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PA ALASKA PIPELINE OIL SPILL LEADS TO $1.5 MILLION CORP. FINE

Release Date: 5/31/96
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PA ALASKA PIPELINE OIL SPILL LEADS TO $1.5 MILLION CORP. FINE

FOR RELEASE: FRIDAY, MAY 31, 1996

ALASKA PIPELINE OIL SPILL LEADS TO $1.5 MILLION CORPORATE FINE AND CRIMINAL CHARGES

On May 23, two Alaska corporations, Pacific and Arctic Pipelines Inc. (PAPI) and Pacific Arctic Railway and Navigation Co. (PARN) agreed to plead guilty to federal criminal violations resulting from an Oct. 1, 1994, oil spill into the Skagway River. The spill occurred when employees accidentally ruptured a PAPI oil pipeline while using heavy equipment to transport rock that PARN had illegally quarried on federal land. PAPI admitted to negligently spilling oil, failing to report the spill as required by the Clean Water Act (CWA) and making a false statement concerning the spill to investigators from the U.S. Coast Guard. In addition to admitting the theft of the rock, PARN admitted to illegally transporting and disposing of hazardous waste in August 1995. The companies agreed to pay a fine of $1.5 million, of which $850,000 may be off-set by court-approved environmental restoration activities. Both companies are owned by Russell Metals Inc. which was not charged with criminal conduct because it promptly reported wrongdoing and cooperated with the investigation. In a related development, Paul Taylor, former president of PAPI and PARN, and Edward Hanousek, a PARN railroad supervisor, were indicted for alleged criminal activities in connection with this case. Taylor was charged with negligent discharge of oil into the river, failure to report the discharge under the CWA, making false statements to government investigators, conspiracy and obstruction of justice. Hanousek was charged with negligent discharge of oil under the CWA and conspiracy. Taylor and Hanousek allegedly supervised the illegal rock quarrying which led to the oil spill. Taylor is also alleged to have paid $100 to an employee to make a false statement to investigators and to have altered the damaged section of pipe to make the damage look smaller than it actually was. This case was investigated by EPA's Criminal Investigation Division, the FBI, the U.S. Coast Guard and Alaska state authorities.

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