a dangerous business
mcwane story


Produced by Neil Docherty & David Rummel
Reported by David Barstow and Lowell Bergman
Written by Lowell Bergman & David Rummel and Linden MacIntyre

Tonight on FRONTLINE one of the most dangerous companies in America.

ROBERT RESTER: Working conditions is probably the worst that you can imagine. Even worse than underground in a coal mine.

In iron foundries danger is everywhere and demands on workers are relentless.

RON HOWELL: It's production come hell or high water

And in this very dangerous business, where they make the water and sewer pipes essential to our lives, there is one company whose production, the government says, has left a trail of death and dismemberment.

JOHN HENSHAW: Fatalities, injuries and illnesses and amputations are not accepted practice.

But even when workers have been killed the company continued to put employees at risk.

ELOISA SORIANO: The sad thing is this keeps happening over and over and over.

And the government has few tools to stop them.

CHARLES JEFFRESS: To willfully violate the law and kill someone is a misdemeanor.

With foundries stretching across 10 states and Canada, over the last 7 years the company has amassed more safety violations than all its major competitors combined.

Privately owned by one of the wealthiest families in the country it is called the McWane corporation.

Company executives have consistently refused to be interviewed about their safety and environmental record, revealed in thousands of pages of documents we gathered as part of a special joint investigation by FRONTLINE, The New York Times, and the Canadian Broadcasting Corporation.

Tonight, a report on how thousands of employees and neighboring communities in the United States and Canada have been repeatedly put at risk by a company in a dangerous business.

Every morning, Marcos Lopez says, his day begins with pain.

He is 45 years old. Since high school he has been working at a pipe foundry now owned by the McWane corporation.

Last March while working on a pipe-molding machine, he suffered a serious back injury, becoming one of more than 4,600 McWane workers hurt on the job since 1995. And like others, he is struggling with his disability.

MARCOS LOPEZ: I work all my life, I put all my time, my energy. I put a lot of -- I'm a dedicated worker. Never been late and everything. And I feel destroyed.

Marcos Lopez worked here, at Tyler Pipe in Tyler, Texas. McWane's largest plant. Since they bought this plant seven years ago, federal officials say it stands out as repeat violator of safety rules -- with a workforce that has endured burns, amputations, and violent industrial accidents.

MARCOS LOPEZ: They will force you, you know, to care less about safety, and just do your work. And you got this point, you know, you reach this point, that you just don't care about you and you set your mind on work. And that's what they want, and that's how people get hurt.

Many McWane workers say safety is sacrificed to increased productivity.

Since the 1970s, the McWane way of management has spread as the company aggressively expanded. It has estimated annual revenues approaching $2 billion.

Buying up antiquated plants they now have foundries across North America; increasing profitability through what they call "disciplined management practices."

Here in Tyler, Texas, disciplined management practices meant reducing the workforce by nearly two-thirds of the people working there.

MARCOS LOPEZ: There were a lot of changes and it changed for the worst for every employee.

RON HOWELL: I'm embarrassed for people to even know that I have been employed by those people.

Ron Howell worked at Tyler Pipe for 42 years as a design engineer.

Now retired, he blames McWane for increasing profits at enormous human cost.

RON HOWELL: A human being can only hit so many buttons on a machine. If he's operating a machine, they put another machine behind him now he's gotta operate two machines. Well they got room to put another machine over here, now it's, he's got to work three machines.

MARCOS LOPEZ: Sometimes I worked sixteen hours up there a day.

DAVID BARSTOW: Sixteen hours?

MARCOS LOPEZ: Sixteen hours. And I will find my supervisor and ask him, "Can I go?" He said, "No, you will leave when I tell you to."

In the relentless drive to increase productivity, Tyler veterans say McWane's disciplined management practices at times curtailed even the most basic human needs.

RON HOWELL: If you have a need, you just have to relieve it there at the machine.

DAVID BARSTOW: You're saying that they're not allowed to go to the bathroom?

RON HOWELL: When they hold up their hand, they need to go to the bathroom, they're told, you can hold it more, just don't, and they've had to sit there and excuse me, they've urinated in their pants.

MARCOS LOPEZ: We were tired, exhausted. We work in a real dangerous environment, you know. There's a lot of parts moving. There's a lot of things, you know, going on.

Dangerous moving parts are supposed to be covered with safety guards.

Equipment with moving parts must be stopped for adjustments or repairs.

These are the rules set out by the federal safety agency called OSHA.

But these basic safety rules have been repeatedly ignored in McWane plants -- with tragic results -- recorded in the files of OSHA, the Occupational Safety and Health Administration. We've reviewed thousands of pages from their files.

This is Ira Cofer. He was a mechanic at Tyler Pipe working around an unguarded moving conveyor in January 1997. A sleeve became entangled in the machinery.

LINDEN MACINTYRE: His arm was pulled under the belt system and trapped there.

Because of layoffs, he was working alone. The report of his accident is graphic:

"Cofer was missing for more than two and a half hours. Yet he was crying out for help the entire time. When he was finally heard they found him standing on top of his hard hat trying to relieve the pressure on his arm."

