Niagara Gazette

March 19, 2014

Tonawanda Coke ordered to pay $12.5M in fines; official jailed

By Jessica Bagley
Niagara Gazette

Niagara Gazette — BUFFALO — A federal judge ordered Tonawanda Coke to pay $12.5 million in fines and sentenced a senior plant employee to spend 366 days in prison on Wednesday, marking the culmination of the a landmark criminal environmental trial. 

"For years, Tonawanda Coke has operated in violation of its permits," said Chief U.S. District Judge William M. Skretny, who presided over the trial and sentenced the defendants. "The immediate effects of the crimes is not readily apparent or easily quantifiable ... but this community has suffered in unexplained medical illnesses, contaminated properties and unknown future effects." 

Last year, the River Road plant and its environmental compliance manager Mark Kamholz were convicted of violating the Clean Air Act and the Resource Conservation and Recovery Act for releasing cancer-causing toxins into the air and dumping hazardous material on the ground. 

Kamholz, 66, who was additionally convicted of obstruction of justice, was ordered to pay a fine of $20,000 and complete 100 hours of community service in addition to his year-and-a-day prison sentence. He retired from the plant in December and will be allowed to voluntarily surrender to authorities at a date to be determined.

Wednesday's verdict closes a chapter in a decade-long fight against the plant, when residents began publicly campaigning due to medical problems and black soot covering their homes. After years of work and a 30-day trial, the jury delivered a guilty verdict, and community members immediately started pushing for a portion of the fine money to stay local. 

Skretny responded to those calls Wednesday and ordered the coal-burning plant to fund two community service projects as part of its five-year probation — a decision U.S. Attorney William J. Hochul Jr. said is very rare. 

The plant will fund a 10-year, $11.4 million University at Buffalo epidemiological study that will allow residents and workers to meet with doctors and determine if the effects of Tonawanda Coke's crimes impacted their health. A $711,161 soil testing study proposed by environmental activist Jackie James-Creedon will also be funded.

"I feel like the judge really heard our voices," said James-Creedon, who cried in court after the judge announced the community service projects. "I have worked so hard to have the soil testing, and to have it funded just provides so much vindication. The ironic thing is that Tonawanda Coke is paying for it." 

The plant will pay the fine money and community service funds over the course of five years. 

During his opening remarks, Skretny stated that he intended for his sentence to constitute "more than a slap on the proverbial wrist," but that he did not want the fines to represent a "corporate death penalty."

"It environmental manager existed in title only and the strategy was to react to violations only when caught," Skretny said. "Tonawanda Coke has failed the community. Yes, it is to be recognized for employing 100 people, but it has breached society's reasonable trust." 

Assistant U.S. Attorney Aaron Mango, who prosecuted the case, echoed those statements and said the plant's conduct illustrated "a total and utter disrespect for the environment and the environmental regulatory framework."

He reviewed the plant's crimes, noting that Tonawanda Coke operated an unpermitted pressure relief that emitted tons of coke oven gas, that it failed to install a required environmental barrier in its quench tower and that it improperly stored and disposed of hazardous waste.

Mango also argued that the recent explosion at the plant indicates that Tonawanda Coke has not changed its approach to environmental regulations. The plant, which eventually admitted that workers were injured in the incident, received two notices of violations from the state Department of Environmental Conservation for failing to maintain its equipment and failing to report the explosion. 

"It's difficult to sit by and hear that they have done everything in their power to cooperate with regulatory agencies when that's just absolutely not true," Mango said.

The ongoing monitoring of the plant does provide a challenge, but Hochul noted that the probationary period will allow federal and state officials to enter the property based on reasonable suspicion. U.S. Environmental Protection Agency Regional Administrator Judith A. Enck said the plant is a top priority for both state and federal regulators. 

"There's still more work to be done. This is an important chapter, but the book is not completely written and we have to keep protecting the public's health," she said. "We are committed to cleaning the place up." 

Clean Air Coalition Director Erin Heaney, whose group was among the earliest and loudest critics of the facility, also said that her organization's work is far from over. 

"I don't think this is the end of the story. It's an important milestone, but the court system is only one fight," she said. "We were hoping for more money and more jail time, but this is just one victory out of many." 

More than 20 civil cases against Tonawanda Coke are still pending, including a mass tort action involving 268 residents. Although the government had requested that Skretny classify local residents as victims of the plant's crimes and give them rights to restitution, the judge refused to do so. 

Paul Saffrin, Tonawanda Coke's CEO and the grandson of founder J.D. Crane, did apologize for the violations in court on Wednesday and said the company will learn from them. 

"Tonawanda Coke sincerely regrets these mistakes," he said. "We tried, but we failed." 

Kamholz also offered a brief statement, and through his attorney, apologized to residents for the uncertainty about their health. 

"I do accept the consequences of my actions and my failure to act," he said. "When I say that it was an eye-opening experience, I mean that I realized I should have handled things differently, and if I wasn't able to, I should have walked away from the company. The limits on my position as environmental manager posed difficulties, but those limits should not be offered as an excuse."

Tonawanda Coke was sentenced to: • $5.5 million fines for the Clean Air Act Violations -- the maximum allowed • $7 million for the Resource Recovery and Conservation Act violations • $12.2 million in community service projects as part of a five-year probation • $5,600 special assessment fee Former environmental compliance manager Mark Kamholz was sentenced to: • One year and one day in prison • $20,000 fine • One year supervised release • 100 hours of community service in Tonawanda or Grand Island • He is also barred from holding an environmental compliance position