Nov 26, 2004

Sabine CEO convicted in Juneau pollution case

Rick Dean Stickle, Chairman and CEO of Sabine Transportation Inc, of Cedar Rapids, Iowa, was convicted Tuesday by a Miami federal jury for his role in the 1999 dumping of oil-contaminated wheat in the South China Sea from the S. S. Juneau.

In August, Sabine Transportation was fined $2 million and put on probation in relation to a number of dumping incidents involving the Juneau and other Sabine vessels. Three crew members shared a $1 million whisteleblower award in that case.

On Tuesday, according to a U.S. Department of Justice statement, Stickle was convicted of engaging in a multi-purpose conspiracy to illegally discharge the oil contaminated grain at sea; of obstructing a proceeding initiated by the United States Coast Guard by presenting the Coast Guard false and misleading statements and records; and of defrauding the United States by hampering and impeding the Coast Guard and the Department of Agriculture in their efforts to enforce environmental laws and the laws and regulations governing the carriage and delivery of donated agricultural commodities.

Stickle's sentencing hearing is set before Judge Gold on February 9, 2005 at 4:30 p.m. Each count carries a maximum statutory sentence of five (5) years' imprisonment and a fine of the greater of $250,000 per count or twice the gain or loss caused by the relevant conduct.

Other senior Sabine employees, Michael R. Reeve, President of Sabine, Michael M. Krider, Port Engineer, George K. McKay, Master of the S. S. Juneau, and Philip J. Hitchens, Chief Officer of the S. S.Junea, were previously convicted for their involvement in the in the scheme, based on their guilty pleas.

"Today's verdict reflects the Department's commitment to prosecute those who do not act in accordance with the law," said Thomas L. Sansonetti, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. "From the ship operators to the corporate executives in the boardroom, all corporate officials will be held accountable for breaking the nation's environmental laws by dumping wastes into our waters and on the high seas."

The government's investigation began when the S. S. Juneau arrived in Portland, Oregon at the end of a voyage to Bangladesh carrying a cargo arranged and funded by the U.S. Department of Agriculture and administered by C.A.R.E. Crew members alerted a Coast Guard inspector that a diesel oil leak into one of the S.S. Juneau's main cargo tanks was discovered while a humanitarian shipment of grain was being off-loaded in Bangladesh in December of 1998. According to information provided, approximately 442 metric tons of wheat became saturated with the oil and could not be off-loaded.

Subsequently, as alleged, company officials intentionally misled Coast Guard officers in Singapore and Portland by failing to disclose the true nature of the contaminated residue while seeking authorization to discharge the residue at sea under the guise of it merely being an oily waste. Such wastes ordinarily can be processed through an oil pollution prevention device on a ship, which would limit any oily waste discharge to the standards set by U.S. and international law. The Sabine officers and employees were well aware, as alleged, that discharging the oil-laden mixture in this fashion from the S. S. Juneau was neither legal nor feasible. Nevertheless, they decided to hire a team of 15 Bulgarian nationals and a technician to board the S. S. Juneau in Singapore and directly discharge the contaminated wheat into the ocean during the return voyage to the United States. Over seven (7) days in February 1999, the S. S. Juneau, while transiting the South China Sea, emptied the contaminated cargo tank and failed to report the discharge to the U.S. Coast Guard as required by law.

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