He watched helplessly as his left arm slowly disintegrated.

IRA COFER: The belt rubbed it all down to the bone and took all my flesh off.

He remembers that he talked to God and that the pain eventually ceased. But today he lives with the permanent result of an accident that could have been prevented.

IRA COFER: I know I got to get used to it, but some things you can't just never get used to.

Every day he struggles with his disability, but he was lucky. Every year researchers say tens of thousands of American workers die from workplace diseases, and 6,000 workers die from accidents.

LOWELL BERGMAN: He was a supervisor, as I understand it ...

Jerry Hopson died a long slow death after an accident that happened at Tyler Pipe seven months before Ira Cofer's.

As Hopson was taking a familiar short cut across an unguarded machine, the machine started up -- and crushed him.

Bobby Hopson used to work at Tyler. He remembers his brother in grief and anger.

BOBBY HOPSON: Me and him were real close. The fact is, I never remember having a cross word with him. And you know, brothers don't do that.

DAVID BARSTOW: Why didn't they wait, though, for him to get all the way through and clear, before starting that machine back up?

BOBBY HOPSON: Production. The company should have had a shield up there, or some, some kind of guard, where those guys could not walk across that cylinder.

DAVID BARSTOW: Was it any kind of secret to supervisors, to management, that guys were taking that short cut?

BOBBY HOPSON: Supervisors go across there, too.

DAVID BARSTOW: So the company knew there was a hazard, knew that men were walking through this hazard, but took no steps whatsoever to prevent that from happening?

BOBBY HOPSON: Right. Exactly right.

At the time the company denied responsibility for Mr. Hopson's accident. A company official told the local Tyler paper he was a "good man who made a very big mistake."

The McWane company safety handbook spells out all the appropriate federal regulations while instructing employees to work safely and as "efficiently and quickly as possible."

But on the shop floor, workers and managers told us there was a gap between policy and practice.

RON HOWELL: They preached it. They're telling you, "Be safe, but you get down there and do it." "But sir, I've got to have two or three guys with me." "Well you better round them up and be down there in 30 seconds. And I want that thing fixed and running. And if it's not, it's not making production, and we're gonna see the numbers the next week, and it's gonna be your fault if it didn't make those numbers."

As productivity increased so did the accidents. There were four more amputations following Ira Cofer's -- 60 percent of the maintenance workers in one plant were injured -- and OSHA inspectors would find 30 more safety violations involving unguarded machinery in 1999. Tyler Pipe and McWane continued to violate OSHA rules and put workers at risk.

CHARLES JEFFRESS: When we have an, a rogue company, when we have a renegade company like this and our local staff knows that there are problems, they send a message up the line that hey, here's somebody we need to get their attention.

Charles Jeffress was OSHA's adminstrator in the late '90s. He tried to get McWane's attention -- without much success.

CHARLES JEFFRESS: The current law is inadequate to deal with serious violators, repetitive violators. Situations where people are put at risk day after day.

LOWELL BERGMAN: It sounds like the law isn't, doesn't have significant penalties to it.

CHARLES JEFFRESS: The penalties in the OSHA Act are inadequate to deal with people that don't take their safety responsibility seriously. The penalties were first established in 1970. They've only been increased one time since then and it's very low. A serious violation, something that might lead to someone's death, carries a maximum penalty of $7,000.

In 1999, four years after McWane bought Tyler Pipe, an OSHA inspector's report described conditions there:

"Many workers have scars or disfigurations, which are noticeable from several feet away. Burns and amputations are frequent. Throughout the plant in supervisors' offices and on bulletin boards next to production charts and union memos is posted in big orange letters: REDUCE MAN HOURS PER TON."

In just a few years, the new management philosophy had turned Tyler Pipe into an employer of last resort, and the company tried to cope with heavy turnover in the workforce by recruiting ex-convicts from local prisons.

RON HOWELL: The word had got out about Tyler Pipe, what the management philosophy was, how the employees were treated. You couldn't find a local in East Texas that really wanted that job. And if they took it, they'd be gone in a month.

DAVID BARSTOW: What, what was that management attitude? What was that mindset?

RON HOWELL: Uh, did, doesn't matter. Uh, just put another warm body in there.

Rolan Hoskin was desperate for work.

His daughter and twin brother say he had nowhere else to turn. He was divorced and in debt. But in May 2000, he took a maintenance job on the graveyard shift at Tyler Pipe. And he was afraid.

NOLAN HOSKIN: He was always, you know, saying he -- how dangerous it was out there. I said, oh, you know, he didn't -- really the training wasn't adequate. For he didn't believe -- nobody showed nobody how to do nothing. You know they just -- you're on your own.

Working alone at four in the morning with little experience, he entered a sand pit to adjust a moving, unguarded conveyor belt -- a dangerous and illegal but routine practice. The machine grabbed his arm.

The graphic photographs, by investigators, show Rolan Hoskin never had a chance. After the accident the company argued that it was his own fault.

