A fourth-generation Arizonan, Warne is the former president of the now-defunct Westech Laboratories Inc., formerly the largest environmental-testing lab in the state, a business that had been started as a one-man lab by Warne's father in 1955. Forty years later, Westech was routinely testing drinking water for Scottsdale and several other Arizona cities.
As business prospered, the Warnes became a powerful Republican family with strong ties to Governor J. Fife Symington III and his allies in the Legislature.
Then, Warne contends, the state health department began a "vendetta" against Westech that ultimately drove him out of business. In 1994, the state accused Westech of falsifying drinking-water test results. The swill was being pumped from the North Indian Bend Wash Superfund site that lies beneath Scottsdale. The city served citizens contaminated water instead of purchasing clean, but more expensive, water from other sources.
All of this caused the state to suspect Scottsdale conspired with Westech to keep the bad drinking water a secret.
Warne has always contended the company did nothing intentionally wrong and tried to cooperate, but the state was merciless, wouldn't give him a chance. In 1995, the state began an ongoing procedure to yank Westech's license to do environmental testing in Arizona. The same year, Westech went out of business.
But that was all in the past. For once, Jim Warne had good news to share. Westech and the Warne family name had finally been cleared, he announced. After a lengthy license-revocation hearing held earlier this year, a hearing officer concluded on August 8 that the state was wrong--Westech didn't deserve to lose its license after all. According to Warne, the hearing officer's new findings painted his company on the side of the angels.
At his spin session, Warne vowed revenge against the malevolent regulators at DHS. He would sue them, he said, for at least $3 million for unfairly going after his company.
Yet no matter how much Warne spins it, the Westech saga is not about Westech's persecution by the health department. Actually, it's a tale about brave men and women at DHS who risked their jobs to force a politically powerful company to obey laws intended to protect our health.
But the Westech story has a larger meaning: As this desert state grows, water supplies will dwindle and we will be forced to rely on underground water reserves already contaminated by industries. The water can be cleaned up after it is pumped out of the ground, but the state will have to ensure that labs and cities don't lie about water quality.
Yet instead of supporting our protective laws, Arizona industries are partnering with conservatives in the legislature to get rid of them. Their mantra: Overregulation drives companies out of business. It's not true.
A lone legislator showed up at Warne's press conference--property-rights advocate Karen Johnson, who had been invited by Warne's father. To Johnson, Warne's story was a frightening example of government's rapacious destruction of a mom-and-pop business. Of course, she didn't yet know the whole story. She was just a potential tool in James Warne's spin machine.
By inviting Johnson, the Warnes seemed once again to be bringing yet another public official around to taking up their cause to get rid of the DHS staffers who had the nerve to go after Westech. Several sympathetic politicians had showed up at the Westech hearing--including senators Rusty Bowers and Tom Patterson. And sources in the state Senate say Bowers is already trumpeting Westech as his next poster child in his campaign to dismantle state agencies designed to protect public health. You can expect Warne's spin to be repeated again and again by Bowers and his minions when they attack the state health department later this year in the Legislature.
That is, unless certain Westech officials and employees are indicted by state or federal prosecutors for environmental crimes before the Senate gets into full swing.
You see, there is a lot James Warne III forgot to mention at his press conference--like the damning details of what led up to the license hearing in the first place. The state had turned up problems with Westech's tests of Scottsdale's drinking water in 1994. On some occasions that year, about 70,000 people, including those most at risk--pregnant mothers, children and frail old people--unwittingly drank water laced with unhealthful amounts of a suspected carcinogen called trichloroethylene, or TCE. The state said Westech's test results were misleading--reporting less poison in the water than actually existed. But the state gave Westech two chances to clean up its act before deciding to begin the arduous process of yanking its license.
You have to wonder why Warne fought to keep the state from revoking Westech's license even after the company no longer existed. Was he terrified of being sued by angry ex-customers who would suddenly find their Westech test results invalidated by the state and federal government? Would the ex-customers force Warne to pay for expensive re-tests? Or for damage settlements?
The hearing that Warne gloated about in the press conference was only a routine administrative hearing that gave Westech a chance to protest the state's license-revocation process. It was not a court of law, fortunately, but it was a sham.
Hearing officer Tim Barnes could only recommend to the DHS director what to do. The final power to pull the license rests with DHS, which will decide next month.
It's a good thing that Barnes really doesn't have any power, because he seems to have the legal acumen of Mary Jane Cotey, the juror who couldn't track the material in the Symington case.
Barnes said it would be "inappropriate" to comment for this story. So we will probably never know why Barnes did such a lousy job, why he couldn't find any serious infractions by Westech, despite clear proof provided by DHS. Why he seemed so chummy with Westech's lawyers during the hearing. Or why he structured the hearing--at Westech's suggestion--to exclude testimony from five former Westech lab workers.
Those workers were reportedly willing to testify that their bosses instructed them to rig the computers that tested drinking water.
If you doubt their veracity, consider that Westech itself, in a letter to DHS, admitted in 1995 "that certain employees of its Phoenix laboratory engaged in unauthorized practices in violation of that laboratory's quality assurance manual and other applicable standards of practice and conduct."
Mike English, Westech's lab director, conveniently invoked the Fifth Amendment and would not testify at the hearing.
Even without testimony from English and the five ex-employees, the state presented enough evidence at the hearing to nail Westech, but Barnes ignored it. The most important evidence: an electronic trail of deceit. The state contended Westech's own software provided coded data in its computer hard drive that showed the lab workers had fiddled with the equipment to fabricate test results.
Barnes' silly conclusion that Westech had done nothing wrong carries no weight.
Fortunately, the final power rests with DHS, an agency so maligned by Warne during his spin doctoring that he may not find the agency in the mood to give a license back to his nonexistent company.
And even if DHS capitulates to pressure from politicians interested in protecting the powerful Warne family, even if DHS restores Westech's license to rescue the Warnes from the possibility of lawsuits, the Westech matter is far from settled.
At this very moment, Westech's suspicious test results are being investigated by the Environmental Protection Agency and by the Arizona Attorney General's Office. So far, no charges have been filed, and no one but DHS has accused Warne of wrongdoing.
But clearly, Westech cannot escape the scrutiny of regulators out to protect our drinking water.
And the Warne spin isn't necessarily working.
Legislator Karen Johnson says she showed up at Westech's press conference because she thought the government was abusing an honest company. She understood from the Warnes that Westech had been "completely exonerated." She says she didn't know about the one-sided hearing, the criminal investigations, the Scottsdale test results.
But now she says she knows, and she's not nearly as enthusiastic.
Contact Terry Greene Sterling at 229-8437, or online at [email protected]