A Dangerous Business Revisited
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Introduction: february 5, 2008

UPDATE: April 2009

More than six years after FRONTLINE, The New York Times and the CBC first reported on McWane Inc.'s worker safety and environmental record, the final case pending against the corporation ended.

McWane was fined $8 million for dozens of safety and environmental crimes at its New Jersey plant, Atlantic States Cast Iron Pipe Company. Four of the plant's managers received prison sentences ranging from 6 months to 70 months. The case was one of several lawsuits brought by federal prosecutors in a multi-state investigation that began in 2003 into McWane's operations (see box below listing the prosecutions).

Read the 4/24/09 New York Times article here.

  • Related Link
  • The McWane Prosecutions
    A summary of the legal actions taken against McWane, its plants and its employees.

A worker at McWane Cast Iron Pipe in Birmingham, Ala.

In January 2003, FRONTLINE, The New York Times and the Canadian Broadcasting Corporation joined forces to investigate thousands of injuries and nine deaths at plants owned by the privately held McWane, Inc., one of the largest iron pipe foundry companies in North America.

Through interviews with current and former employees and executives; government officials; and environmental, health and safety experts; a portrait emerged of McWane as the most dangerous company in an inherently dangerous business.

In A Dangerous Business Revisited, FRONTLINE correspondent Lowell Bergman examines what happened after the broadcast: how the Justice Department responded, the changes made at the company, and what happened to some of the injured workers and a whistleblower who told their stories on camera five years ago.

The 2003 program drew the attention of the Environmental Crimes Section of the Department of Justice. Working with Environmental Protection Agency (EPA) criminal investigators and Occupational Safety and Health Administration (OSHA) inspectors, then-section head David Uhlmann guided a nationwide investigation that led to the prosecution of five different McWane facilities in four federal jurisdictions.

"During the 20-year history of the Environmental Crime Section, we had never seen a company that committed criminal violations at so many of its facilities," Uhlmann tells FRONTLINE. "There was, in effect, a culture of lawlessness."

Ronald Tenpas, the assistant attorney general for the Department of Justice's Environment & Natural Resources Division, tells FRONTLINE, "There were some folks who made some conscious decisions about what they were going to do and that they were going to obstruct the government, that they were going to deliberately violate the laws."

All told, McWane and eight of its executives and managers were convicted of 125 environmental, health and safety crimes, including violations of the Clean Water Act and the Clean Air Act, as well as lying to government officials and conspiracy. The company and executives still await a scheduled April 2008 sentencing in a case involving their Atlantic States foundry, in which a federal court in New Jersey convicted them of 52 felonies.

Editor's note: In October 2007, the 11th Circuit Court of Appeals reversed the convictions of McWane and its managers in the McWane Cast Iron Pipe case in Alabama. The court ordered a new trial on charges relating to the Clean Water Act, based on a recent Supreme Court decision interpreting part of that law. The court also ordered that the company be acquitted on the charge of making a false statement to the EPA.

To date, the courts have imposed almost $20 million in criminal fines, and McWane has paid millions more in penalties imposed by government regulatory agencies. Only one McWane official has served any time in jail.

But after an in-depth investigation, FRONTLINE found that what was once pejoratively known as "the McWane way" appears to have changed dramatically.

The company says it has forced out many of the old managers at its troubled foundries. McWane officials also say the company has spent more than $300 million on improvements since 1999, and after our original broadcast it hired three former high-ranking government officials to serve as architects of its turnaround. The company also uses advanced computer programs to track environmental compliance and injuries, and its injury rate for 2007 will, according to McWane's outside auditor, be below the industry average.

McWane's owner, Phillip McWane, declined our repeated requests for an interview, as he did for the original broadcast. But the company provided reams of documents as evidence of its turnaround and encouraged us to talk with its new environment, health and safety teams, as well as its executive consultants and workers. After extensive negotiations, McWane President Ruffner Page did meet with us off the record. Later he agreed to put some of what he said on the public record and to read a prepared statement on camera.

The McWane investigations created a new template for protecting workers. By trying companies under environmental laws, which carry stiffer fines and prison terms, prosecutors were able to sidestep the lesser penalties set forth for OSHA violations. It is still only a federal misdemeanor, punishable by a maximum of six months in jail, to commit a "willful" OSHA violation -- intentionally disregarding the law or showing indifference to it -- that causes the death of a worker.

Despite various legislative attempts -- including the Protecting America's Workers Act currently awaiting action in both houses of Congress -- the law has not been changed, in part because of the effectiveness of prosecutions at the state level and the ongoing reluctance of lobbying groups representing business and industry. "I can tell you that our position right now is that we don't support an increase in the criminal penalty structure," says Marc Freedman, director of labor policy for the U.S. Chamber of Commerce, which represents some 3 million businesses nationwide.

Nonetheless, the current system has yielded considerable results. "Do you think we'd be talking about a new McWane today if all we could have done in the various McWane prosecutions was hit them with misdemeanor sanctions?" Uhlmann asks. "We wouldn't be hearing about a new McWane today. We wouldn't even have the possibility of a new McWane today if they hadn't been faced with felony prosecutions and multimillion-dollar fines."

"There's always companies that don't think it's important to comply with the law," Uhlmann says, "and for those companies you need a strong enforcement scheme to bring them in line and to make sure that crime doesn't pay."

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posted february 5, 2008

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