APRIL HOSKIN-SILVA: My dad isn't the kind of person -- he wasn't stupid. He wasn't stupid, but he didn't want to lose his job. And he felt like if he didn't do whatever he needed to do, that he would lose his job. And he was just trying to make it. Trying to get back on his feet and make it.

NOLAN HOSKIN: We all miss him, you know. He just went to work and didn't come back.

Rolan Hoskin was one of nine workers killed in McWane plants since 1995, and the only one whose death would result in McWane being held criminally responsible under federal law. The company was charged with the maximum penalty, a misdemeanor, and then paid a fine of $250,000. No one was sent to jail.

CHARLES JEFFRESS: You can't send someone to jail for any significant period of time for willfully violating the law and killing somebody. That's the problem. The law is inadequate.

An injured worker like Ira Cofer will get medical bills paid and a portion of his income through workers' compensation benefits.

But as he and Jerry Hopson learned -- before he died, after more than 20 operations -- workers' compensation isn't just about compensating workers. It provides the company with immunity.

CHARLES JEFFRESS: The deal in workers' comp that was struck back in the 1930s is that in return for a company not contesting it, someone's claim, that claim will be paid quickly. But the employee loses the right to sue.

LOWELL BERGMAN: Workman's comp gives them immunity

But our investigation of McWane's own internal corporate records reveals that, even with that legal shelter from lawsuits, the number of injuries at Tyler Pipe was so extraordinary that it had an impact on the pipe factory's bottom line.

This e-mail from a senior plant manager reveals that the company's workers' compensation costs had almost tripled within one year.

MICHELLE SANKOWSKY: Tyler Pipe was hemorrhaging money over the workers' comp claimants.

Michelle Sankowsky is a nurse. Last year the company hired her to help bring soaring workers' compensation costs at Tyler Pipe under control. She was shocked by how they proposed to do it.

MICHELLE SANKOWSKY: The company's attitude towards the injured workers was that none of the injuries were legitimate, is how it ended up being. That every, everything was suspect. And they felt that Tyler Pipe was giving everyone a free ride.

One of those suspected freeloaders was Marcos Lopez.

MICHELLE SANKOWSKY: Marcos Lopez was a long service employee and the epitome of just how wrong things can go at Tyler Pipe.

When he injured his back last March, company managers were skeptical. But the injuries were serious. Michelle Sankowsky was there.

MICHELLE SANKOWSKY: He was obviously in an extreme amount of pain. There was not any position or anything that we could do that could alleviate his, you can't even call it discomfort. It was just flat out pain. He was in actual shock.

Instead of calling an ambulance and sending him to a hospital, company officials sent him in a van to a private clinic that was under contract to Tyler Pipe.

MARCOS LOPEZ: They just asked me a few questions and made me walk on my toes and then he filled out his paper work and tell me to go back to the house and sit down on the couch. This is what he tell me.

He was diagnosed by a clinic doctor with back strain and given an ice pack and some pain medication.

As he sat at home, company records show that plant managers were discussing putting him under surveillance to see if he was faking his injury.

After 10 days of agony he returned to the clinic and asked for an X-ray.

MARCOS LOPEZ: I ask him, I said, "Sir, I ain't got nothing against X-rays. Can you please take an X-ray?" So he did.

The X-ray revealed that his back was broken.

DAVID BARSTOW: As soon as they discovered this in the X-ray, did they hospitalize Mr. Lopez?

MICHELLE SANKOWSKY: They did not hospitalize Mr. Lopez, they did not refer him to a surgeon, and, in fact they did not tell Mr. Lopez himself that he had a compression fracture of the spine. I said, "Why do you not tell this gentleman that he's got a compression fracture of the spine?" And he said to me, "Well, then he'd know how hurt he was." They didn't even have him in a back brace.

DAVID BARSTOW: They let a man walk around with a broken back?


It was a full 25 days after his accident before he finally had surgery that attempted to repair his damaged back with screws and a plate.

The owner of the clinic where he was originally taken says Mr. Lopez was treated appropriately and that he "got the care that he needed."

Marcos Lopez has been healing. McWane suggests he is a malingerer, but a medical examination by the State of Texas concluded that he will be partially disabled for life.

None of the managers at Tyler Pipe would speak to us about the deaths or injuries there, referring us instead to the McWane corporate headquarters in Birmingham, Alabama.

The company was started here in Birmingham by James Ransom McWane in 1921.

The McWanes are one of the wealthiest families in the south, known for their philanthropy, endowing museums and universities. And they are also known for their avoidance of publicity.

This is the only photograph we could find of Phillip McWane -- great grandson of the founder, and current head of the company.

He wouldn't talk to us, nor would he permit any company official to speak on camera, nor allow us access to any of their plants.

This is footage from inside the original McWane cast iron pipe foundry filmed for a Hollywood movie. We found a former plant manager who was willing to speak on the record.

ROBERT RESTER: Working conditions is probably the worst that you can imagine. Even worse than underground in a coal mine. I mean it's hot, dirty, nasty, but they paid good money.

Robert Rester has spent his entire career working in the dangerous world of pipe foundries.

