McWane Inc., operator of Pacific States Cast Iron Pipe Co. in Provo and one of the nation's most persistent violators of workplace safety and environmental laws, is the target of a federal criminal investigation, according to law enforcement officials and current and former employees who have been questioned in the inquiry.
The investigation began in January, the same month the company was the subject of articles by The New York Times and a documentary on the PBS television program "Frontline." They described how McWane, a major manufacturer of cast-iron pipes owned by one of Alabama's wealthiest families and employing 5,000 workers, had recorded more than 4,600 injuries since 1995 while also illegally polluting the air and water in several states — including Utah — where it owns foundries.
Several former McWane employees interviewed for the series said they had since been contacted by Justice Department prosecutors and by criminal investigators from the Environmental Protection Agency. Last week, a senior investigator described the inquiry as "very significant, substantial and nationwide."
The investigation — encompassing McWane's safety and health record as well as its failure to protect the environment — is especially significant because it represents an unusual effort by the federal government to build a comprehensive case against a major corporation that for years has avoided serious criminal sanctions despite a lengthy record of infractions.
Investigators also appear to be developing new information, seeking interviews with current and former employees who were not interviewed for the original articles in The Times. In recent weeks, for example, EPA investigators have sought to question a former McWane executive who, in a series of recent interviews with The Times, said he was fired after alerting two of McWane's highest executives to what he says were unreported environmental crimes at the foundry in Provo.
The former executive, Franklin Marold, said that in late 1999 and early 2000 he told McWane's president, G. Ruffner Page, and McWane's general counsel, James M. Proctor II, that Pacific States was doctoring its Utah air emission tests.
Marold said he told them the falsified tests were meant to fool state environmental regulators into thinking that the plant was not releasing more smog and air pollution than was allowed under its operating permit. Marold, who has filed a wrongful-termination lawsuit against McWane, said he also told the executives that the plant at times improperly diverted fouled industrial wastewater into a nearby wetlands area.
"I'm not a tree hugger, but I'll draw a line," Marold said. "To blatantly do something willfully — that's wrong. I have a problem with that."
At the time, Marold, a 16-year McWane employee, had just been promoted to assistant general manager at Pacific States, a job that made him the No. 2 manager at the plant and also gave him responsibility for making sure the plant complied with environmental regulations. Marold said he appealed to Proctor and then Page because his immediate boss, the general manager of Pacific States, had not taken action when he brought the matter to his attention.
Marold said that even though he supplied plant documents that supported his claims, Page and Proctor made no efforts to correct the problems. Instead, he asserted, Page told him to let the matter drop.
Months later, in October 2000, Marold said, he was abruptly fired by Page, who flew to Provo on a company jet to deliver the news. He said Page told him, "Son, you're a round peg in a square hole."
Marold said he had rejected a settlement offer "in the high six figures" because it would have required him never to discuss with anyone, including government officials, his years at McWane. "They were trying to buy my silence," he said.
Page, in his statement, said Marold's allegations "were thoroughly investigated and found to be without merit." He said that Marold was fired for "failing to properly perform his employment duties." He asserted that Marold had "attempted to extract a substantial monetary settlement from the company in exchange for an agreement to refrain from contacts with the news media."
"We refused to pay him what he demanded, despite the knowledge that he would talk with you about his unwarranted accusations," Page wrote.
But a former engineer at Pacific States said in a recent interview that Marold's allegations about the plant were accurate. He recalled a conversation with McWane's lawyers in 2001 when he was questioned about Marold's claims. "Every day we run, we are breaking the law," the engineer said he told the McWane lawyers.
The engineer, who spoke on condition of anonymity, said the plant regularly "fudged" smokestack test results to Utah air quality regulators. "We would stack the deck for the test," he recalled.
The engineer, who said he had not been questioned by federal investigators, also said that from 1996 to 2001, Pacific States regularly used its cupola, the huge furnace in the foundry used to melt iron, to burn hazardous waste, primarily old paint. He said the waste was burned in clear violation of environmental regulations. He said he and others also knew about contaminated wastewater that was allowed to flow into wetlands. "It had been going on for as long as I was there," he recalled.
Environmental regulators in Utah said they were not aware of any allegations that Pacific States was deceiving them about its air and water emissions. "If a company intentionally wants to falsify records or produce more than they are allowed to produce or burn a lot of hazardous waste, then there is no way we can catch them unless an insider decides to report it," said Robert W. Sirrine, a compliance inspector with the state division of air quality.
The plant, he said, has long been a subject of smoke and odor complaints from neighbors. But, he added, McWane has spent millions of dollars in recent years on upgrading pollution control equipment at Pacific States.
Indeed, in recent interviews, workers at several McWane plants said that since January, life on the shop floor had changed sharply. Supervisors are beginning to put safety and environmental compliance over production quotas, and general working conditions have started to improve, they said.
"Now we get gloves for free," said a worker at a McWane plant in Phillipsburg, N.J. Workers, he explained, used to be charged 97 cents for each pair.
The company has been cited for more than 400 safety violations and 450 environmental violations since 1995. While the company has paid roughly $10 million in fines and penalties, no McWane official has ever gone to jail for these violations. Instead, a disjointed and fragmented regulatory apparatus repeatedly failed to detect, much less end, patterns of misconduct.
The current investigation, which comes as members of Congress and regulators consider tougher laws for dealing with persistent violators, involves some of the Justice Department's most senior environmental prosecutors in Washington working with assistant U.S. attorneys in districts around the country.
The inquiry also includes at least a half-dozen full-time investigators from the EPA, with assistance from another half-dozen investigators in field offices in states where McWane, which is based in Birmingham, Ala., has plants. The investigation has also relied on assistance from the federal Occupational Safety and Health Administration, which is separately continuing a series of safety inspections at five McWane plants, a senior investigator said.
Page said in a written statement Wednesday night that the company had not been contacted by any state or federal investigators.
"If we are contacted, however, we will give them our full cooperation, as is our policy and practice," he said. "Furthermore, we are confident that any such investigation would reveal the significant progress we have made in recent years on safety, health and environmental compliance."
A spokesman for the Justice Department declined to confirm or deny the existence of any investigation.
In recent months, McWane has invested millions of dollars in new safety and environmental equipment. Senior managers have received more safety training, and the company has hired consultants to help it improve safety programs. Some managers have been reassigned or removed.