Years After Criminal Conviction, Citgo Petroleum Finally Facing Sentence in Corpus Christi

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

Six years after Citgo Petroleum Corp. became the first major oil company to be criminally convicted by a jury for violating the Clean Air Act, the company may finally be sentenced this month. Residents who were exposed to harmful emissions from Citgo’s Corpus Christi refinery have been awaiting a sentence. The hearing in federal court opened last week in Corpus with their testimonies.

The hearing marks the first time that victims of an air pollution crime have been awarded protection under the Crime Victims’ Rights Act and allowed to share testimony in court. The Citgo case could open the door for other air pollution victims to claim that status in environmental justice cases around the country, says Melissa Jarrell, a professor of criminal justice at Texas A&M-Corpus Christi.

The unusually long sentencing hearing is scheduled to continue through the end of the month. In 2007, Citgo was convicted of violating the Clean Air Act after an inspection revealed that the company had been illegally storing oil in two uncovered tanks for 10 years, and, unbeknownst to the residents, releasing harmful chemicals like benzene into the air. Residents of the fenceline communities surrounding the refinery, who attribute a spectrum of health problems to consistent and prolonged exposure to toxic chemicals, feel they’ve been denied justice. They are eager to see Citgo punished for its crimes, and are also seeking restitution from the company.

Jean Salone shared her story at the hearing last Wednesday, and she also testified at Citgo’s trial in 2007. Her house is two and a half blocks east of the refinery, in the Hillcrest neighborhood where she has lived for more than 50 years. She told the Observer that during the time Citgo was illegally operating the tanks, a strong smell woke her up in the middle of the night and she called to report the incident to the TCEQ. Salone says her granddaughter, who lives in Austin, has to stay with friends when she visits Corpus because her asthma prevents her from being at her grandmother’s house for too long.

“She tells me, ‘You don’t go nowhere to die, grandmother,’” Salone says. “People are believing and hoping that we’ll get out – that [Citgo] will buy us out or something.”

Suzie Canales, an environmental activist in the area, agrees that most residents want out of Hillcrest. “What the judge needs to do is make a statement here and what we’re hoping he does is relocate the people to safety and away from Citgo,” she says. “Anything less than that would be an injustice. Since [the conviction in] 2007 Citgo haven’t been good neighbors.”

U.S. District Judge John D. Rainey, who presided over Citgo’s criminal trial, will determine the sentence. Rainey will almost certainly make Citgo pay a fine, and he’ll set the conditions of the company’s temporary probation. The judge can also order the company to pay the victims restitution or even relocate residents. There’s no limit to how much he can order the company to spend on restitution, but for now, he’s capped the financial penalty he can impose on Citgo at a level that prosecutors and victims find inadequate.

Last year, Citgo celebrated a victory when Rainey granted the company’s request to block the federal government from seeking the highest possible monetary sentence. Citgo argued its punishment should be limited to paying the statutory maximum of $500,000 per felony count, which amounts to $2 million, chump change for a multi-national oil company. The U.S. Justice Department calculates that Citgo raked in $1 billion in profits during the time it was violating the Clean Air Act, and tried to set the maximum penalty at twice the “gross, pecuniary gain,” or $2 billion. Rainey said empaneling a jury to evaluate Citgo’s financial gain would prolong the sentencing process, and capped the penalty at $2 million.

“[If] a company like Citgo makes $1 billion violating the Clean Air Act and gets sentenced to a $2 million penalty, that is not a deterrent to future violations of the Clean Air Act,” says Bill Miller, a former EPA attorney who worked on the Citgo case but has since retired. Because corporations can’t do jail time, the threat of prohibitive financial penalties is one of the few ways to deter them from committing crimes, Miller said.

He predicts that in the coming weeks, the prosecution will try to show that Citgo has “continued to violate the Clean Air Act with impunity because they’re not being penalized for violations.”

Miller points to other Clean Air Act violations Citgo has committed since being convicted, including most notably an accidental release of at least 4,000 pounds of the highly corrosive and poisonous hydrofluoric acid in 2009. Few residents were notified of the release, and Citgo initially reported only 30 pounds of hydrofluoric acid had leaked. Residents complained of nausea, dizziness, burning throats and other problems at the time of the leak.

Rainey is expected to deliver a sentence next week, but either Citgo or the Department of Justice could appeal. In the meantime, Hillcrest residents are hanging on for good news.

“You put your trust in God,” Salone says. “That’s all you can do.”

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.