ROBERT RESTER: It's metal against metal all day, pipe rolling down steel rails, pipe hitting pipe, pipe hitting kickers, kickers kicking pipe. A lot of pinch points, a lot of heavy, heavy equipment, and if it's not maintained, then you got danger spots.

In his 24 years at McWane, Rester rose from the shop floor to become a McWane plant manager -- a conservative southerner with a no-nonsense leadership style.

When we met him he was on sick leave -- for stress and a heart condition -- acquiring firsthand a whole new perspective on the McWane management philosophy.

ROBERT RESTER: Now I'd went off sick, first time I'd been, missed a day in 25 years. And they started giving me a hard time about that and I never could understand why. And then I finally realized that they were doing to me what I've watched them do for 25 years to other people. You know, I been watching for, and waiting and watching for years and the way people got treated and I was a part of it. And, and I just, I knew for a long time that sooner or later, somebody's gonna to have to stop it, somebody's gonna have to say something. And I was always hoping it would be somebody besides me. I never knew I'd be the end up one talking or pushing the issue. But that's the point I was at.

Rester now laments having been part of what he says is an abusive management culture that placed the production of pipe above all else.

ROBERT RESTER: The job, like I said, it was a good job, money. As far as conditions it was a big shit hole. The way you treat people would be awful. I mean, just, you know, the people, they're nothin', they're just a number. You move 'em in and out. I mean, if they don't do the job you fire 'em. If they get hurt, complain about safety, you put a bull's-eye on them. I mean, if they're a target, that means that they're gonna, they're not gonna have a job in the near future.

While the company wouldn't meet with us they have responded in writing, denying Mr. Rester's allegations: "We do not put production concerns ahead of safety and environmental compliance."

In e-mails and letters they point to recent multimillion dollar improvements at plants like this one, Union Foundry, in Anniston, Alabama, where, until six months ago, Robert Rester worked as a manager.

ROBERT RESTER: "Safety starts here with attitude." That's to try to make the public look like that they're really concerned about somebody's health and all. And they say it starts with attitude and you can walk through that gate and the attitudes in there, it's unbelievable how bad they are. You know, every day somebody's forced to do a job out there while a piece of equipment's running or something like that and it's unsafe. And these guys get to the point to where they just hope that they can make it another day without getting caught on one of these jobs that's dangerous.

Reginald Elston's file is consistent with many others we've investigated: An electrician, out of the navy, had a baby daughter, needed work, took a job at Union Foundry on maintenance.

August 22, 2000 -- working at a conveyor belt that was running and unguarded, he was yanked head first into a machine, where he died -- his left hand just inches away from a safety shutdown switch.

Clyde Dorn was in charge of safety at Union Foundry when Reginald Elston was pulled into the unguarded conveyor belt.

DAVID BARSTOW: How had this escaped your attention?

CLYDE DORN: There was new construction going on in that department. As a matter of fact they were putting in a whole new machine. They told me that this particular belt was a part of the new construction. I was not allowed to get involved in new construction.

DAVID BARSTOW: But in fact this tail pulley was actually in regular operation.

CLYDE DORN: From what I understand afterwards, yes.

Clyde Dorn admitted to us that he was fired last year after he was arrested and convicted for trafficking in the painkiller OxyContin. Before going to prison, he spoke with us about his six years working at Union Foundry.

DAVID BARSTOW: Have you ever worked in a foundry before?

CLYDE DORN: No, I had never worked in a foundry.

DAVID BARSTOW: How many previous jobs have you held as a safety director before coming to Union?

CLYDE DORN: That's actually the first job I had as a safety director.

DAVID BARSTOW: Did you have a budget?

CLYDE DORN: Well no, there was never a safety budget.

DAVID BARSTOW: Did you have assistants?

CLYDE DORN: No there was no assistants. I was it.

DAVID BARSTOW: As the safety director, did you have the authority to stop production?

CLYDE DORN: No. I had to go to the plant manager and the plant manager would make the decision.

DAVID BARSTOW: No matter -- no matter what?

CLYDE DORN: Well, if somebody was caught in the machine I could shut it off.

DAVID BARSTOW: So you have no budget, you have no staff, you have no authority. How can you possibly be effective then as a safety director?

CLYDE DORN: It's difficult.

Clyde Dorn's job was also to deal with OSHA and its inspectors. Soon after he started work, there was a fatality on his watch.

Johnny Brewster was a machine operator temporarily assigned to clean-up duties.

He was working in the bottom of an elevator shaft. The elevator continued operating. It descended and crushed him. When OSHA fined the company $12,000, the safety director fought it, and got the fine reduced to $4,500.

DAVID BARSTOW: You took offense to that fine.

CLYDE DORN: That's my job.

Dorn says he not only fought OSHA fines but on occasion he withheld information from federal inspectors.

For example, in 1996, OSHA found excessive levels of silica inside the plant -- putting workers at risk of contracting a deadly lung disease.

Clyde Dorn knew about the air quality. He'd done his own tests.

DAVID BARSTOW: What reading did you come up with?

CLYDE DORN: About 16 times over the limit.

DAVID BARSTOW: But OSHA asked Union Foundry, "Were any tests done of silica?" And you said no.


