Wednesday, July 31, 2013

SSA Marine's Actions Prove They Cannot Be Trusted

Photo of the Cherry Point reach, the proposed site of the coal terminal.
After a year-and-a-half legal battle, RE Sources for Sustainable Communities (RE Sources) has entered a settlement with SSA Marine-owned Pacific International Terminals (PIT) for PIT’s illegal filling of 1.2 acres of wetlands at Cherry Point, WA. As part of the settlement, PIT will pay $1.6 million in penalties and fees, including a payment of $825,000 to the nonprofit Rose Foundation for restoration projects to benefit Puget Sound. PIT will also set aside 2.9 acres of wetlands to help mitigate part of the damage caused by the wetland impacts of this illegal fill.

RE Sources receives no money from the settlement.

“In 2011, PIT violated the Clean Water Act and ignored local and national permitting requirements when it built nearly 5 miles of roads, filling or clearing nearly 3 acres of wetlands in the process,” said Crina Hoyer, Executive Director at RE Sources. “Unbelievably, they also bulldozed and drilled in a registered Lummi historical site known to contain burial sites. They tell us to trust them, but PIT’s leadership knew exactly what they were doing when they broke the law.”

PIT’s destruction of wetlands was part of a larger unpermitted geotechnical investigation project, authorized by PIT on property currently planned for the Gateway Pacific Coal Terminal. The data gathered by the geotechnical investigation supports project planning and design. According to evidence collected by RE Sources, PIT knowingly violated the law and attempted to cover up its actions in order to gain this valuable information.

“When dealing with an economically unstable commodity like coal, a few years can make a big difference in the profitability of a project. The information they gained will certainly help them expedite their proposal. This is a classic case of begging for forgiveness, rather than asking permission,” said Hoyer.

Hoyer’s statement is reinforced by a leading national expert on large-scale construction project management, Philip S. Lanterman. After conducting an in-depth analysis of the evidence, Lanterman stated “In my opinion, it is probable that PIT intentionally chose to proceed with the geotechnical investigation without necessary permits to obtain the expected economic benefit of securing the geotechnical information early in the project timeline, and PIT has actually received such benefit.”

SSA Marine had permits to do geotechnical studies on part of the property, but the settlement finds them at fault for venturing well outside their legal limits. The settlement is among the largest in the history of the Clean Water Act's dredge and fill provisions.
Lanterman further found that “PIT’s efforts to ensure legal compliance of the geotechnical investigation were so far below the standard of care that, in my opinion, they evidence extreme recklessness as to legal compliance or, more likely, an intentional violation of the law.”

SSA Marine, the corporate home for PIT, has decades of experience developing marine port facilities, including building new operations and providing engineering, port design, terminal construction and project management services. With so much experience in project construction, it is difficult to understand how PIT could simply fail to obtain 6 necessary permits before conducting this work.

According to RE Sources’ attorney Richard Smith, “PIT acknowledged that they knew beforehand that permits or authorizations were required not only from the Army Corps, but also from Ecology and the County. They could offer no explanation for why they didn't get these, except that following the law 'fell through the cracks.' Then, their own wetlands consultant testified that she was 'appalled' by the destruction PIT caused. What does this say about how they are likely to conduct themselves in building and running a huge coal terminal?"

SSA’s own internal documents show that, in the months leading up to the clearing, SSA had multiple exchanges with Whatcom County, the Department of Ecology, and the Army Corps of Engineers, discussing the permits and the processes needed to perform the clearing legally. Had SSA applied for the appropriate permits, the Army Corps would have been consulted on Clean Water Act permits, resulting in consultation with the Lummi and Nooksack Indian tribes about SSA’s plans to drill and clear land in known Indian burial grounds.

The Whatcom County Council and a variety of state and federal agencies will, at some point, make a decision whether or not to approve permits for SSA’s coal terminal at Cherry Point. Each of those agencies--the DNR, Ecology, Fish and Wildlife, and others--will be acting in the public’s interest, in the public trust. SSA has demonstrated through its actions that it is willing to ignore, or forget, or willingly violate environmental laws, even at the earliest stages of this project. Hoyer concludes, “When SSA can’t even comply with basic permitting requirements, how can we trust them with the complex elements necessary to protect human health, the Puget Sound, and the resources on which our community relies?”

