FOR IMMEDIATE RELEASE MONDAY, FEBRUARY 6, 1995

ENR (202) 616-0189 TDD (202) 514-1888

KETCHIKAN PULP CO. PLEADS GUILTY TO ENVIRONMENTAL CRIMES AND PAY $3 MILLION IN FINES WASHINGTON, D.C. The U.S. Attorney's Office for Alaska and the Justice Department's Environmental Crimes Section today announced charges against the Ketchikan Pulp Company ("KPC") for dumping harmful sludge and wastewater into Alaska's Ward Cove for three years, including an intentional dump that lasted for five straight days. In a criminal plea agreement, KPC agreed to pay $3 million in fines for its actions, which violated an EPA permit forbidding such dumping. The waters near the Ketchikan plant in Ward Cove have been classified as "impaired" by EPA because of the adverse cumulative effect from waste discharges including solids, toxic chemicals, alkaline substances and oxygen-depleting materials that deprived the cove of its potential as a marine habitat. The vicinity of Ward Cove is populated with numerous species of wildlife including Killer Whales, Salmon, Halibut, Sea Otters, and various birds. "KPC committed environmental crimes over a long period of time," said Lois J. Schiffer, the Department's Assistant Attorney General for Environment and Natural Resources. "The plea agreement gives the company significant incentive to clean up its act, and it also includes management controls to help assure that KPC will not pollute in the future." "This case draws the line against environmental crime," said Karen L. Loeffler, Acting U.S. Attorney for Alaska. "Business as usual is not a license to pollute the environment. Protection of our environment requires that those doing business in Alaska not view environmental violations as simply a cost of doing business." The criminal plea agreement and criminal information, filed today in Federal Court in Anchorage, Alaska, detail 1 felony and 13 misdemeanor violations of the Clean Water Act during a three year period ending in 1993. (MORE) The violations were discovered during the course of a criminal investigation into the pulp mill by the FBI and EPA, which included two searches of the facility. The felony charge stems from a 1990 offense in which company intentionally dumped the contents of a huge clarifying tank containing sludge and wastewater into Ward Cove in direct violation of an EPA permit. The clarifying tank, a pollution prevention device, was deliberately bypassed when the mill was shut down for repairs in

April 1990. The misdemeanor violations concern numerous negligent discharges of magnesium oxide contaminated wastewater into Ward Cove from a sewer line. To settle the criminal case, KPC agreed to a fine of $3 million. Of that amount, $1.75 million may be suspended if the company completes an ambitious program to prevent pollution at the mill. Under the terms of the plea agreement, KPC will establish and maintain an effective environmental compliance program, appoint a responsible corporate officer for environmental matters, and submit quarterly reports to the court. The terms of the plea agreement are subject to approval by the Court. The plea agreement also anticipates the settlement in the near future of a companion case for alleged civil violations that have been subject to suit since 1992. The case was prosecuted jointly by the U.S. Attorney's Office for Alaska and the Department of Justice Environmental Crimes Section. The criminal case was investigated by EPA's Criminal Investigations Division and the FBI. Schiffer and Loeffler commended EPA and FBI for their outstanding work in investigating KPC's criminal misconduct. They also recognized the contribution made to the investigation by citizens concerned with the environmental violations caused by KPC. KPC is a Washington Corporation, a wholly owned subsidiary of Louisiana-Pacific Corporation, operates as a manufacturer of pulp, timber and other logging products. The mill uses chemicals to manufacture dissolving-grade wood pulp, which is the raw material used in making rayon, cellophane and paper. KPC's mill uses millions of gallons of water a day that must be treated in accordance with EPA issued permits. ### 95-123