DAVID BARSTOW: But that wasn't correct?



CLYDE DORN: Yeah. The McWane way is don't tell anybody anything, especially if they're going to do the testing--

DAVID BARSTOW: Meaning don't tell anybody even if the anybody is government regulators?

CLYDE DORN: Yeah. Well, I mean you don't convict yourself. Let them do it, that's what they get paid for.

Over the last 20 years the judgment in Washington has been that regulation was strangling business. After heavy lobbying by industry, OSHA's authority and budgets have been curtailed, making it easier for some companies to dismiss the agency.

CHARLES JEFFRESS: They consider OSHA a mosquito. That they'd rather pay the fines than bring their plants into compliance. That they think the law is so ineffective that it's more profitable for them to take the risk by not having safety programs in place than to comply with the law. That is a serious problem.

But Jeffress' successor, John Henshaw, who was appointed by President Bush, believes he has the tools to do the job.

LOWELL BERGMAN: Are the laws tough enough?

JOHN HENSHAW: They are strong. Obviously we're constantly looking at where we need to improve that and will continue to make those improvements as we go forward.

LOWELL BERGMAN: What happens when you come across a company that has, as in the case of Tyler Pipe, repeated violations and then it turns out, repeated instances in other plants owned by the same people?

JOHN HENSHAW: With Tyler Pipe or McWane or other organizations, when they have a pattern, we need to take special attention to make sure that we don't have the same kind of pattern going throughout the organization.

LOWELL BERGMAN: In the death of Mr. Hoskins, do you know that within two months of that death, another worker was killed in another plant in a similar situation owned by the same company?

JOHN HENSHAW: It was in Anniston, Alabama.


JOHN HENSHAW: It was a significant enforcement action against the company in Anniston, Alabama, as well. It was over $150,000 levied in penalties.

LOWELL BERGMAN: No criminal charges?

JOHN HENSHAW: I don't know what the criminal action was. As I said, that's a Justice Department decision.

LOWELL BERGMAN: How many criminal referrals have there been since you've been the head of OSHA?

JOHN HENSHAW: I don't have that statistic. We've had criminal referrals. Certainly the most notable one is Tyler Pipe, where we've got a criminal--

LOWELL BERGMAN: But that started before you got here.

JOHN HENSHAW: That started before, yes.

LOWELL BERGMAN: I mean since you've been in office, do you have any idea--

JOHN HENSHAW: I have no idea how many we've had. I don't have that statistic.

After our interview Mr. Henshaw told us he had referred five cases to the Justice Department, but if history is a guide there is little likelihood of stiffer enforcement. Since OSHA was established 32 years ago, there have been more than 200,000 workplace-related deaths. In all that time there have been only 11 short jail sentences handed out.

LOWELL BERGMAN: It appears to be true that under federal law you get a more severe penalty for harassing a wild burro on federal land than you do for willfully killing a worker in your factory?

CHARLES JEFFRESS: That's true and we have many more wildlife protectors than we have industrial plant inspectors.

LOWELL BERGMAN: Why hasn't this situation changed?

CHARLES JEFFRESS: There hasn't been a groundswell from the public to get Congress' attention to change the situation. Any change in the law has to come from Congress and in this era, regulatory programs, enforcement programs are not popular in Congress.

And enforcing OSHA misdemeanors is not popular with federal prosecutors around the country.

CHARLES JEFFRESS: The U.S. attorney is generally going to spend his or her time on felony convictions, on things with big fines. And if all you can bring is a misdemeanor case it just doesn't get the attention that a felony case would.

These are the faces of the workers who have died at McWane plants since 1995. All these deaths were declared accidents by local authorities, so tougher state felony charges were never filed. But there was one case where McWane nearly got indicted for criminally negligent homicide.

Emergency call:

"We need a fire truck over here. You do what's the problem? All I know is there was an explosion out in the brass foundry, and we've got a man down. I also need an ambulance."

It was January 13, 1995, at a McWane plant called Kennedy Valve in Elmira, New York.

The explosion at the plant killed this man -- Frank Wagner, a 20-year veteran.

Jane Wagner is Frank's widow.

JANE WAGNER: I know they didn't mean to have the oven blow up and kill Frank, but they knew they were doing something wrong. And it happened, you know, it might not have been Frank, it could have been somebody else who was working in there that day. It was gonna happen. It was an accident that was going to happen sooner or later. Everything changed. All our plans that we had, you know, hopes and dreams that we had, were just all gone. Just blew up. Literally blew up.

Frank Wagner had been ordered to dispose of hundreds of gallons of a volatile and highly toxic paint by burning it in this oven.

This video was part of the investigation of his death. Environmental crime investigators would discover that the oven was never designed to serve as an incinerator. It had been modified. It exploded.

A team of veteran New York state prosecutors and investigators came to the conclusion that Frank Wagner's death was the result of criminal negligence by McWane. They felt strongly that someone should go to jail for it.

In a confidential 1996 memorandum they wrote: "The evidence compels us to act."

Former state environmental crimes investigator, Donald Snell.

DONALD SNELL: We had a very, very powerful case against Kennedy Valve and McWane corporation.

