CORPORATE CRIME REPORTER

Rowan Companies, Nine Employees Plead Guilty to Environmental Crimes
21 Corporate Crime Reporter 40, October 9, 2007

Rowan Companies, Inc., a major oil and gas drilling company, pled guilty to three felonies in connection with the routine discharge of pollutants and garbage into the Gulf of Mexico from one of the firm's oil rigs.

Rowan will pay a $7 million criminal fine, along with community service payments totaling $1 million to five state government enforcement organizations.

Rowan will also make a $1 million payment to the National Marine Sanctuaries Foundation to be used for preservation and protection projects at the Flower Garden and Stetson Banks National Marine Sanctuary located in the Gulf of Mexico off the coasts of Texas and Louisiana.

Rowan will also reorganize its corporate structure to add an environmental division.

“Oil drilling operations must be done in a way that complies with environmental law,” said the Justice Department’s Ronald J. Tenpas, “Along with paying a criminal fine, Rowan Companies, Inc. is implementing a compliance plan and is helping to set industry standards that will serve as a model for other oil drilling companies."

The federal officials alleged that the operation and cleaning of offshore drilling rigs created substantial amounts of waste.

For example, the hydraulic cranes on board the Rig Midland required the use of large amounts of fresh hydraulic oil, and routine maintenance and operation of the rig necessitated the use of chemicals, paint, and other materials.

Federal officials alleged that employees on the Rig Midland routinely discharged waste hydraulic oil mixed with water, used paint, paint cans, and other pollutants and garbage into the Gulf of Mexico and failed to notify the government of the discharges in violation of the Clean Water Act and the Act to Prevent Pollution from Ships.

Nine supervisory employees of Rowan who worked on the Rig Midland pled guilty.

Carl Smith, James Rawson, Warren James, and Randy Hoover each pled guilty to negligently discharging pollutants into U.S. waters in violation of the Clean Water Act in connection to the sandblasting operations and agreed to pay a $2,500 fine.

David Burcham and Murphy Comardelle each pled guilty to a failure to report knowledge of a felony in connection with the illegal discharges of waste oil from the Rig Midland, and agreed to pay $5,000 in criminal fines.

Terry Glen Fox and Michael Friend pled guilty to misdemeanor charges for negligently discharging waste oil into U.S. waters in violation of the Clean Water Act and agreed to pay $2,500 in fines.

Michael Freeman pled guilty to a felony violation of the CWA for knowingly discharging waste oil into U.S. waters and faces a maximum fine of $250,000.

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