West Virginia

Owner of company responsible for West Virginia chemical leak is a two-time convicted felon

Saturday, January 18, 2014 by: Julie Wilson
Tags: chemical leak, convicted felon, West Virginia

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(NaturalNews) The chemical plant responsible for leaking 7,500 gallons of "crude MCHM," or 4-methylcyclohexane methanol, into West Virginia's water supply, ostensibly has a less than average track record when it comes to facility inspections, and the owner is a two-time convicted felon.

As the investigation ensues, it turns out the company responsible for the chemical leak, Freedom Industries, has a bit of a sketchy past when it comes to conducting, or rather dodging, regular facility inspections. Aside from a confirmed inspection in 1991, reports are contradicting whether or not the chemical plant had been inspected since.

According to CNN, in 2010, officials were called out to inspect the chemical plant after they received complaints of the licorice-smelling foaming agent. "We went out on site and didn't find anything that would cause concern, no leaks or anything like that," said Randy Huffman, the head of the West Virginia Department of Environmental Protection.

When officials reportedly visited the plant again in 2012 to determine whether or not the company required additional air quality permits, inspectors decided that none were needed. "There's not necessarily the kind of robust environmental controls that people might anticipate that there should be on these types of facilities," said Huffman.

The state's environmental officials confirmed that the facility only required one permit to operate, an industrial storm water permit.

"Basically they had to monitor the runoff from the rain and send us the results every quarter. Those were the only regulatory requirements," said Huffman.

However, a report by the Charleston Daily Mail claims that no records of any inspections were found on the facility sites. The Federal Occupational Safety and Health Administration (OSHA) said they arrived to examine the Elk River site in 2009 but withdrew from the inspection, because it was the "wrong type of business for that particular inspection."

Following the January 9 leak, the remaining "crude MCHM" was moved to a sister company named Poca Blending, LLC.

According to the Charleston Daily Mail, officials with OSHA attempted to inspect the Poca site in April 2012 under a national program emphasized on "process safety management." They again stopped the inspection because it was the wrong type of business.

"'The state Division of Labor has never conducted any inspections, safety consultations, or made any reports in general pertaining to the Elk or Poca Blending locations,' according to answers provided in response to a request made by the Daily Mail under the Freedom of Information Act," reported the Charleston Daily Mail.

Freedom Industries, valued at $13.5 million in 2005, is responsible for storing the foaming agent used to wash coal but doesn't process the chemical. "In 2008, the company employed 45 people, sold 10 million gallons of material and earned $26 million," according to newspaper records.

With nearly half a million W. Va. residents affected by the water contamination, it's shocking to learn that the company responsible, Freedom Industries, was partially founded by two-time convicted felon Carl Lemley Kennedy II.

A report by the Charleston Gazette reveals shocking revelations regarding Kennedy's past, including a 1987 conviction for selling 12 ounces of cocaine. The incident was connected to the removal of then-Charleston Mayor Mike Roark, a former prosecutor nicknamed "Mad Dog" for his drug-fighting advocacy, but who later faced 30 Federal charges of cocaine possession, distribution and tampering with a Federal grand jury.

Kennedy's criminal history continued into 2005 when he was charged with tax evasion and willful failure to pay employees' withholdings (approximately $1 million) to the government. He subsequently pleaded guilty to both charges in the U.S. District Court in the Southern District of West Virginia. Court findings show that he owed more than $200,000 in state taxes. While working as an accountant for Freedom Industries, Poca Blending and New River Chemical Co. from 2000 to 2003, he admitted to withholding employees' paychecks and depositing would-be tax monies into a personal bank account.

"Carl L. Kennedy II took steps to conceal a large portion of his income from the Internal Revenue Service by, among other things, using his position as an accountant to ensure a W2 form was not filed in his name," read court documents, "using corporate funds for his personal benefit and writing corporate checks to cash for his personal enrichment."

Kennedy was sentenced to three years but had his sentence cut nearly in half after he agreed to act as an informant for the Feds, which included wearing a wire to help make "controlled cocaine buys" with a former business associate.

When the Gazette reached out for comment regarding Kennedy's role in the company, a woman who answered the phone said, "He left the company 'years ago.'" According to the report, Kennedy owned just 5 percent of Freedom Industries in 2005, and also owned portions of several other companies, including Poca Blending, which Freedom recently merged with on December 31, 2013.

The newly merged companies, Etowah River Terminal (the facility where the leak occurred), Poca Blending and Crete Technologies, were already doing business together.

Monday's inspection of Poca Blending by the state Department of Environmental Protection (DEP) revealed hazardous conditions including "holes at floor level in the building's walls."

"Secondary containment within the facility was deteriorated or non-existent," read the report. "The plan indicates that the building itself acts as secondary containment, but holes exist at floor level in the building's walls."

Poca Blending received five notices of violation from the DEP:

  • Above ground storage tanks were not provided with appropriate secondary containment.
  • Failing to store drums containing materials that have the potential to contaminate groundwater so that spills and leaks are contained.
  • Failing to provide adequate discharge monitoring reports.
  • Failing to follow any pollution prevention or groundwater protection plan.
  • Failing to "post a permanent marker at each permitted outfall."

The company has 20 days to respond and will be expected to take corrective action immediately.

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