Press Contacts

Crina Hoyer, Executive Director at RE Sources, (360) 223-8678
Matt Krogh, North Sound Baykeeper at RE Sources, (360) 820-2938

Thursday, July 11, 2013

Washington Supreme Court hands a victory to RE Sources

BIAW Held Accountable for Fiduciary Misuse, RE Sources, A1 Builders & Other Small Businesses Handed a Victory  

By Crina Hoyer & Rick Dubrow 
Thursday, July 11th 

Yesterday, the Washington Supreme Court handed a victory to RE Sources, A-1 Builders and other small businesses challenging the Building Industry Association of Washington ("BIAW") for breach of trust in connection with its retrospective rating program.

The Court of Appeals previously ruled that the BIAW had breached its fiduciary duties by skimming interest off trust funds belonging to thousands of small businesses. It also held that BIAW was restricted in how it uses millions of dollars it has removed from the trust over the years. The Court of Appeals required the BIAW to return certain funds to the businesses and pay the plaintiff attorneys’ fees.

The BIAW appealed the Supreme Court, which refused to hear the challenge. Therefore, the Court of Appeals decision stands firm. “We are thankful to the Supreme Court for upholding this decision,” said Crina Hoyer, Executive Director of RE Sources, “The BIAW misused funds, and violated the trust of its members and they needed to be held accountable.”

The Court of Appeals held that the BIAW, its for-profit affiliate, and its trust were responsible for improperly commingling trust funds and skimming interest from the trust. It ordered the BIAW to return the funds.

Most significant was the Court of Appeals decision that the BIAW was only allowed to use the multi-million dollar “Marketing Assistance Fee” it took from the trust for legitimate marketing purposes. During the period at issue, BIAW paid itself over $20 million in “marketing fees” from the trust. By all accounts only a fraction was used for marketing. The BIAW has admitted that it treated these trust funds as profit and used them to fund its political program, including its notorious, multi-million dollar effort to elect Dino Rossi as governor in 2008.

The Court of Appeals remanded the case back to the trial court to determine the amount of improper expenditures. Finally, the Court of Appeals granted Plaintiffs their attorneys’ fees and costs incurred at trial on successful issues and on appeal.

Eight small companies have filed lawsuits seeking to hold BIAW accountable for breach of trust and to require the BIAW to return wrongful profit back to over 10,000 BIAW members who participated in the BIAW’s retrospective rating (“retro”) program. Under retro, BIAW members earned hundreds of millions of dollars in tax refunds and the State of Washington paid all these refunds to the BIAW. The BIAW agreed to hold these refunds “in trust” for its member participants, but instead commingled the trust funds with its own moneys and skimmed interest and principal from the trust for its own use.

The Court of Appeals’ decision was on the first lawsuit, In re Washington Builders Benefit Trust, which has been ongoing since approximately 2008 and went to trial in 2010. “Our state’s Supreme Court has now solidified the Court of Appeals decision imposing an across-the-board victory for the members of the BIAW. We trusted the BIAW and the Court agreed that the BIAW abused this trust. Now the BIAW will have to return the funds it took from thousands of small businesses across the State,” said Rick Dubrow, owner of A-1 Builders, one of the small-businesses that served as a plaintiff in the lawsuit.

The plaintiffs in the case are represented by Seattle attorneys Knoll Lowney and Mike Withey, and the Arizona law firm of Bonnett, Fairbourne, Friedman & Balint, PC. The appeal is being handled by the Seattle law firm of Smith Goodfriend, PS.

Click here to read Smith & Lowney's Press Release.

Rick Dubrow
is the CEO of A-1 BUILDERS, INC. and ADAPTATIONS, our design division, recognized as Bellingham and Whatcom County's premier design/build contractor working towards sustainable business and construction practices! We are a full-service remodeling and custom home builder, addressing both residential and light commercial projects. Our team is committed to outstanding workmanship, impeccable aesthetics, and green, sustainable designs that will last many lifetimes.

Crina Hoyer is the Executive Director of RE Sources for Sustainable Communtities, a non-profit sustainability organization founded in 1982. RE Sources promotes sustainable communities and protects human and environmental health through application of science, education, advocacy and action. Our vision is to see people living satisfying lives in accord with the ecosystem we depend on – generation after generation. To attain this vision, we operate five programs: Sustainable Schools, an in-school program that empowers school children to be waste, energy and transportation ambassadors; North Sound Baykeeper, charged with reducing water pollution, protecting and improving aquatic habitat; Sustainable Living Center, teaching skills to empower families to live more sustainably; and The RE Stores, providing green jobs and diverting millions of pounds from regional waste streams each year, and the Power Past Coal coalition, working to prevent the West Coast from becoming a high volume coal corridor.