and we understand that, and we are going to try to make a fair offer,” Sonny Cranch, a Texas Brine spokesman, said recently while giving a visiting journalist a tour of the sinkhole on company property.

Many of those pushing for buyouts are crestfallen by the prospect of packing up from a place where they fish, hunt and occasionally encounter alligators. When school is out, visiting grandkids pop up like spring flowers, giving the community the feel of camp on the water. Since the sinkhole’s arrival, many grandchildren have stopped returning.

Other long-timers refuse to leave homes they saved a lifetime for, state of emergency be damned.

“I don’t care if I’m the only one standing here. I’ll live here as long as I can,” vows James Bergeron, a 14-year resident of Crawfish Stew Street and retired deputy sheriff and offshore crane operator. “I’m 76 years old. This is all paid for. What am I going to do, go somewhere and buy something else?

“Come on!”

As he spoke, his eyes glistened.

Across the U.S., buyouts move slowly, painfully

While the environmental hazard in Bayou Corne is new — state officials say they know of no other instance in which a cavern’s sidewall collapsed to trigger a sinkhole — the wrenching prospect of relocation is not new for many communities from Florida to California.

Residents living on the fence-line face long odds in their quest to escape. Few communities flex political power, their voices faint against big-muscled industry or slow moving government.

“The vast majority of relocations in this country have come as a result of politics,” said Lois Gibbs, executive director of Center for Health, Environment and Justice, a nonprofit based in Falls Church, Va., that works with communities seeking relief from pollution.

Gibbs knows this firsthand. More than three decades ago, she was a housewife with sick children in the Love Canal neighborhood of Niagara Falls, N.Y., when she learned that her supposed dream town was built atop a 21,000-ton mound of toxic chemicals. Gibbs’ push lured President Jimmy Carter to come to town and, in 1980, free some 900 families from Love Canal’s toxic dump.

Today, Gibbs and her colleagues at CHEJ have prepared a 43-page guidebook to help communities navigate the tangle of industry and government.

The guidebook includes two dozen case studies of communities that did just that, winning relocation bankrolled by government or industry. But even successful relocation bids take years, sometimes decades.

In Pensacola, Fla., Gibbs said, residents sought for a decade to free themselves from the dioxins, arsenic and heavy metals from an abandoned former wood treating facility. By 1992, the Environmental Protection Agency said it excavated 225,000 cubic yards of contaminated material — creating a mound nearly 60 feet high — and “stored it under a secure cover on-site.” Residents dubbed the site “Mount Dioxin,” and complained of cancers and respiratory disease. The community launched a letter writing campaign demanding the EPA move them out.

Four years later, in 1996, the EPA said it would relocate a third of the residents. Enraged, the blue- collar community turned up the heat. Taking in small donations from across the country, CHEJ took out a full page ad in USA Today challenging President Clinton — then running for re-election, and needing the Florida vote. The ad juxtaposed a Clinton quote — saying that children should not live near hazardous waste sites — with a picture of Pensacola children aside the wood treating plant. Advocates delivered the ad to Hillary Clinton, then in Florida stumping for her husband.

The message, Gibbs said: “Clinton, put your words and your actions together.” Soon after, the community won a full relocation. Some activists refer to Pensacola as the “Black Love Canal.”

Other fence-line fights stretch out even longer.

In Norco, La., a four-street, all-black community named Diamond won a historic relocation from Shell Oil in 2002 after decades spent enduring illnesses and sometimes-deadly plant explosions. The grassroots victory was 13 years in the making, and came five years after a St. Charles Parish jury returned a verdict in favor of Shell in a citizen lawsuit alleging the company’s chemical plant and neighboring refinery contaminated the air and sickened residents. As in Pensacola, the Diamond residents were aided by aggressive activists who helped push intransigent industry and government.

Some communities harmed by pollution never do get out.

In Tallevast, a largely black southwest Florida town founded by turpentine workers, industry and government officials discovered in 2000 that a former beryllium plant had leached a 200-acre underground plume of cancer-causing TCE and other toxins in a town of 1.5 square miles. Lockheed Martin, the property owner at the time, discovered the leaching and set out to clean it up.

Yet for three years, no one — not the county, the state nor industry — told residents what was under their feet. Tallevast homeowners unearthed the news by chance in 2003, when community leader Laura Ward noticed workers on her lawn and started asking questions.

A decade after that discovery, the company has yet to agree to a full relocation.

Ward said residents continue to press for buyouts — with no success. “I think their decision to not do the buyout and do the move, was a bad decision,” Ward said. “We felt like that eight, 10 years ago, and we still feel that way.”

Meantime, Lockheed Martin’s cleanup will unfold over decades. The company vows to “continue to invest in the environmental, health and economic needs of the community.”

In Tallevast, as in Bayou Corne, residents seeking a buyout would depart with painfully mixed feelings — leaving homes they thought would pass down the generations.

Unexplained bubbling — then the sinkhole

Trouble in Belle Rose began months before the sinkhole arrived, with residents noticing a bubbling in the bayou and smelling gas in the air. In June and July of 2012, Assumption Parish, state and federal officials began examining the unexplained bubbling in Bayou Corne and Grand Bayou.

On August 3, an area of wooded swamp in Bayou Corne began to subside, prompting state Commissioner of Conservation James Welsh to issue a Declaration of Emergency. Assumption Parish issued its own state of emergency, and Gov. Jindal did too.

By 7:30 that night, the Assumption Parish Office of Homeland Security and Emergency Preparedness had called for a mandatory evacuation as state and federal scientists searched for answers, “uncertain of what the actual possible risks are,” the state said.

Louisiana authorities discovered that the sinkhole was caused by the collapse of a sidewall of a previously plugged cavern. “The collapse had created a pathway to the nearby groundwater aquifer and the surface for crude oil and natural gas which had been confined in a hydrocarbon-bearing layer,” wrote the state’s Courreges.

The collapse is unprecedented, he said — the “first reported failure of a brine cavern sidewall.” Caverns have collapsed before, but always from the top, he said.

The state directed Texas Brine to remove natural gas in the aquifer through vent wells, provide home methane detectors for any resident wanting them — and to pay residents under terms of the company’s permit and the Parish evacuation order.

Since then, Texas Brine has cut $875 weekly checks to all homeowners, whether the residents left or stayed back. The state’s evacuation order was mandatory — but not forced. Many residents have fled to temporary quarters, but return regularly to check on their properties as the company and state try to keep a lid on the sinkhole and monitor its environmental impact.

State officials have ordered underground 3D seismic technology to get a clearer picture of what is happening underground.

The biggest public safety concern, Courreges said, is “to get the gas out of the aquifer, and stop it from recharging the aquifer.”

“We’ve got to stop the source of it, because it’s still being fed. We’ve got to figure out the source, find some way to intercept it, stop it,” he said. “We’re looking into that 3D seismic to get some information, to get that underground picture.”

The state also intends to gain “a full understanding of the impact the collapse had on the stability of the ground surface,” Courreges said.

The sinkhole continues to stir concern. In late March, more than two dozen trees collapsed into it. And then on March 28, authorities temporarily halted work around the sinkhole after seismic monitoring detected “fluid and gas movement below the sinkhole.” More trees and a sinkhole access ramp sloughed in. On April 1 came another work stoppage amid signs of “fluid and gas movement below the sinkhole,” and water movement at its surface.

Explosion hazards are another worry. The state, working with the EPA, conducted a series of flights over the area scouring for potentially hazardous plumes. Monitoring to date has not “detected concentrations at or above surface that have reached the lower explosive limits,” Louisiana officials say. Concerned that crude oil and saltwater could spread to surface waters, the state ordered a containment berm to be built around the sinkhole.

So far, tests results by the Louisiana Department of Environmental Quality show “no harmful environmental releases,” the state said.

Yet for residents, the harm is right before their eyes: A community facing potential extinction.

‘Keep Out’ signs where residents frolicked

Today, homes once filled with bustle now feature “No Trespassing” or “Keep Out” signs. Along Highway 70, where giant trucks rumble past and dead armadillos occasionally dot the sideway, an insurance company’s ad has suddenly turned ironic: “Dreams can come true.”

The homes range from modest to modern, but all share a link to the water. The sinkhole’s mysterious arrival — and its murky long-term consequences — has taken a psychological toll.

“It’s just horrible,” said Wilma Subra, a Louisiana environmental chemist who has studied the area and visited recently. “This was a very close, very small community. You cannot imagine what they must be going through, day in and day out. Not knowing if you’re ever able to come back or not.”

Julie Albarado said she and her husband, drawn by a love of fishing, hunting and the water, moved to Bayou Corne in 2003. “It’s just terrible that we may have to leave,” said Albarado, who said she was diagnosed with cancer several years ago. “We don’t know where we are going.”

Nick and Brenda Romero say they dread leaving, but see no other option.

The Romeros bought their home in 1991 as a getaway retreat, and moved in fulltime in 1996. “We decided we enjoyed it so much we wanted to retire here,” said Nick. For several years, the couple drove back and forth to jobs in Baton Rouge, some 50 miles away. Nick is retired from the U.S. Postal Service, and Brenda a retired loan closing manager.

They started the community’s annual Mardi Gras parade, replete with live music, beads and hearty food. Their house connects with a vein of canal that leads into the bayou, and their yard features an orange tree that spouts so much fruit they share it with neighbors.

In summer, a cluster of their 10 grandchildren came to visit, with fishing on the bayou, and an occasional encounter with gators.

“Our grandkids loved coming here. It was one experience they never experienced anywhere else,” Nick Romero said. “We don’t have that anymore. Our grandkids can’t come out here anymore.”

Brenda, battling breast cancer, has developed a second career as an artist, often using wildlife as her muse. “To be on the water, peacefully on the water … We feel it would be impossible to find another place like this,” she said. “This is where we wanted to be for the rest of my life.”

Her husband worries about what Texas Brine will offer. “I didn’t and she didn’t cause this,” said Nick Romero. “We still have a mortgage on this. I’m retired with a mortgage.”

Karen St. Germain, the Louisiana state representative for the area, said she understands the residents’ anxiety. “You have taken a piece of their life that they can’t get back,” St. Germain, a Democrat, said on a steamy afternoon last month, just before Gov. Jindal swooped in on a helicopter visit. “I grew up on the water. It’s our sense of calmness.”

The sinkhole threatens to destroy that calm. St. Germain said she is keeping close tabs on how Texas Brine addresses the situation. The company, she said, didn’t initially move quickly to permanently relocate residents. “Not till they got pushed,” she said.

As he landed in Bayou Corne, Jindal shook hands with residents and heard their stories. “For the people that want to leave, there should be that option,” the governor told residents clustered around him. “But it shouldn’t be mandatory.”

Jindal then huddled inside with dozens of residents, emerging later to address the community and press, flanked by Assumption Parish and state officials. Jindal had drawn some criticism for not coming to Bayou Corne sooner — the press conference was his first visit since the sinkhole’s emergence — but he told residents he has been on their side from the start.

“We will hold Texas Brine accountable,” he said. “We’re going to make sure they’re responsible for cleaning up the mess they have caused.”

He cautioned that solutions will not come quickly. “This is a marathon.”

Jindal said Texas Brine has “missed many commitments and deadlines they made to the state. We said, ‘Enough is enough.’ ” The state, he said, will closely follow the company’s offer of buyouts, which could potentially begin coming later this month.

“The real proof will be in whether residents are actually accepting their offers,” Jindal said.

Before the sinkhole, “For Sale” signs were scarce in Bayou Corne. Over the last year, just three properties had been sold, a lawyer for Texas Brine told homeowners at a town hall meeting several hours after the governor’s visit.

Cranch, the Texas Brine spokesman, said the company has moved to address the environmental damage in the community while responding to citizen lawsuits already filed. “We have tried and made a good faith effort to respond as quickly as we possibly could” to the demands of the state, Cranch said. “We were faced with an awful lot of issues.”

Texas Brine’s website includes regular bulletins. “It’s been a big hardship on a lot of these people. Truly it has, and we recognize that,” Cranch said.

Four citizen lawsuits have been consolidated into one case in federal court. A fifth case moves ahead in state court, and more are likely. Environmental activist Erin Brockovich, working with Los Angeles attorneys, came to town in March to meet with homeowners who contacted her after the sinkhole surfaced.

Under a buyout process approved in court, Texas Brine is first contacting residents not represented by lawyers. Getting to that point has taken time, Cranch said, with the myriad environmental and legal issues triggered by the cavern collapse. Another question Texas Brine has grappled with, he said: “What to do with people who stay?”

Back on the bayou

Tim Brown is among them. A lab technician for a chemical plant, he and his wife Kathryn have lived on the bayou for 14 years, hosting crawfish boils and feeling securely at home.

“I’ve always wanted to be on the water,” said Brown, originally from French Lick, Indiana. “We’ve got too much invested in our home to try to move. … Once you live on the water, you don’t want to leave.”

“The fishing is still good,” said his wife. Indeed, Tim Brown said. He caught some catfish that day.

The Browns say they confront the catastrophe with a sense of perspective built from overcoming hardships. Kathryn’s mother and brother lost their homes in Hurricane Katrina. One of their daughters has had breast cancer. Tim Brown underwent heart surgery and a series of knee surgeries in recent years.

Yet they bring a dash of Cajun personality to the chaos. Each Christmas, the Browns decorate their lawn with three giant alligators. In March, the display remained in their front yard — with sinkhole related additions. “Texas Brine Sinkhole — Stink Hole,” says one sign. “We’re having a little fun with it,” Tim Brown said. “And the Texas Brine people thought it was funny.”

Soon, he is back on the water.

“Money’s not everything,” Brown said, recalling the day he encountered beavers, eagles and otters. Giant signs on the water warn of a natural gas pipeline, but Brown betrays little worry. Testing in his yard has not revealed any harm from the sinkhole, he said.

He points out his favorite fishing spot, just past the juncture where the Bayou Corne and Grand Bayou merge, then spins his boat back home. One of his three dachshunds stands beside him as the boat picks up speed.

“Hang on, hound dog,” Brown says to his dachshund, Fritz. As he pulls up to dock, he turns to a visitor and glances upon the water. “This is what we’re staying for.”

Energy Department auto loan program sputters

2013-03-18T11:57:39-04:00

A Department of Energy loan program, infused with $25 billion to spur a wave of fuel-efficient vehicles, has not closed a loan in two years and is likely to leave two-thirds of the money unspent amid fallout over the Solyndra debacle and other factors.

Those findings, revealed Friday in a U.S. Government Accountability Office report, rekindle questions over how effectively the Energy Department picks winners and losers for its lucrative green energy portfolio.

The audit focuses on DOE loan programs, including one known as ATVM — the Advanced Technology Vehicles Manufacturing program.

That program was pitched as part of a broader government campaign to spur innovative, clean technologies that would both rev up the economy and clean the environment. Under ATVM, the government would help bankroll electric cars and other fuel-saving initiatives; this seed money would, in turn, trigger a domino effect for industry and consumers.

Yet the last loan closed in March 2011, and just $8.4 billion has been spent so far in five projects.

The money, records show, helped stalwarts Ford Motor Co. and Nissan North America transform factories to build fuel-efficient vehicles, and cutting-edge upstarts Tesla Motors and Fisker Automotive develop electric cars and plug-in hybrids. A smaller loan went to a Miami company to develop wheelchair-accessible vehicles to run on compressed natural gas.

Yet not all the projects have found success.

An investigation by The Center for Public Integrity and ABC News, published in October 2011, revealed that DOE made a $1 billion bet on two politically connected California car companies — Tesla and Fisker — despite questions from analysts and others about how well their electric cars would fare in the market.

Both companies said the government investment ultimately would pay off. Yet Fisker’s CEO stepped down this week, as the company seeks new investors to jump-start its production.

The ATVM program was infused with another $7.5 billion to cover credit subsidy costs, yet $4.2 billion remains in that pool of money, the GAO report said.

The Energy Department does not expect to issue any more loans under a program once pitched with promise.

As of January 29, 2013, “DOE was not actively considering any applications for using the remaining $16.6 billion in loan authority or $4.2 billion in credit subsidy appropriations available under the ATVM loan program,” the GAO’s Frank Rusco wrote.

The Energy Department told auditors it had seven ATVM applications on file, totaling $1.48 billion. But those applications were “inactive,” DOE said, “for reasons including insufficient equity or technology that is not ready.”

“DOE is not likely to use the remaining ATVM loan program authority given the current eligibility requirements,” the GAO said.

Some potential applicants said they were hesitant to seek Energy Department funding. One factor: The ghost of DOE’s Solyndra debacle continues to hover over the program.

Solyndra, the first green energy loan guarantee unveiled by the Obama administration, was announced with fanfare in early 2009. Yet the Center and ABC reported in May 2011 that DOE initially green-lighted the $535 million loan without all due diligence in hand, putting taxpayers at risk. Later in 2011, Solyndra shuttered its California headquarters and filed for bankruptcy.

The FBI and the Energy Department’s Inspector General have been conducting a joint investigation of the Solyndra project since 2011. No charges have been filed. “It’s still an ongoing, joint investigation,” an FBI spokeswoman told the Center January 31.

“Most applicants and manufacturers noted that public problems with the Solyndra default and other DOE programs have also tarnished the ATVM loan program, contributing to the challenges,” the GAO wrote. “They believed the negative publicity makes DOE more risk-averse or makes companies wary of being associated with government support.”

Applicants and manufacturers said the loan program is needed to help advance technology. Yet several told auditors the cost of participating “outweigh the benefits.” Some cited a “lengthy and burdensome application and review processes.”

This is not the first time auditors have questioned the ATVM program. An earlier GAO audit, released in 2011, warned that the $25 billion may never fully be spent in a program lacking clear benchmarks to ensure taxpayer dollars were properly spent.

An Energy Department spokesman did not respond to an interview request Friday.

The agency, in a written response to auditors, acknowledged it “is not likely to use the remaining Advanced Technical Vehicles Manufacturing loan program authority under the current eligibility requirements.”

The loan office “would be pleased to share our lessons learned in implementing the program and discuss options for program modifications to improve implementation of the original legislation,” wrote David G. Frantz, the Loan Programs Office’s acting executive director.

EPA unaware of industry ties on cancer review panel

2013-06-03T10:04:11-04:00

In September 2010, scientists at the Environmental Protection Agency came to a startling conclusion: Even a small amount of a chemical compound commonly found in tap water may cause cancer.

The compound, hexavalent chromium, gained infamy in the Oscar-winning film Erin Brockovich, based on the David-vs.-Goliath legal duel between desert dwellers in Hinkley, Calif., and Pacific Gas & Electric Co. The film ends in Hollywood fashion, with the corporate polluter paying $333 million to people suffering from illnesses.

But in real life, the drama continues. More than 70 million Americans drink traces of chromium every day, according to the Environmental Working Group, a nonprofit research organization.

And now, more than a decade after the film, EPA scientists cite “clear evidence” that the chemical compound, also known as chromium (VI), can cause cancer. The federal agency was poised to announce its findings in 2011, a step almost certain to trigger stricter drinking-water standards to prevent new cancers and deaths.

The chemical industry’s trade association and chief lobbyist, the American Chemistry Council, urged the EPA to wait for more research, a common practice to delay action on toxic chemicals. However, Vincent Cogliano, the soft-spoken head of EPA’s chemical-assessment program, rebuffed the powerful group, writing in an April 2011 letter that “strong” new research was already available.

Ten months later, the EPA reversed itself, quietly posting a notice on the Internet that it was pushing back the release of its findings for at least four more years. Environmentalists were stunned at the reason: The agency would wait for the results of new studies costing $4 million and paid for by the American Chemistry Council.

The EPA decided to wait at the urging of a panel of scientists chosen to give an unbiased review of the chromium findings. But the EPA doesn’t vet these scientists directly, instead handing the task over to outside contractors. An investigation by the Center for Public Integrity found that several of the panelists had worked on behalf of PG&E to defend the company in the Brockovich lawsuits.

President Obama pledged during his 2008 campaign to halt meddling and interference in government science. The president put restoring integrity to science on his short list of priorities in his first inaugural address, right after fixing the economy and before health care reform. “We'll restore science to its rightful place,” he said.

The story of chromium (VI), full of twists and turns, offers a case study in how the Obama administration has failed to shield science at the EPA from industry influence.

Companies with a stake in chromium have borrowed from the Big Tobacco playbook, using science to create doubt. Ever since the brassy Brockovich knocked on doors in Hinkley to organize a class-action lawsuit, scientists paid by industry have tried to convince the courts and regulators that chromium (VI) poses no health risk.

Some of those scientists ended up on the panel chosen to review the EPA’s chromium findings, the Center for Public Integrity found:

Three of the five panelists who urged delay had worked on industry's behalf in the Hinkley court cases.

One of those scientists was retained by PG&E in the company’s ongoing chromium cleanup in Hinkley at the same time he was serving on the EPA panel.

Another scientist who urged the EPA to wait for the American Chemistry Council studies served as a consultant on those studies.

“You don’t have to be a rocket scientist to realize that this is corrupt and unacceptable,” contends Rena Steinzor, a law professor at the University of Maryland and president of the Center for Progressive Reform, a think tank that recently published a report on the chemical industry’s influence.

Those members served on the EPA’s toxic-chemical-assessment program, the Integrated Risk Information System. IRIS, as it is known, is the pure science upon which clean air and water rules are based. But IRIS has become a major bottleneck, delaying new federal and state air and water standards amid industry influence and other factors. Critics say the EPA has only itself to blame.

Since October, EPA Administrator Lisa Jackson has declined interview requests to discuss IRIS or loopholes that open the door for potential conflicts of interest. Yet Jackson is pushing reform before she leaves office this week that would address some of the conflicts unearthed in the Center’s review, and cited by environmental activists.

And recently the EPA decided to move up its timetable to complete its chromium assessment to later this year.

Case study of industry’s muscle

The issue of scientists with industry ties serving on special EPA peer review panels goes beyond chromium. One out of every six scientists appointed to such panels since Obama took office had been a primary author of research articles funded by the American Chemistry Council over the past dozen years.

In all, 11 of the 68 members appointed to EPA panels assessing chemical health hazards were significant authors on studies funded by the ACC, a review of the council’s research database reveals. That number does not capture all scientists backed by industry, just those with work funded by the ACC. The authors of the hexavalent chromium studies, for example, are not included.

One scientist who has served on several EPA panels and co-written more than a dozen ACC-funded studies said that working with industry does not necessarily suggest a conflict.

“Scientists by and large want to get at the truth, so this really becomes more a matter of a perception of a problem than a real problem, in my opinion,” said Frederick J. Miller, an independent consultant who once worked at the Hamner Institutes for Health Sciences, a North Carolina research institute formed in the 1970s by leaders from 11 major chemical companies.

“The people that serve on these panels … know if somebody is trying to make an argument that doesn’t hold water,” said Miller, who began his career in government.

However, studies have shown that when industry pays for research, it may influence the outcome. A 1998 analysis of more than 100 articles published on secondhand smoke reported that 37 percent found no health risk. At least 74 percent of the articles exonerating cigarette smoke were written by scientists with ties to the tobacco industry.

The American Chemistry Council has a stake in the outcome of research. Lobby disclosure forms from 2011 reveal that the ACC lobbied the EPA on its assessments of three highly controversial chemicals: dioxin, formaldehyde and chromium (VI). The group boasts on its Web site that “in 2012, we helped defeat or amend 281 chemical regulation and product ban proposals.”

The ACC, whose members such as ExxonMobil, Dow Chemical, Merck and Procter & Gamble are a who’s who of the Fortune 500, is one of the freest-spending lobby groups on Capitol Hill. In 2011, it laid out $12.6 million on lobbying, four times the amount spent by the National Rifle Association.