LOWELL BERGMAN: The owners as well?

DONALD SNELL: The owner of Kennedy Valve, unlawful disposal of hazardous waste, unlawful dealing in hazardous waste. A minimum charge of criminally negligent homicide and possibly manslaughter.

LOWELL BERGMAN: Against executives of the company?

DONALD SNELL: Against corporate officials up to and including the plant manager, yes.

LOWELL BERGMAN: And was there any evidence that you gathered that, you know, above the plant manager, the owners in Birmingham, Alabama, was there any reason to believe that they knew what was going on?

DONALD SNELL: We believe that they did know, but any evidence that would have been recovered to prove that would have been recovered through the attorney general's office.

It was up to the New York state attorney general to decide whether company executives should face an indictment for criminally negligent homicide in the death of Frank Wagner. Prosecutors felt they had a formidable case based on search warrants, witness statements, and forensic analysis.

DONALD SNELL: They considered it the mother of all cases. It had everything in it that they could possibly want for a prosecution. It had good guys and bad guys and lots of violations.

But about a year after Donald Snell completed his investigation he noticed that the attorney general's office wasn't moving on the case.

LOWELL BERGMAN: You'd call up and say, when are we going to the grand jury and they'd say, not yet?

DONALD SNELL: Well, it went from, the answers went from, soon, soon, sometime, not yet, maybe, we don't know. That's how it went through the months.

Fearing the case was stalled, Snell and the prosecution team realized they needed help and arranged for federal prosecutors to get involved. Then they called in the FBI to review the evidence.

Peter Ahearn is the special agent in charge for western New York. He examined the case file for us.

LOWELL BERGMAN: They were handing you a case on a silver platter.

PETER AHEARN: Yes. Yeah, from what I've read and even discussed with the FBI agent that was assigned the investigation, it was an excellent case. To quote agents in this case, it was a slam dunk.

DENNIS VACCO: It wasn't a slam dunk.

Dennis Vacco was New York state attorney general at the time.

DENNIS VACCO: When you take into consideration all the factors, all of the variables, all of the twists and turns and the likelihood of success in bringing in indictment, it was not a slam dunk.

Prosecuting McWane was also politically risky for the attorney general. In this confidential memorandum to Mr. Vacco's office, McWane's attorneys made the following points:

-- That they would not accept any criminal responsibility for Frank Wagner's death.

-- And they suggested the attorney general would damage his political future by presenting an "anti-business message."

Any criminal charges, they warned, " ... could result in the closure of Kennedy Valve that would cost the Elmira area more than 320 jobs ..."

The company was playing political hardball -- Elmira was already an economically depressed city.

The threat to close another plant could be disastrous for the community.

Dennis Vacco now says he is not impressed by the company's threat but at the time he called it "blackmail" and he vehemently denies that political pressure derailed the prosecution.

DENNIS VACCO: Maybe it has something to do with proof.

LOWELL BERGMAN: There wasn't enough proof for a negligent homicide case? Are you saying that?

DENNIS VACCO: Yes, that's what I'm saying. That's what I'm saying, that at the end of the day, could we have brought an indictment for criminally negligent homicide? Yes. Would there have been a conviction? I don't know.

LOWELL BERGMAN: But you accept that people in your office felt very strongly that they could've sent somebody to jail in this case?

DENNIS VACCO: I accept the notion that there was discussion and maybe even disagreement in the attorney general's office, but at the end of the day that's what the attorney general or the DA gets paid to do. To make the tough choices in the tough cases.

More than two years after Frank Wagner's violent death, faced with the possibility of federal intervention, McWane agreed to pay $500,000 in donations and fines, and plead guilty to an environmental felony. The plant manager pled to a misdemeanor and paid an $85 fine.

In a statement to us, the company emphasized that it was not accepting responsibility for Frank Wagner's death. "The criminal plea was for a charge of unauthorized possession and storage of waste paint, not for conduct that caused the accident."

LOWELL BERGMAN: The critics would go on to say in the end you settle for half million dollars, $475,000 of which is tax deductible and $85 fine against the plant manager.

DENNIS VACCO: Well, don't make, you make it sound as though you know they walked away with a slap on the wrist. They walked away with a felony conviction. They were convicted of an environmental, of an environmental crime in New York State. They still paid a half a million dollars back into the community.

For Donald Snell who thought he'd built a case for strong criminal penalties, it was a bitter disappointment.

DONALD SNELL: I believe it was a reckless act on the part of certain individuals in the company that caused the death of that person. I'll believe that till the day I die.

In the two years following Frank Wagner's death OSHA inspectors found 120 violations at Kennedy Valve. Since then the company insists it's made improvements and workers say that things have gotten better inside the plant.

Pipe foundries like the McWane plant in Birmingham are not only inherently dangerous, they are dirty. And McWane plants have been declared in violation of pollution laws and emission limits more than 450 times in the last seven years.

BART SLAWSON: McWane's attitude is unless you catch us, unless you push us, unless you were right up to the to it, to the limit, we're not gonna do anything we have to do.

