Picture of Disarray at Water Quality Board

By PAUL JACOBS

Feb. 16, 1997 12 AM PT

TIMES STAFF WRITER

The state agency responsible for protecting the water supplies of 10 million Southern Californians failed to take action on leaking underground fuel tanks for as long as 12 years.

The water quality agency also did nothing after a private laboratory acknowledged that it misrepresented tests conducted to evaluate contaminated property.

And while the agency lagged behind the rest of the state in cleaning up pollution from buried tanks, employees were coming to work late, leaving early, and engaging in such malicious and threatening backbiting that the top executive hired a private investigator and once even called in a bomb squad.

After years of warning signs, records and interviews show, the Los Angeles Regional Water Quality Control Board was spinning out of control. The problems were so serious and persistent that state auditors conducted a surprise “raid” last year, and last month the federal government launched a criminal investigation. About the same time, the agency’s executive officer resigned abruptly.

Among the allegations is that some of the 125 staff members may have steered business to private contractors and profited by investing in polluted properties.

The turmoil tended to confirm the fears of property owners who thought that the government was forcing them into protracted and unnecessary testing, and of environmentalists who believed that the board was moving too slowly to prevent the spread of contamination.

What happened is the story of how an obscure public body with an important mission fell into disarray.

The board is responsible for protecting underground water sources in Los Angeles and Ventura counties and for stopping the discharge of pollutants into streams and coastal waters, including Santa Monica Bay.

It plays a critical role in cleaning up land as varied as mom-and-pop gas stations with leaking fuel tanks and the vast San Fernando and San Gabriel valleys’ federal Superfund sites, where underground water has been tainted by cancer-causing industrial solvents.

Four years ago, there were strong indications of trouble within the agency’s underground fuel tank unit, which supervises the testing and cleanup of 2,500 leaking tanks in the region.

In the water board’s Monterey Park offices, federal auditors found boxes of environmental reports that had gone unread. Other reports were missing.

Auditors concluded that the staff had failed to take decisive action on cleanups and did not aggressively pursue penalties against some of the worst polluters. Owners were able to delay costly cleanups for years.

The audit criticized not only the regional board but also the rest of the state’s tank cleanup program. California lagged behind the rest of the nation--and the Los Angeles region trailed the rest of the state. By late 1995, the regional board had completed work at only 10% of the sites, about a third of the state’s cleanup rate.

Meanwhile, the State Water Resources Control Board in Sacramento noticed that for some reason the regional board in Los Angeles was not spending its share of a $140-million-a-year fuel tax imposed for tank cleanups.

Officials on the regional board also began questioning why more leaking tank cleanups were not being completed, and anonymous phone calls and letters started pouring in.

“There were some crazy allegations,” recalled Michael I. Keston, a real estate investor and home builder who was then chairman of the nine-member regional board appointed by the governor. “There were others that showed that the people had a good knowledge of what was going on in the department, and . . . of something that might not be proper.”

Keston sought help from the state Capitol.

On a Monday morning in mid-May 1996, Keston informed executive officer Robert P. Ghirelli that a team from the state board in Sacramento would be arriving that afternoon to conduct a thorough audit of the tank program.

One state official said the unannounced audit amounted to a “raid,” intended to catch the agency off guard.

Over the next several days, a 14-member audit team reviewed 641 active cases and interviewed 25 employees responsible for the cleanups. Another 730 files on “inactive” cases were shipped to Sacramento for review.

The result was a devastating confidential report, which was made available to The Times. “Interviews reveal that many employees do not produce because they are not expected to produce,” auditors wrote.

Errors of all types occurred. One polluted site was assigned to an employee in 1984, but records show that 12 years later there was “no indication in the file that any contamination ever occurred.” Another employee shifted a case involving a Chevron station to his “inactive file,” even though records indicated “high levels of ground-water contamination.”

The audit team found chaos in the storage of files, which spilled onto chairs and floors. Scientific reports on the extent and movement of pollutants were often ignored, including some that “were years old but unopened.” And the “squeaky wheel method” determined which pollution sites were cleaned up.

One employee was faulted for repeatedly arriving to work late, leaving early and spending the day mostly socializing. Her boss said he eventually transferred her because he could not make her do any work. Another employee “simply does not work,” and a third was described as “seriously unproductive.”

Although the auditors complained about a number of employees, only two lower-level staffers were singled out for formal discipline last year, state sources said. Records show that one was docked 5% of his pay for six months, and the other was formally reprimanded. Both have filed appeals.

The complaints did not stop with the audit. One letter, signed “An Astute Observer,” quoted “unsubstantiated talk” that one employee was directing polluters to hire a particular consultant and getting an under-the-table cash payment in return.

In response to the audit and the growing list of allegations, Ghirelli asked for help from the state water board, which in July temporarily reassigned Dave Deaner, manager of the state’s underground tank cleanup fund, to run the Los Angeles tank unit.

Deaner, an engineer and retired Army colonel, put the fire to the staff to review cases and close out those that presented little or no risk to water supplies. In Deaner’s four months at the regional board, he and his staff closed a third of the entire caseload, declaring 827 sites clean. That brought the region’s record in line with the rest of the state.

The few staff who resisted--who argued that more time and care were needed to make these decisions--were reassigned. “I needed some ‘can-do’ people,” Deaner said in a recent interview. “I didn’t need ‘can’t-do’ people.”

