Citgo’s Corpus Christi Environmental Crimes: Too Big to Punish

Fire at the Citgo Refinery in Corpus Christi on July 19, 2009.
Fire at the Citgo Refinery in Corpus Christi on July 19, 2009.

After seven years of waiting, Corpus Christi pollution victims finally learned what restitution they’ll be receiving from Citgo Petroleum Corp.: nothing. Last week, a federal district judge determined that residents of a neighborhood exposed to toxic chemicals from Citgo’s Corpus refinery weren’t due any compensation, including medical expenses or relocation costs.

In 2007, a jury convicted Citgo of violating the Clean Air Act, a first for a major oil company. The company had illegally stored oil in two uncovered tanks, exposing nearby residents to toxic chemicals including the carcinogen benzene. It took seven years for U.S. District Judge John D. Rainey to sentence the company, finally ruling in February that Citgo owed $2 million—a paltry sum next to the $1 billion prosecutors argued the company had earned from its illegal operation. Still, victims held out hope for some restitution.

On Wednesday, Rainey denied victims any restitution, including funding to pay for annual cancer screenings and other diseases that could be linked to chemical exposures. The Justice Department had requested that Citgo set up a fund to cover relocation costs, and another for victims’ future medical expenses, plus attorney’s fees and administrative costs for a total of $55 million in restitution.

Ironically, Rainey wrote that determining how much victims are really owed would “unduly delay the sentencing process” and “outweighs the need to provide restitution to any victims.”

The Citgo case is also the first in which victims of air pollution are recognized as victims of crime under the Crime Victims Rights Act and allowed to present oral testimony in court. Rainey had originally rejected 20 victims’ request for that status, but the Fifth Circuit Court of Appeals ordered Rainey to reconsider. He eventually did grant more than 800 residents the status, but in his latest ruling Rainey says the operation of the tanks only caused short-term health effects on “at least two specific days.” He writes that there’s no evidence emissions could have caused long-term effects.

Paul Cassell, a University of Utah law professor and former federal judge who is representing 20 of the victims in the case pro bono, says he is appealing the ruling.

“We intend to argue to the Fifth Circuit [Court of Appeals] that Judge Rainey required indigent victims to come forward with expensive expert testimony that simply isn’t realistic in these kinds of cases,” Cassell says.

“In this situation when you have a wealthy company and many indigent victims, we think in some ways the order was backwards, focusing too much on the defendant’s interests and not giving enough attention to the victims’ interests,” Cassell says.

The restitution ruling was the prosecution’s last hope that Citgo would be made to pay more than the minimum fine of $2 million the judge set months ago. The Department of Justice calculates that Citgo made $1 billion in profit as a result of illegally operating two uncovered oil tanks. In February, Rainey ruled that empaneling a jury to determine exactly how much money Citgo made—and therefore what the appropriate fine would be—would “unduly” prolong the sentencing process that had already lasted seven years. He applied the same logic to determining restitution: Though in this case he wouldn’t have to empanel a jury, it would take the court too long to determine what each victim is owed.

“Had he come to that conclusion [seven] years ago, he might have something there. But after you’ve unduly prolonged it for [seven] years, spending a little bit more time making a determination is not going to unduly prolong it,” says Bill Miller, a former EPA attorney who worked on the Citgo conviction but has since retired. “I think he’s completely ignored the word ‘unduly.’”

The Observer contacted the Department of Justice for comment and received this statement: “We are disappointed in the court’s decision, especially for the residents of the community surrounding the refinery who suffered as a result of Citgo’s crimes.”

The Justice Department wouldn’t comment on whether or not it intends to appeal. It has until the end of the month to do so, and Miller isn’t optimistic.

“It doesn’t look like Department of Justice has any intention of appealing the sentencing of Citgo, which is a crime in itself in my opinion,” Miller says. “It basically emasculates environmental crime prosecution in the United States completely.”

Miller says if Citgo’s sentence goes unchallenged, it will send the message that some corporations are too big to punish simply because it’s too hard to determine how much they profited from committing environmental crimes. Environmental crimes cases rarely go to trial, as corporations prefer to settle out of court. When the government succeeds in taking corporations to court—and, even more seldom, secures a conviction—it should take that opportunity to show that it will aggressively prosecute environmental crimes, Miller says.

“If you’re not going to do anything about it then it behooves every large corporation who gets caught violating a complex statute like Clean Air Act to go to trial and hide behind the complexity of it.”

Priscila Mosqueda is a contributing writer at the Observer, where she previously interned. She grew up in San Antonio and graduated with a bachelor's in journalism from the University of Texas at Austin in 2012. Her work has appeared in InsideClimate News, The Center for Public Integrity, The Daily Beast, and various Central Texas outlets.

Published at 9:00 am CST
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