Bart Slawson ought to know. He's an Alabama environmental lawyer who threatened to sue McWane for problems at their Birmingham foundry.

BART SLAWSON: There had been complaints from people who work in downtown buildings about McWane because they'd be sitting in their offices and here'd be this big cloud of junk coming up from McWane. And they'd get mad and they'd call the health department. Well the health department didn't do anything about McWane's air pollution. And I got asked to look into it and I did and I found this long line of air pollution violations. So I wrote them a 60-day notice that said under the Clean Air Act in 60 days we're gonna sue you for several million dollars for violating your air permit and polluting the air in that area.

The company reacted to Slawson's notice and agreed to clean up the emissions from their Birmingham plant.

But environmentalists would discover that air pollution wasn't the only problem.

BART SLAWSON: Well, apparently they were dumping, you know, pollution from their process waste water and runoff from the plant into basically a pipe that ran into a village creek. An illegal discharge of polluted water.

A pipe foundry like the McWane plant in Birmingham uses vast quantities of water for cooling pipe.

Wastewater contains oil, silica, and heavy metals. The law requires that it be collected in holding ponds, then treated and recycled.

But what happens when the holding ponds become full? According to Robert Rester, you break the law, with a little help from Mother Nature.

ROBERT RESTER: Any time there was excess oil or something in there they would wait till a big storm or something come along. Then go out there and open that up and then that way the storm water and all would just flush the oil and everything all out at one time in the middle of the night or whatever and--

LOWELL BERGMAN: Did that happen when you were the plant manager?


LOWELL BERGMAN: More than once?


LOWELL BERGMAN: Did the general manager know this?

ROBERT RESTER: Oh, yeah. The executive vice president of the corporation knew what was going on. Yeah, he said we had to do -- all he would ever say is whatever we had to do to run, we need to do it. You know, get rid of the water, we got to run.

We tried to contact the general manager and the vice president but they refused to speak to us, referring us to McWane headquarters.

The problem with wastewater wasn't just in Alabama.

The Delaware River flows by Phillipsburg, New Jersey, and millions have been spent over the years to clean it up.

But on the morning of Dec. 5, 1999, residents noticed this oily sheen on the river.

It grew into an oil slick eight miles long.

Investigators eventually found the source: a city storm drain somehow turned into an industrial sewer.

They started pulling manhole covers to find where the oil was coming from.

The trail led them here: to Atlantic States foundry a pipe plant owned by the McWane corporation.

Even after the FBI and state officials raided the foundry they were unable to find out who at the plant released the contaminated wastewater. To dispose of the case McWane paid $50,000 to an environmental group. But we found former employees who told us that this was not an isolated incident.

Getting rid of wastewater was a constant headache for Brad Schultz.

BRAD SCHULTZ: Once or twice once or twice a week we were told that we had to pump it out. That's 100,000 some gallons of fluid that you're losing every single day. It's got to go somewhere.

And the nearest somewhere was through a storm drain that led here: the Delaware River.

BRAD SCHULTZ: My supervisor gives me that order. At the time it was Bobbie Bobinis.

PRISON GUARD: C'mon out, Bob.

Bobby Bobinis wasn't supervising much when we found him.

He was in the Sunbury, Pennsylvania, jail.

He was in for a driving offense, but he worries about the legality of some of the things he did when he worked for Atlantic States foundry, like getting rid of contaminated wastewater the easy way.

BOBBY BOBINIS: You had to pump it out.

LOWELL BERGMAN: And held in what, in holding tanks?

BOBBY BOBINIS: There's holding tanks but they can't hold their capacity. When you pump 20,000 gallons of water into a 10,000-gallon tank and it overflows, it runs down the storm sewers, it goes wherever storm sewers end up, which is usually in the Delaware River.

LOWELL BERGMAN: But I just want to get this clear. The water's overflowing everyday. Did your supervisor know that?


LOWELL BERGMAN: You mentioned it?

BOBBY BOBINIS: Yeah, because I, me and my supervisor were sitting out on a bunch of pipes about 5 o'clock one morning and I looked at him and I says I don't want to go to jail for this because I realized what was going on. And that's--

LOWELL BERGMAN: And what'd he say?

BOBBY BOBINIS: Shhh. That's when I realized how, what the magnitude of what was going on was, when he said that. He just looked at me and shhh.

The supervisor in question would not talk to us.

In an exchange of letters and e-mails company officials have assured us that overall they are trying to do better. McWane says its spending tens of millions to clean up the air and water pollution from their foundries around the country; $5 million alone at the Atlantic States, where they say they have sealed off the foundry from the town's storm drains.

In a letter to us McWane pointed out that, in the real world, they're fighting for survival, competing against foreign manufacturers who have "little or no regard for the safety of their workers or ... the environment ... "

But in Washington, McWane's record may finally be getting some attention. OSHA administrator John Henshaw.

LOWELL BERGMAN: We counted up 420 OSHA violations over a seven-year period. How can that possibly happen if there's an effective enforcement program going on?

JOHN HENSHAW: I can't speak to the past. But the fact is, McWane has had 595 violations and we've had over 111 inspections of those facilities. So clearly they have a serious record with us and we need to do something different.

