CORPORATE CRIME REPORTER Railway Company Charged with Environment Crimes 22 Corporate Crime Reporter 14, April 3, 2008 A Massachusetts grand jury today indicted a New Hampshire railway company, and three of its subsidiaries, for failing to report a hazardous spill and contamination on its rail yard property. Pan Am Railways, Inc., of Portsmouth, New Hampshire was charged with violating a Massachusetts law that requires any owner or operator of a site, as soon as it has knowledge of a release or threat of release of oil or hazardous material, shall immediately notify the Department of Environmental Protection (MassDEP). Pan Am Railways, previously known as Guilford Rail Systems, is a privately-owned freight railroad that services northern New England, from Mattawamkeag, Maine, to Rotterdam Junction, New York. Pan Am is reportedly controlled by Timothy Mellon of the Mellon banking family of Pittsburgh. The Maine Central Railroad Company, which owns the locomotive from which the spill occurred, the Boston & Maine Corporation, which owns the rail yard in Ayer, Massachusetts where the spill occurred, and the Springfield Terminal Railway Company, which is the operator of both the locomotive and the rail yard, were also charged with two counts each of violating the Massachusetts Oil and Hazardous Material Release Prevention Act. An investigation conducted by the Massachusetts Environmental Crimes Strike Force (ECSF) found that, on the evening of August 8, 2006, a locomotive left idling at Pan Am Railways' rail yard in Ayer, spilled hundreds of gallons of diesel fuel onto the ground. Despite a two-hour time period for reporting spills of ten gallons or more to the MassDEP, the fuel spill was not reported by the company or its subsidiaries either that night or the next morning, but instead investigators allege that an attempt was made to cover it up. The MassDEP was first notified of the fuel spill on the afternoon of August 9, 2006, by a caller, who wished to remain anonymous out of a concern for retribution by the railroad. The caller indicated that the railroad was alleging the spill was less than the reportable quantity of ten gallons, but that workers believed the spill was significantly greater. The caller said that the railroad appeared to be trying to hide the spill and avoid its detection by covering the spill area with fresh ballast. The Ayer Fire Department, a member of MassDEP's Emergency Response team, and inspectors from the Federal Railroad Administration responded to the scene late in the afternoon of August 9, 2006, and initiated an investigation into the circumstances surround the spill. Initial assessments by the responding agencies indicated that a fuel spill of hundreds of gallons occurred at the site. The Federal Railroad Administration's investigation eventually concluded that over 900 gallons of diesel fuel had leaked from the locomotive. Subsequent investigation by the ECSF revealed numerous ways in which the railroad companies learned of the spill, and its extent, but failed to report what it knew to MassDEP. Each failure to report is punishable by a criminal fine of up to $100,000. Home Corporate Crime Reporter 1209 National Press Bldg. Washington, D.C. 20045 202.737.1680
