Federal authorities were concerned about the "completeness" of the assistance being provided by a former Freedom Industries environmental manager they helped to avoid prison time for his role in the January 2014 chemical spill that contaminated drinking water for hundreds of thousands of people in the Kanawha Valley and surrounding communities, according to a newly unsealed court filing.
Assistant U.S. Attorney Phil Wright said in the filing that the government was "initially concerned" about information being provided to them by Freedom environmental manager Robert Reynolds, who earlier this week was sentenced to three years probation and a $10,000 fine - but no jail time - largely based on Wright's representation to the court that Reynolds had provided "substantial assistance" in the probe of the Freedom spill.
"Frankly, the government was initially concerned about the completeness of Reynolds' assistance, because he expressed confidence about his knowledge of a key environmental issue that he really did not know much about, as we later learned in the course of the investigation," Wright wrote in the seven-page legal memo.
Wright said that the issue was whether Freedom's Etowah River Terminal along the Elk River was required to have an environmental plan known as a "Spill Prevention, Control and Countermeasure."
"The facility needed one," Wright said. "Reynolds was sure (in the summer of 2014) it did not."
Wright added, "Ultimately, however, the government does not believe that any initial concern detracts significantly from the value of his assistance."
"In fact, Reynolds' lack of knowledge of the need for an SPCC plan and his explanation of how his job duties for Freedom evolved over time dovetailed with the prosecution theory that Freedom was very badly managed," Wright wrote.
The government's concerns were not mentioned when U.S. District Judge Thomas Johnston sentenced Reynolds on Monday in open court, but were discussed in a legal memo that Wright initially provided privately to Johnston and that the judge unsealed after the Charleston Gazette-Mail raised concerns about other documents in the Freedom criminal cases being withheld from the public.
Johnston is in the midst of a three-week series of hearings where he will sentence bankrupt Freedom Industries and six former company officials for water pollution crimes that caused the Jan. 9, 2014, spill of MCHM and other chemicals from Freedom's facility, located just 1.5 miles upstream from West Virginia American Water's regional drinking water intake.
Residents and businesses in all or parts of a nine-county area were told not to drink or bathe in their tap water for up to a week, and many residents continued for months not to drink the water because of health concerns. Hundreds of residents sought medical care at hospital emergency rooms - for nausea, skin reactions, vomiting and other problems - and local health officials concluded that 100,000 residents probably experienced similar symptoms.
So far, both Reynolds and a former Freedom owner and vice president, Charles Herzing, have avoided being sentenced to any prison time. Both had faced up to one year in prison. But Acting U.S. Attorney Carol Casto's office told Johnston that both Reynolds and Herzing had provided "substantial assistance" to the government's efforts to investigate the spill and bring charges against others responsible for the incident. Such motions for "substantial assistance" can lower the "offense range" that helps to guide judges in determining a sentence.
In another prosecution memo that was unsealed Wednesday by Johnston, Wright argued that Herzing provided "helpful information" about how former Freedom President Gary Southern's role went beyond dealing only with financial matters and regarding another former Freedom president, Dennis Farrell, and Farrell's "lack of attention to details."
"Herzing really had no competence to run a tank farm, but in fact neither did any of his fellow officers and co-defendants," Wright wrote. "Herzing's testimony would have made this fact plain.
"In the end, Herzing's agreement to plead guilty and cooperate gave the government significant leverage in making the case against Southern and Farrell," Wright wrote.
In his memo on Reynolds, Wright noted that Reynolds was "the first individual defendant to agree to plead guilty and cooperate" in the government's investigation of Freedom.
"His assistance was significant and useful because he provided necessary background information about the inner workings of Freedom, including its organizational structure (or lack thereof), and described Freedom's failure to have well-defined roles and responsibilities for carrying out important tasks, such as developing and implementing a stormwater pollution prevention plan that was required by the Clean Water Act permit governing the Etowah facility," Wright wrote.
Wright said that Reynolds also helped to implicate another defendant, Freedom plant manager Michael Burdette, who also reached a deal and began cooperating with investigators.
"Burdette turned out to be a very significant witness, even more important to our case against the remaining defendants than Reynolds," Wright wrote. "Burdette's information was more helpful in terms of implicating [Freedom co-owner] William Tis and Charles Herzing and spelling out in greater detail the role that Southern played with Freedom before December 2013 [when Chemstream Holdings, Inc., bought the company and Southern became president]."
Johnston said that prosecution motions for "substantial assistance" are by local policy generally not made public, but instead provided privately to judges, because of concerns about the safety of defendants who are cooperating with the government. Such motions are then discussed in open court, but most sentencing hearings are not attended by the media, so the identities of cooperators - and any questions about whether such motions are justified - are often not publicly disclosed. Johnston said the safety concerns that might be present in many cases do not appear to exist in the Freedom matters.
At the Reynolds sentencing hearing, Wright declined when Johnston asked if he wanted to discuss any of the details of his motion in open court.
During the sentencing hearing for Herzing, Johnston said that he generally defers to federal prosecutors on the issue of whether a defendant has provided substantial assistance. Johnston said his practice is also to give defendants "the full benefits" of such assistance when determining how far to reduce their potential sentence.
Under the federal sentencing guidelines, courts do not have to grant such motions. But if they do, judges are - in deciding how much credit to give a defendant - supposed to weigh a variety of factors, including the court's "evaluation of the significance and usefulness of the defendant's assistance," and the "truthfulness, completeness and reliability of any information or testimony provided by the defendant."
Sentencing in federal criminal cases is determined at least in part by the advisory Federal Sentencing Guidelines and by confidential pre-sentencing investigation reports prepared by the U.S. Probation and Pre-trial Services office.
In Reynolds' case, the initial calculation of a sentencing "range" under the guidelines yielded a potential sentence of 24 to 30 months. That's because the "offense level" was increased based on factors such as the "disruption of public utilities" and the violation of an environmental permit. But because the maximum sentence under the statute was one year, the recommended sentence was converted to 12 months.
Wright, though, asked Johnston to reduce that "guideline sentence" from 12 months to an offense level that made the sentencing range zero to six months, allowing Johnston to stay within the guidelines' range while giving Reynolds probation rather than any jail time. Johnston accepted the recommendation, and sentenced Reynolds to three years probation and a $10,000 fine.
Reach Ken Ward Jr. at kward@wvgazettemail.com, 304-348-1702 or follow @kenwardjr on Twitter.