Despite Gains, Problems Plague Governor’s Toxic Waste Program

After nearly three years of plowing additional staff and money into the state’s efforts to clean up hazardous waste dumps, Gov. George Deukmejian finds his program for coping with toxics plagued by serious problems that cloud its accomplishments.

Few doubt the Republican governor’s claims to having cleaned up more sites, conducted more investigations, and levied more fines than his Democratic predecessor, Edmund G. Brown Jr. But Administration officials agree that their record pales before the enormity of the job yet to be done.

And just as the state Department of Health Services is poised to begin spending $100 million in voter-approved bond funds for hazardous waste cleanups, there are signs of trouble:

- The FBI is investigating contract practices at the Stringfellow Acid Pits hazardous waste dump site and the death of a 4-year-old boy who lived nearby.

- Cost overruns and delays have used up millions of tax dollars, reminding some critics of excesses at the Pentagon.

- A computerized hazardous waste tracking system, intended to follow toxic waste “from cradle to grave,” is so seriously flawed that it cannot be used to catch those who dump illegally.

- State Civil Service engineers and scientists have left their jobs with the state toxics unit at an alarming 20% annual rate over the last three years, often for higher-paying posts with the consulting firms that they had supervised or the industries that they had regulated.

Besieged by criticism from legislators who challenged the Administration’s toxic cleanup performance and from federal auditors who questioned the handling of millions of dollars in contracts, state officials now are defending their record and promising solid achievements in the months ahead.

“This Administration is trying to be responsive to the need for hazardous waste cleanup, but it always seems that someone or something else is trying to block us,” said Thomas Bailey, who directs the state’s cleanup operations.

The staff of the health department’s toxics unit has doubled since Deukmejian took office in 1983. And the budget for cleanups has increased several-fold with the addition of $100 million in bond money approved by voters a year ago.

In his 1985 State of the State address, the governor proudly proclaimed, “In our first two years, we cleaned up more (hazardous waste) sites, launched more inspections and levied more fines than in all the previous eight years.”

While Deukmejian’s statistics do surpass those of his predecessor, critics and officials agree that government has only begun to tackle cleanups at the sites that represent the biggest threats to public health and the environment--in part because such projects are technically complex and extraordinarily expensive.

Many of the Administration’s problems seem to result from haste in trying to rapidly compile a record of progress in cleaning up toxic waste, a subject certain to become a prime issue as Deukmejian runs for reelection next year.

“The key is what’s been accomplished,” said David B. Roe of the Environmental Defense Fund. “The answer is very, very little.”

Barry Groveman, who prosecutes violators of hazardous waste laws for Los Angeles County Dist. Atty. Ira Reiner, questioned the claims of tough enforcement. “I’ve been in this business almost seven years, and I haven’t seen any major achievements,” he said, referring to both the Deukmejian and Brown administrations.

Amid the criticism, the FBI has started an investigation into contracting practices at federal cleanup sites that the state Department of Health Services’ toxics unit has managed for the U.S. Environmental Protection Agency. The probe was begun after allegations that the state quashed its own investigation into the death of a 4-year-old boy who lived within a mile of the notorious Stringfellow Acid Pits near Riverside, a dump site that threatens the water supply of 500,000 Southern Californians.

Possible Overcharges Investigated

Those interviewed by the FBI say the investigation is looking into the possibility that contractors have illegally overcharged the state or billed for services not performed.

As at many of the major cleanup sites, the Stringfellow operation has been dogged by substantial cost overruns.

Spending at Stringfellow has “gotten to be more like defense contracts, because of all the overruns,” said Penny Newman, who helped organize residents from the nearby community of Glen Avon. “We start out with one thing and (it ends up costing) a whole lot more.”

In 1984, for example, the state awarded Virginia-based JRB Associates (now Scientific Applications International Corp.) $1.6 million to evaluate the Stringfellow site and prepare a cleanup plan.

The contract, which was competitively bid, has since been amended three times as decisions were made to dig more wells for more laboratory testing. This increased costs to $5.9 million.

Members of the Stringfellow project’s advisory committee urged the state toxics unit to reopen the planning contract to competitive bidding, said Newman, who serves on the committee. But the advice was ignored.

Cost overruns are common at federal Superfund cleanup sites throughout the nation, because initial estimates are often based on incomplete knowledge of the extent of the contamination, said Christina Griffin, executive assistant to the chief of EPA’s Superfund program.

“What is uncommon is that California’s overruns were so much higher,” Griffin said. “It’s unique to have that much discrepancy.”

She attributed the escalating costs in California to the complexities of the sites and to problems identified in an August report prepared by EPA’s inspector general.

