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4 former chemical company executives indicted on pollution charges in West Virginia spill

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CHARLESTON, West Virginia — Four former chemical company executives have been indicted on federal pollution charges over a January spill that triggered a ban on drinking water for days for 300,000 West Virginia residents.

The indictment unsealed Wednesday charged ex-Freedom Industries presidents Gary Southern and Dennis P. Farrell and two others with failing to ensure that the company operated the steel storage tank that leaked the coal-cleaning chemical in a reasonable and environmentally sound manner.

Southern also faces federal fraud charges related to the company's bankruptcy case. Freedom filed for bankruptcy eight days after the Jan. 9 spill of the chemicals into the Elk River in Charleston. West Virginia American Water uses the river for its water supply a mile and a half downstream.

U.S. Attorney General Eric Holder said in a statement that the tank conditions at Freedom Industries "were not only grievously unacceptable, but unlawful. They put an entire population needlessly at risk. As these actions make clear, such conduct cannot, and will not, be tolerated."

The others charged are William E. Tis and Charles E. Herzing, who along with Farrell owned Freedom until December 2013. They sold it to Pennsylvania-based Chemstream Holdings for $20 million, after which Southern became president.

Farrell, 58, served as Freedom's president from October 2001 until the sale, after which he continued to work at the terminal in a management role.

Herzing, 63, also was Freedom's vice president and Tis, 60, served as secretary.

All four were indicted for alleged violations of the federal Clean Water Act.

In addition, U.S. Attorney Booth Goodwin said the company, Freedom environmental consultant Robert J. Reynolds and tank farm plant manager Michael E. Burdette were charged in federal informations with Clean Water Act violations. A federal information typically signals a defendant's willingness to cooperate in the investigation.

"It's hard to overstate the disruption that results when 300,000 people suddenly lose clean water," Goodwin said at a news conference. "This is exactly the kind of scenario that the Clean Water Act is designed to prevent.

"This spill was completely preventable. And this spill happened to take place in my district, but it could have happened anywhere. If we don't want it to happen again, then we have to make it crystal clear that those who will commit violations like this are held accountable."

During their time as Freedom corporate officers, Farrell, Tis, Herzing and Southern "approved funding only for those projects that would result in increased business revenue for Freedom or that were necessary to make immediate repairs to equipment that was broken or about to break," the indictment said.

The men ignored or failed to fund other projects to repair, maintain and improve equipment and systems needed for compliance with environmental regulations, including addressing drainage problems in the containment area.

Southern's attorney, Robert Allen, said Wednesday that his client plans to plead not guilty and "vigorously fight the charges." Farrell referred questions to his attorney, who didn't immediately return a telephone message.

More than a dozen aboveground storage tanks at the facility were removed. The World War II-era tank that leaked had two holes, just a few millimeters each, and had subpar last-resort containment walls.

The federal Chemical Safety Board is conducting its own investigation.

According to health officials, after the spill, more than 400 people were treated at hospitals for symptoms that patients said came from exposure to the chemical, known as MCHM.

Southern, 53, was arrested last week, accused in a criminal complaint of lying about his role with the company in bankruptcy court hearings and meetings to protect his personal wealth of nearly $8 million from lawsuits. Goodwin said those charges of bankruptcy fraud, wire fraud and lying under oath were included in the indictment.

If convicted of all charges, Southern faces up to 68 years in prison, Farrell, Herzing and Tis face up to three years apiece and Burdette and Reynolds would face up to a year each. Freedom could face unspecified fines if convicted.

(A previous version of this story incorrectly said Freedom Industries was indicted. Freedom was named in a federal information.)


Associated Press writers Pam Ramsey and Jonathan Mattise contributed to this report.


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