David Fischer, a senior director at the ACC, defended the group’s research program. “We feel we have an obligation to step up and fund studies to assist the agency — whether it’s EPA or others — to answer questions that might be posed about chemicals that we manufacture,” he said.

Asked if any of the ACC’s studies had ever shown that a chemical was more toxic than previously thought, Fischer replied, “I'm not aware of one right at this moment.”

The ACC said it was not involved in selecting the peer reviewers studying chromium (VI). “EPA's peer reviewers were selected by EPA. They were vetted in the normal peer review process from EPA and we from the ACC do not have any direct links to these people,” said Ann Mason, the ACC scientist who commissioned the group’s new studies on chromium.

However, few scientists in the world specialize in chromium, a compound used to add color to paints, make stainless steel, add finish to chrome and inhibit rust. During its lawsuits, PG&E hired several of these scientists as expert witnesses; some say the debate over the compound’s toxicity caused lasting splits in the tight-knit scientific world.

One of PG&E’s key experts was Steven Patierno, a former professor of pharmacology at the George Washington University School of Medicine and Health Sciences who had conducted numerous studies on the metal. Patierno, now the deputy director of the Duke Cancer Institute, has been an expert defense witness in seven chromium lawsuits. He hasn’t wavered in his view that drinking low doses of chromium (VI) does not cause cancer.

By early 2011, Patierno was selected for the peer review panel critiquing the EPA’s chromium (VI) findings. At a public meeting on May 12, 2011, he revealed a potential conflict of interest. There’s no recording or transcript of the meeting. Nothing in the EPA’s public record reveals the conflict. Two EPA officials who were there say they cannot recall what Patierno said. Patierno himself declined requests for an interview.

Jennifer Sass, a senior scientist at the nonprofit Natural Resources Defense Council, took notes at the meeting and said that Patierno revealed he was an investigator — though not a principal investigator — on the American Chemistry Council studies.

The ACC’s Mason disputes that Patierno was involved. But Travis O’Brien, one of the principal investigators on the studies and a former colleague of Patierno’s at George Washington University, told the Center for Public Integrity that Patierno was a consultant on the research.

Max Costa, now a professor at New York University’s medical school, knows Patierno well. When Costa taught at the University of Texas Medical School, Patierno worked in his laboratory. The two published research together. Costa said they became rivals when they took opposite sides in the PG&E lawsuit.

He argues that Patierno’s opinions are not credible because he works for the chrome industry. “He’s been a paid a large amount of money by them, and he’s totally biased because of that.”

Patierno levels the same charge against Costa, attacking his conclusions in a lawsuit as “unsubstantiated” and “severely flawed.” Patierno criticized the EPA for even citing Costa’s papers among hundreds of others in its report. In his peer review comments, Patierno said two of Costa’s articles should not be taken seriously because “they were written and published at a time when the senior author was actively engaged as an expert witness for the plaintiffs in high-profile hexavalent chromium lawsuits.”

Patierno was an expert witness for PG&E in the same lawsuits. When he was asked in a 2006 lawsuit if he discloses his expert-witness work for industry when submitting articles on chromium (VI), he answered no. Patierno said his articles were based on laboratory studies that were not relevant to his legal work.

Costa was originally listed as a candidate for the EPA peer review panel, according to documents obtained by the Center through a Freedom of Information Act (FOIA) request. Costa says he disclosed his work in the PG&E lawsuit but doesn’t know if that work disqualified him. An EPA official said privately said that Costa’s work as an expert witness may have kept him off the panel.

Industry ties and EPA panel

Patierno was not the only defense litigation expert who served on the EPA’s IRIS panel. Two others were John P. Wise Sr., a toxicology professor at the University of Southern Maine, and Joshua Hamilton, a chief academic and scientific officer at the Marine Biological Laboratory in Woods Hole, Mass., which is affiliated with Brown University.

Wise, who worked in Patierno’s laboratory as a graduate student, said that in 1997 he worked for a consulting firm and was assigned to do research for an industry client in the Hinkley lawsuit – but that he has not accepted industry money in the past 15 years. Wise added that he was never told the identity of the client and that he does not believe "such limited contact so long ago" influenced his opinion.

Hamilton was a defense expert in a PG&E chromium lawsuit that settled in 2006 and worked for the company as a consultant again starting in 2009, according to PG&E. PG&E acknowledged that it hired Hamilton in May 2011 — the same month the EPA panel met — to consult on the ongoing chromium cleanup in Hinkley. PG&E said it paid him $110,000.

Hamilton appeared before a California Regional Water Quality Control Board on June 8, 2011, to speak on behalf of PG&E about its cleanup of Hinkley. The EPA peer review panel issued its final comments one month later, on July 6, 2011.

Hamilton’s consulting work included criticism of the California EPA’s own scientific assessment of chromium (VI), which was nearly identical to the EPA’s.

In an eight-page statement to the water board dated July 9, 2011, Hamilton wrote that the state agency’s findings did not represent “established science.” He described California’s regulations as “overly protective.”

The PG&E director in charge of the Hinkley cleanup, Sheryl Bilbrey, said Hamilton’s work should not have affected his objectivity. “PG&E expects all of our experts to give us unbiased advice,” she said. “So we would never ask anyone to change their scientific opinion to fit something that we would want.”

Asked whether it was appropriate for an EPA peer reviewer to be working simultaneously for PG&E, the ACC’s Fischer said, “That sounds like a conflict of interest to me. Generally, the way you get around it is you just — you don’t appoint that particular scientist to that particular panel.”

It was not the first time Hamilton had been paid a substantial sum by PG&E. In 2001, Hamilton said he was surprised to get a $100,000 check in the mail before doing any work as an expert witness. According to his deposition, Hamilton talked to PG&E’s lawyers about the check and learned that it was on top of his hourly fee. PG&E ultimately paid Hamilton nearly $300,000 for his work on the lawsuit.

(Hamilton has since disclosed that he repaid the $100,000; see editor's note below)

“That’s completely outrageous,” said Francesca Grifo, director of scientific integrity at the nonprofit Union of Concerned Scientists. “I don’t know how anybody could stand up logically and say I got $100,000 but it didn’t affect how I handled this.”

Hamilton declined interview requests.

EPA farms screening to consultants

Working for a chemical company appears to violate the EPA’s guidelines on conflicts of interest. The EPA’s Peer Review Handbook says peer reviewers should appear to be impartial, defined as not having anything that “may cause a reasonable person with knowledge of the relevant facts to question the expert’s ability to carry out official duties without bias or influence.”

The handbook offers, as an example of a conflict, a scientist paid to be an expert witness for a chemical company in a class-action lawsuit.

Yet, the EPA doesn’t ask scientists if they’ve worked as expert witnesses or have taken money from industry. Instead, it turns that job over to private companies, which handle conflict-of-interest reviews in secret. All of the information the vendors collect, including financial disclosure forms, is “considered private and non-disclosable to EPA or outside entities except as required by law,” the EPA policy says.

The contractor examines candidates’ published work, and prospective panelists fill out a questionnaire detailing potential conflicts. Once the panel is picked, the contractor certifies to the EPA that “no unresolved actual or potential conflict of interest issues” remain.

What’s more, the ethics guidelines are not binding on contractors, and the EPA handbook says the agency should not override decisions on conflicts of interest. “EPA should not attempt to make any changes in the contractor’s conclusions as this would compromise the independence of the peer review conducted by the contractor,” the handbook says.

The EPA said it set the system up this way to ensure impartiality. But, the Center found, this structure helps shield the very conflicts the agency aims to avoid.

A year ago, the Center sought information on the screening of IRIS panelists through a FOIA request. The EPA withheld most documents, including emails between the vendors and agency.

Officials at Eastern Research Group Inc., the Massachusetts firm that vetted the peer reviewers on the chromium (VI) panel, did not return emails and phone calls. An official at another company handling peer reviews, Versar Inc., said he was prohibited by EPA from talking.

The EPA’s administrator, Jackson, and its chemical-assessment officials declined requests for on-the-record interviews. But an EPA official acknowledged privately that the agency was not fully aware of the chromium (VI) peer reviewers’ ties to PG&E. The official defended the use of private vendors, contending that if the EPA chose peer reviewers, it could pick scientists it knew would be friendly.

However, the EPA routinely selects scientists for other advisory panels. Critics said it’s not clear how checking financial disclosure forms would taint the process. The Peer Review Handbook does note that checking disclosure forms would activate the Federal Advisory Committee Act, a law meant to make panels more open.

“It’s bizarre,” Grifo said of the EPA’s secretive screening process. “At its core it’s supposed to increase the public trust in the system. If it looks like the whole system is rigged to begin with, then why should a citizen trust it?”

The EPA said it was working to reduce the potential for conflicts. “We are exploring the best ways to provide for public review of contract-managed peer review panels and ensure that contractors are held accountable for their assessment of any conflicts of interest,” the agency said in a statement.

The ‘pure science’ bottleneck

Some 700 new chemicals hit the market each year, adding to the tens of thousands already in use. Yet the EPA has assessed only 557 chemicals since the IRIS program began in 1985. A typical review takes six to eight years, sometimes much longer. It took 27 years for the agency to issue a partial assessment of dioxin, a byproduct of plastics manufacturing and burning.

The Government Accountability Office (GAO) concluded in 2008 that the IRIS program was so bogged down that it was in danger of becoming obsolete.

In 2009, EPA Administrator Jackson made bold promises within her first weeks in office to fix the program. She pledged to finish many more assessments and to try to complete each one within two years. Since May 2009, the EPA said it completed 24 IRIS assessments, “double the number” completed in the same time period prior to May 2009.

Yet its overall progress remains slow, and in the past two years, the program produced as few assessments as ever. Last year, the EPA planned to complete 40 assessments. It finished three.

The reasons for the logjam are complex. But it has become common for industry and its allies inside the federal government to push for delay. “Even a single delay can have far-reaching, time-consuming consequences, in some cases requiring that the assessment process essentially start over,” the GAO reported.

In the case of chromium (VI), evidence shows that industry worked closely with the EPA as the agency conducted its assessment. On Oct. 8, 2009, a scientist at a law firm representing chemical companies complained in an email that the EPA was pushing ahead on its assessments without waiting for studies to address “gaps” in the science.

“EPA moved Chrom VI up by about two years after ‘we’ entered into a process of planning research with them to address gaps,” wrote Richard Canady, a former scientist at the White House’s Office of Management and Budget (OMB), who was then working at the private law firm of McKenna, Long & Aldridge. “I’d like to make a case for EPA planning ahead in cooperation with industry.”

Canady’s email was sent to Nancy Beck, a toxicologist at OMB who reviewed the EPA’s findings. Beck referred Canady to an American Chemistry Council official for help in gathering data. A 2009 investigation by a subcommittee of the House Science and Technology Committee criticized Beck for improperly interfering with IRIS assessments during the George W. Bush administration. Beck now works for the ACC. She did not return a call last week seeking comment; an ACC spokesman said Tuesday he would seek her perspective.

In a recent interview, Canady said he could not recall the precise details from his email and declined to reveal clients for which he was working. But Canady said he thought the process of planning research with the EPA “wasn’t that formal.” Instead, industry scientists would call EPA scientists to find out what new data would help them in their chromium (VI) assessment, he said.

His 2009 email also said, “Peter made a point to me the other day about how boron and methylene chloride were good examples of working together on developing data ahead of assessments in ways that influenced the outcome.”

Canady said this was a reference to Peter Preuss, then the director of the EPA’s National Center for Environmental Assessment, which oversees IRIS.

The EPA originally planned to issue its chromium (VI) assessment last summer, giving the ACC time to finish its new studies. However, under Jackson’s imperative to quicken assessments, the EPA moved up its timeline by six to nine months.

When the EPA’s Cogliano rebuffed the ACC’s request for a delay, the trade association turned its attention to the peer review panel.

Critics say the industry uses comments on chemicals that are under review to overwhelm the agency.

“There’s a very elaborate process that involves multiple opportunities for industry to pick away and blast away and confuse and overload the staff of IRIS, and the IRIS staff reacts by trying to address each and every one of industry’s concerns,” said law professor Steinzor.

“The chemical industry has made IRIS its leading target, one of its leading targets, for spoil in the current age of greed,” Steinzor said

Of the 49 public comments submitted to the EPA on chromium before the peer-review panel met, the American Chemistry Council and its research partners authored 29 of them, totaling 1,661 pages. In addition, 10 other comments totaling 137 pages came from industry urging the EPA to wait for the ACC studies.

As the EPA stood poised to announce potential new safeguards for chromium (VI), the ACC had hired a scientific consulting firm, ToxStrategies, to manage the $4 million studies of mice and rats given the chemical for 90 days.

The panel met May 12, 2011, at a Hilton hotel near Reagan National Airport. Patierno was highly critical of the EPA’s findings and suggested the agency “absolutely consider the extensive new data being provided.” Hamilton and Wise agreed.

In a recent interview, Wise said he wasn’t entirely familiar with ToxStrategies’ findings, which hadn’t yet been published. But he assumed the delay would be short, only a few months. The EPA initially said the delay would take four years. Later, the agency said the assessment would be done this year.

Anatoly Zhitkovich, a professor at Brown University who chaired the EPA peer review panel, was upset with the results and wrote his own review published in the journal Chemical Research in Toxicology, according to Costa, a close colleague. Zhitkovich declined an interview request, but his article supported the findings of the EPA.

In lobbying for delay, the American Chemistry Council quietly enlisted the help of a small office within the U.S. Small Business Administration.

SBA Chief Counsel for Advocacy Winslow Sargeant, an electrical engineer by training, submitted a comment to the EPA on Oct. 5, 2011, challenging its scientific conclusions and urging it to delay its chromium assessment pending completion of the ACC studies. Winslow cited the peer review comments from Hamilton and Wise to support his argument.

But emails obtained through FOIA by the advocacy group Center for Effective Government revealed that the ACC helped shape the SBA letter. An ACC lobbyist, Randy Schumacher, sent an email to Sargeant’s office on June 28, 2011, asking for its help.

“Administrator Jackson calling upon her to stop the Cr6 risk assessment process to do exactly as EPA’s peer reviewers deemed advisable,” Schumacher wrote. “Since it appears EPA needs to hear from more constituents for it to listen to its own peer review team, would SBA be willing to send a letter to Ms. Jackson to weigh in on this matter?”

Later emails from Schumacher suggested editing changes to Sargeant’s letter. The SBA official has not responded to interview requests.

Frustration prompts reform push

Now the EPA is in the process of revamping its IRIS program once more. Cogliano has proposed releasing the names of prospective peer reviewers in advance, giving the public an opportunity to explore conflicts. “This will improve transparency in the peer review process,” the EPA said in a statement. The changes could be formally announced this week, as Jackson departs.

The ACC’s Fischer says he’s in favor of a conflict-of-interest policy that allows industry to participate on peer review panels. “Bias in and of itself should not necessarily disqualify a particular scientist from serving on the panel,” he said. “Industry perspective is a bias but so [is] every other perspective.”

The EPA is also weighing whether to set “stopping points” for new research, a deadline after which no additional studies would be considered. Kenneth Olden, a senior EPA official who oversees IRIS, has proposed announcing assessments two years in advance, giving industry time to complete new studies.

Such proposals drew criticism at an EPA meeting in November, with an environmental group’s scientist stating bluntly that industry seeks delays because it wants IRIS to fail. His comments drew faint gasps from a conference room filled almost entirely with industry consultants.

“The practice of waiting for one more study to be completed, as has happened repeatedly under IRIS – especially when that study is to be conducted by an entity with a vested financial interest in tilting the outcome – simply must stop,” said the scientist, Richard Denison, with the nonprofit Environmental Defense Fund. “Simply put, a decision delayed is health protection denied.”

This story has been clarified to reflect that, as an employee of a consulting firm, John P. Wise Sr. worked for an industry client in the PG&E lawsuit but that he was never told the identity of the client. After the story was published, Joshua Hamilton provided proof that he repaid a $100,000 check from PG&E more than three years after he received it. Hamilton now says he was confused about the July 2001 check at the time he was deposed in August 2002. A 2001 letter he provided from PG&E that came with the check says it was prompted by the company's Chapter 11 reorganization and was meant as "security for additional work you may be asked to perform on this matter." The letter says that Hamilton could keep the full amount of the check until his final invoice, but he was expected to repay the $100,000 when his work was done.

Ouster of scientist from EPA panel shows industry clout

Maine,United States — 2013-06-03T10:04:11-04:00

In 2007, when Deborah Rice was appointed chair of an Environmental Protection Agency panel assessing the safety levels of flame retardants, she arrived as a respected Maine toxicologist with no ties to industry.

Yet the EPA removed Rice from the panel after an intense push by the American Chemistry Council (ACC), an industry lobbying group that accused her of bias. Her supposed conflict of interest? She had publicly raised questions about the safety of a flame retardant under EPA review.

Rice’s travails through the EPA’s Integrated Risk Information System, or IRIS, program reveal the flip side of industry’s sway. Not only does the ACC back many scientists named to IRIS panels, it also has the power to help remove ones it doesn’t favor.

The ruckus over the Maine scientist surfaced six years ago, but its lesson echoes today.

To Rice, her removal points up an irony borne out by a Center for Public Integrity investigation: Scientists with deep ties to industry are allowed to continue on IRIS panels. But she — with no financial link to industry — was booted.

“It wasn’t like I was a consultant, saying this stuff is really bad because someone is paying me to do it. I was the toxicologist working for the state of Maine asked by my department to do these reviews,” she said. “That was the basis on which they said I was in conflict.”

Another irony: Rice’s assessment was on target. Two years later, the EPA moved to cease production of decaBDE, a chemical it views as a possible carcinogen. In Maine, Rice’s research had supported a state ban on the chemical.

Rice was with the Maine Center for Disease Control and Prevention when she was appointed to the EPA panel convened to study the safety of brominated flame retardants used in products ranging from building materials to electronics and plastics. The panel was tasked to assess the safe reference doses of four forms of polybrominated diphenyl ethers (PBDEs) — including decaBDE, which Rice had studied for several years in Maine.

A former EPA toxicologist, Rice had been honored by the agency in 2004 for outstanding scientific work.

Her undoing came after she made public comments about a compound that was under EPA review.

Before her appointment to the IRIS panel, Rice, like other members, was asked whether she had taken public positions on the chemicals being studied. She answered “No” — but reported that in 2004 and 2005, as a toxicologist for the Maine CDC, she had written a review of the health effects of PBDEs.

With the IRIS panel due to convene Feb. 22, 2007, members were asked on Feb. 16 if any of their information had changed. “No changes,” Rice reported.

A day earlier in Maine, Rice had testified before the Legislature supporting a ban of decaBDE. “Deborah Rice with the Maine CDC’s Environmental and Occupational Health Program told lawmakers there is no question in her mind that deca should be eliminated because it is a persistent toxin that accumulates in the food chain,” the Bangor Daily News reported.

The ACC seized on those public statements and, in May 2007, dispatched a 10-page letter to the EPA urging that she be stricken from the panel. The chemistry council cited “certain information that has come to light that could suggest the potential for bias exists on the part of the Peer Review Chairperson.”

The ACC cited her comments in Maine and in articles she had written. “Thus, EPA staff had to know or should have known that the Chairperson has been a fervent advocate of banning deca-BDE — the very sort of policy predisposition that has no place in an independent, objective peer review,” wrote an ACC vice president.

Rice’s inclusion on the panel, the ACC said, “ultimately calls into question the overall integrity of the entire IRIS database.”

An EPA official met with the ACC that June. In the end, the agency sided with industry, concluding that Rice’s statements created a “perception of bias.” Reviewers found, however, that her comments did not influence others — “because her comments were echoed by the other panelists.”

In August 2007, the EPA deleted Rice’s comments from its website. A day later, an IRIS official called Rice to tell her the news.

The EPA site today says: “The final report includes only four of the five reviewers’ comments. One reviewer’s comments were excluded from the report and were not considered by EPA due to the perception of a potential conflict of interest.”

Rice had already completed her IRIS service when the EPA took its action. She said she was simply reporting her findings as a toxicologist and had no conflict. “All of a sudden my comments disappeared as if I had never been part of this panel,” she said.

Rice wonders whether industry targeted her as part of a larger plan to discredit attempts to ban deca. At the time, several states were raising concerns over the retardant’s safety. The EPA itself had raised concerns — ones so significant that in late 2009 the agency and several chemical companies agreed to phase out its production.

“I think the motivation just has been to discredit me personally,” Rice surmised. “To say, ‘She’s biased, she has a conflict, she’s discredited. These other states shouldn’t pay attention to what Maine has done.’ And it seemed to me they saw a good opportunity to do this.”

The ACC said it sought Rice’s removal to ensure the peer review was independent.

Her ouster triggered a dustup. Groups ranging from the Environmental Working Group to the Center for Science in the Public Interest chastised the EPA for removing Rice while, in other cases, keeping panelists with ties to industry. “The actions taken by EPA against Dr. Rice call into question the credibility of EPA management,” the groups wrote in 2008, urging the EPA to reinstate Rice as panel chair. “When it allows itself to serve the interests of the polluting industries that it is charged with regulating, it has perverted its mission.”

Rep. John Dingell, D-Mich., then-chairman of the Energy and Commerce Committee, pressed the chemistry council to explain why panelists with industry ties “have not been targeted by the ACC as also having conflicts of interest that would disqualify them from serving on EPA panels.”

The EPA’s Office of Inspector General investigated, and found no wrongdoing in the agency’s actions. “We conclude that EPA did not violate existing federal law, regulations, guidance or other relevant requirements in its actions,” an IG official wrote in January 2009.

Still, the removal of Rice shone a light on the system — for a time. The EPA “kind of promised to clean things up,” said Rice, who recently retired. “Once the spotlight shifts to something else, it’s business as usual.”

About the 'Mystery in the Fields' project

2012-09-19T07:53:27-04:00

Mystery in the Fields, a three-part series, explores how a rare form of kidney disease is killing laborers and crippling communities in three different regions, from Central America to Sri Lanka to India. As death tolls mount, researchers remain puzzled, unable to definitively uncover the disease’s causes.

The series is an outgrowth of an earlier investigation, “Island of the Widows,” published last December in the Center for Public Integrity and its International Consortium of Investigative Journalists. In that piece, reporter Sasha Chavkin exposed how chronic kidney disease was so prevalent in some regions of Central America it left communities filled with widows and scientists searching for answers.

Building from that research, Chavkin discovered that the disease had also developed in clusters in India and Sri Lanka. Over several months this year, he and video journalist Anna Barry-Jester traveled to the countries to tell the story from the ground, and pressed governments and leaders of the medical community for answers.

Their report is also being published or aired in news outlets including PRI’s The World, the BBC, The Sunday Times of Sri Lanka and The Week in India.

Project staff

Reporter: Sasha Chavkin

Photographer/videographer: Anna Barry-Jester

Web team: Christine Montgomery, Paul Williams, Sarah Whitmire

Fact-checking: Peter Newbatt Smith

Project Editor: Ronnie Greene

Fishing deaths mount, but government slow to cast safety net for deadliest industry

2013-01-25T09:41:44-05:00

NARRAGANSETT, R.I. — “Get your panic out now!”

Veteran fisherman Fred Mattera stands atop a fishing trawler at the Point Judith Harbor, seagulls squawking by and a fishy mist in the air, and instructs the seven mostly young, tattooed men standing before him to pull on life-safety immersion suits that cover them from foot to head, to zip up and plunge feet first into the water. Then two groups of fishermen interlock like centipedes and take turns paddling backward until they reach a life raft where, going smallest man first, they pull in one by one.

