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Archive for Tuesday, April 10, 2001

Koch avoids trial with deal

Pipeline company to pay $20 million fine

April 10, 2001

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— One of the country's biggest oil pipeline companies has agreed to pay a $20 million fine to avoid trial on charges it violated federal air pollution laws and then tried to cover it up.

Koch Industries Inc. announced the settlement with the Justice Department on Monday, two days before the trial was to start in Corpus Christi, Tex.

The deal, which calls for Koch Petroleum Group a subsidiary to plead guilty to one count of concealment of information, still must be approved by U.S. District Judge Janis Jack.

"We were and remain willing to cooperate with the government in investigating any wrongdoing, but we would not cooperate with the government in its pursuit of these innocent employees who acted responsibly," Koch spokesman Jay Rosser said.

A Justice Department spokeswoman declined comment.

A 97-count indictment handed down last September charged Wichita, Kan.-based Koch, Koch Petroleum Group and four employees with concealing from state and federal authorities the release of 91 metric tons of benzene from a Corpus Christi refinery in 1995.

Koch and its employees pleaded innocent, saying the company acknowledged problems to Texas officials in 1995, fixed them within months, and has been in compliance on the benzene issue for more than four years.

In January, prosecutors set aside 86 of the charges, following an order by Jack. By Monday the remaining charges had been pared to seven.

The indictment focused a spotlight on a major Republican donor and the environment in President Bush's home state just weeks before the presidential election.

Al Gore's campaign charged the indictment was evidence of lax oversight of oil companies and environmental regulations by Bush as Texas governor. Bush's campaign vigorously disputed the claim and hailed the indictment.

Koch has had previous environmental problems. Last year, it settled a case involving oil leaks in six states with a record $35 million payment to the government. And it pleaded guilty in Minnesota to discharging oil into streams, paying an $8 million penalty.

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