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Tyson pleads guilty in pollution case, will pay $7.5 million in fines

Date Class
25th Jun 2003 Fraud Investigation
Tyson Foods Inc. pleaded guilty Wednesday to 20 felony violations of the federal Clean Water Act and agreed to pay $7.5 million in criminal and civil fines.

The fines are the largest environmental penalties in the history of the Western District of Missouri.

Les Baledge, Tyson's executive vice president and general counsel, entered the plea on behalf of the company before Senior U.S. District Judge Howard Sachs. The firm is based in Springdale, Ark.

"I want to add on behalf of Tyson Foods that we regret that these failures occurred," Baledge told Sachs midway through the 90-minute hearing.

Under an agreement with the U.S. attorney's office in Kansas City and the environmental crimes section of the U.S. Justice Department, Tyson admitted that it illegally discharged untreated wastewater from its poultry processing plant near Sedalia, Mo., into a tributary of the Lamine River.

The Environmental Protection Agency began investigating the discharges in late 1997 after receiving a complaint that Tyson was bypassing its wastewater treatment plant and discharging untreated wastewater through storm drains into a neighboring stream, which flows into the Lamine River.

In 1999, federal officials served two criminal search warrants at the plant. Even after the search warrants were executed, Tyson continued its illegal conduct, Justice Department and environmental officials said.

"Having done this work for nearly 20 years, I don't recall any case where violations continued after the execution of two search warrants," said Jeremy Korzenik, a senior trial attorney in the Justice Department's environmental crimes section. "That's stunning."

In addition to its plea in federal court in Kansas City, Tyson on Wednesday also entered a consent judgment in Pettis County with the Missouri attorney general's office. The judgment resolved state charges of environmental violations related to the same discharges.

Under the federal and state pleadings, Tyson agreed to pay $5.5 million to the federal government, $1 million to the Pettis County School Fund and $1 million to the Missouri Natural Resources Protection Fund to help remedy the damage caused by the illegal discharges.

In addition, Tyson was placed on probation for three years. The terms of its probation require it to:

Hire an outside consultant to perform an environmental audit and provide the results to state and federal authorities.

Institute an "enhanced environmental management system" at the Sedalia complex.

Comply with all environmental laws and orders applicable to the complex.

In a written statement, Tyson, the world's largest meat producer, said it "never intentionally sought to bypass its wastewater treatment system." The company said that since 2001, when most of the incidents occurred, it had invested in improvements designed to enhance its storm-water handling capabilities.

But government officials painted a different picture, outlining a continuing pattern of environmental violations at the 1,000-acre Sedalia complex.

Tyson's characterizations of its violations as mere leaks and spills "trivialize a decade-long record of permit violations that demonstrate indifference to environmental regulations and recalcitrance to civil enforcement efforts," prosecutors wrote in a June 20 letter to Sachs. Sachs made the letter part of the public record.

Sachs, while accepting Tyson's plea Wednesday, expressed concern that the sentence wasn't severe enough, noting that the 20 felony violations carried maximum monetary penalties of $500,000 each, or a total of $10 million.

"These amounts are not very impressive, considering the size of the company and its public history," Sachs said, referring to the fines Tyson agreed to pay.

Tyson posted 2002 sales of $23.4 billion. Its net income was $383 million.

Sachs said he would accept the sentence only because additional fines "wouldn't greatly change the impact of the prosecution" and because of "the risk of extending the controversy" for months or years.

"It has gone on too long already," he said.

Although Tyson has been a target of civil actions by both the government and private litigants for environmental violations, its plea Wednesday marked the first time it had been convicted of criminal violations of environmental laws.

"As a first offender, at least as far as the criminal law, the company is entitled to some consideration," Sachs said.

Korzenik said that Tyson continued to discharge untreated wastewater through its storm drains, despite company assurances that the discharges would stop, and even after numerous warnings, administrative orders, two state court injunctions and the criminal search warrants.

"There was a pattern of conduct of violation after violation after administrative and civil remedies completely failed," Korzenik said at a news conference after the court hearing. "That required that we bring criminal action against the company."

Assistant U.S. Attorney J. Daniel Stewart, who prosecuted the case with Korzenik, said that Tyson's was the first environmental prosecution against a corporation in the Western District in several years.

Stewart noted that most environmental prosecutions are brought against individuals, rather than corporations, and often result in jail time. In Tyson's case, however, responsibility was too diffuse to warrant singling out any individual wrongdoers, Stewart said.

Tyson shares closed Wednesday at $10.60, down 12 cents.




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