This is survival training, and the plunge-and-rescue dry run is meant to gird the fishermen for the real thing, which comes too often in an industry beset by a high death rate and fragile federal net of protection.

Commercial fishing is the deadliest vocation in the United States. Four years running, from 2007 to 2010, the Bureau of Labor Statistics ranked commercial fishing as the most dangerous occupation in the United States. From 2000 to 2010, the industry’s death rate was 31 times greater than the national workplace average.

And no place, a recent National Institute for Occupational Safety and Health report reveals, is more deadly for commercial fishermen than the East Coast. From 2000-2009, the NIOSH report shows, 165 fishermen died from Florida to Maine. That’s more than Alaska — 133 deaths — which had long been viewed as the most brutal place for commercial fishing but saw deaths dip amid a safety push. It’s a greater death toll than in the Gulf of Mexico, which suffered 116 deaths, or the West Coast, with 83.

The U.S. Coast Guard has been granted only spotty powers to safeguard commercial fishing vessels, and the industry, steeped in a tradition of independence on the high seas, has long resisted government intrusion. Yet some longtime fishermen from Alaska to New England agree the federal safety net has left workers vulnerable.

“This has been an industry where there just hasn’t been a vigorous pursuit of safety at the federal level,” said former congressman James Oberstar, who held fishing safety hearings in 2007 as chairman of the Committee on Transportation and Infrastructure.

Advocates are trying to cast a new culture of safety. The immersion training in this seaside resort is one piece of a still-in-the works campaign — and, until full federal reform comes, a key ingredient to curbing losses at sea.

“Panic sets in when you don’t know what to expect,” said Mattera, who scrapped his dreams of going to law school 40 years ago when a roommate took him on a fishing boat, and who now runs a company leading safety seminars. “We’re taking that unknown out of it.”

In this tightly knit Rhode Island community, nearly everyone knows someone who died at sea.

“It’s like being a race car driver, one of those things you don’t want to talk about,” said lobster boat captain Norbert Stamps, who took part in the safety session with three crew members from his boat, the Debbie Ann.

“We were all resistant in the beginning,” he said of the hands-on drills. “You now realize this isn’t fun and games. This is really serious stuff.”

Stamps began fishing at 13 and, after more than four decades on the water, said he takes his family to services for brethren lost at sea. “I’m preparing them for the fact that someday, something might happen,” he said. “You stay at sea long enough, everything happens.”

A decade ago, Mattera tried to rescue a friend’s 22-year-old son from a fishing hold 125 miles out to sea. The Rhode Island fisherman, Steven Follet, had collapsed, apparently after poisonous gases accumulated in the hold. Airlifted to a Cape Cod hospital, he died.

“Believe me, to this day it’s haunted me,” Mattera said. “Could I have gotten there five minutes sooner? All these things: My kid’s the same age as his. I will never forget coming in, going to see the family. In their eyes I was a hero. In my eyes I was a failure.

“In the end he’s not alive, and I swore to them, promised in his legacy we would change this culture of fishery.”

At his office overlooking the docks here, Mattera keeps a small picture of Follet on the wall near his desk. “It’s always in the back of your mind,” he said.

Inspection push snagged in Congress

For decades, safety advocates and government regulators have pushed for mandatory inspections of the often decades-old boats that take to deep water to bring back scallops, fish, squid and lobster.

And for decades, Congress has stood still. Despite the strikingly high death rate among the men and women who live by the boat, the federal government has never required inspections of commercial fishing boats. The Coast Guard performs voluntary exams of safety equipment, and Congress recently acted to make those dockside reviews mandatory. But the law has yet to mandate detailed inspections of the vessels themselves.

“Fishing vessels are uninspected, so the Coast Guard doesn’t have jurisdiction to go on and look at the condition of the vessel. There’s no standards that a fishing vessel has to be built to or maintained to. That’s much different than a ferry or cargo ship,” said Jennifer Lincoln, a NIOSH epidemiologist based in Alaska who leads the agency’s Commercial Fishing Safety Research and Design Program.

“Every time there’s a vessel loss with high numbers of lives lost and the Coast Guard has done an investigation, one of the recommendations that always comes back is that these vessels should be inspected,” Lincoln said. “There’s industry push back: ‘That would be an expensive thing to do.’”

Pushing for sweeping safety changes, she said, is “like planting a tree.” The government can press for one change, and hope it sprouts into another. NIOSH can suggest reform, but has no law-writing power. That rests with Congress.

The National Transportation Safety Board has argued for vessel inspections and, in 2010, held a forum on fishing safety. “Fishermen tolerate long absences from home, inhospitable environments, and workplaces that are teeming with heavy, dangerous equipment while constantly in motion,” board member Robert L. Sumwalt III said at the hearing. “For some, the price paid is even higher: hypothermia, loss of limbs, and even death.”

From 2000 to 2010, 545 commercial fishermen died in the U.S., reported NIOSH, part of the Centers for Disease Control and Prevention. More than half of these deaths occurred after a vessel disaster, with boats sometimes swallowed by the sea. Another 30 percent involved fishermen falling overboard. Other deaths came from accidents on board, or while crew were diving or injured on shore.

Atlantic scallop fishermen suffered some of the highest death tolls, with a fatality rate more than 100 times the national average from 2000-2009, and some of the industry’s most notable disasters.

In December 2004, vast swells rolled the New Bedford, Mass., scalloping boat Northern Edge on its side, plunging the crew of six into frigid waters 45 miles off Nantucket. One man survived, making the Northern Edge New England’s deadliest fishing tragedy since the sinking of Gloucester, Mass.’s Andrea Gail in 1991, a case that inspired The Perfect Storm book and movie.

“I often wonder what is the true price of a pound of scallops,” fisherman Christopher Gaudiello said at the funeral for Northern Edge victims.

Mattera said the work can be brutal. “If you went scalloping for 10 days and stood in that box for 18 hours a day, day after day after day, you would not believe how fatigued you are,” Mattera said. “You cannot compare it to anything. Shuck and shuck and shuck, you would not believe the monotony. You are in constant pain. … You are bringing a steel cage swinging in the seas. Man, that stuff hits you, you are a dead man or you are breaking hands, you are cracking skulls.”

There’s a human cost to the industry push back and congressional inaction, experts say.

Richard Hiscock, a longtime marine safety advocate from Vermont who worked as a U.S. House of Representatives staffer in helping to write safety laws, said government is too often “reactive to casualties.”

Marine safety laws on the books, he said, “have been what I described as the little Dutch boy going around putting his finger in the dike,” Hiscock said. “Every time there’s a major casualty there will be a lot of hubbub and there will be an investigation to see what we can do to improve the existing statutes and plug a loophole.

“And they’ve been doing this since 1838.”

Hiscock draws a contrast between the Federal Aviation Administration, which has broad power to ensure airplanes fly safely, and the Coast Guard. “Congress has given the Coast Guard little bits and pieces of authority, not the broad authority,” he said.

The Coast Guard’s website includes a Hiscock report, “The Tragedy of Missed Opportunities,” that details failed reform attempts dating years. In 1999, a Coast Guard task force issued Living to Fish, Dying to Fish, a report citing the industry’s high casualty rate and lack of deep reform.

“Despite long-standing recognition of the serious hazards of commercial fishing, a long succession of proposed laws were not enacted,” the report concludes. “Many fishermen accept that fishing is dangerous, and lives are often lost. Many of those harvesting the bounty of our ocean frontier staunchly defend the independent nature of their profession, and vehemently oppose outside interference.”

Indeed, many fishermen have fiercely opposed government regulations — challenging, for instance, fish catch quotas some say hasten dangers at sea.

Reform’s Piecemeal Rollout

Strides have come, but slowly.

In 1988, Congress passed the Commercial Fishing Industry Vessel Safety Act, requiring fishing boats to carry survival craft, personal flotation devices and other safety equipment on board.

The regulations went into effect in 1991. A year later, the Coast Guard sought authority to inspect fishing boats. Approval never came.

“Whether the industry was lobbying enough or Congress didn’t see the need for it, we just weren’t given the authority,” said Jack Kemerer, division chief of the U.S. Coast Guard’s Fishing Vessels Division.

Kemerer said the 1988 law and subsequent tweaks have helped drop death tolls from even higher numbers in the 1980s. “There have been improvements based on the law and safety programs and safety initiatives,” he said.

“But,” he added, “fishing still remains the most hazardous occupation in the country.”

In 2007, the House Subcommittee on Coast Guard and Maritime Transportation held hearings, citing a string of tragedies from Alaska to Maine that had taken 22 lives in recent months.

A core of veteran fishermen, their spouses and safety advocates told the panel how they had lost friends to the seas.

“If we had regulated airline safety the same way we have regulated fishing vessel safety, all passengers on an aircraft would be issued a parachute and be trained in how to use it,” said Jerry Dzugan, executive director of the Alaska Marine Safety Education Association. “The fishing vessel safety act focuses on survivability after a vessel loss. By anyone’s definition, this is a reactive, rather than a proactive approach to casualties.”

Maine lobster fisherman Robert Baines described finding two teenage boys — aspiring fishermen — drowned in the cold April waters after their boat, inadequate for the weather conditions, capsized. One boy’s body washed ashore; Baines found the other in the water. “I will never forget that unnecessary tragedy,” he said. When the 1988 law passed, he said, the Maine Lobstermen’s Association opposed safety requirements for state registered vessels. “Times have changed,” said Baines, chair of Maine’s Commercial Fishing Safety Council.

Oberstar, then the transportation committee chair, concluded that the government needed a “much more vigorous program” and national standards to safeguard the industry.

He too draws a contrast between the FAA’s powers and those handed the Coast Guard. “Safety in aviation shall be maintained at the highest possible level, not the level industry can afford,” Oberstar said, and flights can be grounded with a mechanic’s signature. “That’s the kind of standard we need for Coast Guard inspectors.”

That standard has not come, but another reform swell passed with the U.S. Coast Guard Authorization Act of 2010. Congress approved an amendment requiring the Coast Guard to examine safety equipment on commercial fishing vessels every two years.

Now, fishermen can seek voluntary examinations of their safety equipment. If they pass, they get a sticker. If they fail the so-called “No Fault Exam,” no violation is issued. Captains of failed boats do risk citation if they take to the seas and happen to be boarded by the Coast Guard. The 2007 congressional hearing, however, revealed that less than 10 percent of the commercial fishing fleet took advantage of the voluntary program.

But even that voluntary review couldn’t ensure fishermen knew how to use the equipment. “That’s like taking your car in to go in for a safety sticker, and then you get into it and you don’t buckle up and you drive down the highway,” said Rodney Avila, a New England fisherman and safety advocate.

Under the new rules, which could go into effect later this year or next, the Coast Guard will check to ensure safety equipment is up to date and boats have proper life preservers, survival suits, life rafts, flares, alarms and documentation. The Coast Guard has not yet decided what consequences would follow a failed exam — but one possibility is that the boat would not be allowed to sail.

The rules also call for enhanced training of fishermen and lay the groundwork for safety compliance programs for older or substantially changed vessels.

Still, the pending mandatory dockside exams do not call for Coast Guard inspections of the vessels themselves. That would entail a “cradle-to-grave program” in which the Coast Guard issues a certificate of inspection, re-inspects the boat every year and conducts an out of water inspection every five years.

There’s a big difference, the Coast Guard’s Kemerer said, between an exam and a fuller inspection. “Safety would certainly be improved,” he said.

To some, having equipment exams but not the vessel inspections is like checking a car’s seat belts and air bags, but never getting around to the engine and frame.

Who is to blame?

“That’s the $64,000 question,” Hiscock said. “It’s a shared responsibility. Congress has never had the courage to do it, and the industry has never pushed for it.”

Kemerer said the exam could be a step toward more extensive inspections one day. The stakes, he said, warrant it. “When a serious emergency develops … the fishermen, if they haven’t practiced getting into their life suit or how to deploy a life raft, they are facing death,” he said. “Sometimes you only have a matter of minutes.”

Still, a question begs: If inspections came, who would pay for them in an industry with approximately 20,000 federally documented fishing boats and some 50,000 state registered vessels?

“We’re talking about hundreds of inspectors that would be needed, but right now with the budget climate the way it is, there’s no way we could get the number of inspectors,” said Kemerer. “It would be great to have it. The challenge would be: How do we accomplish it?”

Hiscock, the former House official, questions just how hard the Coast Guard has pushed for a full vessel inspection program. “They’re not up there lobbying for inspections constantly,” he said.

Deaths at Sea

In a stretch of the U.S. where seafood is king, tragedies continue.

Up and down the East Coast, fishermen set out to make a living, but then lose their lives. Some were unprepared for the catastrophe confronting them, government records show.

In March 2009, the 76-foot fishing vessel Lady Mary sank in 210 feet of water 65 miles off the New Jersey coast, killing six crew members. The NTSB said flooding, triggered by a hatch mistakenly left open during rough weather, sank the ship.
In January 2009, the Patriot sank 14 miles east of Gloucester, drowning its two crew members. “The Coast Guard attributes the vessel’s loss to a rapid event, most likely a capsizing, that did not allow the crew time to respond or access lifesaving gear,” a Coast Guard report found.

“Everyone thinks it’s never going to happen to them, that’s the problem,” said Avila, who served on the New England Fishery Management Council. “A lot of fishermen have never set off flares … A lot of fishermen have been fishing for 40 years and they may not have inflated a life raft. Most people don’t read [the instructions] until you need it.

“And when you need it, you have a minute or two until the boat sinks.”

Avila is among the reform advocates in New Bedford, a city of 95,000 some 60 miles south of Boston founded by whalers. Fishing remains the city’s lifeblood and, occasionally, a cause of mourning.

A string of New Bedford fishing boats sank in frigid, rough waters beginning in 2004.

When the Northern Edge went down that winter, the sole survivor was a crew member who had taken safety training in Portugal. That survivor, Pedro Furtado, later filed a lawsuit and contended the boat operator improperly stored life safety suits in an engine room — where the crew couldn’t reach them in emergency.

In January 2007, New Bedford’s 75-foot Lady of Grace — battered by 40-knot gales, and taking on ice — went missing at sea as it staggered to escape the weighty chill and return safely to harbor.

On January 28, five days after Lady of Grace set out to lure fish and scallops, the Coast Guard found the vessel submerged in 56 feet of water at the bottom of Nantucket Sound. Like so many New England fishing boats, Lady of Grace was workmanlike, not sleek, and aged — built 29 years earlier, its blue facade dotted with black marks.

Divers recovered the bodies of the captain, a fisherman for 25 years, and another crew member, in the business for 27 years. The bodies of the other two men did not surface. Heavy ice literally sank the boat, the Coast Guard concluded, drowning the men before they could reach port. Once more, the Catholic Church held solemn funerals, and the close-knit Portuguese community prayed for families left fatherless.

Avila knew everyone on that boat.

“I lost a lot of my friends that year, and it wasn’t a good feeling,” he said. “I was already into safety a little bit before that happened but that just confirmed it. I just dedicated myself to the safety program.”

A fisherman for more than five decades, Avila said he felt invulnerable to tragedy. After all, he reasoned, he always spent money for safety equipment.

“Even though I had all the best equipment, I didn't know how to use it,” he told the NTSB forum in 2010. “And right then and there, a light bulb went off and I started looking at all my fellow fishermen in my port one by one, who had started fishing with me, and they were in the same boat — different vessels, but same boat. They had the best equipment, but they didn't have the knowledge to use it.”

Avila got a wakeup call when he flew to Alaska for safety training himself. “I thought I knew everything there was to know about it until I sat in his class. And then I scratched my head the first, maybe the second day and I said, 'Boy, I really know nothing about this,'” he told the NTSB.

Now, like his friend Mattera, he leads drills that prepare fishermen for the worst — and get them intimately acquainted with equipment that could save their lives. The best safety equipment is useless, he learned, unless you know how to operate it: How to quickly zip into a life suit. How to inflate a life raft, send a mayday call, plug a gaping leak on a boat taking on water. With help miles away and unforgiving waves pounding, fishermen have scant moments to act.

“The problem with a boat, when something happens or breaks, you are out in the middle of the ocean,” said Mattera, the long-time fisherman from Rhode Island. “It’s not like you are out at the curb and can call AAA.”

Using the life-saving gear can mean the difference between death and survival.

Lincoln, the NIOSH official from Alaska, said getting into an immersion suit increases odds of survival by 7 percent. Getting into a life raft, she said, increases survival chances by 15 percent.

In Alaska, a safety campaign supported by industry helped lower the death totals. There, NIOSH studied the industry’s high fatality rate and focused on the sectors, such as the crab fishery, with the highest numbers. “NIOSH would look at the fishing data for the entire state, and we identified a hazardous fishery and then we worked with the Coast Guard and crab fishermen,” Lincoln explained. “What can we do to prevent these fatalities from happening?”

NIOSH intends to use the same targeted approach in the East Coast, Gulf Coast and West Coast, using its region-by-region breakdown as a guide. “What’s that one or two things we need to focus on to intervene so that fatalities start decreasing?” Lincoln asked.

Lasting reform, she said, requires industry buy in and a focused, not “one-size-fits-all mentality.” Having fishermen help lead safety drills is one piece of the puzzle. “If the training can be led by the fishermen, then they already have credibility by the people they are trying to train,” Lincoln said.

The potential for tragedy is compounded by the economics of an industry that experiences steep price swings — and feels the domino effect of a still-shaky economy. Looking to save money, some captains set out with fewer hands on deck, leading to fatigue during the long days on the water. They stay out in dangerous weather to lure the extra fish that will reel in a bigger bounty. And, they put off housekeeping.

“When you have economic hardship, a lot of times the first thing you neglect is the safety equipment,” Mattera said.

“Stretching it out,” he calls it. “It’s like having a home and knowing you should paint your home every 10 years. And when 10 years comes it costs you $10,000 to paint it and you already have a second mortgage. You either do it yourself, which ends up being half-ass, or you wait.”

Mattera said he and Avila had been complacent before tragedy spurred them to act. “Now we’re like pains in the asses to everybody because we’re so committed to this,” said Mattera, who until recently owned an 84-foot trawler, Travis & Natalie, named after his now-adult children.

After a boat goes down, Avila said, everyone starts pointing fingers. At the boat owner, the government, the regulations. His goal is to shift from the blame game to a culture where fishermen are prepared for chaos at sea. “If you go out fishing and you’re not prepared for any disaster, that’s like you going into a gunfight with a pea shooter.”

In Rhode Island this month, Mattera played the role of man overboard in another drill. Using their might and a yellow lifeline, two men pulled him back aboard. “Like a swordfish,” Mattera said, “235 pounds.”

One of the rescuers, Mike Gallagher, recalled finding a friend dead on a boat in 2002. The man, fishing alone, had not returned at day’s end, and Gallagher searched for him the next morning. Trapped by equipment onboard, the fisherman was dead from head trauma.

“I used to fish alone back then,” said Gallagher. “I never went alone after that.”

Farmworkers plagued by pesticides, red tape

2012-08-17T11:43:04-04:00

NASHVILLE, Tenn. — Laboring in the blackberry fields of central Arkansas, the 18-year-old Mexican immigrant suddenly turned ill. Her nose began to bleed, her skin developed a rash, and she vomited.

The doctor told her it was most likely flu or bacterial infection, but farmworker Tania Banda-Rodriguez suspected pesticides. Under federal law, growers must promptly report the chemicals they spray.

It took the worker, and a Tennessee legal services lawyer helping her, six months to learn precisely what chemical doused those blackberry fields. The company ignored her requests for the information. The Arkansas State Plant Board initially refused to provide records to her lawyer, saying it didn’t respond to out-of-state requests. An Arkansas inspector, dispatched after the complaint, didn’t initially discern what pesticides were used the day the worker became ill, records show.

When answers finally arrived — the fungicide was Switch 62.5WG, a chemical that can irritate the eyes and skin — Banda-Rodriguez had already left Arkansas to follow the season to Virginia and ultimately returned to Mexico. She never learned whether the pesticide sickened her.

The episode is as telling a snapshot today as it was six years ago for one of America’s most grueling and lowest-paying vocations. Pesticides can endanger farmworkers, but thin layers of government protect them and no one knows the full scope of the environmental perils in the fields.

The Environmental Protection Agency administers a Worker Protection Standard meant to regulate pesticides and protect workers and handlers. Yet the agency maintains no comprehensive database to track pesticide exposure incidents nationwide.

In 1993, the Government Accountability Office (then called the General Accounting Office) warned that the lack of data could lead to a “significant underestimation of both the frequency and the severity of pesticide illnesses.”

Nearly 20 years later, the EPA can still only guess at the scope of pesticide-related ailments in an industry where many workers, toiling in the shadows, are reluctant to speak up. The EPA often hands enforcement of pesticide regulations to states, which receive and investigate few formal complaints each year, federal records show.

“The system in place to address pesticide exposure is horrible. It’s dysfunctional,” said Caitlin Berberich, an attorney with Southern Migrant Legal Services, a Nashville nonprofit that provides free legal services to farmworkers in six southern states. “It just doesn’t work at all.”

Some top state regulators agree the full toll of pesticides on farmworkers is not documented. Yet reforms requiring more complete disclosure of pesticide use have been caught up in EPA red tape.

The EPA did not respond to repeated requests for comment and written questions, sent by the Center for Public Integrity over the last month, about its pesticide oversight. The EPA "estimates that 10,000-20,000 physician-diagnosed pesticide poisonings occur each year among the approximately 2 million U.S. agricultural workers," federal records show.

Yet when workers do complain — as in the case in Arkansas — securing hard information can be daunting.

Sometimes, workers say, they pay a price for speaking up.

When pesticides were sprayed near them in 2010 in the tomato fields outside the city of Newport, in a patch of east Tennessee where the mountains touch the clouds and road signs warn of falling rock, the migrant farmworkers complained to state regulators. When it happened again, they say, they snapped videos with their cell phones.

The tomato farm’s response, the workers say in an ongoing federal lawsuit: to fire them on the spot, pile them on a bus and route them back to Mexico. The company denies any wrongdoing or retaliation.

In Florida in late 2009, farmworker Jovita Alfau, working in an open-air plant nursery in a rural swath of south Miami-Dade County, said she became dizzy and weak, with numbness in her mouth, and vomited.

Alfau said she had been told to tend to hibiscus plants at the Homestead nursery less than 24 hours after they had been sprayed with the pesticide endosulfan. The grower sent workers out too soon after the spraying, Alfau said in a lawsuit, violating the Worker Protection Standard, and did not tell her when pesticides were applied, provide protective gear or tell her how to protect herself.

Endosulfan is so toxic that, by summer 2010, the EPA banned its use, saying the pesticide “poses unacceptable risks to agricultural workers and wildlife.”

Several days after falling ill, Alfau went to the doctor but was not asked about pesticides, said her lawyer, Karla Martinez of the Migrant Farmworker Justice Project. Alfau, a legal U.S. resident and Mexican native, said she has been unable to work regularly since.

Power Bloom Farms and Growers denies wrongdoing, but agreed this month to settle Alfau’s case for $100,000, court records show. Under terms of the settlement, the company could also pay up to $75,000 total to other affected workers in a case that also included wage abuse allegations. The company did not respond to an interview request.

Farmworkers who have spent decades in the fields say one constant remains: Workers have little voice when it comes to pesticides.

“We have to run to the cars and close the windows because the plane is putting pesticides in the fields. After that happens, people feel sick,” said Yolanda Gomez, who began picking Florida oranges when she was nine and spent more than 30 years following the harvest from Florida to Washington State. “When you go to the field you go clean, and when you come out of the field you can see your eyes are very red.”

Raised in a family of farmworkers, with a father who once carried signs for Cesar Chavez, Gomez is now a community organizer for the Farmworker Association of Florida, in Apopka near Orlando. Farmworkers frequently trek into the office complaining of pesticide-related illnesses, she said.

