Risky Business

A former employee says Maricopa County is better at covering up than cleaning up its environmental hazards. And that could get the county in trouble for financial fraud--again.

County administrator David Smith won't offer details, but he says it's hard to chart liability in the murky waters of environmental litigation.

"The very nature of environmental liabilities makes it difficult to estimate their ultimate financial impact," Smith said in the official response. "However, Maricopa County has historically been conservative in its estimates. Actual costs, when determined, have usually been less than what had been estimated."

Smith adds that the state auditor general reviewed the county's estimates and concluded that the financial statements fairly represent the financial position of Maricopa County.

Still, ASU's Karen Smith says, the county can argue for its estimates, but there isn't a "close but no cigar" defense in financial reporting.

"A bad estimate is worthless, really; it's just as bad as no estimate," the professor explains. "Any users of those statements could certainly call the county on it, like an investor does a corporation."

Since the countywide audit Michael Walters was designing was never done, there is no overall, reliable assessment of the county's environmental risks.

Maricopa County is developing a database to "continue to refine its estimates of environmental liabilities," David Smith said in his letter. Still, the hazards the county is aware of, according to county documents, could cost large chunks of change--especially if county officials didn't follow the rules about reporting and fixing those problems.

According to what Bergen wrote in various e-mails, the county has already violated multiple laws.

"On another matter . . . near and dear to the heart of the county . . . is the fact that apparently there has not been an asbestos related environmental regulatory compliance law, mandate or regulation that MMC staff DID NOT VIOLATE within the past five years. Consequently, we may have self-reporting obligations to ADEQ, EPA, OSHA, our employees, third party contractors, landfills, the public, etc.," Bergen wrote last June. "This is technically what we refer to in the environmental liability arena as 'some serious shit!'"

Violating these laws can be expensive, if the county gets caught. In another e-mail concerning the proposed remodeling of county court buildings, which have similar asbestos problems, Bergen noted that fines can mount rapidly.

"Regulatory fines can be as much as $25,000 per day if OSHA, EPA or ADEQ should find us in violation (which presently we may or may not be) of asbestos regulations," Bergen wrote on October 30.

In a June 20, 1996, e-mail to Larson (subject: Looney Tunes Updates), Bergen detailed serious asbestos problems.

"In every area we survey at MMC, we find asbestos--EVEN the areas that were supposedly 'abated' during the remodeling activities of the last five years. We are abating all friable ACM as we find it in the course of conducting the survey," Bergen reported.

For example, Bergen said there was asbestos in every fire door in the hospital. "It is a dangerous condition because every time a bed, cart or gurney is rammed into a door (which only happens approximately 1000 times a day in the normal course of hospital operations), there is a fiber release, which creates the potential for human health hazard exposure, which triggers a . . . violation and increases the potential for toxic tort liability," he wrote.

According to records of Maricopa County's environmental services department, the asbestos-containing fire doors have since been removed. The county was fined $550. But asbestos still exists in the hospital, and at least one exposure was apparently never reported to county environmental services.

Maricopa County's problems were not limited to the hospital. In June 1996, county employees described the potential for infection and explosions at the Maricopa County medical examiner's office.

"There has been a lot of equipment installed without regard to the internal air quality of the building and the safety of all the employees," facilities manager Hal Hoover wrote in an e-mail to Larson. "We will ask for [the medical examiner's] cooperation in getting this resolved ASAP. Right now if there was a 'hot' infectious disease in the building, everyone would be exposed. Scary thought and a great liability. We are on top of the remediation."

Hoover's note prompted this response from Roland Bergen, describing earlier problems at the medical examiner's office:

"As an aside, Environmental Policy assessed the office in 1992. At that time it was best characterized as an 'environmental catastrophe waiting to happen.' . . . in one closet they had 12 one-gallon cans of Toluene (a highly flammable, highly explosive chemical) sitting on the shelf next to an 'ancient' bottle of Picric acid that had obviously crystallized. (This means that in this aged state it had the explosive volatility of Nitro Glycerine.) If the Picric acid had been . . . 'rattled,' . . . it would have exploded. The highly flammable Toluene would have then turned the entire building into a 'fire bomb' like something out of 'Apocalypse Now.' I literally had to call in the Phx. Police Department's bomb squad to dispose of the Picric acid."

In the e-mail, Bergen said he was instructed to back off the medical examiner's office. "I then brought the matter to the attention of my boss. He told me: 'Roland, just #%@*!! leave this #@!&*$#@!!! thing ALONE!!!"

Though Hoover and Bergen both note in later e-mails that the county is fixing the problems, it's not clear if these problems are resolved or if they were ever reported to employees or regulatory agencies.

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