Consumer Watchdog Requests Financial Audit After Toxics Regulator Reveals $185 Million in Uncollected Cleanup Bills

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SANTA MONICA, CA –Consumer Watchdog called for the California State Auditor to perform a comprehensive financial audit of the Department of Toxic Substances Control (DTSC) today after, as acknowledged in the Sacramento Bee, the state’s top toxics regulator admitted it had never billed or failed to collect $185 million in reimbursements of public funds from polluters for overseeing cleanup of their toxic messes.

“It’s outrageous that companies like Chevron, chemical companies, and junkyards didn’t get billed for cleanups and regulators stuck Californians with the tab,” said Consumer Watchdog advocate Liza Tucker. “This is financial malpractice and heads should roll at the DTSC.” Tucker said it was clear that the DTSC was trying to get out front of this problem to avoid the larger question of why it had failed for the past 26 years to bill polluters for tens of millions of dollars.

Consumer Watchdog had requested specific internal spreadsheets about companies that were never billed for cleanups and the DTSC had just denied the information on May 24 on grounds that the documents were “privileged” between attorney and client. “How a state agency spending public funds can claim that this information is privileged defies comprehension. This is about money that rightfully belongs to the public, and this department does not have the legal right to keep what has happened to that money secret,” she said.

Tucker said that the DTSC was leaving Californians to pick up a tab that actually runs into the billions of dollars. “This is just the tip of the iceberg,” said Tucker. She said that the department rarely makes companies put up the money to follow through on any corrective actions the DTSC orders, and definitely does not demand enough money up front in the form of insurance policies, bonds, or other funds for the closure of facilities when it hands out permits. The California Integrated Waste Management Board estimates that the state could face a risk of $1.8 billion just to maintain closed facilities by the middle of this century.

Major polluter Exide Technologies, whose operations were suspended by DTSC in April, is a case in point. The company never put up financial assurance for corrective actions the DTSC ordered over the years and the $10 million it put up for closure is not enough, according to DTSC regulators, to clean up extensive groundwater and soil contamination, let alone maintain the closed facility for decades.

Tucker said that because California is prone to earthquakes, and anticipates a sea level rise of more than three feet this century, it was imperative to demand companies put up realistic sums to close facilities that cover not just the decontamination of hazardous waste units but also the cleanup of soil and groundwater contamination present at many sites.

In addition California law allows toxics regulators to demand companies demonstrate the financial capacity to pay for any corrective actions the DTSC orders along the way. “The DTSC virtually never requires that, arguing that companies don’t need to put up the money until the remedy is selected and that’s ridiculous,” Tucker said.  “In practice it means, regulators have no financial leverage over polluters to make them do as they are told. So they drag the process out for years at a time and never clean up their contamination.”

Tucker said the gross fiscal mismanagement at the DTSC meant the regulator was putting the public in toxic harm’s way, instead of protecting the public against it. “This department has shortchanged everyone, including environmental justice communities who could have used the money to right a lot of wrongs done by both regulators and the business community.”

For more on the DTSC and communities under toxic siege see:

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Liza Tucker
Liza Tucker
Liza Tucker is a consumer advocate for Consumer Watchdog, following everything from oil and gas to the regulation of toxic substances in the state of California. She comes to us from Marketplace, the largest U.S. broadcast show on business and economics heard by ten million listeners each week on 400 radio stations. Liza worked at this public radio show for a decade, first as Commentary Editor and then as Senior Editor for both Washington and Sustainability News.

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