Feds drop criminal case involving Chemours, Clean Water Act

The Cape Fear River is contaminated GenX, which originates from the Chemours plant in northern Bladen County, 100 miles away. (Photo: Lisa Sorg)

Chemours will not be criminally charged in a Clean Water Act case involving its Fayetteville Works plant, according to the company and federal officials.

Don Connelly, spokesman  for US Attorney’s Office for the Eastern District of North Carolina said the charges were dropped after a grand jury investigation. Since grand jury deliberations are confidential, the spokesman could not comment on or release documents related to the case.

Chemours noted the case had been dropped in its first-quarter Securities and Exchange Commission filings. The company “responded to grand jury subpoenas, produced witnesses before a grand jury and for interviews with government investigators and attorneys,” the filings read. then in March, the US Attorney notified the company that “after an extensive review of the law and all the facts, it declined to pursue any criminal action against Chemours and is closing its file.”

Corporations are seldom criminally penalized for environmental violations. (The most recent case in North Carolina was in 2015, when Duke Energy paid a $68 million criminal fine for the Dan River coal ash disaster.)

Not only are there few corporate criminal penalties, but the number of criminal investigations is also low. According to the EPA, it opened fewer than 200 criminal investigations last year. While up from the previous two years, that figure is still half of its peak of nearly 400 in 2009. The declines also occurred during the Obama administration.

In its annual report for 2019, the EPA doesn’t list the number of cases that were declined for prosecution. But data from the Transactional Records Access and Clearinghouse, at Syracuse University, shows that from 1986 to 2016, there was a consistent pattern of prosecutors declining to pursue criminal environmental violators.

(Graph: TRAC, Syracuse University)

It’s unclear what specific allegations prompted the Chemours case, but for decades, it and former parent company DuPont, discharged millions of gallons of wastewater contaminated with GenX, a type of perfluorinated compound, into the Cape Fear River.

GenX was supposed to be a less harmful replacement for PFOA and PFOS, which have been connected to serious human health effects, including several types of cancer, high blood pressure during pregnancy, low birth weight, ulcerative colitis and high cholesterol. But researchers have found GenX poses similar health risks

The river is a major drinking water supply for tens of thousands of residents in New Hanover and Brunswick counties, including Wilmington, where high levels of GenX were detected in treated tap water. Those levels have decreased since state environmental regulators required Chemours to stop its discharge or they would revoke its discharge permit. A consent order among the state, Cape Fear River Watch and Chemours established additional requirements to halt or decrease contaminant releases.

In its SEC filings, Chemours estimated it would cost roughly $200 million to clean up environment damage from the Fayetteville plant. But a full cleanup is likely impossible, at least from a technological standpoint. GenX and other types of perfluorinated compounds, collectively known as PFAS, persist in the environment for tens if, not hundreds of years, earning them the term, “forever chemicals.”

In its recent Corrective Action Plan filed with the NC Department of Environmental Quality, Chemours said it could not afford to remove the pollutants from the 70 square miles where the groundwater, drinking water and surface water are contaminated. DEQ, which received hundreds of public comments decrying the plan, deemed the company’s proposal inadequate and sent it back for revisions.

Last year the EPA also cited Chemours alleging that in 2017 it had violated the federal Toxic Substances Control Act. According to the citation, the company failed to report and report uses of certain PFAS — the commercial names are redacted — as well as control emissions and discharges of GenX.

That case has not yet been resolved. Chemours has denied the allegations. In the SEC filings, the company said “management does not believe that a [financial] loss is probable related to the matters in the Notice of Violation.”

However, Chemours still faces hundreds of civil lawsuits related GenX and PFAS, including several in North Carolina. In other states, Chemours also inherited litigation from DuPont in relation to allegations that former employees became sick because of benzene and asbestos exposures while working in the plants.

Chemours reported gross profits of $298 million for the first quarter of 2020, which ended in March. However, its comprehensive after-tax income showed a loss of $4 million.

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