“When you tell them, ‘Let’s make this paper and put your name on it so we can make a difference,’ they just won’t do it,” Gomez said. “‘I don’t have any papers. I have to work. This is the only way I can feed my family.’ They don’t see another way out of the system.”

The system, she said, “should care about the human side of the worker.”

Bottom of the food chain

The battle over pesticides is a microcosm of the larger struggle for laborers at the bottom rung of the economic food chain.

“There’s this disenchantment,” said attorney Adriane Busby, who focuses on pesticide safety policy for the nonprofit Farmworker Justice in Washington, D.C. “They just don’t believe anything will happen if they go above and beyond in reporting things. They don’t believe in the system protecting them.”

For farmworkers, just getting clear answers about pesticides is a struggle. No one, the EPA included, has a full picture of the problem.

An EPA slideshow report in 2006, for instance, opened with a question: How many occupational pesticide incidents are there each year in the United States?

The slide listed multiple possibilities, from 1,300 to 300,000. Each number could be true, the report said – it just depends upon the source. One number came from the Poison Control Center, another from EPA estimates and yet another from the Council of State and Territorial Epidemiologists.

This uncertainty, even the EPA admits, can carry real consequences. As its slide noted, the lack of accurate information “inhibits clear problem identification.”

Advocates say the dearth of information triggers another problem: It’s hard to hold government and industry accountable when there is no benchmark from which to judge.

In its 2006 report, the EPA set goals of gathering more complete information and creating a more consistent means of tracking incidents. Among its recommendations: To “prepare a report on occupational incidents.”

Six years later, asked whether such a report has been prepared, the EPA did not respond.

Instead of maintaining its own database, the EPA depends on states to report complaints. But those annual reports list minuscule numbers. In 2011, for instance, North Carolina listed a total of five investigations based on complaints — for the entire state. South Carolina, another major agricultural producer, reported zero. Tennessee: 3.

Florida, the nation’s second-biggest agricultural state after California, reported 61 complaint-based investigations that year.

But Gregory Schell, managing attorney with the Migrant Farmworker Justice Project in Lake Worth, near West Palm Beach, Fla., said just a fraction of the pesticide incidents are reported.

His guess: “One-tenth of 1 percent, in Florida.”

In 2005, Schell surveyed laborers who worked for a grape tomato grower in northern Florida that season. Nearly one in four said they had been directly sprayed with pesticides or other chemicals. Just under half said they had encountered drift from nearby fields. Thirty-six percent said they had become sick or nauseous from pesticides, and more than four of 10 said they developed skin rashes or irritation.

Had those numbers been extrapolated out for a state with 200,000 farmworkers, there would have been thousands of complaints, not dozens.

“Workers view these exposures as an occupational hazard. Even when they do complain, there’s an unwillingness to come forward,” Schell said. “One [reason] is their immigration status. The other is the employer can and will fire them.

“It is like pulling teeth for us to get people to file pesticide complaints.”

The official count doesn't reflect reality, agrees Andy Rackley, director of agricultural environmental services for Florida's Department of Agriculture and Consumer Services. "I would say we probably don’t have a good handle on it," Rackley said. "It’s probably not as big as some people say it is but it’s probably bigger than what our complaint investigation files would indicate."

Rackley believes growers should be required to more fully disclose where farmworkers are when pesticides are being sprayed. "Where were the workers at the same time, were they harvesting in the same fields?" he asked. "That won't keep anybody who's intent on hiding something from doing something, but it certainly raises the stakes."

Growers log their pesticide use, and many track workers' activities — but there's no rule requiring one report tying the two, Rackley said. "EPA has been working on a rule to do that for at least eight years, maybe longer," he said, "but we still don’t have it."

Language barriers add another hurdle.

Pesticide warning labels are not required to be in Spanish, though eight of every 10 farmworkers are foreign born and most of the nation’s agricultural workforce comes from Mexico.

On average, according to the U.S. Department of Labor’s National Agricultural Workers Survey, crop workers had not advanced beyond the seventh grade. Forty-four percent said they could not speak English and 53 percent could not read the language. When farmworkers can’t read safety instructions, they face higher risks of exposure, say advocates who have pushed the EPA to require bilingual labeling.

With a scarcity of hard data, advocates are sometimes left to cite decades-old reports as proof of pesticide’s perils. One report, from the U.S. Bureau of Labor Statistics, said farmworkers suffer the highest rate of chemical-related illness of any occupational group, at 5.5 per 1,000. The report date: 1987

Florida's Rackley believes the EPA should more fully fund qualified advocacy groups to train workers on pesticide safety — empowering workers, giving growers a level of comfort, and building trust between the two. "Listen, the growers need the workers and the workers need the growers, that’s the bottom line," he said. In recent years, records show, the EPA has provided funding from $25,000 to a nonprofit to help reduce farmworker pesticide exposures in New Jersey to up to $1.2 million over five years to help train clinicians working with farmworkers.

A conflict in Tennessee

Workers who speak up sometimes find themselves immersed in conflict.

In Newport, Tenn., tomato grower Fish Farms hired workers under the federal government’s H-2A temporary agricultural program, in which legal foreign workers can be brought in when industry lacks local laborers for the job.

At Fish Farms, 15 workers contend in an ongoing lawsuit, pesticides were sprayed in the fields while they worked and close to their trailer homes, in a secluded stretch of a city of almost 7,000 whose commercial strip includes Debbie’s Drive Inn, For Heaven’s Cake & Bakery and the Newport Plain Talk newspaper.

In July 2010, aided by Southern Migrant Legal Services, the laborers complained to the pesticides administrator of the Tennessee Department of Agriculture, “citing frequent exposure to pesticides while working at Fish Farms, physical symptoms, and the absence of medical care,” according to the lawsuit. Some laborers told the state they had lost fingernails that season, and said pesticides were sprayed 30 feet away from them.

That August, the workers turned to the Knoxville Area Office of the Wage and Hour Division of the U.S. Department of Labor, contending the company skirted federal and state pay and housing laws. The workers said they had to wash their clothes in a nearby river, and that their trailers were insect-infected and overcrowded, with holes in the walls. The company said the housing met federal standards, and any violations were caused by the workers.

On August 23, 2010, the Labor Department conducted an on-site investigation — leading to a skirmish. Two Fish Farms bosses “impeded” the inspectors’ discussions with the workers, the federal lawsuit says, and two others “arrived brandishing firearms.”

Fish Farms disputes that account in its response to the lawsuit. Instead, the company said, one worker “held a knife in a threatening manner.” The company fired him and filed an aggravated assault charge. The worker said he had been using the knife to cook with and did not threaten anyone. The state dropped the charge.

On September 5, 2010, the workers said, pesticides were again sprayed close to their trailers. This time, they took out their cell phones and began taking video of tractors passing by. Fish Farms bosses again turned out.

Workers said they retreated to their trailers, but, according to their lawsuit, a Fish Farms boss kicked in one door and two bosses yelled obscenities, including “f---ing Mexicans.” Farm bosses snatched their cell phones, loaded workers on a bus and arranged their return to Mexico, the suit said.

This May, Fish Farms referred a reporter’s inquiry to the company’s Knoxville attorney, Jay Mader. The lawyer did not respond to three interview requests, but the company challenges the workers’ account in a formal response to the lawsuit filed this month.

On the September day workers began taking video footage, Fish Farms said, the laborers were actually trying to “fabricate evidence of improper pesticide spraying.” The decision to fire them was warranted for “excessive absences,” the company wrote, and because the farmworkers “knowingly engaged in behavior that falsely portrayed Fish Farms as being out of compliance with local, state, and federal law.”

A Fish Farms boss “may have briefly removed” cell phones in his face, but returned them. The company said it paid for lodging and bus tickets for the workers to return to Mexico. There were “heated exchanges,” the company admitted, but executives said they could not recall the exact words.

After the lawsuit was filed, Fish Farms tried to get the case dismissed, saying the former H-2A workers lacked legal standing. A judge denied the farm’s request last month,calling its argument “completely unsubstantiated and devoid of merit.” The company continues to seek the case’s dismissal.

Ultimately, the Tennessee Department of Agriculture investigated the pesticide complaints. In November 2010, months after the workers had returned to Mexico, the state cited Fish Farms for using pesticides inconsistent with labeling, and for not displaying specific information about pesticides used.

The civil fine imposed: $425, which Fish Farms paid that same month. “The department considers this matter to be closed,” the state wrote.

Maze of red tape

The case in Arkansas opens a window into the maze farmworkers enter when they think they’ve been poisoned by pesticides.

Banda-Rodriguez, the 18-year-old farmworker toiling in the blackberry fields in Judsonia, Ark., said she started getting sick one day in June 2006. A short time later, she reached out to attorney Melody Fowler-Green of Southern Migrant Legal Services about another matter, involving immigration. Later, the worker mentioned her sickness.

In October 2006, Fowler-Green sent a certified letter asking the grower, Gillam Farms, to tell her what pesticides were used the day the woman became ill. She cited the EPA’s Worker Protection Standard, which mandates disclosure. Gillam Farms did not respond, the lawyer said in a letter to the EPA the following year.

Gillam Farms did not respond to two interview requests from the Center for Public Integrity.

In Arkansas, the EPA defers regulation to the state Plant Board. In November 2006, after not hearing back from the grower, Fowler-Green contacted the state and said she was told her phone call constituted a complaint.

In January 2007, a state official told her an investigator had visited the farm “but failed to gather information regarding the pesticide used on the fields when my client became ill,” Fowler-Green wrote the EPA. “I was not offered any coherent explanation for this failure.”

She followed up again in February 2007, when the Plant Board faxed to her a complaint form to fill out. Fowler-Green said it was the first time she was told she had to submit that paperwork.

Along with a complaint, the lawyer filed an open records request to obtain the Plant Board’s investigative file.

That same month, a lawyer for Gillam Farms questioned the pesticides inquiry in a letter to the state. “My client intends to cooperate with any legitimate investigation by the Plant Board,” wrote attorney Byron Freeland. “However, we are concerned that the Plant Board is being used by a former Gillam Farms employee and her attorney to harass Gillam in an attempt to gain information for a spurious claim.”

That April, Fowler-Green said, the Plant Board finally told her the pesticide that had been used: Switch 62.5WG, a fungicide made by the Swiss conglomerate Syngenta that kills diseases on crops ranging from blackberries to turnip greens.

But the agency still hadn’t turned over its investigative case file.

“It is the opinion of the Arkansas Attorney General’s Office that the state FOIA [Freedom of Information Act] does not apply to persons outside the state,” Plant Board Director Darryl Little wrote the Nashville attorney that July.

Only when she threatened to sue did the board provide the information.

All told, it took the lawyer six months to learn the name of the pesticide Banda-Rodriguez encountered — and 10 months to get a copy of the state’s investigative file. By that time, the farmworker was back in Mexico.

In an interview, Plant Board Director Little said the agency was hamstrung because the initial complaint did not arrive until months after the worker became sick. Normally, he said, the department aims to move as quickly as possible to gather evidence.

“It was frustrating figuring out what we could do to help this lady since it had been such a long time since this incident occurred,” Little said.

Yet the director acknowledged that his office, once contacted, moved slowly.

“We were extremely short-handed in that division at the time and I am sure we were slow — there’s no question about that,” he said. “We were struggling in our division at that time to keep our nose above water.” He said the Plant Board is back to full staffing.

Asked about his initial records response, Little said he was simply applying the law. “The way it’s written states that the records are open to the citizens of the state,” Little said. “But my take on it is, the only thing you’re going to do is make somebody mad and they’re going to call someone they know in Arkansas and they are going to get the records.”

His ultimate call, he said: “Give them the records. And that’s what we did.”

In the end, the Plant Board concluded it had insufficient evidence to determine whether the worker had been exposed to pesticides, or whether the Worker Protection Standard had been violated.

When Fowler-Green complained to the EPA, the federal agency replied that Arkansas’ review was proper. The EPA does not meddle in state public records disputes, an official said — and, if anything, the worker should have filed her complaint sooner.

If it took a lawyer this long to obtain basic information, Fowler-Green thought, imagine the difficulty farmworkers face.

“Yes, of course complaints should be made right away,” said Fowler-Green, who recently took a job with another law firm. “But whether it’s a month, two months or three months, the worker still should have a right to the name of the pesticide that was applied.”

Advocates wage longshot campaigns. Southern Migrant Legal Services has four lawyers handling farmworker cases in six states.

Yet the federal Worker Protection Standard meant to protect laborers has gone 20 years since a thorough revamping.

Farmworker Justice and the nonprofit environmental law firm Earthjustice are pressing for upgrades, writing to EPA Administrator Lisa Jackson last November and calling for reforms, including:

Expanded training requirements for agricultural workers and pesticide handlers;
Strict limits on when workers can re-enter the fields after spraying, and more complete information provided about the pesticides they encounter;
Rules mandating special areas for workers to change into their work clothes, store clean clothing, and shower at day’s end, so they don’t carry pesticide residues home.

Asked about the suggestions, the EPA did not respond.

Illegal ocean dumping persists despite DOJ crackdown

United States — 2012-04-04T17:06:22-04:00

When a U.S. Coast Guard inspector boarded the M/T Chem Faros, a 21,145-gross-ton cargo ship that pulled into port in Morehead City, N.C., an oiler with the engine crew quietly handed him a note.

"GOOD MORNING SIR, I WOULD LIKE TO LET YOU KNOW THIS SHIP DISCHARGING BILGE ILEGALLY USING BY MAGIC PIPE,” the note said. “IF YOU WANT TO KNOW ILLEGAL PIPE THERE IN WORKSHOP FIVE METERS LONG WITH RUBBER.”

The crewman’s hand-scrawled note, passed that March day two years ago, triggered an inquiry that unmasked a wave of high-seas pollution and phony recordkeeping as the ship ferried cargo in Asia and the U.S. The crew had used the so-called magic pipe to divert oily waste overboard at least 10 times in six months. Eleven days before the inspection, the chief engineer ordered 13,200 gallons of oil-contaminated waste dumped into the ocean.

The ship’s owner, Cooperative Success Maritime S.A., was fined $850,000 and sentenced to five years’ probation after its guilty plea. And the chief engineer — after cooperating with authorities — was sentenced to one year of probation. “The oceans must be protected from being used as dump sites for waste oil or other hazardous substances,” said Maureen O’Mara, special agent-in-charge of the Environmental Protection Agency’s criminal enforcement program in Atlanta, in June 2010. A company attorney declined comment.

That Department of Justice prosecution is one piece of a larger federal crackdown targeting dumping on the high seas, a form of pollution that taints global waterways and is drawing increased scrutiny.

The weapons in the government’s arsenal: whistleblowers who can reap six-figure rewards for reporting dumping and sometimes providing secret cell phone photos to inspectors; investigators who hunt for “magic pipe” diversion devices hidden aboard massive ships; and ship operators pressed to change their ways or risk a ban from U.S. waters.

Over the past 10 years, a Justice Department Environment and Natural Resources Division report shows, the Vessel Pollution Program has triggered more than $200 million in fines and 17 years in prison for ship officers and executives. Four corporations that own and operate a Panamanian cargo vessel were fined $1 million last July — and banned from doing business in the U.S. for five years for deliberately dumping waste overboard and trying to hide their crimes.

“Imagine this, you are the owner of a ship and you can’t come to the most lucrative market in the world. That’s a big hammer,” Capt. David Fish, chief of the Coast Guard’s Office of Investigations and Analysis, said in an interview with the Center for Public Integrity. “They can sail away, but they’re never coming back.”

Yet even with the number of high profile cases brought, more cases come. That leads some experts to conclude the government has snared only part of the problem.

“It’s still occurring at a fairly regular basis, which as a prosecutor is frustrating,” said John Cruden, president of the Environmental Law Institute in Washington and former deputy assistant attorney general for DOJ’s Environment and Natural Resources Division. “That leads me to think there’s a lot more of this out there than the Coast Guard is finding. We are probably just seeing part of the iceberg of the criminal behavior.”

The law, magic pipes — and whistleblowers

Under federal and international law, ships must properly dispose of oily wastewater and sludge by passing the waste through an oil-water separator on board, or burning sludge in an incinerator. The ship’s crew must record each transfer or disposal in an “Oil Record Book.”

When dumping occurs in international waters, U.S. authorities cannot prosecute the actual pollution because it lies outside their jurisdiction. But they can bring charges when crews file false paperwork, use illegal diversion devices, or lie to investigators.

Many scofflaws use so-called “magic pipes” — detachable pipes that can route waste overboard and then be hidden when inspectors arrive — to bypass the required pollution prevention equipment. Some dump in the dark of night in international waters far from port.

Whistleblowers help bring these cases to light, handing to inspectors the scrawled notes or cell phone photos capturing illegal dumping and homemade diversion pipes hidden on board.

Yet some defense lawyers for shipping companies have questioned the government’s use of whistleblowers, contending that a quest for cash could distort a company’s true environmental record. Ultimately, though, the evidence from crews has factored in several cases.

This January, two companies that owned and operated the M/V Aquarosa, a 33,005-gross-ton cargo ship registered in Malta, were fined $1.2 million and sentenced to three years of probation in a case sprung from 300 cell-phone pictures. The ship’s chief engineer got a three-month prison sentence for obstruction of justice.

On the ship’s first voyage in 2010, court papers say, senior engineers started dumping oil bilge waste. They sometimes used a magic pipe constructed from a long rubber hose and metal flanges welded together onboard.

The investigation began after the shipped pulled into Baltimore port in February 2011, and an engineer handed Coast Guard investigators his cell phone with 300 pictures revealing a magic pipe spewing sludge and oily waste overboard. The crew also dumped oil-soaked rags in plastic garbage bags. Prosecutors are seeking a reward for the whistleblower.

In another case, in 2007, a dozen crew members each pocketed $437,500 for blowing the whistle on Overseas Shipholding Group Inc. in what became the largest-ever fine for deliberate vessel pollution: $37 million.

One crewman, upset by dumping close to the New England shore, created a secret journal hidden inside another book. An engineer, being sent back to the Philippines after alleging company wrongdoing, contacted the Coast Guard with help from a hotel night clerk in Wilmington, N.C., and provided evidence, prosecutors said. Yet another engineer contacted the Coast Guard through an Internet café.

The whistleblower awards were granted under the Act to Prevent Pollution from Ships, which allow those providing information leading to conviction to reap up to half of the criminal fines collected. The company, OSG, pleaded guilty for violations in Boston; Portland, Maine; Los Angeles; San Francisco; Wilmington, N.C.; and Beaumont, Texas, and was also sentenced to three years of probation.

In some instances, the company “tricked” pollution prevention equipment by flushing an oil sensor with fresh water, DOJ said.

“The violations at issue in this case were so systemic, repetitive and longstanding that the criminal conduct amounted to a serious failure of corporate and shore-side management,” prosecutors told the court. “Criminal violations continued on some ships during the three years in which OSG was under investigation, including six vessels on which OSG self-reported violations.”

An OSG spokeswoman, contacted this week, said the company had no immediate comment.

Banned from U.S. seas — but some critics of whistleblowers

Last April, in the Panamanian cargo vessel case, four companies were banned from U.S. waters for five years.

Stanships Inc. of the Marshall Islands, Stanships Inc. of New York, Standard Shipping Inc. and Calmore Maritime Ltd. — owners and operator of the M/V Americana — pleaded guilty in New Orleans to 32 felony counts of violating the Act to Prevent Pollution from Ships, the Ports and Waterways Safety Act, and obstruction of justice. The owner of the companies was banned from owning or managing ships trading in the United States.

The inquiry began when a crew member told the U.S. Coast Guard the crew used a magic pipe to illegally dump sludge and oily waste overboard — and provided cell phone pictures taken at sea. Ultimately, the companies admitted transferring sludge and oily waste from the vessel’s engines to a fuel tank, and then pumping it overboard. The metal bypass pipe was hidden when the ship was in port.

The government’s exhibit list included the cell phone pictures showing the magic pipes in action.

Michael G. Chalos, the attorney for Stanships, said the company “is not operating anymore.”

Chalos has raised questions about the government’s investigations of ships. Earlier this year, he helped bring a lawsuit, filed by eight shipping companies, challenging the conditions that the Coast Guard and Homeland Security imposed before releasing vessels that allegedly kept false Oil Record Books. The U.S., in a court filing this week, maintained that its procedures are proper.

Chalos also challenges the government’s use of whistleblowers.

“I would say the majority of ship owners want to be compliant and they pay a lot of money to set up these compliance programs and procedures,” Chalos said. “But they can’t outbid the government. Some whistleblower who decides he wants to make some money can thwart all those efforts. … They don’t report it to the owner, because they know if they wait until they come to the U.S. and they have pictures of some alleged illegal act, they are going to get a reward.”

Cruden, the former DOJ official, said the cases are difficult by their nature. The dumping comes, often, in the dark of night on seas far from port. Ships, many flying under foreign flags, sometimes dock at port a day or two.

“I’m well aware that corporations do not like these laws, because their own employees are finding things and basically turning them in,” he said. “But the problem is, how else would you know?”

Federal case files show how those whistleblowers turn up crucial evidence. In 2010, four crew members who flagged authorities about illegal discharges of oil and plastic from the M/V Iorana, a Greek flagged cargo ship, were awarded $125,000 each. In that case, Irika Shipping S.A. paid a $4 million penalty — $3 million for a criminal fine and $1 million to fund marine environmental projects.

The investigation began in January 2010, court records say, when a crew member, after the ship’s arrival in Baltimore, passed a note telling a Customs and Border Protection inspector that the ship’s chief engineer had ordered the dumping of waste oil overboard through a bypass hose.

“We are asking help to any authorities concerned about this,” the note said, “because we must protect our environment and our marine lives.”

The government’s exhibits at sentencing included pictures of the hoses that flushed waste overseas — and a photo of the vessel with a large painted sign: “Safety First Clean Seas.” An attorney for the company, Dimitri Georgantas, said Friday he doesn't comment on specific cases. But speaking broadly, he believes the government has "over-reached" in the length of time it holds crews during investigations.

One month earlier, in December 2009, nine crew members of the M/V Theotokos shared $540,000 for helping secure the guilty plea of Polembros Shipping Ltd. The ship management company, headquartered in Greece, paid a $2.7 million criminal fine for violating anti-pollution laws and ship safety laws, and making false statements during a U.S. Coast Guard investigation, the DOJ said.

Polembros was ordered to pay a separate $100,000 to the Smithsonian Environmental Research Center, and was given three years of probation — and its 20 vessels were barred from entering U.S. ports and waters for three years. Ship officers also received punishment, including 10 months’ confinement for the ship master. Georgantas, who also represented Polembros, declined comment.

Sometimes, the whistleblowers turn to higher authorities.

Last May, the chief engineer of the M/V Capitola pleaded guilty to obstructing a Coast Guard inspection a year earlier.

The investigation, launched at the Port of Baltimore, began after a crew member told a clergy member, on board as part of a pastoral visit, that there had been “monkey business in the engine room” involving a magic pipe. At the crew member’s request, the minister alerted the Coast Guard, and its inspectors found the magic pipe: A bypass hose that dumped waste oil overboard.

Fish, the Coast Guard captain, said the cases are emerging amid a confluence of factors: Information from whistleblowers, detailed inspections on board — and an increased appetite by prosecutors to bring cases.

Yet one constant, he said, is money. “In any environmental contamination, it’s in reverse correlation to the economy. The economy is down, companies cut corners, and they generally cut corners in maintenance.”

