Ship company agrees to $1 million oil pollution fine

Pacific-Gulf Marine awaits deal's approval from federal judge

two chief engineers charged in related environmental crime case

June 30, 2006|By MATTHEW DOLAN | MATTHEW DOLAN,SUN REPORTER

A New Orleans-based ship operator has promised to pay a $1 million fine for pollution violations after a Coast Guard investigation in Baltimore led to the discovery of the improper discharge of hundreds of thousands of gallons of oil-contaminated waste.

Pacific-Gulf Marine Inc. (PGM) agreed to plead guilty to criminal charges that it allowed four of its ships to dump untreated waste, the Justice Department announced yesterday. As part of the plea agreement, the company will also pay $500,000 for community service. The agreement still needs approval from a judge in federal court.

Todd Johnson, the company's chief executive officer, said in a prepared statement yesterday that "PGM wants to be part of the solution, not part of the problem. We deeply regret that some of our crews violated environmental laws and we apologize for these actions."

The company recently won contracts with the federal Maritime Administration's Ready Reserve Force, which provides supplies to the U.S. military overseas, according to published reports.

In a related criminal case, a federal grand jury in Baltimore also returned an indictment Wednesday that charges two former chief engineers on a PGM ship with environmental crimes.

The company admitted that ship records created the impression that bilge waste had been properly discharged overboard through required equipment, instead using a "magical pipe" to bypass the system, court papers say. The motive was to save money, prosecutors said.

PGM executives said they turned over the results of their internal investigation to federal authorities, aiding in the prosecution of the chief engineers.

"Companies that voluntarily assist in federal criminal investigations and accept responsibility for their own crimes will receive credit," said Maryland U.S. Attorney Rod J. Rosenstein. "By waiving privilege claims and disclosing the results of its own internal investigation, PGM helped to ensure that others also will be held accountable."

In federal court in Baltimore, Stephen Karas and Mark Humphries, the former engineers, have been charged with conspiracy, violation of the Act to Prevent Pollution from Ships for failing to maintain an Oil Record Book and making false statements.

Karas was also charged with a count of obstruction of justice for witness tampering, according to federal officials.

Humphries has been charged with a count of obstruction for the destruction of evidence when he allegedly threw the bypass pipe overboard after the Coast Guard inspection in Baltimore, federal investigators said.

Federal prosecutors in Baltimore did not yet know when the men would appear in court.

matthew.dolan@baltsun.com

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