Chemetco

Location, history and operations

38°50′06″N 90°05′42″W

Location

The Chemetco smelter was in Hartford, Illinois, one mile east of the Mississippi River, within Madison County's American Bottom floodplain. The facility occupied roughly 41 acres of a 230-acre tract.

History

Construction of the plant, originally with the name Chemico, began in 1969. Three 70-ton gas-fired converters were installed, and a fourth later. For each converter, there was also a melting furnace.

The business was incorporated as a Delaware company and renamed Chemetco, Inc. in 1972.

Ownership

Corporate records indicate that Chemetco underwent a change in ownership during the early 1990s. In testimony before the Illinois Pollution Control Board, Chemetco president David Hoff stated that John M. Suarez purchased Chemetco in 1993.

1992 U.S presidential primary 'laundered money' campaign contributions

In June 1992, a year before John M. Suarez took over as Chemetco's owner, a complaint was filed with the Federal Election Commission alleging that contributions connected to Chemetco's president, John Suarez, and associate José Bóveda, violated federal election law. A contemporaneous The Kansas City Star profile of Suarez had noted his history of political contributions and that some donations were made through companies or associates rather than in his own name.

The FEC complaint stated that the contributions affected '...an ongoing primary election campaign which will end on August 4, 1992', referring to the U.S presidential primary then underway in Missouri.

In 1994, the FEC investigated allegations that Suarez arranged a $25,000 contribution through an account under the name Tippins Development Ltd., which was refunded amid concerns over its legality. Additional contributions from Concorde Trading, Chemetco, and Midco, all of which were linked to Suarez and a Belgian holding company, were also routed to federal campaigns through intermediaries.

Main products

Chemetco was primarily a secondary smelter of copper anodes and cathodes. Its peak historic capacity was about 125,000 tonnes of refined copper annually, from an average of 250,000 tonnes of scrap copper and residues.

Subsidiary products and precious metals

The smelter also produced lead and tin ingots. Independent evaluations of the tankhouse sludges confirmed gold, silver, and other metals.

Introduction of Kaldo /Top-blown rotary converter (TBRc) technology to secondary copper smelting

Chemetco appears to mark the first large-scale, continuous application of TBRc in secondary copper refining rather than steel, showing parent company Metallo to be an early adopter. Chemetco's primary rival was Noranda's Horne Smelter in Rouyn-Noranda, Quebec.

Characterization of by-products

Chemetco operated under state and federal environmental regulations that governed the handling of secondary materials and industrial residues. In a significant hearing in front of the Illinois Pollution Control Board (PCB) the company petitioned for an 'amended standard' that would allow it to slurry its bunker material, which it described as 'zinc oxide,' then blend it with copper and tin fines before shipment overseas. Chemetco presented this process as a means of recovering metal value from material it characterized as a product.

Prosecution and conviction

Discovery of the concealed discharge

Between 1986 and 1996 Chemetco operated a secondary copper refining facility at Hartford, Illinois, which was later found to have discharged untreated wastewater through a hidden pipe into wetlands leading to the Mississippi River. The pipe was not shown on site diagrams and its exposed sections were covered with straw, but after a tip-off, it was discovered by an Illinois Environmental Protection Agency field manager on September 18, 1996, along with a valve which enabled it to be shut off at the distal end.

The pipe, known to employees as 'the mystery pipe to nowhere', was an open secret within the plant and was used before its discovery by IEPA for about ten years to dispose of toxic waste into nearby wetlands. Its exposure triggered a multi-agency criminal investigation involving the Illinois Environmental Protection Agency, the Environmental Protection Agency's Criminal Investigation Division, the Illinois State Police, the FBI and the U.S. Army Criminal Investigation Command.

Its existence had allowed the plant to bypass permitted outfalls and monitoring systems resulting in unreported releases of heavy metals including lead and cadmium.

Charges, plea, and sentencing

Chemetco, its president and several employees were indicted for conspiracy, knowing violations of the Clean Water Act and making false statements to federal officials. The company pleaded guilty to conspiring to violate and knowingly violating the Act, and entered a plea of nolo contendere to making false statements, admitting that the concealed pipe had been used during the charged period.

Legal precedent and appeal

On appeal, Chemetco argued that the number of violation days, used to decide the size of its fine, should have been found by a jury beyond a reasonable doubt. However, the Seventh Circuit held that the number of days was a sentencing factor, not an element of the offense, and so it could be decided by the judge weighing up the evidence. This ruling affirmed Chemetco's sentence and established a precedent on the treatment of "per-day" penalties under the Clean Water Act. Since then, legal analyses have cited the case as a leading authority in environmental criminal law and sentencing.

The decision made it clear that when penalties are based on each day of a violation, a district court is responsible for deciding how long the violation lasted and the size of the fines, and that this applies even when the financial stakes are very large.