Department of Energy knew of Solyndra risks, former FBI agent finds

2012-03-29T15:31:20-04:00

The Department of Energy was fully aware of the risks in backing Solyndra Inc., a start-up company that pocketed a half-billion dollar DOE loan but never turned a penny in profit before shutting its doors, concludes a former FBI agent hired to examine the company’s books.

The expert’s report, filed this week in Solyndra’s voluminous bankruptcy case in California, could embolden critics who say the government ignored financial red flags in supporting the solar panel maker with President Obama’s maiden green energy loan in 2009.

The $535 million loan, which bankrolled a vast new manufacturing plant in Fremont, Calif., was part of a broad government mission to kick-start the clean energy movement: Solyndra’s unique solar panels would cover commercial rooftops across the country, aiding the environment and boosting the economy.

Yet the company collapsed under a sea of debt and a business plan that, amid dramatic shifts in the global solar market, caused it to sell far fewer panels at far higher costs than envisioned. From 2009-11, it cost Solyndra $3.92 more per watt to make its panels than to sell them, the bankruptcy report shows.

Solyndra filed for bankruptcy Sept.6, 2011. Two days later, it faced a raid by agents from the FBI and the Energy Department inspector general. With those clouds looming, the company’s board hired R. Todd Neilson — the former federal agent and veteran trustee in bankruptcy cases — as chief restructuring officer.

Solyndra’s board wanted a CRO to not only manage its bankruptcy case, but to explore whether the company committed misdeeds on its road to collapse. “In light of the Federal criminal investigation and ongoing Congressional investigation … the Subcommittee agreed that the CRO would act in an independent capacity in determining if any improprieties had occurred with respect to the Debtors’ finances,” Neilson’s report said.

After examining tens of thousands of pages of records, Neilson concluded that Solyndra did not improperly divert funds. “The construction costs were correctly recorded in the accounting records and no material funds were diverted from their original intended use,” he wrote.

All funds drawn from the DOE loan, he found, “were spent in accordance with the relevant loan documents.”

And, Neilson made clear, the DOE was fully informed of Solyndra’s finances when it initially backed the company in 2009 — and restructured its loan in 2011, seven months before the bankruptcy and raid.

“The CRO has reviewed the vast level of communications and the underlying records between the DOE and Solyndra,” he wrote. “It is the opinion of the CRO that the DOE had sufficient information to understand the risks and challenges associated with the guarantee obtained from DOE and make an informed decision as to the ongoing financial condition of Solyndra throughout the loan guarantee time frame.”

In fact, records show, the Energy Department supported the Solyndra financing in the early days of the Obama administration in the face of criticism from officials within several wings of government — the Office of Management and Budget, the U.S. Treasury and DOE. “This deal is NOT ready for prime time,” one OMB employee wrote March 10, 2009, government emails show. Ten days later, energy officials announced Solyndra was in line to be the first company to secure a green energy loan guarantee.

And, the Center for Public Integrity and ABC News reported last year, Energy Secretary Steven Chu announced that conditional commitment to back Solyndra before completed marketing and legal reviews were in hand.

An Energy Department spokesman did not respond Thursday to requests for comment about the new bankruptcy report.

In the past, DOE officials have said they support risky — but potentially game-changing — technologies. Sometimes, they say, innovative projects fail. They have also defended the Solyndra loan, saying all due diligence was in hand when the financing closed and that veteran private investors also heavily backed the company.

The Energy Department, Neilson found, was equipped with all the information it needed to “make an informed decision as to the ongoing financial condition of Solyndra.”

A weekly report filed with the Energy Department last year, for instance, detailed the company’s falling fortunes. “By August 20, 2011, the reported cash balance was just $5.0 million and sales for the same seven week period were only $5.3 million, $13.8 million below the February 2011 forecast for the same seven week period,” Neilson wrote. “By July 2, 2011, a little more than a month prior to the bankruptcy filing, Solyndra had reported losses totaling almost $1.1 billion.”

Neilson’s report was built from a review of records and informal interviews with Solyndra employees. He sought interviews with former company CEOs Dr. Chris Gronet and Brian Harrison. “Both Gronet and Harrison declined, through their legal counsel, to speak directly to the CRO.”

While his report found no wrongdoing by Solyndra, the criminal investigation continues.

Julie Sohn, a spokeswoman with the FBI in San Francisco, said Thursday that “since it’s an ongoing investigation,” she could not comment.

Audit cites risk in DOE loan program

2012-03-12T19:07:19-04:00

A new audit of the Department of Energy’s $34 billion loan guarantee program said the agency doesn’t always follows its own rules in awarding the highly coveted funding, creating risk in an effort already hindered by breakdowns.

The audit by the Government Accountability Office carries fresh relevance amid the bankruptcies of two of the first three firms to land the government’s green energy funding: Solyndra Inc. and Beacon Power Corp.

“What we found was problems in how they followed their process and in some cases deviated from the process without a clear explanation why,” Frank Rusco, the GAO auditor who wrote the report, said in an interview. “This has gotten the program in trouble in the past and certainly raises questions that are hard for them to answer.”

The GAO report, the latest to spotlight vulnerabilities in the way DOE awards public money, details just how selective the loan pool is.

Of 460 applicants, the GAO found, the Energy Department awarded loan guarantees to 7 percent and committed to 2 percent more. To date, the investigative arm of Congress said, the department has issued $15 billion in guarantees and committed to $15 billion more.

The GAO scrutinized 13 winning applications in detail. Of those, it found, the Energy Department did not follow its written procedures at least once in 11 of the 13 cases.

“DOE did not always follow its own process for reviewing applications and documenting its analysis and decisions, potentially increasing the taxpayer’s exposure to financial risk from an applicant’s default,” the GAO found. “It also has not completely documented its analysis and decisions made during reviews, which may undermine applicants’ and the public’s confidence in the legitimacy of its decisions.”

Private lenders who finance energy projects told GAO the loan program’s review process “was generally as stringent as or more stringent than their own,” the report said.

Yet the process wasn’t always followed, the auditor found.

The Energy Department, in a written response to the audit, said it has strengthened its management and recordkeeping, creating a “state-of-the-art” system.

“The Department managed to build and continuously improve an organization that has succeeded in making an unprecedented level of clean energy investments while maintaining standards that are as high or higher than major financial institutions in the United States,” wrote David G. Frantz, acting executive director of the Loan Programs Office.

The loan portfolio, Frantz said, includes two biomass projects, three geothermal power plants, a dozen solar power generation projects and four wind power projects.

For the government, and the loan recipients, the stakes are high. The $34 billion loan guarantee pool was created to help finance innovative clean tech projects that may not otherwise land funding in the private market. Done well, advocates say, the program helps spur green energy projects — from solar panels to wind farms to electric cars — that create jobs and aid the environment.

Yet the program has been hindered by missteps from the start. Solyndra, chosen as the first recipient of an Obama administration green energy loan guarantee, was granted a conditional green light before all due diligence was in hand, The Center for Public Integrity and ABC News reported last year. The company’s bankruptcy last fall cast a harsh spotlight on the way DOE picks its winners, and created a political vulnerability for President Obama.

A GAO audit released in 2010, exploring the same loan guarantee program, found that the Energy Department “treated applicants inconsistently, favoring some and disadvantaging others.”

The new audit said the Energy Department lacked “a consolidated system for documenting and tracking its progress in reviewing applications.”

Auditors said it took months to gather all the paperwork they sought.

“Omitting or poorly documenting reviews reduces the (Loan Guarantee Program’s) assurance that it has treated applicants consistently and equitably and, in some cases, may affect the LGP’s ability to fully assess and mitigate project risks,” the GAO concluded.

Energy-backed firms award bonuses, file bankruptcy

2012-10-05T12:04:27-04:00

President Obama’s Department of Energy financed a fleet of green energy companies that later fell into bankruptcy — but not before the firms doled out six-figure bonuses and payouts to top executives, a Center for Public Integrity and ABC News investigation found.

Take, for instance, Beacon Power Corp., the second recipient of an Energy Department loan guarantee in 2009. In March 2010, the Massachusetts energy storage company paid cash bonuses of $259,285 to three executives in part due to progress made on the $43 million energy loan, Securities and Exchange Commission records show. Last October, Beacon Power filed for Chapter 11 bankruptcy.

Ener1 subsidiary EnerDel, maker of lithium-ion battery systems, landed a $118.5 million energy grant in August 2009. About one-and-a-half years later, Vice President Joe Biden toured a company plant in Indiana and heralded its taxpayer-supported expansion as one of the “100 Recovery Act Projects That Are Changing America.”

Two months after Biden’s visit, corporate parent Ener1 paid $725,000 in bonuses to three executives — including $450,000 to then-CEO Charles Gassenheimer, who led Biden on the tour. This January, Ener1 filed for Chapter 11 bankruptcy protection.

At least two other firms that benefited from Energy Department funding — one a $500,000 grant, the other a $535 million loan guarantee — handed out hefty payouts to executives and later went bankrupt.

The Department of Energy, asked about the payments examined by the Center and ABC, said it is troubled by the practice and intends to convey that message to loan recipients.

"We don’t begrudge companies or their executives for their success, but it is irresponsible for executives to be awarded bonus compensation when their workers are losing their jobs,” said department spokeswoman Jen Stutsman. “We take our role as stewards of taxpayer dollars very seriously, and as such, we will make clear to loan recipients our view that funds should not be directed toward executive bonuses when the rest of the company is facing financial difficulty.”

The bonuses and bankruptcies come against a growing wave of trouble for companies financed with Energy Department dollars. Of the first 12 loan guarantees the department announced, for instance, two firms filed for bankruptcy, a third has faced layoffs and a fourth deal never closed.

The nonprofit Citizens Against Government Waste counts nearly 20 government-backed energy companies that have run into financial trouble ranging from layoffs to losses to bankruptcies. An outside consultant hired by the White House said the Energy Department’s loan pool includes $2.7 billion in potentially risky loans and suggests the agency hire a “chief risk officer” to help minimize problems.

To watchdogs, the pattern of firms awarding bonuses only to file for bankruptcy raises questions about how well the Energy Department chose its winners, and how thoroughly it kept an eye on them once selected.

“Giving a bonus to the executives under these circumstances is rewarding failure with our money with no chance of getting it back,” said Leslie Paige, spokeswoman for the nonpartisan Citizens Against Government Waste.

“Taxpayers need some representation here. They didn't really get it.”

The setbacks have intensified the glare on the president’s environmental mission, already under scrutiny following the collapse of Solyndra Inc., the first recipient of an Obama green energy loan.

Solyndra, bankruptcy records show, was among the companies to dole out thousands in executive payments — in its case, just months prior to its late August collapse and early September bankruptcy. As a criminal investigation and House inquiry continue into the company’s implosion, the government must navigate bankruptcy proceedings in hopes of recovering a piece of its $535 million investment.

In interviews, executives with companies backed by public dollars defended the payments as proper. Some said bonuses were granted for work done in a previous year, before financial storm clouds had fully developed, and that the executive cash infusions were sometimes linked to broad corporate milestones.

One company executive said the Energy Department explicitly allows for federal funds to be used to pay out executive bonuses.

DOE does not set salaries and benefits of companies it backs, “but we do closely scrutinize all of the expenses submitted by the companies before they are reimbursed to ensure that taxpayer dollars are being used appropriately,” said spokeswoman Stutsman. “Funds are paid out as the work is actually completed.”

Secretary Steven Chu declined an interview request. The department has long defended the green energy movement as a way for government to help spur development of cutting edge products that aid the environment and economy. Sometimes, they say, investments in potential game-changing technologies simply don’t work. The potential default rate, they say, is within the parameters set by Congress.

Yet some members of Congress — already concerned about lucrative paydays at bankrupt Solyndra — say they’re particularly troubled that failed companies, backed by Energy Department funds, would pay bonuses at all.

“Any company that's going into bankruptcy or any executive that ran a company into bankruptcy shouldn’t be getting bonuses in the first place,” said Sen. Charles Grassley, R-Iowa, former chairman of the Senate Finance Committee. “In the case where there might be federal grants or federal loans, I would be very concerned.”

Grassley added: “The purpose of our grants for energy or almost any other grant of government is for the purpose of innovation. It's not for the purpose of feathering the nest of a private company executive.”

Bruce Kogut, director of the Sanford C. Bernstein Center for Leadership and Ethics at the Columbia Business School, said it is not uncommon for corporate bonuses to be awarded when executives meet key achievement milestones.

“The problematic issue,” professor Kogut said, is giving out bonuses “near the time of bankruptcy.”

Solyndra executives, bankruptcy records show, pocketed thousands in payments just months before the company dismissed 1,100 workers. At least 17 company executives received two sets of payments — ranging from $37,000 to $60,000 each payment — on the same days in April and July 2011. The insider payments, reported last year in the San Jose Mercury News, came as the company catapulted toward bankruptcy in early September. A Solyndra spokesman did not reply to interview requests.

Solyndra’s crash last August put a sharp focus on the selection process the Energy Department follows in awarding taxpayer dollars. The administration backed the upstart firm despite concerns even from some government officials worried about Solyndra’s financial viability, email records show. And, energy officials committed to the financing before all due diligence was in hand.

Bankruptcies and bonuses

Not as well-known are three other firms backed by Energy Department dollars — ranging from $500,000 to $118.5 million — that also suffered financial downturns. As with Solyndra, each corporate entity rewarded executives prior to its bankruptcy filing.

One example: Ener1, whose subsidiary EnerDel won the $118.5 million Energy Department grant in 2009 to help expand its manufacturing plant. The company also received supportive write-ups on the DOE website.

Vice President Biden’s January 2011 visit to the company’s Greenfield, Indiana, plant was part of the government’s “White House to Main Street Tour.”

“This Administration is forging a new path forward by making sure America doesn't just lead in the 21st Century, but dominates in the 21st Century,” Biden said after a tour with Ener1 CEO Gassenheimer. "We're not just creating new jobs — but sparking whole new industries that will ensure our competitiveness for decades to come — industries like electric vehicle manufacturing."

A White House report listed the EnerDel project as No. 67 among the “100 Recovery Projects that are Changing America.”

In March 2011, Gassenheimer was awarded a $450,000 bonus, SEC records show. Two other Ener1 executives pocketed bonuses of $225,000 and $50,000 for a total payout of $725,000.

In January 2012, one year after Biden’s visit, Ener1 filed for bankruptcy, citing $73.9 million in assets and $90.5 million in debts.

Energy officials noted that while the bonuses were paid to executives from Ener1, the government grant went to a subsidiary called EnerDel, which was not part of the bankruptcy case. But the two are closely related — bankruptcy records show EnerDel now provides all of the employees for the parent company. And the distinction is new for the Energy Department — a press release touting Biden’s visit referred to the parent company Ener1 as the recipient of administration support, not EnerDel.

Gassenheimer, reached for an interview, said he could not comment. He is no longer with Ener1.

A company spokesman said the bonuses were paid through Ener1, the corporate holding company, not EnerDel. DOE said the subsidiary’s project is on schedule, and an Ener1 spokesman said the battery company aims to get back on its feet through reorganization.

Beacon Power’s bonuses were specifically linked to executives’ progress in landing the company’s $43 million Energy Department loan guarantee in 2009.

Securing the loan was among the measures used to establish how much executives would pocket in bonuses, company SEC filings show. “The DOE loan application was approved by the credit review board, making us the first public company and the second of 16 applicants to receive the commitment,” the document notes.

President and Chief Executive Officer F. William Capp received a $133,256 cash bonus in March 2010. Two other company officials pocketed combined bonuses that month of $126,029.

In an interview, Capp said the company’s pay structure was reasonable and that executives took pay cuts in a bid to help Beacon Power survive.

“The record is clear on that. The executives have not enriched themselves,” Capp said. “We all agreed to take a 20 percent reduction in pay just to make the funds last longer in order to keep the team together. There’s hardly been self-enrichment.”

Last week regulators approved Beacon Power’s sale to an equity firm that should help it repay $25 million of the $39 million Beacon had drawn down from the loan. The company, under new ownership, plans to continue operating the 20-megawatt flywheel energy storage plant in Stephentown, New York, a project the department said would “ensure the reliable delivery of renewable energy to the electricity grid.” It hopes to build a second plant in Pennsylvania.

Capp blamed the bankruptcy on a variety of factors, including government fears about restructuring loans after Solyndra filed for bankruptcy. His firm, he said, got swept up in “Hurricane Solyndra.”

‘It all happened so quickly’

Other energy companies struggled in the storm.

Among them: SpectraWatt, a New York state manufacturer of silicon solar cells. In 2009, SpectraWatt secured a $500,000 grant from the DOE’s National Renewable Energy Laboratory Photovoltaic Technology Pre-Incubator program. In March 2010, U.S. Labor Secretary Hilda L. Solis and a local congressman toured the company’s Hudson Valley Research Park in Hopewell Junction, N.Y., highlighting the wave of coming green jobs.

“President Obama and I understand and believe that the first thing we have to do to turn the economy around is provide American families with good jobs,” the labor secretary said, according to a SpectraWatt press release. “That is why we are committed to investing in greening our economy.”

Yet, not long after, the company’s momentum suddenly halted.

Last August, SpectraWatt filed for Chapter 11 bankruptcy protection.

“It all happened so quickly,” Richard J. Haug, SpectraWatt’s President and COO, said in an interview. The company’s innovative technology, he said, butted up against changing market and pricing conditions, competition from the Chinese — and the fact that some early investors did not follow through.

“They couldn’t locate any new money,” he said. “It was very disappointing.”

While the DOE’s early grant supported research and development, Haug said, a later funding request was denied. Last March, he said, the company laid off its workforce and effectively shut down. “It became increasingly difficult for us to make any more money. By the end of 2010 we basically dropped down to a cash level … that by March we would be out of business,” Haug said.

In March, the big payouts began. Five company executives, including Haug, received six-figure payments in late March or early April 2011, bankruptcy records show. The five “insider payments” totaled more than $745,000.

Haug said the payouts were not bonuses, but accrued vacation and pay for executives that had been spelled out in severance agreements. “There were no golden parachutes,” he said. “This was a very straightforward very honest group of people. I’d go to work with them again anytime.”

Energy officials noted that their early investment in SpectraWatt was relatively small compared to other project financing. Late last year, the company held auctions to sell off its plant and property.

In recent weeks, several other companies backed by DOE dollars have encountered deep financial woes.

At least six Energy Department loan and grant recipients — from electric car maker Fisker Automotive to electric-car battery maker A123 Systems to Colorado-based Abound Solar — have laid off workers or suffered financial woes. Those setbacks come on top of the companies that have already filed for bankruptcy.

Administration officials, from Obama on down, say they continue to support the green energy mission. “There were going to be some companies that did not work out,” Obama told reporters in October, after Solyndra’s meltdown. “All I can say is the Department of Energy made these decisions based on their best judgments.”

DOE needs better risk management

2012-02-10T17:58:18-05:00

An outside consultant hired by the White House to assess the Department of Energy’s hot-button green energy loan program suggests the agency hire a “chief risk officer” to better track companies backed by taxpayer-funded loans.

“To enhance the independence of the oversight function, DOE should create a new Risk Management department,” wrote Herbert Allison, the independent consultant.

That conclusion is among the core recommendations detailed in the 75-page report, released Friday afternoon.

The report was intended to help resolve concerns triggered by the political backlash over the Obama administration’s failed $535 million investment in upstart solar firm Solyndra, which declared bankruptcy last fall.

But the review never directly addresses Solyndra’s failure, or another DOE-backed green energy venture that went bankrupt, Beacon Power Corp.

Allison, a longtime official in the public and private sectors who most recently served as Assistant Secretary of the Treasury for Financial Stability, writes that he “did not evaluate the loans to Solyndra and Beacon” because those companies have already failed.

He also notes that his review was less exhaustive than it could have been because it was put on a 60-day fast track by the White House.

“Because of this abbreviated time period, the Independent Consultant’s work plan necessarily omitted activities that might have provided further insights,” Allison’s report notes, “such as a more detailed examination of each loan’s performance and of the financial, operational, regulatory, and market demand risks facing each loan applicant … and more extensive examination of the loan origination and monitoring processes and practices that DOE followed for each of the loans.”

The report evaluated 30 loans, worth $23.4 billion, that closed by late November 2011. Of that, $8.3 billion, or 35 percent, had been drawn down. The money helped bankroll projects ranging from alternative energy and solar manufacturing ventures by startup companies to fuel saving projects launched by major corporations such as Ford Motor Co. and Nissan North America, Inc.

Of that portfolio, DOE had put aside $2.9 billion to cover potential risk. Allison’s review set that risk value at slightly less, $2.7 billion.

The White House considered the report a validation of its efforts, saying it “confirms that the overall loan portfolio as a whole is expected to perform well and holds less than the amount of risk envisioned by Congress when they designed and funded the program.”

“While the portfolio includes loans to a range of projects that carry different levels of risk,” said White House spokesman Eric Schultz, “today’s report finds that the Department of Energy has been judicious in balancing these risks.”

Rep. Henry A. Waxman, the ranking Democrat on the House committee that has been investigating the Solyndra financing and the loan program more broadly, also greeted the report as a sign that the administration’s program is working.

“The report is a repudiation of the partisan attack on the program by congressional Republicans and the oil and coal industries,” Waxman said.

Republican members of Congress leading the investigation see things differently.

“It would be a stunning case of bureaucratic disregard to declare victory because the government is expecting to lose 'just' $3 billion,” House Energy and Commerce Committee Chairman Fred Upton and Oversight and Investigations Subcommittee Chairman Cliff Stearns said in a statement. “One key lesson is that taxpayers should not have been placed in the position to lose one dollar, let alone billions, all because the stimulus allowed companies with shaky finances to apply for and receive taxpayer support without putting up any money.”

Allison did caution that he expects some companies that received loans to come back to the Energy Department to revise the financing terms. He said the rules imposed on the companies, and the complexity of their enterprises, means that “many projects are likely to seek such relief at some point during the term of the DOE loan or loan guarantee.”

Along with creating a chief risk officer, he suggests a new Risk Management unit be created – and that it be separate from the Loan Programs Office and report to senior DOE management. And, the Energy Department should establish an “early warning system” to spotlight major problems early in the process.

The White House said the Department of Energy “is reviewing the recommendations and will carefully identify the best ways to implement them.”

Another green energy company stumbles: Fisker announces layoffs

Delaware,United States — 2012-05-03T11:29:05-04:00

Fisker Automotive, maker of exotic electric sports cars being built with help from a $529 million federal loan, has announced layoffs at its Delaware plant as it tries to persuade the Department of Energy to continue backing it with public money.

The company says 26 Fisker employees have been let go from the Delaware factory where renowned automotive engineer Henrik Fisker promised to one day begin producing affordable electric sedans. A Delaware newspaper also reported that subcontractors working on the car venture have been let go.

"It's temporary," said Roger Ormisher, a company spokesman. "We're being prudent and sensible as a company."

Fisker was one of a handful of auto companies to receive sizeable federal loans to help support the birth of an electric car industry in the United States. As the Center for Public Integrity and ABC News reported in October, Fisker's efforts have been beset by delays — even after the company was touted by Vice President Joe Biden and others.

“Folks, we're making a bet,” Biden said on Oct. 27, 2009 in Delaware. “We're making a bet in the future, we're making a bet in the American people, we're making a bet in the market, we're making a bet in innovation.”

While benefitting from U.S. taxpayer support, Fisker signed a contract with a firm in Finland to assemble its first generation electric vehicle, a flashy $97,000 sports coupe called the Karma.

As the layoffs were announced, Fisker approached the Department of Energy about the targets it must meet to continue drawing federal money. It is not yet clear whether the Energy Department will alter the loan’s terms, or invest more taxpayer dollars in the Fisker venture.

