Koch guilty plea, fine resolves Corpus Christi refinery case

Koch Industries and Koch Petroleum Group LP will plead guilty to one charge and pay $20 million to resolve federal allegations about benzene emission violations at Koch's 297,000-b/d Corpus Christi, Tex., refinery. It will pay a $10 million fine and $10 million for community service projects in the Corpus Christi area.

Apr 10th, 2001


By the OGJ Online Staff

HOUSTON, Apr. 10 -- Koch Industries and Koch Petroleum Group LP will plead guilty to one charge and pay $20 million to resolve federal allegations about benzene emission violations at Koch's 297,000-b/d Corpus Christi, Tex., refinery.

Koch Petroleum Group, which operates the refinery, agreed to plead guilty to concealment of information over a 3-month period in early 1995. It will pay a $10 million fine, and $10 million for community service projects in and around Corpus Christi as a condition of probation.

As part of the agreement, the US Department of Justice Monday dropped seven charges against Koch Industries, Koch Petroleum Group, and four employees. They were named in a 97-count indictment last fall that alleged reporting and compliance violations. All of the original counts were dropped and the new one was filed.

Koch said an employee, not one of the four charged, concealed information from it and the government. Koch terminated the employee in 1995 after it discovered that he withheld information from management.

It said the employee filed reports in early 1995 indicating that certain wastewater monitoring tests had been completed. An internal investigation later discovered the tests had not been performed and a control device had been separated from a source of benzene wastewater. Koch notified the regulators of the violations and terminated the employee.

Koch Industries spokesman Jay Rosser said, "We were, and remain, willing to cooperate with the government in investigating any wrongdoing, but we would not cooperate with the government in its pursuit of these innocent employees who acted responsibly. From the beginning of this ordeal we have said we would stand by these four employees. They helped find the problem, investigated it, and reported it to the proper agencies, which led to the termination of the employee responsible for the problem in the first place."

More in Refining & Processing