Wisconsin allows 3M to settle pollution case without paying fine

A 2016 air pollution case against 3M Corp. represented the first time under Attorney General Brad Schimel the Justice Department allowed a company to make upgrades to a facility but avoid paying a financial penalty as part of the settlement.

Minnesota-based 3M agreed to make $665,000 in improvements at two facilities in Wausau for air pollution violations in 2014 and 2015, according to court records.

Unlike other major pollution cases, Schimel and his staff did not also seek forfeitures with 3M — a company that employs hundreds of workers at plants in Wausau, Menomonie, Cumberland and Prairie du Chien.

Former state Department of Natural Resources Secretary George Meyer and former Assistant Attorney General Tom Dawson were critical of the agency for relying solely on the use of a compliance tool known as a supplemental environmental project.

Supplemental environmental projects require a polluter to undertake projects that can demonstrate big reductions in pollution or reduce risks to public health.

But Meyer and Dawson said the requirements for 3M did not go far enough and instead helped the company address problems it needed to fix.

“Unprecedented,” said Dawson, who said he is now retired.

Dawson led the Justice Department’s environmental protection unit until August. He said he could not recall a comparable case during his tenure at the agency. With 3M, he asserted the final settlement was dictated by higher-ups in the department over the objections of staff lawyers.

Said Meyer: “They’re basically giving 3M a pass for all of the violations they had."

Meyer is executive director of the Wisconsin Wildlife Federation.

Meyer was DNR secretary from 1993 to 2001. After a law change that allowed the governor, instead of the Natural Resources Board to appoint the DNR secretary, Meyer was hired by Republican Gov. Tommy Thompson and replaced by GOP Gov. Scott McCallum. Meyer led the DNR’s enforcement division for 10 years before he took over the agency. The DNR refers cases to the Justice Department for prosecution.

Justice Department spokesman Johnny Koremenos defended the agency’s work with 3M and said in an email that a high priority is to bring individuals and companies back into compliance.

"We want to make sure a company uses its resources to fix any environmental harm that is done before paying a penalty,” he said.

Supplemental environmental projects are generally used to allow a polluter to mitigate a civil financial penalty, according to policy guidance from the U.S. Environmental Protection Agency.

The only other case where such a supplemental project was used in Schimel’s first two years in office involved air emissions violations at a Michigan-based Grede foundry plant in Browntown in Green County in 2016.

In that settlement, Grede agreed to pay a judgment of $25,000 and spend an additional $300,000 on environmental projects.

Dawson was in charge of the environmental protection unit for 13 years. Schimel replaced him last summer with David P. Ross, who was a senior assistant attorney general in Wyoming involved in water and natural resources issues.

Dawson, who worked as an assistant attorney general before he left the agency, said he and others in his unit pushed for financial penalties against 3M. “I don’t remember the exact figure, but it was probably in the 6 to 7 figures,” he said.

He said Schimel’s chief of staff, Delanie Breuer, directed lawyers for the department to use only an environmental project in the final settlement.

Was he satisfied with the decision?

“I was not,” Dawson said. “But we were directed to do it. I did not see an ethical reason not to do it. But we were disturbed by the potential precedent it was setting.”

Koremenos said some comments Dawson made to a reporter should not have been shared and some were false and others were misleading. He said details on how the agency handled the case are confidential, but noted the attorney general's executive team sometimes provides input in a case.

“DOJ is proud of the resolution in this case and believes it was the best result for the protection of our environment and natural resources,” Koremenos said in an email

Said Dawson: “It’s an old case. It’s a dead case. I don’t see any reason why the public shouldn’t know about it.”

Schimel is a Republican and former district attorney from Waukesha County. Elected in 2014, he has run the Justice Department since January of 2015.

During his tenure, penalties in environmental cases involving individuals and companies have dropped to the lowest level since at least 1994, according to agency records.

3M is one of 20 environmental cases prosecuted by the Justice Department in 2016. Those cases resulted in judgments of $449,253 — the lowest in 22 years, agency records show.

The next lowest year was in 2015 when judgments totaled $734,127.

By comparison, judgments averaged $3.7 million a year during predecessor Republican J.B. Van Hollen’s eight years from 2007 to 2014.

Judgments under Democrat Peg Lautenschlager, who was attorney general between 2003 and 2006, averaged $4.3 million a year.

Records also show the average was $5.2 million a year between 1994 to 2002 under then-Attorney General Jim Doyle, a Democrat.

“It’s hard to believe that currently there is such a dramatic drop-off in forfeitures and other payments — it’s hard to comprehend,” Meyer said.

He has tracked environmental enforcement since Republican Gov. Scott Walker took office in 2011.

The issue has been closely watched in the conservation community, but Walker has said that regulators are protecting the environment and working better with those they regulate to avoid problems before they become more serious.

In an email, Koremenos said the attitude of businesses “toward the environment, environmental controls, self-reporting and stewardship have changed dramatically over the past decades. It would be highly unusual for DOJ to continue the exact same enforcement strategy as it did, 10, 15 or 20 years ago.”

3M, a Fortune 500 company, had revenue from worldwide operations of $30.1 billion in 2016.

3M settled with the Justice Department under Van Hollen in another case in Prairie du Chien in 2010 when the company paid $150,000 in forfeitures and penalties for violations of its air permit between 2004 and 2009.

The company also agreed to spend $200,000 for two environmental projects to purchase equipment that reduced carbon dioxide emissions and saved more than 6 million gallons of water a year.

In the most recent 3M case, documents show bag houses failed to operate at times over 26 days between June 2, 2014, and June 9, 2015, at a downtown Wausau plant and failed to operate periodically during three days between Sept. 4, 2014, and Aug. 1, 2015, at a quarry outside of town. The facilities employ about 150 people, according to the company.

A bag house is an air pollution device that acts as a filter and traps particulates before the pollutants are released into the air.

The Wausau plant makes roofing granules. 3M bought it in 1929 and said the plant is the company’s oldest operating manufacturing facility in the world.

Koremenos said 3M reported the problems.

Documents show that in one case 3M reported an incident, but six days after the fact, instead of the required next business day. During this time, 1,442 pounds of particulates were emitted.

While non-operating bag houses violated the law, Koremenos said 75% of the time when the equipment was not working, it was for periods of less than 5 minutes.

“One violation was only for 19 seconds,” he said. “Overall, the actual impact on the environment was minimal.”

3M spokeswoman Fanna Haile-Selassie said most of the emissions stayed in buildings, and company analysis showed pollution did not leave the property.

Under the settlement, 3M must upgrade electrical and communications systems that were factors in malfunctioning pollution-control equipment as well as make improvements in an environmental managements system it has had in place since 2010.

Meyer, the former DNR secretary, said the improvements the company was required to make were essentially investments in its own operations.

“This is just the cost of doing business,” he said. “This is what any of their competitors have to do. Why should they be given credit for this?

The failure to require a forfeiture sends the wrong message, he said.

"It means there is less deterrence for other companies that may not care as much about meeting environmental regulations,” he said.