Department of Energy officials said they understand that Fisker has experienced production delays, but said they are not uncommon for a new company. And the department remains hopeful about the company’s future, in part because it has successfully raised more than $650 million in private sector investment to support its ongoing operations.

“Our loan guarantees have strict conditions in place to protect taxpayers,” said DOE spokesman Damien LaVera. “The Department only allows the loan to be disbursed as the company meets certain milestones and demonstrates results.

As has been widely reported, Fisker has experienced some delays in its sales and production schedule -- which is common for start-ups. As Fisker works through those issues and incorporates lessons learned from the production of the Karma, the Department is working with Fisker to review a revised business plan and determine the best path forward so the company can meet its benchmarks, produce cars and employ workers here in America.”

Critics of the Obama administration say they fear Fisker was at risk of becoming the next Solyndra — a reference to the now-bankrupt solar panel firm that received support from a government loan program only to shutter its doors.

When asked directly by ABC News in October if taxpayers should worry about the half-billion dollar federal investment, Henrik Fisker was emphatic: "No, I don't think they need to worry about it." Could Fisker be the next Solyndra? "Absolutely not," he said.

Fisker’s loan commitment, of $528.7 million, was announced in September 2009. The loan was broken in two parts.

In the first, Fisker would use $169.3 million for engineering integration costs to complete its first vehicle, the Karma. Engineering work would take place in Pontiac, Mich., with support from the company headquarters in Irvine, Calif. — and final assembly completed overseas.

The bigger chunk of the loan, for $359 million, would bankroll Fisker's Project Nina, a lower cost plug-in hybrid sedan. “Fisker estimates that up to 75,000-100,000 of these highly efficient vehicles will roll off assembly lines in the U.S. every year beginning in late 2012,” the Energy Department announced.

To date, Fisker has received $193 million in government funds, according to a company statement.

In October, the company acknowledged outsourcing Karma assembly to Finland, but said the bulk of its government funds would be used to launch the second-generation electric vehicle, still under wraps, that would be assembled in a shuttered General Motors plant in Delaware. Some of those hired to prepare the Delaware plant for that effort were among those let go.

That project, the Nina sedan, has been put off until sometime in 2013.

"We have temporarily delayed work at the plant based on ongoing discussions with the DOE regarding funding for the Project Nina program," the company said. "As a result, we have laid off 26 people."

Ormisher said Fisker has delivered between 250 and 300 Fisker Karmas in the United States, and the company is nearing approval to sell the cars in Europe.

Industry wields sway over air pollution rules, enforcement

2013-04-19T14:36:05-04:00

When the top environmental regulator in Kansas rejected its bid to build two new power units in 2007, citing health concerns, Sunflower Electric Power Corp. refused to take no for an answer. When the governor vetoed bills that would have paved the way for construction in 2008 and 2009, Sunflower again refused to relent.

The company’s persistence paid off. In 2009, the new governor approved construction of a new coal plant in the tiny city of Holcomb, so long as Kansas legislators backed renewable energy policies at the same time. The state regulator who initially denied Sunflower’s permit? He was let go.

Sunflower said it won the permit on merit, and that political influence was not a factor.

Yet the company’s success is a telling snapshot of how, when industry flexes its muscles over Clean Air Act issues, it often wins. From Kansas to Louisiana to Texas, Wisconsin and Ohio, community groups have fought new plants, expansions and chronic emissions – only to see industry score victories with regulators and politicians.

“We’re not protecting public health today,” said Jim Tarr, an air pollution consultant in California who worked as an engineer for the Texas Air Control Board in the 1970s. “One of the primary reasons we’re not is that the environmental agencies have been co-opted by the people doing the polluting.”

Industry’s influence plays out at every step of the process: From the campaign contributions it spreads to sway policy to its role shaping clean air rules to its resistance to enforcement actions brought by regulators.

Its reach is deeper than most realize.

Two just-published reports – one from academic researchers, the other from the Environmental Protection Agency’s own inspector general – detail industry’s role in shaping Clean Air Act regulations meant to protect communities from dirty air.

The academics’ study – Rulemaking in the Shade: An Empirical Study of EPA’s Air Toxic Emission Standards – examined the level of input by industry and public interest groups at key stages as the EPA wrote rules for more than 100 major industries. Those stages: Before a proposed rule was published; once notice was given and the public weighed in; and during the final rule-writing process.

The results surprised even the study’s authors:

At the early, pre-proposal stage, industry had an average of 84 informal communications with the EPA per rule compared to less than 1 for public interest groups;
During the public comment period, industry provided more than 8 of every 10 comments;
Changes to the final rule favored industry 4-1 over those benefiting public interest groups.

“We expected imbalance in engagement, but did not imagine it would be that badly skewed,” said co-author Wendy Wagner, a professor at the University of Texas School of Law.

For every two industry comments, she said, one change was made weakening the final rule.

Industry said its motivation is no secret.

“It’s survival,” said Robert Bessette, president of the Council of Industrial Boiler Owners, a trade group representing manufacturers that use boilers to power their operations. “Industry, when pushed up against the wall, reacts.”

The council is pushing back against a proposed EPA rule to curb toxic emissions from boilers – an effort that includes prodding Congress to pass legislation and meeting with the EPA and the Office of Management and Budget, Bessette said.

Political contributions help ease industry’s access. Thirteen states house three-fourths of the nation’s most worrisome air polluters – facilities listed on an EPA “watch list” of alleged violators that haven’t faced timely enforcement. Those companies, their corporate parents and executives have made nearly $60 million in overall state campaign contributions since 2006, the Center for Public Integrity found.

Facilities in the six congressional districts with the greatest number of watch list sites contributed $120,350 to their federal representatives since 2006.

Uneven state enforcement

In some states, industry influence is clear.

The EPA IG’s recent report, EPA Must Improve Oversight of State Enforcement, documents breakdowns in Clean Air Act enforcement that can translate into fewer health protections for communities in the shadow of power plants, refineries and chemical manufacturers.

“When neither states nor EPA takes enforcement actions when needed, these health benefits are not realized and premature deaths and illnesses are not prevented to the extent that they could be,” the IG concluded. “As a result, EPA cannot assure that Americans in all states are equally protected from the health effects of pollution or that enforcement of regulated entities is consistent nationwide.”

The IG said a culture of protecting industry was clear in some states with the weakest records of enforcing the Clean Air Act, such as Louisiana.

“State, EPA regional, and external interview responses attributed Louisiana’s poor performance to several factors, including a lack of resources, natural disasters, and a culture in which the state agency is expected to protect industry,” the IG found.

The EPA did not respond to the Center's questions about Rulemaking in the Shade. In its reply to the IG’s report, the agency questioned some of the research methodology – but ultimately agreed “that state enforcement performance varies widely across the country.”

“We also agree that there are steps EPA Headquarters and regional offices can and should take to strengthen our oversight and address longstanding state performance issues,” the EPA replied.

That industry weighs in with frequency and success is no surprise to environmental activists, people who live near plant fence-lines and some political leaders who have long tangled with Big Oil.

“The fight that industry wages against any kind of threat to their pollution is across the board,” said James "Jim" Cox, a retired state senator from southwest Louisiana. “It boils down to the control the industry has of the community. It’s a jobs situation. It’s a well-organized lobbying situation.”

Health fears in Mossville

One long-running battle centers on Mossville, a small African-American community founded in the 1790s across from Lake Charles, La.

Fourteen major industrial facilities surround the community, including an oil refinery, a coal plant, chemical manufacturers and one of the largest clusters of vinyl production facilities in the United States.

For 15 years, residents have been asking government and industry to relocate them from the powerful odors and toxic chemicals released by the plants, citing reports showing dangerous levels of dioxins in the air. Dioxins, researchers say, can cause cancer and reproductive damage and slow child development.

In 1998, the federal Agency for Toxic Substances and Disease Registry found that Mossville residents had an average dioxin blood level three times above that in the typical U.S. community.

The report, however, did not identify the source of the exposure. A later ATSDR report said residents in the neighboring parishes of Calcasieu and Lafayette had typical blood dioxin levels. But, residents say, that report included a larger group outside Mossville. Their health fears continue.

Wilma Subra, a chemist from Louisiana who studied the community, produced a report linking dioxin levels to local industry.

As Mossville residents pressed for answers, the government continued to issue permits fueling industry’s growth. The EPA’s enforcement website lists more than a dozen facilities in Lake Charles out of compliance with the Clean Air Act.

In 2005, the people of Mossville filed an environmental racism petition with the Inter-American Commission on Human Rights, part of the Organization of American States. When the commission accepted the complaint last year, it became the first such U.S. case to move forward.

“Filing the human rights petition is really our last resort,” said one of the community’s lawyers, Monique Harden, co-director of the public interest law firm Advocates for Environmental Human Rights.

“It’s been 15 years of evolving strategies,” Harden said. “Residents want a voluntary relocation program that they help to develop. They want medical care services. They want pollution reduction and cleanup of contaminated sites. So it’s been years of trying to get both the industry in the Mossville area and governmental agencies to meet the community on these remedies.”

Some residents have been relocated, but the petition seeks a more far-reaching move-out for those who want it. It asks that the U.S. “refrain from issuing environmental permits and other approvals that would allow any increase in pollution.”

Lake Charles-area companies deny causing any harm to residents, saying they strive to curtail emissions.

“We strongly support efforts to reduce dioxins in the environment,” Georgia Gulf Corp., which makes a raw ingredient in polyvinyl chloride, or PVC, wrote on the Business & Human Rights Resource Centre website.

“Our industry is responsible for quality products that consumers want, buy and use every day. Medical supplies, medicines and pharmaceutical products, computer keyboards, PVC pipe, automobile dashboards, toys and sporting goods and food wrap are products Louisiana plants help make, and these products in turn help Louisianans enjoy a healthy and productive lifestyle,” the company wrote.

Echoing other facilities, PPG Industries said it operates “in a manner that is protective of public health, safety and the environment.” ConocoPhillips, the world’s fifth-largest refiner, declined an interview request but cited its website, saying it is committed to working with its neighbors.

‘They love their polluters’

In some communities, activists feel like lone wolves.

In Longview, in East Texas, the Eastman Chemical Co. plant is among the top national emitters of ethylene glycol, chloromethane and chloroform – compounds that can damage the nervous system, liver, kidneys or lungs. EPA records show $420,004 in Clean Air Act penalties levied in the last five years against Eastman, which manufactures more than 40 major chemical and polymer products.

Eastman said it diligently monitors emissions and its Longview site meets air-quality standards. “Protecting air quality is an essential and complex part of Eastman’s environmental program,” the company said in a statement. “The men and women at Eastman not only strive to improve Eastman’s compliance with the Clean Air Act because it is the law, but also because we and our families live in the adjacent communities.”

Over a five-year period from August 2005 to August 2010, no residents filed complaints about the facility with the Tyler office of the Texas Commission on Environmental Quality, records show.

That is not surprising, some say, in a region proud of the economic jolt industry provides, where Eastman Road runs astride the plant and where, in 2009, the Texas Chemical Council awarded Eastman its “Excellence in Caring for Texas" award. The plant employs more than 1,500, placing it among the largest employers in a region replete with industry.

Tammy Cromer-Campbell, a professional photographer and environmental activist, is a rare breed in Longview: a critic who stands up against pollution. She said the mission has been lonely. “They love their polluters,” Cromer-Campbell said with a laugh while driving near Longview’s industrial hub.

A co-founder of a group called WECAN – Working Effectively for Clean Air Now – she rose up at meetings of the Northeast Texas Air Care, a cooperative association of local governments and industries. Cromer-Campbell found herself the outsider looking in.

“Whenever I go to those meetings, I don’t have a crowd of people behind me, supporting me. It’s all industry,” she said. “I got burnt out. We couldn’t get a lot of other people to join me.”

Picking up the slack

Some Texas officials are frustrated, too.

Two veteran lawyers with the Harris County Attorney’s Office – whose jurisdiction includes Houston and the nation’s largest petrochemical complex – seem to be in perpetual conflict with the Texas Commission on Environmental Quality.

One, Terry O’Rourke, called the agency “a lap dog for polluters” and said state regulators are too quick to overlook companies that poison the air and water. O’Rourke said his office, which represents the Harris County Pollution Control Services Department, has picked up the slack.

“We have to stop the pollution at its source,” said O’Rourke, who began prosecuting polluters as an assistant state attorney general in 1973. “You do it the same way you write speeding tickets. If you don’t enforce the law, everybody will be driving 100 miles per hour.”

His colleague, Rock Owens, said the TCEQ “treats the regulated community as if they are customers. It’s always with an eye toward the convenience and the bottom line of the major players.”

Owens cited a recent example. On five occasions from April 2008 through March 2010, according to a civil complaint drafted by the county attorney’s office, a Shell Chemical plant east of Houston “illegally released over eight tons of toxic petrochemicals into the air in Harris County, including known carcinogens such as benzene and butadiene. . .”

Shell, however, failed to report the releases to the county within 24 hours, as required. The TCEQ fined Shell $71,900 for one of the incidents in 2008. Owens’s office deemed this insufficient and went after Shell, preparing a complaint in 2010 that sought more than $6 million in penalties.

The case was settled this year, with Shell agreeing to pay $500,000 to the county. O’Rourke said he remains annoyed the TCEQ didn’t move more aggressively.

“That, to me, is fundamentally offensive,” O’Rourke said. “TCEQ slapped their wrist. We’ve got kids who play in schoolyards in the shadow of these [plants]. Most of them are black and brown, and a lot of them are poor. Just because they’re poor doesn’t mean they should have to breathe crap.”

He added: “We can have the largest petrochemical complex in the United States and still have a clean environment. They are not incompatible.”

In a written statement, Shell said that while it “disputes the claims and allegations made by Harris County, we are complying with the settlement in the interest of securing a timely and effective resolution to this matter.”

The TCEQ said in a statement that it has fined Shell more than $1.4 million over the past five years as a result of 26 enforcement orders, many involving “unauthorized emissions and failure to comply with permitted emission limits.”

The TCEQ “emphasizes compliance to protect our citizens from harm, coupled with swift, sure and firm enforcement for those who do not comply,” the statement said.

Owens scoffed at the amount of the TCEQ penalties, saying large companies like Shell consider them “just another part of doing business in Texas. Pay a little fine, go about your way – that’s not an effective deterrent.”

Shell, which reported profits of $18.6 billion in 2010, cited $7 billion in profits in the third quarter of 2011 alone.

Working Washington

Big industry pays big lobbying fees to press its agenda in Washington.

The Washington lobby shop for San Antonio-based Valero Energy Corp., for instance, spent $496,000 in the first three quarters of this year pressing environmental issues ranging from air and water quality to fuel specifications.

The company also hired outside lobbyists to work the aisles of Congress and federal agencies, according to Senate lobbying disclosure records.

One firm, Bracewell & Giuliani, spent $140,000 lobbying for Valero on “clean air, energy legislation and other environmental issues relating to the refining industry.” Among the lobbyists is a former acting general counsel for the EPA.

Six Valero plants – five refineries and one ethanol plant – are on the EPA’s November Clean Air Act watch list.

Still, the company's message to its shareholders has been reassuring. Even if "one or more [enforcement actions] were decided against us, we believe that there would be no material effect on our financial position or results of operations,” Valero said in its 2010 annual report.

A Valero spokesman declined to comment, saying, “Our advocacy efforts are outlined in required filings.”

‘There were abuses’

Industry often prevails over critics – and, sometimes, regulators.

In Holcomb, Kan., residents so far have been unable to stop the Sunflower power plant even after the state initially shot it down.

After Roderick Bremby, then head of the Kansas Department of Health and Environment, denied Sunflower’s initial permit application, project supporters pushed bills in the state legislature clearing the way for construction.

In 2008 and 2009, Democratic Gov. Kathleen Sebelius vetoed the bills.

Less than a month after an April 2009 veto, Sebelius left to become secretary of the U.S. Department of Health and Human Services. Lt. Gov. Mark Parkinson took over, and, by May 4, had struck a deal with Sunflower.

Before the plant could be built, it had to get a permit – a lengthy process allowing public input. The clock was ticking: If the permit wasn’t issued by January 2011, new rules would require the plant to do more to reduce greenhouse gas emissions.

In November 2010, as the January deadline loomed, Parkinson fired Bremby.

In a statement the week after the firing, Parkinson said the decision wasn’t related to the Sunflower permit. “When evaluating the permit application,” Parkinson said, “what I have told the acting Secretary is simply this: I don’t care whether you approve the permit or not, but I do care that Kansas follows the laws and regulations governing the process.”

But Bremby, who is now commissioner of the Connecticut Department of Social Services, said during a speech at a Kansas community college this February that the permit approval process “was not a benign, pristine, routine bureaucratic process. Unfortunately, there were abuses.”

On Dec. 16, 2010, the Kansas department approved Sunflower’s permit.

Earthjustice, a nonprofit environmental law firm, soon challenged the permit in court, accusing state officials of rushing the permitting process because of pressure from Sunflower and the governor’s office. The result, the firm alleged, was a flawed permit.

Among the concerns expressed in Earthjustice’s legal brief: State regulators allowed Sunflower to underestimate the amount of toxic air pollution it would release, shielding it from requirements to install better pollution controls.

Sunflower spokesperson Cindy Hertel said the permit “was thoroughly vetted” by state regulators. “As far as influencing anyone, we certainly did not,” she said.

Some in Holcomb want the new plant for the economic boost Sunflower promises will come, but others are worried. Lee Messenger, who lives a few miles from the current plant and the proposed site for the new one, fears the expansion will drain the town’s water supply and pollute the air.

“We don’t get a chance to vote on anything,” said Messenger, 81. “These politicians like to think we elected them to take care of us. But they take care of themselves first. “

Kansas regulators declined to comment on Sunflower’s permit, citing the ongoing court case. In a brief, lawyers with the state attorney general’s office wrote, “The accusations of political bias and procedural impropriety are factually unsupportable in the administrative record.”

Business-friendly regulators

Some grassroots groups worry that state environmental agencies lean too heavily toward business interests.

In Wisconsin, Scott Walker swept into the governor’s office in 2010 on a message of job creation. Soon after, he appointed Cathy Stepp, a former Republican state senator, to head the state’s Department of Natural Resources.

Stepp had been a vocal critic of the department she now leads. In June 2009, she posted on a conservative blog that some who worked at the state agency “tend to be anti-development, anti-transportation, and pro-garter snakes, Karner blue butterflies, etc. … So, since they're unelected bureaucrats who have only their cubicle walls to bounce ideas off of, they tend to come up with some pretty outrageous stuff that those of us in the real world have to contend with.”

DNR officials said Stepp was unavailable for an interview. The department’s No. 2 official, Matt Moroney, said that before joining the department, Stepp “was representing a constituency. She was listening closely to some of her business friends and looking at how to improve DNR.”

Her current job, he said, “is a completely different role for her.” Stepp has focused on cutting waste and streamlining the agency. This October, department officials testified in favor of a bill in the state legislature that would restrict the number of times regulators could ask companies for more information on a permit application. It would also impose stricter time limits for the department to approve permits.

Environmental groups say the department’s new approach, coupled with tightening budgets, will undermine attempts to curb pollution. “They are going to these public hearings and advocating for taking their own authority away,” said Shahla Werner, director of the state’s Sierra Club chapter. “It’s surreal to watch.”

Paint-eating pollution

Middletown, Ohio, has lived under the cloud of AK Steel for nearly a century. The largest employer in the Ohio town 40 miles north of Cincinnati, AK Steel has for decades pumped out pollution that takes the paint off residents’ cars and settles in their siding, some say.

“It got into people’s gardens, and kids playing in the yard would come in with their feet black from the soot,” said longtime resident Rachael Belz.

In 2000, the Department of Justice sued AK Steel over violations of the Clean Air and Clean Water acts. The Ohio Environmental Protection Agency joined the suit, which settled out of court and required the company to clean up Dicks Creek, which runs between the facility and a neighboring school. AK Steel committed to $66 million in pollution-control upgrades.

The facility remains on the EPA’s Clean Air Act watch list, and some say problems linger. “We still have soot in our house,” said Belz, who suffers from asthma. “You can’t sit outside on your porch for more than 10 to 15 minutes without crap flying into your coffee.”

An AK Steel spokesman said the company does not know why it is on the watch list and has complied with regulations. He declined further comment.

During the civil case, residents launched a campaign to pressure the company to meet its promises. Elected officials, community organizer Belz said, made themselves scarce.

But politicians, from the city council to the governor’s office to U.S. Rep. John Boehner – a regular beneficiary of AK Steel contributions – were on hand to cheer the company’s 2010 expansion plan. Boehner did not reply to interview requests.

“We do our campaigns in part,” Belz said, “because we can’t count on our politicians.”

Paul Abowd, Rachael Marcus and Fred Schulte contributed to this report.

Thousands of sugar cane workers die as wealthy nations stall on solutions

2013-01-23T14:18:21-05:00

LA ISLA, Nicaragua — Maudiel Martinez is 19 years old and has a shy smile, a tangle of curly black hair and a lean, muscular build shaped by years of work in the sugarcane fields. For most of his adolescence, he was healthy and strong and spent his days chopping tall stalks of cane with his machete.

Now Martinez is suffering from a deadly disease that is devastating his community along with scores of others in Central America, where it has decimated the ranks of sugarcane workers. The same illness killed his father and his grandfather and affects all three of his older brothers.

“This disease eats our kidneys from inside us,” Martinez said. “We don’t want to die, and we feel grief because we already know that we’re hopeless.”

Martinez’ illness stands at the heart of a lethal mystery — and legacy of neglect by industry and governments, including the United States, which have resisted pleas for aggressive action to spotlight the malady and find a remedy. Wealthier nations are more focused on spurring biofuels production in the region’s sugarcane industry and keeping up the heavy flow of sugar to U.S. consumers and food manufacturers than the plight of those who harvest it.

Little noticed by the rest of the world, chronic kidney disease (CKD) is cutting a swath through one of the world’s poorest populations, along a stretch of Central America’s Pacific Coast that spans six countries and nearly 700 miles. Its victims are manual laborers, mostly sugarcane workers.

Each year from 2005 to 2009, kidney failure killed more than 2,800 men in Central America, according to the International Consortium of Investigative Journalists‘ analysis of the latest World Health Organization data. In El Salvador and Nicaragua alone over the last two decades, the number of men dying from kidney disease has risen fivefold. Now more men are dying from the ailment than from HIV/AIDS, diabetes and leukemia combined.

“In the 21st Century, nobody should die of kidney disease,” said Ramon Trabanino, a physician from El Salvador who has studied the epidemic for a decade.

The surge of kidney disease is overwhelming hospitals, depleting health budgets, and leaving a trail of widows and children in rural communities. In El Salvador, CKD is the second leading cause of death for men. In the province of Guanacaste, Costa Rica, the regional hospital had to start a home dialysis program because it was overwhelmed with so many CKD victims that it began running out of beds to treat patients with other ailments.

So many men have died in some parts of rural Nicaragua that Maudiel Martinez’s community, called The Island, now is known as the Island of the Widows — La Isla de las Viudas.

At first glance, the lush community bounded by vast sugarcane fields looks like many places in Latin America: children ride bicycles over dirt roads and play alongside dogs, pigs and chickens. But now there are few men in the front yards. Indoors, framed photographs of dead husbands, fathers and brothers adorn tables and countertops. No older men converge in small groups, trading gossip and news, as one often sees in communities farther inland from the Pacific coast.

Here, women struggle to make at least a little money doing odd jobs. Some are now in the sugar-cane fields they believe claimed their husbands.

“My children have suffered a lot,” said Paula Chevez Ruiz, a widow from La Isla whose husband Virgilio died in 2009, leaving her to support four children on her own. When she can find customers, she sells fruit and enchiladas. “It is sad to want to give to your children, but not to have anything. Sometimes not even enough to buy a bag of salt.”