One of those shunted aside to a new management job was Anne Saffell, who supervised the underground tank unit’s 27 employees.

In an interview, she defended the unit, saying it had been small and overworked, and she criticized Deaner for being too swift to declare sites environmentally safe.

“Deaner closed cases where there was actual free product, gasoline, floating on the ground water,” said Saffell, who left the board this year to take care of two children.

Deaner said he closed several cases where there was oil floating on ground water, but only when the contamination did not threaten drinking water.

Critics inside and outside the agency question whether Deaner moved too quickly. Among those concerned is Santa Monica, which was forced to shut down a well field last year because of contamination with MTBE (methyl tertiary butyl ether), a possible cancer-causing chemical routinely added to gasoline to reduce smog.

“The closures were not being based on scientific or technical analysis of all the cases,” said Craig Perkins, the city’s director of environmental and public works management. “It seemed to us very ad hoc, capricious and even reckless.”

John Norton, now the acting chief of the regional board, has begun reviewing the underground tank cases closed under Deaner to see if any should be reopened. “I want to be able to stand up and say we are doing everything we can to prevent what has happened in Santa Monica,” Norton said.

While the tank unit was closing cases, Ghirelli turned his attention to allegations that a testing laboratory had submitted “fraudulent data” for a cleanup site in Los Angeles.

He had not previously acted on the allegations, which were detailed in a memo sent to him a year earlier by a committee of nine employees.

The committee urged Ghirelli and other top managers for the regional board to drop Transglobal Environmental Geochemistry from the agency’s list of approved laboratories.

According to the memo, a co-owner of the firm, Blayne Hartman, had admitted that two years earlier he had “fabricated” two out of three instrument checks that were needed to ensure the reliability of the tests at a site in Los Angeles. “Dr. Hartman was forced to reveal the data fabrication because of a wrongful-termination suit filed by a former employee,” the memo states. Court records show that the ex-TEG employee, Stacie Wissler, alleged that “on several occasions, Mr. Hartman asked [her] to tamper with data so it would pass the regional water quality control board requirements.” Wissler declared that she once found her name “on falsified data.”

Hartman denied Wissler’s charges but eventually settled the lawsuit. In an interview, he said he did not fabricate data. But he did say that his lab had run only one instrument check on the day of the soil tests, rather than the three checks that the staff’s standards required.

“I may have misrepresented to them the exact date these things were done,” he said, adding that the lapse did not affect the final measurements of contamination.

The issue remained dormant for a year. Last summer, Ghirelli asked his counterpart at another agency for advice but took no action.

The company remains on the list of board-approved laboratories. TEG has continued to conduct testing at numerous sites throughout the state, and a number of its clients praise the quality of its work. Ghirelli declined to comment on the matter.

Throughout last summer, pressure was mounting on Ghirelli and his governing board to improve the agency’s performance. Tensions were high.

In early August, a staff member received a package containing a stuffed toy gorilla, accompanied by a profane note warning him to “keep your mouth shut,” board sources said. Attached to the animal was a watch, which prompted fears that the toy might be a bomb. The stuffed animal was moved outside, half the building was evacuated and the county sheriff’s bomb squad blew up the toy, which proved to be free of explosives.

Later that summer, an anonymous letter was mailed to board staffers attacking individuals and their spouses on a personal level. “The letter upset a lot of people,” said one staff member. Some were crying, others were openly furious.

Ghirelli called a staff meeting to try to deal with the crisis. The letter was so vituperative that he hired a private investigator and a linguist to identify the author. Staff members were asked to submit to interviews and fingerprinting--and, on advice of their unions, many declined. The author was never identified.

In October, the governing board and Ghirelli agreed on a six-month work plan to get the agency back on keel. Last month, only halfway into the reforms, the board met in closed-door session to discuss his performance. After the meeting, several board members met with Ghirelli, who decided to tender his resignation after 13 years.

Ghirelli has refused to comment on his departure or the problems at the board, other than a short statement praising the “many good people working for the board,” and noting that the “board is facing some tough challenges ahead.”

Late in January, investigators from the U.S. Environmental Protection Agency’s Office of Inspector General began interviewing employees, sources said. Officials say the former executive is not a target of the federal probe.

One allegation is that employees invested in polluted property, then sold it for a profit after the agency declared it free of contamination.

The allegations “are really theories, not yet supported by hard evidence,” said Ted Cobb, senior staff counsel for the State Water Resources Control Board. “It is safe to say we are still trying to determine if crimes were committed and, if so, who committed them.”

Times library researcher Julia Franco contributed to this article.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Water Board Under Scrutiny

Problems at the state agency that oversees water quality in Southern California have led to critical audits, a criminal investigation and the resignation of the agency’s head.

* Cleaning up leaking tanks

The Los Angeles Regional Water Quality Control Board was not cleaning up leaking underground fuel tanks as fast as the rest of the state until a state takeover of the troubled underground tank program last year. Now officials are reviewing the closed cases in response to criticism that some should not have been closed.

Total cases as of . . .

December 31, 1995

Los Angeles Regional Board

Leaking tanks: 2,740

Cases closed: 9.6%

All California

Leaking tanks: 29,076

Cases closed: 27.7%

****

December 31, 1996

Los Angeles Regional Board

Leaking tanks: 2,974