In the report, EPA auditors faulted state officials for failing to follow contract procedures intended to ensure the lowest possible price for planning and cleanups. The auditors recommended withholding $2 million in federal funds from the state unless it can justify the expenditures at Stringfellow and two other federal Superfund sites, the McColl dump at Fullerton and the Purity Oil site near Fresno.

Documentation Needed

Federal auditors warned state officials that they must be prepared to document all their price negotiations. However, the officials still are unable to provide documentation for recent negotiations on one major contract change, a $2.5-million work addition for Scientific Applications at Stringfellow.

The state’s toxics chief, Richard P. Wilcoxon, acknowledged that the contract could have been put out to bid again. But like many on his staff, he expressed his impatience with time-consuming contract procedures that he believes do not guarantee the lowest cost or the best cleanups.

“We don’t want to start a (cleanup) and stop in the middle of it and cause more public health problems than we are curing,” Wilcoxon said.

“We sure don’t want to have any $1,000 ashtrays either,” said John Ramey, the Department of Health Service’s chief of staff, referring to controversial Pentagon purchases of ashtrays for warplanes.

“We’ve made a real effort to improve that part of the program (contracting),” Ramey said, noting that a separate contracts and procurement office was created in September, 1984, to deal with contracting problems.

But contract problems persist.

Delays Prove Costly

Delays during the first 10 months of work on another major hazardous waste site, the McColl dump, are expected to cost the state more than $3 million. Meantime, workers and machinery sit idle. The delays were caused by court orders and EPA rules changes.

State officials now estimate that it will take as long as another year to complete an environmental impact report required by the court before 200,000 tons of contaminated soil can be hauled away.

But almost a year after delays began and six months after the final court order blocking the cleanup, state officials only last month finally decided to cancel contracts with Radian Corp., which supervised cleanup operations, and Canonie Engineers Inc., which was to have done the hauling.

Federal auditors were highly critical of the state’s decision in 1984 to award Radian its $1.4-million contract without asking for bids--the second time that the company had been chosen to work at McColl without competitive bidding.

“Time is of the essence,” argued the Health Services Department in a written justification for skipping competitive bidding and bypassing state contracting procedures.

Political Considerations

State files also show that political considerations played some part in the decision-making at McColl. For example, in agreeing in 1983 to add $90,000 to the first state contract with Radian, officials argued, “This site is politically sensitive, thus it needs immediate action.”

Documents illustrated keen awareness by department officials that Assemblyman Ross Johnson (R-La Habra) was pressuring the state for a quick cleanup at the site, which is surrounded by expensive homes.

Further complicating the McColl cleanup were what the department claimed to be inappropriate charges by Texas-based Radian. State documents show that the toxics unit for months refused to make any payments to Radian because of a dispute over $17,000 or more in living expenses and relocation costs claimed by Radian.

One clause of the contract flatly forbid the payment of living expenses for Radian workers while another clause, in contradiction, set payment rates for such expenses. Because of the ambiguity, the department finally agreed to pay Radian.

State officials also balked at paying a bill of almost $150,000 for equipment that cost the contractor only $100,000--a markup of 50%. Tom Blair, Radian’s regional manager, contended that the difference in cost represented modifications in the equipment and that the department has now agreed to pay the billed amount.

No Justification Asked

But the state has never required a detailed justification of the added charges, said Steven Viani, a state official responsible for overseeing the McColl project who first raised the issue in August.

Also at McColl, the state last year terminated its contract with Water Development Corp. of Woodland, Calif., for digging a series of monitoring wells. A toxics unit memorandum explaining the decision complained that the company had used “poor, inadequate or inappropriate equipment and materials,” was slow to perform work and disobeyed written orders from the department.

Despite the fact that the work was not completed, the state paid the company $236,000 for the job--almost all the original $250,000 contract. Michael J. Golden, a senior engineer in the toxics unit, said the EPA is planning to spend as much as $200,000 more to finish the job, which now includes an expanded number of wells.

Jeffrey C. Barrow, president of Water Development Corp., denied the state’s allegations and blamed the delays on state supervisors.

In another instance of controversy over costs, the Department of Health Services paid the City of Los Angeles $1.3 million to clean up the Capri Pumping Services dump in Boyle Heights--by far the largest of five state Superfund projects that have been completed.

Bitter Complaints

But before the work was done, three state officials complained bitterly about what they regarded as uncontrolled city spending on the site. In a 1984 memo to state cleanup chief Bailey, they urged an end to what they called “the unjustifiable expenditure of hundreds of thousands of Superfund dollars.” They called for a suspension of work at the site and for the EPA to be brought in to evaluate how much more money actually needed to be spent.