Deadly enigma and a handful of researchers

In the U.S., leading causes of chronic kidney disease are diabetes and hypertension. But the ailment — leading to a progressive decline in kidney function — is typically a manageable condition that can be effectively controlled with treatment. Doctors understand its causes and cures.

In Central America, the disease’s origins are more of an enigma, and more frequently lethal. Afflicted laborers in the sugar cane fields near the Pacific generally have neither diabetes nor hypertension.

Some scientists suspect that exposure to an unknown toxin, potentially on the job, may trigger onset of the disease. Researchers agree that dehydration and heat stress from strenuous labor are likely contributing factors — and they may even be causing the illness. Laborers, typically paid not by the hour or day but based on the amount they harvest, often work to the point of severe dehydration or collapse, potentially harming their kidneys with each shift.

CKD usually attacks small blood vessels in the kidney called the glomeruli; the Central American epidemic attacks the kidney’s tubules. CKD generally affects older people with equal distribution between sexes; this epidemic overwhelmingly affects working-age men, mostly sugarcane workers but also miners and other agricultural laborers.

A growing community of researchers is calling for recognition of a new illness not yet included in medical manuals: “Mesoamerican nephropathy,” “endemic agricultural nephropathy” or “sugarcane nephropathy.” The director of El Salvador’s national CKD program has written of a “Mesoamerican Regional Nephropathy” that would one day be internationally recognized.

“It is important that the chronic kidney disease afflicting thousands of rural workers in Central America be recognized as what it is: a major epidemic with a tremendous population impact,” said Victor Penchaszadeh, a clinical epidemiologist at Columbia University and frequent consultant to the Pan American Health Organization on chronic diseases in Latin America.

Dr. Ramon Vanegas, a nephrologist who assesses applications by workers to Nicaragua’s Institute of Social Security for occupational illness pensions, said cases which he defines as occupational CKD follow a pattern of tubular kidney damage combined with a history of heat stroke.

“Usually they have been working, and they had muscle spasms, they’ve gotten fever, they have collapsed,” Vanegas said of the patients whose applications he approves. “Then they return to work, they face the same exposures, and the cycle repeats. Then, two or three years later, the patient has [CKD].”

While physicians mull labels and diagnoses, the mystery persists: Why does this particular form of CKD attack men in a particular way — and in this specific region?

Some studies suggest risk factors, from pesticide exposure to alcohol abuse to frequent use of anti-inflammatory drugs, may play important roles in CKD’s onset. Others show that miners, stevedores and field workers in affected regions also have high CKD rates; a study in Nicaragua found a mining town to have one of the highest prevalence rates in the country.

“The evidence points us most strongly to a hypothesis that perhaps heat stress — hard work in a hot climate without sufficient replacement of fluids — might be a cause of this disease,” said Daniel Brooks, lead researcher of a scientific team from Boston University that is among a handful of groups conducting early studies.

During days the team observed sugar cane workers, mean temperature in the fields was 96 degrees. Their report noted that the U.S. Occupational Safety and Health Administration, which oversees safety at U.S. workplaces, calls for 45 minutes of rest for every 15 minutes of work at that heat stress level.

The team’s preliminary research bolsters the heat stress hypothesis; blood and urine samples taken from different types of sugarcane workers during the course of a harvest season show more evidence of kidney damage among those who did strenuous labor outside. Earlier, the team identified a number of work practices and chemicals at the company that could potentially damage the kidneys. Brooks said more research is needed before conclusions can be drawn.

Internal studies by Nicaragua Sugar, owners of one of Central America’s largest sugar plantations, provided by the company to ICIJ, show that the company has long had evidence of an epidemic tied to heat stress and dehydration. In 2001, company doctor Felix Zelaya conducted an internal study on the causes of CKD among its workers. “Strenuous labor with exposure to high environmental temperatures without an adequate hydration program predisposes workers to heat stress syndrome [heat stroke], which is an important factor in the development of CKD,” Zelaya concluded.

Nicaragua Sugar and other companies say they have acted voluntarily to protect workers by improving hydration, reducing work hours, and strengthening oversight of labor contractors.

Even so, Nicaragua Sugar disputes the existence of a unique kidney ailment affecting its workers. “We’re convinced that we have nothing to do with kidney disease,” said spokesman Ariel Granera. “Our productive practices do not generate and are not causal factors for CKD.”

Signs of trouble

In 2000, Salvadoran physician Trabanino noticed large numbers of young and middle-aged men coming into his hospital in El Salvador, all with advanced cases of chronic kidney disease. “For some reason, to the rest of the world this seemed normal,” he recalled. “To me it seemed strange and curious.”

In 2002, Trabanino published one of the first studies of the disease, a profile of 205 new patients admitted to his hospital with end-stage renal disease. Two thirds of these cases lacked the usual risk factors for chronic kidney disease — and had some common features.

“They were almost all men who lived in the low-lying zones of the country, close to the coast, near a major river,” Trabanino wrote in the Pan American Journal of Public Health. A large group of these patients also described “frequent occupational contact without adequate protection with insecticides and pesticides.”

Another study of kidney patients from northern Costa Rica — again from a sweltering, low-lying region near the Pacific Coast — described a similar pattern.

“All are young men, between the ages of 20 and 40 years,” wrote Dr. Manuel Cerdas of Costa Rica in the journal Kidney International. “The most interesting feature of these patients is epidemiologic—all of them are long-term sugar-cane workers.”

Cerdas later found that victims of the epidemic shared another condition: the disease attacked a part of their kidneys called the tubules. Tubulo-interstitial disease is usually rare — accounting for only 3.7 percent of cases of end-stage renal disease in the United States. Known causes include toxic exposure and dehydration.

Today El Salvador promotes blood testing in hard-hit rural areas to try to catch cases in treatable stages. Trabanino, who has studied the epidemic for over a decade, said he believes screening, public education campaigns and improved worker safety could stop the ailment’s spread — if only resources were available.

Researchers in Central America, meanwhile, face an uphill battle. The few CKD studies done so far had been conducted in hospitals and affected communities, where people were already sick. Theories about the role toxic chemicals may play in causing the disease are difficult to test because scientists need access to the epidemic’s victims as they are falling ill.

Silence on CKD; fast action on biofuel

Central American sugar companies have been reluctant to open their doors to outside health researchers. Advocates believe the industry fears designation of the disease as an occupational illness. Resistance has begun to soften — notably at Nicaragua Sugar’s Ingenio San Antonio plantation, where the Boston University team is working. But the industry typically has barred independent scientists from company property, employees or records.

Aurora Aragon, an occupational health specialist at the University of Leon in Nicaragua, said that in 2004 researchers from an international NGO called SALTRA asked Nicaragua’s leading sugar companies to collaborate on a study of worker safety. She said that the Ingenio San Antonio and Ingenio Monte Rosa ignored the request.

In 2007, Aragon said another request for access by her colleagues was rejected by the Ingenio San Antonio. “Ultimately, that was the conclusion,” she said. “Not one sugar company gave us permission to study the problem.”

Mario Amador, a spokesman for the Nicaraguan sugar industry trade group that represents plantations approached by SALTRA, said the industry has allowed studies by doctors, medical students and health authorities, but must exercise caution in sharing information with outsiders.

“People with bad intentions have tried to connect CKD with work in the sugar industry, because this industry was the first to find high rates of CKD in the labor force that came to the plantations seeking work,” Amador said. “It is because of these constant attacks that plantations and their staff are very careful about the information they provide to any person or institution.”

Central American producers play a significant role in the global sugar business; in 2011 the US imported more than 330,000 metric tons of sugar from the region, representing 23% of total raw sugar imports.

Beyond the kitchen table, the U.S. government has heavily promoted the sugar industry — in the areas affected by the epidemic — as a source of biofuel from ethanol. The U.S. funded conferences to promote biofuels in both Nicaragua and El Salvador as late as 2008, according to embassy cables released by WikiLeaks. Its ambassadors met repeatedly with the leaders of both nations’ sugar industries, and fretted that failure to develop ethanol production would drive these nations toward dependence on oil imports from Hugo Chavez’s Venezuela.

In 2007, then-Ambassador Paul Trivelli notified the U.S. State Department of Ingenio San Antonio’s first ethanol shipment and wrote that the company had embraced “the potential to develop the industry and the positive aspects of biofuels.” But he expressed concern that Nicaragua’s leftist president, Daniel Ortega, might be swayed by Venezuelan President Hugo Chavez’s opposition to biofuels.

The following year, Trivelli wrote that the State Department had designated Nicaragua as a “high-priority country” for biofuels. The embassy in El Salvador, Nicaragua’s northern neighbor, also forcefully promoted ethanol: ambassadors met with sugar industry leaders, shared concerns with the State Department about the political effects of oil imports from Venezuela, and sponsored a conference to promote biofuels.

The World Bank, meanwhile, has provided more than $100 million in loans to promote biofuel production at two heavily affected plantations, which it approved without formal consideration of kidney disease. After workers complained, the Bank granted $1 million to sponsor the ongoing Boston University study.

Before receiving the loans, the companies needed to assure the Bank that they lived up to social and environmental standards. Appraisal teams published glowing assessments of the Ingenio San Antonio and Monte Rosa’s practices in September 2006 and May 2007. Neither report mentioned CKD.

In October 2006, the board of the International Finance Corporation (IFC) — the World Bank’s lender for private-sector projects — approved a $55 million loan to Ingenio San Antonio. A $50 million loan to Monte Rosa was approved in June 2007.

With the money, the companies expanded, sending more workers into the cane fields.

Edgar Restrepo, a senior investment officer for the IFC, said his team did consider CKD when it appraised the Ingenio San Antonio, but that the content of its deliberations is privileged. IFC spokeswoman Adriana Gomez said the IFC had “complied with its strict social and environmental standards in the due diligence process.”

A standoff in Mexico City

While governments in Central America have committed few resources to combating CKD, they have begun sounding alarms.

El Salvador’s government has been forceful in calling for international research help. At a United Nations summit of health ministers this February in Mexico City, El Salvador Health Minister Maria Isabel Rodriguez declared that chronic kidney disease was “wasting away our populations” across Central America. She called on fellow health ministers to include CKD among the top chronic illnesses in the Americas, a step that could attract U.N. funding for studies.

Rodriguez’s proposal ran into strong opposition from the summit’s most powerful participant: the United States.

Rodriguez said the U.S. delegation refused either to include the disease on the list of the continent’s most serious chronic illnesses, or to accept language suggesting that the epidemic had distinct causes related to exposure to toxic chemicals.

Central American representatives said they felt so strongly they refused to sign the conference’s final declaration unless CKD was included. For several tense moments, the dispute threatened to derail the consensus of the summit. Result: A single phrase mentioning chronic kidney disease in Central America.

David McQueen, a United States delegate from the Centers for Disease Control and Prevention, told ICIJ that the U.S. opposed mentioning CKD to keep the focus on diabetes, heart disease and cancer.

“Declarations that are made are rarely successful unless they are very targeted,” he said.

McQueen, who has since retired, said he wasn’t aware of the dramatic spread of chronic kidney disease until it was raised at the conference. “The chronic kidney thing sort of caught everybody by surprise,” he said. “Why is this being pushed so hard?” McQueen learned at the meeting that it “is a significant problem,” spurring “a major drain on resources” for physicians and hospitals in Central America.

Yet even after learning of the issue, the U.S. has taken little action. CDC spokeswoman Kathryn Harben said that at a dinner on the night of the Mexico City summit, the CDC informally offered to help Central American health ministries. It has not yet done so, she said, because those ministries have not submitted a formal request. The top U.S. health official at the summit, Dr. Howard K. Koh, assistant secretary for health at the Department of Health and Human Services, declined to be interviewed for this story.

Get sick, lose your job

Ingenio San Antonio and Ingenio Monte Rosa, Nicaragua’s largest plantations, now regularly test workers’ blood to measure creatinine, a chemical that indicates kidney function. Workers with elevated creatinine levels are dismissed, a step the companies say is necessary to prevent sick workers from further risking their health in the fields.

Dismissal also cuts off workers from care at company hospitals, and often from company pensions.

The Ingenio San Antonio said it has reduced work hours, provided more water and hydrating solution and hired social workers to accompany contractors in the fields to ensure adequate hydration. Currently, the workday is no more than eight hours for demanding physical jobs, and the company provides eight liters of water and 2700 milliliters of hydrating solutions daily to each field worker, said spokesman Granera.

In November 2009, Maudiel Martinez boarded a company bus one morning and headed for the fields. He was 17 and starting his fourth year with the Ingenio San Antonio. Harvest season was about to begin and, following routine, the company had conducted blood tests to see if workers were healthy enough for field work.

Martinez was on the bus when he got the news: he’d failed the creatinine test. He had the disease.

“I cried because of my grief,” Martinez said. “I was such a child — at the age of 17 you’re still an adolescent.”

The diagnosis meant that Martinez was formally prohibited from working for the company. With his family struggling financially and no alternative job in sight, Martinez assumed a fake name and Social Security number and went back to work in the same fields, for independent labor contractors who, he said, don’t care that he provides a woman’s name and Social Security number.

At least some contract workers are still going out on longer, riskier shifts. An ICIJ reporter in June 2011 noted that buses picking up Ingenio San Antonio contract workers started at 5:25 a.m. and returned at 5:31 p.m. Workers said about 10 of those hours were spent in the fields.

A collapse in the fields

On June 10, 2011, Martinez was assigned to cut four rows of cane. His task was to strip off the leaves, chop them into pieces, and tie them into bundles. About forty pieces make up a bundle. For this labor, he earned one cordoba per bundle – less than a nickel.

By 8:30 in the morning, he had cut two rows. He was starting to feel sick, but continued to cut in the sweltering heat. “The sun was too strong, and I had sweated through my shirt like someone had thrown water on me,” Martinez recalled.

By the time he finished his rows, at about 11, Martinez was feverish and nauseous. He rested some 15 minutes, but still had to tie his pieces into bundles. Another worker came to help.

Martinez said they finished about 1 p.m., and the bus came to bring the workers home about half an hour later. When it arrived, Martinez felt desperately ill. “I got onto the bus and I couldn’t walk anymore,” he said.

Since Martinez was a contract worker, he could not go to the company hospital. He took the bus toward home and on board began to vomit. The bus did not stop. “The guys gave me a chance to stick my head out the bus window,” he said.

The road where the bus left him is separated from his home by a shallow river. His mother and brother carried him across the river to bring him to his bed.

Soon after his collapse, Martinez learned that his creatinine levels were up. He had gone for days with no appetite, wanting only cold drinks to soothe the sensation of fever.

“If death is coming, we have to resign ourselves to wait for it,” Martinez said. “Resigning yourself means waiting for what the disease is going to give you. Because you look at me and I look normal now, but inside I feel like I’m burning.”

Miles de trabajadores de caña de azúcar mueren ante escasez de acción oficial

Salvador,Bahia,Brazil — 2012-02-24T10:55:55-05:00

You can also read this story in English.

LA ISLA, Nicaragua —Maudiel Martínez tiene 19 años, una sonrisa tímida, una maraña de rulos negros y un cuerpo delgado y muscular formado en años de trabajo en campos de caña de azúcar. Durante la mayor parte de su adolescencia fue fuerte y saludable; pasaba los días talando con su machete las altas cañas.

Hoy Martínez sufre de una enfermedad letal que está devastando a su comunidad y a muchas otras en Centroamérica, donde ha diezmado legiones de cañeros. La misma enfermedad mató a su padre y a su abuelo y afecta a tres de sus hermanos mayores.

“Esta enfermedad nos come los riñones desde adentro –dijo Martínez–. No queremos morir, y estamos tristes porque ya sabemos que no tenemos esperanza.”

La enfermedad de Martínez compone el núcleo de un secreto letal –y de una tradición de desinterés y descuido por parte de la industria y los gobiernos, incluido el de los Estados Unidos, que han rechazado pedidos de actuar con energía para hacer conocer la enfermedad y encontrar una cura. Los estados ricos están más interesados en alentar la producción de biocombustibles en la industria azucarera de la región y en mantener el abundante flujo de azúcar hacia los consumidores y productores de alimentos de los Estados Unidos que en ocuparse de los problemas de los que la cultivan.

Poco conocida en el resto del mundo, la enfermedad renal crónica (ERC) está causando estragos en una de las poblaciones más pobres del mundo, a lo largo de una franja de la costa Pacífica de Centroamérica que abarca seis países y cerca de 1.130 kilómetros. Sus víctimas son trabajadores manuales, en su mayoría cañeros.

Entre 2005 y 2009, la enfermedad renal mató a más de 2.800 hombres por año en Centroamérica, según el análisis de los datos de la Organización Mundial de la Salud realizado por el Consorcio Internacional de Periodistas de Investigación (ICIJ, por sus siglas en inglés). Solo en El Salvador y Nicaragua, en las últimas dos décadas el número de hombres que murieron de enfermedad renal se quintuplicó. Hoy mueren más hombres de esta enfermedad que los de VIH/SIDA, diabetes y leucemia sumados.

“En el siglo 21, nadie debería morir de enfermedad renal”, dijo Ramón Trabanino, médico de El Salvador que ha estudiado la epidemia durante una década.

La oleada de casos de enfermedad renal está superando la capacidad de los hospitales, agotando los presupuestos de salud y dejando una estela de viudas y niños en las comunidades rurales. En el Salvador, la ERC es la segunda causa de muerte entre los hombres. En la provincia de Guanacaste, Costa Rica, el hospital regional tuvo que desarrollar un programa de diálisis domiciliaria porque estaba tan sobrepoblado de enfermos de ERC que empezó a quedarse sin camas disponibles para las víctimas de otras dolencias.

Tantos hombres han muerto en algunas regiones rurales de Nicaragua que la comunidad de Maudiel Martínez, llamada La Isla, se conoce ahora como La Isla de las Viudas.

A primera vista, esa comunidad de vegetación exhuberante rodeada de vastos cultivos de caña se parece a muchas otras de América Latina: los niños andan en bicicleta por caminos de tierra o juegan con los perros, los cerdos y las gallinas. Pero hay pocos hombres en los jardines de las casas. Adentro de ellas, las fotos de esposos, padres y hermanos muertos adornan mesas y muebles. No se arman corrillos de viejos comentando los chismes y las noticias, como suele verse en las comunidades más alejadas de la costa Pacífica.

Aquí, las mujeres se esfuerzan mucho para ganar poco con trabajos ocasionales. Algunas trabajan en los campos de caña que, están convencidas, se llevaron a sus maridos.

“Mis hijos han sufrido mucho”, dijo Paula Chávez Ruíz, una viuda de La Isla cuyo marido, Virgilio, murió en 2009, dejándola a cargo de sus cuatro hijos. Cuando encuentra clientes, vende fruta y enchiladas. “Es triste querer darle de comer a tus hijos, y no tener nada. A veces ni siquiera para comprar una bolsa de sal.”

Un enigma letal y un puñado de investigadores

En los Estados Unidos, las causas principales de enfermedad renal crónica son la diabetes y la hipertensión. Pero la enfermedad, que deriva en un progresivo deterioro de las funciones renales, suele ser un mal manejable, que se puede controlar con tratamiento. Los médicos comprenden sus causas y su cura.

En Centroamérica, los orígenes de la enfermedad son más enigmáticos y frecuentemente más letales. Los trabajadores afectados en los campos de caña de azúcar cerca del Pacífico no suelen padecer diabetes ni hipertensión.

Algunos científicos sospechan que el contacto con alguna toxina desconocida, probablemente durante la jornada de trabajo, puede ser el detonante de la enfermedad. Los investigadores concuerdan en que la deshidratación y la insolación producto de las arduas jornadas laborales son factores probables, e incluso pueden ser la causa de la enfermedad. Los trabajadores, a quienes se les paga no por cantidad de horas o días trabajados sino por cantidad recogida, suelen trabajar hasta el extremo de la deshidratación y el desmayo, dañando potencialmente sus riñones en cada turno.

Usualmente, la ERC ataca unos pequeños vasos sanguíneos del riñón llamados glomérulos; en cambio, la epidemia Centroamericana ataca los túbulos del riñón. La ERC afecta por lo general a adultos mayores, hombres y mujeres con idéntica frecuencia; esta epidemia afecta mayormente a los hombres en edad laboral, especialmente a los cañeros pero también a mineros y otros trabajadores agrícolas.

Una creciente comunidad de investigadores está pidiendo el reconocimiento de una nueva enfermedad aún no incluida en los manuales médicos: “nefropatía mesoamericana”, “nefropatía agrícola endémica”, o “nefropatía azucarera”. El director del programa nacional de ERC de El Salvador ha escrito acerca de una “nefropatía regional mesoamericana” que algún día llegaría a ser reconocida mundialmente.

“Es importante que la enfermedad renal crónica que afecta a miles de trabajadores rurales en Centroamérica sea reconocida por lo que es: una gran epidemia con un impacto tremendo sobre la población”, dijo Víctor Penchaszadeh, epidemiólogo clínico de la Universidad de Columbia y frecuente consultor de la Organización Panamericana de la Salud (PAHO) sobre enfermedades crónicas en América Latina.

El doctor Ramón Vanegas, nefrólogo encargado de estudiar las aplicaciones para pensiones por enfermedades ocupacionales presentadas por los trabajadores al Instituto de Seguridad Social de Nicaragua, sostiene que los casos que él califica como ERC ocupacional siguen un patrón de lesión de los túbulos renales combinados con antecedentes de insolación.

“Usualmente han estado trabajado y han tenido espasmos musculares, han sufrido fiebres y se han desmayado”, dijo Venegas acerca de los pacientes cuyas aplicaciones ha aprobado. “Entonces regresan al trabajo, se exponen a los mismos síntomas, y el ciclo se repite. Dos o tres años después, el paciente contrae ERC.”

Mientras los médicos ponderan etiquetas y diagnósticos, el misterio persiste: ¿por qué esta forma particular del ERC ataca a los hombres de un modo singular y en esta región específica?

Algunos estudios sugieren que factores de riesgo, desde el contacto con pesticidas al abuso del alcohol, pasando por el uso frecuente de drogas antiinflamatorias, pueden jugar un papel importante en la aparición del ERC. Otros muestran que mineros, estibadores y trabajadores de cultivos en regiones afectadas también presentan altas tasas de ERC; un estudio en Nicaragua encontró un poblado minero que tenía una de las tasas más altas del país.

“La evidencia decididamente favorece la hipótesis de que el agotamiento debido al calor –trabajo pesado en un clima caliente sin la necesaria reposición de fluidos– puede ser una de las causas de esta enfermedad”, dijo Daniel Brooks, investigador principal en un equipo de científicos de la Universidad de Boston, uno de los pocos que están llevando a cabo estudios tempranos.

Durante días el equipo observó a cañeros; la temperatura media en los campos era de 35,5 grados. En su reporte, anotaron que la Administración de Seguridad y Salud Ocupacionales (OSHA) de los Estados Unidos, encargada de velar por la seguridad en los lugares de trabajo, exige 45 minutos de descanso por cada 15 minutos de trabajo bajo esos niveles de calor.

La investigación preliminar del equipo refuerza la hipótesis del agotamiento debido al calor; las muestras de orina y sangre de diversos tipos de cañeros durante una temporada de recolección evidencian la presencia de daños renales entre los que trabajaron al aire libre. Antes, el equipo ya había identificado una cantidad de prácticas y químicos en la compañía que eran una potencial amenaza para los riñones. Brooks dijo que se necesitan ulteriores investigaciones antes de sacar alguna conclusión.

