JULY 2008

SEI president sentenced for environmental oversights

Spencer Environmental Incorporated (SEI) and its president, Donald M. Spencer, were sentenced by U.S. District Judge Haggerty for the District of Oregon, the Justice Department announced. In a related matter, SEI’s former engineer, Durbin Hartel, was indicted by a federal grand jury for obstruction of justice and lying to investigators.

SEI and Spencer admitted to three felony violations of hazardous waste laws of the Resource Conservation and Recovery Act (RCRA) on October 12, 2007. The court sentenced SEI to pay $150,000. Of this amount, $75,000 will fund various environmental projects in Oregon administered by the congressionally established National Fish and Wildlife Fund (NFWF) through the Oregon Governor’s Fund for the Environment. Judge Haggerty sentenced Spencer to 6 months in prison and 1 year of supervised release.

The case arose from an investigation into a fire at SEI’s former facility. SEI was an Oregon corporation that operated a recycling and wastewater treatment facility located in Portland. The company contracted with industrial companies to collect and recycle material including used oil and antifreeze, and to collect, treat and dispose of wastewater. Spencer was the founder and president of SEI. As president, Spencer had the authority to exercise control over every aspect of the handling of waste and used oil at SEI’s Foster Road plant.

RCRA, in addition to regulating hazardous waste, establishes standards for handling used oil that are designed to minimize the risk of fire and release of used oil into the environment. Between April 2000 and June 2003, employees at the SEI Foster Road plant repeatedly violated the RCRA standards for handling used oil by routinely spilling used oil, overfilling a waste pit used for oily waste, and failing to properly clean up spills when they occurred. This resulted in the release of used oil outside the Foster Road plant, including at least one spill that spread to a storage facility occupied by an appliance retail company next door to the plant. Following the sale of SEI’s facility, a fire broke out when a welding spark touched off used oil residue in a pit and quickly spread to other oil-soaked parts of the facility, largely destroying the facility and leading to the contamination of Johnson Creek, a tributary of the Willamette River known to contain threatened salmonids.

The related indictment charges Durbin Hartel, the former engineer for SEI, with covering up the investigation into a worker’s death at SEI’s facility. Timothy Smith, a summer employee of SEI, was told to pressure wash a 10,000 gallon wastewater tank. Following the cleaning, Smith suffered lung damage that progressed and ultimately resulted in his death. Hartel allegedly filled the wastewater tank with a viscous sludge or rocker lube to conceal its former contents. Attempts to determine what substance caused Smith’s injury were thwarted by the wastewater tank having been filled. When Oregon Department of Environmental Quality and Oregon Occupational Safety and Health Division investigators interviewed Hartel, he denied any knowledge the tank had been filled with sludge despite having allegedly ordered an SEI worker to fill the tank.

“Spencer Environmental and its corporate official are paying the price for lax environmental oversight,” said Eileen Sobeck, Deputy Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “Today’s sentencing and the indictment of SEI’s former engineer reaffirm the Department’s commitment to protecting the environment and worker safety, as well as ensuring that there is a level playing field for those corporations that conduct business in an environmentally responsible manner.”