But Bailey turned down their request, arguing that the work was being done in a way “that will meet all public health needs and be efficient and cost-effective.”

The major cleanup sites are not the only ones where the state has encountered problems.

The toxics unit also ran into difficulties on long-term contracts with two private companies--Crosby and Overton Inc. of Long Beach and IT Corp. of Martinez, Calif.--that handle most of the smaller, emergency cleanups.

Under their contracts, these firms were able legally to tack onto their bills “handling charges” totaling as much as 20% for services provided by subsidiaries of their own corporations.

Until October, local governments, which supervise most of the emergency cleanups paid by the state, were not required to verify that the contractors indeed performed all the work claimed in bills. In several cases, the state was billed premium rates for overtime and holidays--even in cases where state or local government officials on the scene specified that no overtime was needed.

More Money Than Necessary

In 1984, the state paid $11,783 to Crosby and Overton for a round-the-clock guard at a Compton hazardous waste site for 10 days. Local authorities could have provided the same protection at a much lower cost, state records showed.

The toxics unit’s problems extend beyond questions over how it manages its contracts.

A tracking system intended to help the state follow the generation, hauling and disposal of hazardous waste--what the Department of Health Services calls “cradle to grave” monitoring--is seriously flawed.

The computerized system was intended to allow the state to compare shipping manifests prepared by waste producers with copies submitted by disposal sites. But 25% of the more than 400,000 manifests collected over the last three years cannot be matched--either because the producers or the disposal site operators did not send the form required by law.

One out of three manifests contain a significant error--usually a mistake in one or more of the standard 12-digit codes that identify the producers, haulers and disposers as well as the types of disposed waste.

All together, 51% of the computerized manifest records either do not match, contain an error, or both.

Still Useful

Officials argue, nonetheless, that the manifests are still a useful tool in measuring the flow of hazardous waste through the state and in prosecuting haulers who are caught dumping illegally. But the size of the problem is so large that the state cannot enforce rules requiring waste producers to report and explain the record disparities.

Perhaps an even deeper issue facing the state is the high rate of turnover among the engineers and scientists who supervise cleanup operations and the regulation of dump sites and waste-producing industries. Between 1981 and 1984, the turnover rate averaged more than 20% a year, according to a Department of Health Services study.

Many of those professionals left their Civil Service jobs for higher-paying positions with companies that they had formerly supervised or with other government agencies. In some cases, their new salaries were more than 50% higher than what they earned in the toxics unit.

Taking jobs with regulated industries is permitted under state law as long as the former civil servants do not work on the same projects that they once managed for the state.

But the turnover has taken a toll on the toxics unit. The changeover in personnel has been so rapid that current staff members sometimes have difficulty finding a former employee’s project records so that even a relatively recent event may be reconstructed.

Governor Claims Credit

Poor record-keeping has rubbed luster from the toxics unit’s accomplishments. Deukmejian has repeatedly claimed credit for cleaning up more than 100 toxic dump sites and spills over the last three years, compared to only 13 during the eight years of the Brown Administration.

But staff members who have left the agency complain privately about hastily organized “bean counting” sessions to put together cleanup lists. The department’s own audits and investigation unit found that the Administration played either a very minor or an intermittent role in 37% of the 112 cleanups that it took credit for from January, 1983, through last April.

For example, the state toxics unit claims credit for mopping up and disposing of a few half-dollar-sized drops of PCBs, chemicals that pose a risk with long-term exposure. They had leaked from generators at the Santa Clara County Jail in 1983. During the cleanup, the state toxics unit did little more than approve cleanup methods and certify that the job was properly completed.

Also criticized has been a shift in state policy toward cleaning up many smaller sites and leaving the more difficult major dumps to the U.S. Environmental Protection Agency.

New Policy Ordered

The policy was ordered by then-Health Services Deputy Director Joel Moskowitz in a November, 1984, memo. In it, Moskowitz said the large cleanup sites being supervised by the state should be turned over to the EPA. Those large dumps, he explained, will not be cleaned up for decades and offered “no advantage to us or to the neighbors, while diverting us from other sites which we can address rapidly.”

A new system for ranking sites for state cleanup was instituted in January. And it gave the highest priority to dumps that can be cleaned up quickly and cheaply.

Expensive cleanups, including those that pose a threat to water supplies, now have a lower priority. The state, however, has agreed to contribute toxics bond money to help finance the cleanup of federal Superfund sites.