Estudios internos hechos por la Nicaragua Sugar, dueña de uno de los cultivos de caña más grandes de Centroamérica, facilitado a ICIJ por la misma compañía, muestran que se ha tenido evidencia de una epidemia conectada con la insolación y la deshidratación por mucho tiempo. En 2001, el médico de la compañía Félix Zelaya llevó a cabo un estudio interno sobre las causas de ERC en sus trabajadores.

“Trabajo extenuante con exposición a temperaturas ambientales altas sin un programa de hidratación adecuado predisponen al sindrome de fatiga por calor (insolación) que es un factor important en el desarrollo de ERC”, concluyó Zelaya.

La Nicaragua Sugar y otras compañías afirman que han actuado voluntariamente para proteger a los trabajadores, mejorando su hidratación, reduciendo las horas de trabajo y reforzando el control sobre los contratistas laborales.

Aún así, Nicaragua Sugar disputa la existencia de una única enfermedad renal que afecta a sus trabajadores. “Estamos convencidos de que no tenemos nada que ver con la enfermedad renal”, dijo el vocero Ariel Granera. “Nuestras prácticas productivas no generan y no son factores causantes de la ERC”.

Indicios de problemas

En el año 2000, el médico salvadoreño Trabanino notó que una gran cantidad de trabajadores jóvenes y de edad mediana llegaban a su hospital en El Salvador, todos con casos avanzados de ERC. “Por algún motivo esto le parece normal al resto del mund, dijo. “A mí me parece extraño e intrigante”.

En el 2002, Trabanino publicó uno de los primeros estudios sobre la enfermedad, un perfil de 205 pacientes admitidos en su hospital con enfermedad renal terminal. Dos tercios de esos casos carecían de los factores de riesgo comunes a la ERC, y compartían algunas características.

“Casi todos eran hombres que vivían en las zonas más bajas del país, cerca de la costa, cerca de algún río importante”, escribió Trabanino en el PanAmerican Journal of Public Health. Gran parte de los pacientes también habían estado sometidos a “contacto ocupacional frecuente con insecticidas y pesticidas sin la protección adecuada”.

Otro estudio sobre pacientes con enfermedad renal del norte de Costa Rica –de nuevo provenientes de una región baja y sofocante cercana a la costa Pacífica– mostró un patrón similar. “Todos son hombres jóvenes, entre los 20 y los 40 años de edad”, escribió el doctor Manuel Cerdas, de Costa Rica, en la revista Kidney International. “La característica más interesante de estos pacientes es epidemiológica: todos llevan años trabajando como cañeros.”

Más tarde, Cerdas descubrió que las víctimas de la epidemia compartían otra condición: la enfermedad atacaba los túbulos de sus riñones. La enfermedad túbulo-intersticial es rara, culpable tan solo del 3,7% de los casos de enfermedad renal terminal en los Estados Unidos. Las causas conocidos incluyen exposición a toxinas y deshidratación.

Hoy, El Salvador promueve pruebas de sangre en las zonas más afectadas para tratar de encontrar casos en etapas aún tratables. Trabanino, que ha estudiado la epidemia por más de una década, cree que los chequeos, las campañas de educación pública y el mejoramiento de la seguridad laboral podrían detener la expansión de la enfermedad, si tan solo hubiera recursos disponibles.

Mientras tanto, los investigadores de Centroamérica libran una difícil batalla. Los escasos estudios sobre ERC existentes han sido llevados a cabo únicamente en hospitales y comunidades afectadas donde la gente ya estaba enferma. Las teorías sobre el probable rol de químicos tóxicos en la aparición de la enfermedad son difíciles de probar, ya que los científicos necesitan tener acceso a las víctimas de la epidemia cuando se están empezando a enfermar.

Silencio alrededor de la ERC; rápida acción en biocombustibles

Las compañías de azúcar centroamericanas han sido reacias a abrir sus puertas a los investigadores de salud externos. Sus defensores creen que las industrias temen que la enfermedad se catalogue como de tipo ocupacional. La resistencia ha empezado a ceder, particularmente en el Ingenio San Antonio de la Nicaragua Sugar, donde trabaja el equipo de la Universidad de Boston. Pero por lo general la industria le ha negado a científicos independientes el acceso a sus propiedades, empleados y registros.

Aurora Aragón, especialista en salud ocupacional de la Universidad de León en Nicaragua, afirmó que en 2004 los investigadores de una ONG internacional llamada SALTRA le pidieron a las principales compañías azucareras colaborar con un estudio sobre la seguridad de los trabajadores. El Ingenio San Antonio y el Ingenio Monte Rosa ignoraron la petición.

Y en 2007, dijo Aragón, otra petición de acceso fue rechazada por el Ingenio San Antonio. “Y ese fue el fin del asunto— dijo—. Ni una sola compañía azucarera nos dio permiso para estudiar el problema.”

Mario Amador, vocero del gremio industrial nicaragüense que representa las plantaciones contactadas por SALTRA, dijo que la industria ha aceptado estudios de médicos, estudiantes de medicina y autoridades sanitarias, pero debe ser cuidadosa al compartir información con extraños.

“Gente con malas intenciones ha tratado de vincular a la ERC con el trabajo en la industria azucarera porque esta industria fue la primera en encontrar altas tasas de ERC en los trabajadores que vinieron a las plantaciones en busca de trabajo— dijo Amador—. Y es por estos ataques constantes que las plantaciones y sus empleados son muy cuidadosos a la hora de dar información a cualquier persona o institución”.

Los productores centroamericanos juegan un papel importante en el negocio mundial del azúcar; en 2011, los Estados Unidos importaron más de 330.000 toneladas métricas de azúcar de la región, equivalente a un 23% de las importaciones totales de azúcar sin refinar.

Por debajo de la mesa, el gobierno estadounidense ha promovido enérgicamente la industria azucarera –en las áreas afectadas por la epidemia– no sólo como ingrediente culinario sino como fuente de biocombustible del etanol. Los Estados Unidos patrocinaron conferencias para promover los biocombustibles tanto en Nicaragua como en El Salvador incluso hasta 2008, según cables diplomáticos difundidos por WikiLeaks. Sus embajadores se reunieron en varias ocasiones con los líderes de la industria azucarera de ambos países, angustiados por el posible fracaso en el desarrollo de la producción de etanol, que podría llevar a estas naciones a depender de las importaciones de petróleo de la Venezuela de Hugo Chávez.

En el 2007, el entonces embajador Paul Trivelli notificó al Departamento de Estado de Estados Unidos acerca del primer cargamento de etanol del Ingenio San Antonio y escribió que la compañía había alcanzado “el potencial para desarrollar la industria y los aspectos positivos de los biocombustibles”. Pero manifestó preocupación por la posibilidad de que el presidente izquierdista de Nicaragua, Daniel Ortega, fuera influenciado por Hugo Chávez en su oposición a los biocombustibles. Al año siguiente, Trivelli escribió que el Departamento de Estado había designado a Nicaragua como “un país de alta prioridad” en cuanto a los biocombustibles. La embajada en El Salvador, lindante al norte con Nicaragua, también promovió agresivamente el etanol: los embajadores se reunieron con los líderes de la industria azucarera, hicieron saber al Departamento de Estado sus preocupaciones acerca de los efectos políticos de las importaciones de petróleo de Venezuela, y patrocinaron una conferencia para la promoción de biocombustibles.

Mientras tanto, el Banco Mundial ha proporcionado más de 100 millones de dólares en préstamos para la promoción de la producción de biocombustibles en dos plantaciones severamente afectadas, préstamos que aprobó sin consideración formal de la enfermedad renal. Cuando los trabajadores protestaron, el Banco proporcionó un millón de dólares para patrocinar el estudio en curso de la Universidad de Boston.

Antes de recibir los préstamos, las compañías tenían que demostrarle al Banco que estaban cumpliendo con los estándares sociales y ambientales. Equipos de evaluación publicaron rutilantes informes sobre las prácticas en los Ingenios San Antonio y Monte Rosa en septiembre de 2006 y mayo de 2007. Ninguno menciona la ERC.

En octubre de 2006, la junta de la Corporación Financiera Internacional (IFC) –el prestamista del Banco Mundial para proyectos del sector privado– aprobó un préstamo de 55 millones de dólares para el Ingenio San Antonio. Un préstamo de 50 millones de dólares para el Ingenio Monte Rosa fue aprobado en junio de 2007. Con el dinero, las compañías crecieron, enviando a más trabajadores a los campos de caña.

Edgar Restrepo, director general de inversiones de la IFC, dijo que su equipo sí consideró la ERC cuando evaluó el Ingenio San Antonio, pero que el contenido de sus deliberaciones es privado. Adriana Gómez, vocera de la IFC, dijo que la IFC había “cumplido con sus estrictos estándares sociales y ambientales en el proceso de diligencia debida”.

Punto muerto en Ciudad de México

Aunque los gobiernos de Centroamérica han destinado pocos recursos a la lucha contra la ERC, comienzan a sonar algunas alarmas.

El gobierno de El Salvador hizo una enérgica convocatoria a investigadores internacionales. En una cumbre de Naciones Unidas para ministros de salud que se llevó a cabo en Ciudad de México en febrero de 2011, la ministra de salud de El Salvador, María Isabel Rodríguez, declaró que la enfermedad renal crónica estaba “devastando nuestras poblaciones” a lo largo de Centroamérica. Llamó a sus colegas a que incluyeran la ERC entre las enfermedades crónicas principales en las Américas, paso que podría atraer los fondos de Naciones Unidas para investigación.

Su propuesta chocó con la oposición cerrada del más poderoso participante de la cumbre: los Estados Unidos.

Rodriguez dijo que la delegación norteamericana se rehusó tanto a incluir la enfermedad en la lista de enfermedades crónicas más graves del continente como a aceptar un lenguaje que sugiriera que la epidemia tenía causas claramente relacionadas con la exposición a químicos tóxicos.

Representantes centroamericanos dijeron que se sentían tan indignados que se rehusaban a firmar la declaración final de la conferencia hasta que no se incluyera la ERC. Durante momentos de tensión, la disputa amenazó el consenso alcanzado en la cumbre. El resultado: una sola frase mencionando la enfermedad renal crónica en Centroamérica.

David McQueen, delegado estadounidense del Centro para el Control y la Prevención de las Enfermedades, le dijo al ICIJ que los Estados Unidos se oponían a mencionar la ERC para mantener el énfasis en la diabetes, las enfermedades del corazón y el cáncer.

“Los pronunciamientos que se hacen rara vez son exitosos si no están muy bien dirigidos”, dijo.

McQueen, hoy jubilado, dijo que no estaba al tanto de la dramática expansión de la enfermedad renal crónica hasta que el tema se discutió en la conferencia. “La cuestión del riñón crónico tomó a todo el mundo por sorpresa— dijo—. ¿Por qué están haciendo tanta fuerza por este tema?” MacQueen se enteró en la reunión de que era “un problema importante”, que causaba “una sangría enorme en el presupuesto” de los médicos y hospitales en Centroamérica.

Pero incluso después de conocer el tema, Estados Unidos ha hecho poco al respecto. Kathryn Harben, vocera del CDC, dijo que durante una cena en la noche de la cumbre en Ciudad de México, el CDC se ofreció informalmente a ayudar a los ministerios de salud de Centroamérica. Aún no ha empezado a hacerlo, dijo, porque los ministerios no han presentado una petición formal. El funcionario de salud más importante en la cumbre, el doctor Howard K. Koh, subsecretario de salud en el Departamento de Salud y Servicios Humanos, no quiso ser entrevistado para esta investigación.

Enférmate y perderás tu trabajo

Los Ingenios San Antonio y Monte Rosa, las plantaciones más grandes de Nicaragua, ahora examinan habitualmente a sus trabajadores para medir sus niveles de creatitina en sangre, un químico que indica el funcionamiento de los riñones. Los trabajadores con niveles altos de creatinina son despedidos, una medida necesaria según las compañías para prevenir que los trabajadores enfermos arriesguen aún más su salud en los campos.

El despido deja a los trabajadores sin acceso a los hospitales de las compañías y muchas veces a sus pensiones.

El Ingenio San Antonio dijo que ha reducido las jornadas laborales, que provee más agua y soluciones hidratantes y que contrata trabajadores sociales que acompañan a los contratistas a los campos para asegurar su correcta hidratación. Actualmente, la jornada laboral no tiene más de ocho horas para los trabajos físicamente extenuantes, y la compañía proporciona ocho litros de agua y 2.700 milímetros de solución hidratante por día a cada trabajador, dijo el vocero Granera.

Una mañana de noviembre de 2009, Maudiel Martínez se subió a un bus de la compañía con destino a los campos. Tenía 17 años de edad y comenzaba su cuarto año con el Ingenio San Antonio. La cosecha estaba a punto de comenzar y, siguiendo la rutina, la compañía había llevado a cabo exámenes de sangre para ver si sus trabajadores estaban suficientemente saludables para trabajar en los campos.

Martínez estaba en el bus cuando recibió la noticia: no había pasado el examen de creatinina. Estaba enfermo.

“Lloré de tristeza —dijo Martínez—. Era tan joven. A los 17 años uno es todavía un adolescente”.

El diagnóstico significaba que Martínez tenía prohibido formalmente trabajar para la compañía. Con una familia en graves aprietos económicos y sin alternativas de trabajo, Martínez tomó un nombre y un número de seguridad social falsos y regresó a trabajar a los mismos campos para un contratista independiente al que, como dijo Martínez, poco le importaba que éste tomara el nombre y el número de seguridad social de una mujer.

Al menos algunos trabajadores bajo contrato siguen cumpliendo turnos más largos y más riesgosos. Un periodista del ICIJ notó en junio de 2011 que los buses que recogían trabajadores bajo contrato para el Ingenio San Antonio salían a las 5.25 de la mañana y regresaban a las 5.31 de la tarde. Los trabajadores decían que pasaban unas diez de esas horas en los campos.

Colapso en los campos

El 10 de junio de 2011 a Martínez se le ordenó cortar cuatro hileras de caña. Su tarea consistía en pelar las hojas, cortar las cañas en pedazos y reunirlas en atados. Alrededor de cuarenta piezas forman un atado. Por este trabajo recibió una córdoba por atado –menos de cinco centavos de dólar.

A las 8:30 de la mañana había cortado dos hileras. Empezó a sentirse mal, pero continuó cortando bajo el calor abrasador. “El sol estaba demasiado fuerte y yo sudaba a través de mi camiseta como si me hubieran echado agua encima”, recordó Martínez.

Cuando había terminado sus hileras, cerca de las once, Martínez tenía fiebre y sentía náuseas. Descansó 15 minutos pero aún tenía que armar los atados. Otro trabajador vino en su ayuda.

Martínez dijo que terminaron a la 1 de la tarde, y el bus vino media hora después a recoger a los trabajadores para llevarlos a la casa. Cuando llegó, Martínez se sentía desesperadamente enfermo. “Me subí al bus y ya no pude caminar”, dijo.

Como Martínez era un trabajador por contrato, no podía ir al hospital de la compañía. Tomó el bus hacia su casa y empezó a vomitar. El bus no paró.

“Los muchachos me dejaron sacar la cabeza por la ventana del bus”, dijo.

La calle donde el bus lo dejó está separada de su casa por un riacho. Su madre y su hermano lo cargaron desde allí hasta la cama.

Pronto después de su colapso, Martínez supo que sus niveles de creatinina estaban altos. Llevaba días sin apetito, tomando sólo bebidas frías para aplacar la sensación de fiebre.

“Si la muerte viene en camino, tenemos que resignarnos a esperarla— dijo Martínez—. Resignarse quiere decir esperar lo que la enfermedad te va a traer. Porque tú me miras ahora y parezco normal, pero por dentro estoy como en llamas”.

Energy Dept. offered to put private investors ahead of taxpayers if Solyndra went bankrupt

2011-11-21T21:06:12-05:00

As solar panel maker Solyndra sunk deeper into debt last year, a top Department of Energy official pulled the company’s chief investor aside with a last-ditch pitch: If investors raised $75 million to help Solyndra stay afloat, they would be first to collect if the fledgling firm went bankrupt.

Solyndra did shut its doors this year, and now those investors, including a bundler to President Obama, stand first in line in bankruptcy proceedings. The Energy Department, which supported Solyndra with a $535 million loan guarantee even as auditors, analysts and government bureaucrats raised bright red flags about the company’s prospects, placed U.S. taxpayers second in line.

The roots of that arrangement are spelled out in a Dec. 7, 2010 email from Steve Mitchell, the managing director of Argonaut Private Equity, Solyndra’s top financial investor, and addressed to “George.” Argonaut’s founder is George Kaiser, an Oklahoma oil billionaire who bundled campaign contributions for Obama’s 2008 election.

With Solyndra buried in a cash flow crisis late last year, the company and its chief investors met with Energy Department officials in a search for solutions. Solyndra and its investors wanted more money from DOE, which had already bankrolled it with the low interest half billion dollar loan issued by the Federal Financing Bank.

At the meeting, Mitchell wrote, DOE made clear that while it “should be increasing the loan” — it wouldn’t.

“However, they also acknowledge that politically they had no will or ability to get this done,” Mitchell wrote. “The DOE really thinks politically before it thinks economically.”

Jonathan Silver, a former venture capitalist tapped by the Obama administration to run the loan program in November 2009, was not at that late-year meeting but was cited in the email discussion about politics at DOE. The emails released Wednesday redact, or black out, the name of the person who mentioned him.

After DOE shot down its idea, Mitchell wrote, Argonaut “politely moved the conversation” toward the potential bankruptcy ahead. This, he said, caught the Energy Department by surprise. “To me it was clear that the DOE folks were somewhat caught off guard that we weren’t going to bail out the company.”

As the meeting broke up, Mitchell wrote, he was approached by a top Energy official – pitching a new idea.

“The lead decision maker for the DOE at this week’s negotiations… grabbed me and wanted to discuss one final proposal from the DOE,” Mitchell wrote. “She suggested that we (current investors) commit to fund $75 million now and in exchange DOE would fund the remaining $95 million.”

“Under her new proposal, in a downside situation — i.e. a liquidation scenario — our $75 million would receive 100 percent of the liquidation proceeds until we were made whole and her $95 million would stand behind us,” Mitchell wrote.

Mitchell said he struggled with the idea of making another investment in a company losing millions and struggling to find a foothold in the market.

But for the investors, Energy’s pitch carried favorable terms: If Solyndra went belly up, they’d have the first chance to recover. “This request does reduce our risk in the downside scenario,” Mitchell wrote.

By last February, the deal was set. Investors, including Argonaut, raised $75 million. The Energy Department, in turn, refinanced Solyndra’s loan to give the company more time to pay its debt. And it agreed to keep investors in line first in bankruptcy.

Energy Secretary Steven Chu signed off on the arrangement, records show. Chu, facing escalating criticism for his department’s handling of its first loan guarantee, is scheduled to testify Thursday before the House Energy and Commerce Committee investigating the loan.

The fresh emails were part of 187 pages of correspondence made public on the eve of that testimony, including several government dispatches critical of the Energy Department’s oversight of Solyndra. In many cases, the name of the email author is blacked out.

Initially pitched as the signature green energy investment under Obama, Solyndra’s meltdown — and the mushrooming investigations it attracted — has instead become a political vulnerability for the president. His administration’s decision to put investors in line ahead of taxpayers has attracted harsh criticism — and allegations from some Republicans that it violated the Energy Policy Act of 2005.

An Energy Department spokesman did not immediately respond to questions Wednesday about the roots of the government’s refinancing pact with Solyndra and its investors.

Instead, the spokesman sent excerpts from Chu’s planned testimony Thursday, where he will cite how clean energy investments reached a record $243 billion last year.

“When it comes to the clean energy race, America faces a simple choice: compete or accept defeat. I believe we can and must compete,” Chu’s statement says.

“We appreciate the support the loan programs have received from many members of Congress — including nearly 500 letters to the Department — who have urged us to accelerate our efforts and to fund worthy projects in their states,” Chu added. “While we are disappointed in the outcome of this particular loan, we support Congress’ mandate to finance the deployment of innovative technologies, and believe that our portfolio of loans does so responsibly.”

The loan guarantee to Solyndra, he said, “was subject to proper, rigorous scrutiny and healthy debate during every phase of the process.”

Still, some criticism of DOE’s oversight of the deal has come from within government. The U.S. Treasury Department and Office of Management and Budget each raised questions about whether energy officials had the legal authority to put taxpayers second in line.

“There are some questions at the staff level about how DOE is going about the restructuring for Solyndra,” an unidentified government official wrote last December, as the refinancing moved ahead. “At least one involves the legal question of what [the government statute] means for their plan to make some of the debt ‘junior’ to the new debt.

“I think they have stretched this definition beyond its limits.”

Energy officials say the department’s chief counsel conducted a “careful analysis of the terms of the restructuring” and determined it was legal. The department concluded it has “broad authority in a distressed situation to take action that will protect the taxpayer.” In this case, the department said it refinanced the loan to keep the company afloat – or it could shut its doors instantly.

Six months after receiving DOE’s life raft, Solyndra fired 1,100 workers and closed its Fremont, Calif., plant. Days later, it filed for bankruptcy – and, soon after, was raided by agents from the FBI and Energy Department Inspector General. Company CEO Brian Harrison resigned.

Also out: Silver, former executive director of DOE’s Loan Programs Office, who resigned after facing persistent questioning earlier this year from the House Energy and Commerce Committee.

The Republican-led committee will turn its questions Thursday to Chu, and explore key areas:

How did Chu‘s directive to move quickly in awarding green energy loan guarantees impact the level of scrutiny over of Solyndra’s application?
Should DOE have foreseen Solyndra’s financial collapse, predicted even by others within government?
Did DOE protect taxpayers in negotiating and refinancing Solyndra’s loan?

The emails made public prior to his testimony will only heighten the scrutiny. Chu announced the department’s commitment to back Solyndra in March 2009, boasting of the speed at which DOE moved in making the Silicon Valley firm the first recipient of Obama’s green energy funding.

That August, a few weeks before the loan officially closed, government staffers were still raising pointed questions about the risk DOE was taking in backing a venture with no financial track record.

“I’m not really sure where to go from here,” one unidentified official wrote by email as government staffers explored the fine print of Solyndra’s financing. “We’re verging on just silliness. The issue is pretty clear, but I don’t think we understand it. I think in some respects this results from not having a financial advisor on the project team — who would grasp the idea.”

Another government staffer questioned how the rush to close the loan forced negotiations and allowed little time to fully address Solyndra’s financial viability. The official didn’t want to make Solyndra a case study in how to proceed. “But we also need to make sure they don’t jam us on later deals so there isn’t time to negotiate those, too.”

On Aug. 31, 2009, yet another official pushed for DOE to hold off the closing planned days ahead. “I would prefer that the announcement be postponed,” the official wrote. “This is the first loan guarantee, and we should have a full review with all hands on deck to make sure we get it right.”

Four days later, the government finalized the loan, marking the ceremony with a groundbreaking in California and Vice President Joe Biden beamed in on a giant video monitor. Chu was on hand to cite the loan as a signal of the administration’s investment in green technology.

"It is time to rev up the American innovation machine and reclaim our lead on clean energy," Chu said. "This investment is part of a broad, aggressive effort to spark a new industrial revolution that will put Americans to work, end our dependence on foreign oil and cut carbon pollution."

A year later, presaging the larger free-fall to come, Solyndra was already deep in a cash crunch and planned to shutter a plant and lay off 180 workers in October 2010. The Energy Department, however, sought a favor: For the company to put off the announcement until after the Nov. 2 midterm elections, the new emails show.

“No announcement till after elections at doe (sic) request,” says an email sent to a Kaiser company executive.

Solyndra’s announcement came Nov. 3.