OSHA recently collected a rare million-dollar civil fine against McWane related to the death of Rolan Hoskin and Mr. Henshaw says they'll be watching more closely in the future.

JOHN HENSHAW: We worked out an arrangement with them. They've agreed to this, that we are going to inspect five of their facilities to our choosing and do a wall-to-wall inspection of those five facilities. Because my only concern is that they get the message, that they turn themselves around and manage that company more appropriately. And fatalities are not accepted practice. Injuries and illnesses and amputations are not accepted practice.

LOWELL BERGMAN: And you think they're going to change?

JOHN HENSHAW: Proof's in the pudding.

McWane says in e-mails to us that a new company-wide emphasis on safety has lowered their injury rate. At Tyler Pipe, the company says hundreds of safety hazards have been eliminated. But a month after our interview with Mr. Henshaw there was another accident at Tyler Pipe in Texas.

A worker was crushed by a vehicle.

The accident happened Oct. 29th, in the middle of an OSHA inspection.

Doctors fought for days to save Guadalupe Garcia's life. His pelvis and his legs were crushed.

It took hundreds of units of blood to keep him alive. A week after the accident, they had to amputate both legs. The accident is still being investigated.

Another family devastated by a workplace accident.

A family friend expressed their grief and anger. Eloisa Soriano.

ELOISA SORIANO: You hear about OSHA this, OSHA that. They should force them to be more safety cautious. And avoid this. This is unnecessary.

The sad thing is this keeps happening over and over and over.

Birmingham, Alabama -- a city built of fire and metal.

McWane is part of the history of Birmingham.

Some people here know that the McWane way of doing business isn't the only way.

BART SLAWSON: I would like to know why it is possible for one iron foundry company in this community to make a profit, have a safe workplace, and have a clean environmental record, and why they can't.

Bart Slawson is referring to the American Cast Iron Pipe Company, called ACIPCO.

It's been here even longer than the McWane plant. It's in the same business: melting metal, casting pipe. It's a process that is inherently dirty and dangerous.

But there's one defining difference between this place and the McWane foundries. There's a long waiting-list of people who want to work here. They know it isn't perfect -- people have been hurt and killed here in industrial accidents -- but ACIPCO's rate of serious injuries is a fraction of McWane's.

VAN RICHEY: Did you help her get a job here?

The chief executive officer at ACIPCO is Van Richey.

Safety is central to the factory culture there.

VAN RICHEY: We believe the safety of the workers is number one. If we can't do it safely, we don't do it. Every supervisor knows that. Every employee knows that.

LOWELL BERGMAN: You mean that safety takes precedence over production?

VAN RICHEY: Yes, oh yes. Safety--

LOWELL BERGMAN: Your supervisors will not, will close the line down or an employee will close the line down, production line, if they see something unsafe?

VAN RICHEY: Exactly. Exactly. In a minute.

LOWELL BERGMAN: And they won't get disciplined if they're wrong?

VAN RICHEY: No, they will probably get disciplined if they didn't shut down something that was unsafe, or if they saw an unsafe act and didn't try to correct it.

LOWELL BERGMAN: This is a profit-making, capitalist business?

VAN RICHEY: Yes. We have no problem being told that we are a profit-making, capitalistic, because that's the way you survive since 1905.

They say they have survived by steadily improving working conditions. Temperatures in a pipe-casting shop can reach 130 degrees. In Tyler, Texas, McWane rationed the ice cubes in the workers' water cooler. In Birmingham, ACIPCO installed individual air conditioners.

VAN RICHEY: We had people say: You're crazy. That won't work. Why are you doing that? You're wasting all this money. It actually works. And the employees are much more comfortable, and they're more productive.

ACIPCO is consistently rated by Fortune magazine as one of best employers in America -- an achievement that's not lost on one of McWane's veteran employees.

ROBERT RESTER: Oh yeah, I've wanted to work at ACIPCO. Yeah, yeah a lot of people like to work at ACIPCO.

LOWELL BERGMAN: They don't have a lot of turnover?

ROBERT RESTER: No, no. I was told that the only time you can get a job at ACIPCO is if somebody retires or dies or something like that. I mean people go to work there and stay forever.

Workers at ACIPCO have one very good reason to stay. Collectively, they own the plant and share in its profits, even after they retire.

John Eagan, who built the foundry, willed it to his workers when he died in 1924. He was a devout Christian who tried to practice what his pastors preached by running a business based upon the Golden Rule.

VAN RICHEY: Do unto others as you would have them do unto you. Before you make a rule, say, "OK, this rule, what if it applied to me? Is it fair?"

There was one notable dissent when John Eagan announced that he was going to operate his foundry on the Golden Rule. The president of the company quit. His name: J. R. McWane.

He crossed town to start his own pipe company and a dynasty based on a profoundly different vision. That was more than 80 years ago.

In a new millennium the McWane foundries thrive, still faithful to his austere philosophy, now called disciplined management practices. They have an enviable record of commercial success and an unenviable reputation as one of the most dangerous workplaces in America.

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