When legislative staff members asked the Department of Health Services for the original records showing how the state rankings were calculated, they found the files in disarray, with as many as one third of them missing from the headquarters office in Sacramento. Rating sheets were undated and unsigned and often contained arithmetical errors, said one of the legislative aides.

And yet the ranking on these sheets will determine the order in which these sites are cleaned up in the months ahead.

Some Not on List

Others complain that it is difficult to determine whether the most dangerous sites are on the state cleanup list at all.

Robert P. Ghirelli, executive officer for the Los Angeles Regional Water Quality Control Board, said that in April his board formally requested that four abandoned hazardous waste sites in Los Angeles County be added to the state’s list. He described each as a staging area for loading toxic substances that were later transported to barges to be dumped at sea.

They still have not been listed.

Because of the sometimes conflicting roles of the various state agencies that have the power to supervise toxics cleanups, Deukmejian has proposed the creation of a new department of waste management, whose director would be a member of the governor’s cabinet.

The new department would inherit most of the power to enforce the state’s hazardous waste laws, now shared by the Department of Health Services, the state Water Resources Control Board and nine Regional Water Quality Control boards.

The Deukmejian plan stalled in the closing hours of the 1985 legislative session, and the new department appears unlikely to be in place before 1987, even if the proposal wins quick approval next year.

Staying in Limbo

While plans for the new department languish in the Legislature, the toxics unit within the Department of Health Services remains in a kind of limbo. A multi-agency agreement that would settle jurisdictional disputes between the various state agencies with authority over toxics has not been approved by the Administration--in part because many of its provisions were included in legislation to establish a new toxics agency.

And although Moskowitz resigned as deputy health services director five months ago, he still has not been replaced. Candidates for the job have been interviewed, but few are interested in a post that will be abolished once a new toxics agency is established, Health Services Director Kenneth Kizer said.

Moskowitz was a controversial figure in his two years in charge of the toxics program. Flamboyant and argumentative, he deliberately set out to win recognition for the Administration’s efforts. He even proposed listing the latest cleanups on the marquee of the converted Sacramento movie theater building that is headquarters of the toxics unit.

“New blood is needed now that he is gone,” said one of his allies within the bureaucracy who asked not be to identified. “Now there is no blood.”

But the same individual agreed with some of Moskowitz’s critics, acknowledging that “he was not good with the administrative stuff.”

Moskowitz said jokingly in an interview: “I left two steps ahead of my critics.”

He added, somewhat bitterly: “The only way to win is from the outside as a critic, because whatever the guys on the inside do, the guys on the outside can say they did nothing. Or if they did something, the critics can say it could have been done better, faster or cheaper. The critics are perpetually in the catbird seat.”

His one-time boss, former Health Services Director Peter Rank, offers the highest of praise for Moskowitz’s performance.

“The problem in my judgment (is that toxics) is possibly an unsolvable problem,” Rank said. “You must think in terms of decades, maybe centuries. . . . It is a difficult one for any political person to deal with.”

TOXIC DUMPS: 3 OF STATE’S WORST

STRINGFELLOW ACID PITS (near Riverside)

Stringfellow threatens 500,000 residents who depend on the underground Chino basin for drinking water. The state has hired JRB Associates (now Scientific Applications International Corp.) to conduct extensive testing and plan the cleanup. The contract began at $1.6 million, but has grown to $5.9 million--mostly from the federal government. Federal auditors have criticized the state’s handling of this and other Stringfellow contracts. Now the FBI is trying to determine whether any contractors might have overcharged the state.

McCOLL REFINERY DUMP (Fullerton)

Another federal Superfund site, McColl is in a residential neighborhood, under a golf course and vacant lot. Late last year, the state toxics unit was ready to begin the cleanup with a $1.4-million contract with Radian Corp. to manage the project and a $15.6-million contract with Canonie Engineers,Inc. to haul away 200,000 tons of contaminated soil. But court orders and new federal disposal rules led to delays that have cost the state and federal governments $3 million. The cleanup awaits completion of an environmental impact report, which may take another year to prepare. The McColl contracts were criticized by auditors from the EPA and are also part of an FBI probe into the possibility of overcharges at federal Superfund sites.

CAPRI PUMPING SERVICES (Boyle Heights)

The largest of the dumps where a cleanup has been completed, the Capri site was managed by the City of Los Angeles’ Department of Public Works on a $1.3-million contract from the state. Controversy at the site flared when the city’s public works board hired R.E. Wolfe Enterprises to do the actual cleanup, against the initial advice of both city and state engineering staff. Three state officials asked for the work at the site to stop before all the money was spent, arguing that “hundreds of thousands of (state) Superfund dollars” were being wasted.