The Dangers of Ohio's Proposed Audit Privilege

Testimony of D. DAVID ALTMAN Senate Bill 138 February 27, 1996 Ohio House Committee on Energy and the Environment

Mr. Chairman and Honorable Members of this Committee, I am David Altman, a lawyer from Cincinnati, Ohio, with a practice focused on environmental law, primarily the representation of families who live and own property near sources of pollution. I, also, represent local units of government, including cities, counties and townships, who wish to clean up pollution problems.

I am here to testify about the grave shortcomings of SB 138. There are three bad features of the bill: (1) its secrecy provisions, (2) its anti-whistleblower provisions, and (3) its immunity provisions. In my presentation, I will emphasize the secrecy provisions, but I will be happy to answer questions about the other bad features as well.

The secrecy provision of SB 138 defeats the right of families to know the factual information about pollution that threatens the quality of their lives and their enjoyment of their property. The bill creates an unprecedented privilege for the polluter.

In a nutshell, here is what is wrong: the bill grants a new privilege to hide pollution from those who are environmentally underprivileged... the average family.

It is hard to believe that those who wrote this bill ignored the lessons that we should have learned when hundreds of pollution secrets were finally uncovered at places like Fernald, Phthalchem, Elano and Hilton Davis -- just to name a few sites in Southwest Ohio!

I want to tell you a story about just one of the sites, a place in Ohio, that shows you what is wrong with SB 138.

Let's look back to the 1950's... to a quiet farming area... A contractor, working for the U.S. Government at FERNALD, is approached by a group of local residents, mostly farmers...

The citizens have heard that there have been a few accidents when radiation has been released. "Tell us how much radiation has been released," the citizens request.

"It's a secret. The law says if it involves `national security' you have no right to know... We will only tell you this... we have reviewed the problem and it's no problem for you."

Turn now to the 1960's, a few farmers and some new home owners ask the same question... and get the same answer.

Now, it's the mid-1970's, a former worker who was injured in a radiation accident in the 1960's tells of releases of radiation, accidents and spills never before revealed... a TV station runs a story...

The government contractor hires a team of consultants... including famous professors who have done radiation research.

The consultants conclude that there is "no cause for concern."

In the 1980's, more facts about contamination are revealed. In response, the contractor dismantles several radioactive silos...

"The problem is solved," the contractor announces.

The citizens return and ask: "Is that the whole problem?"

"Yes," they are told.

"Can we see all of your tests?"

"No," they are told, "We don't have to under the law."

More facts about site-wide contamination leak out... Finally, the residents, convinced that the government has not protected them, resort to a law suit.

Only then is the cloak of secrecy lifted and the full magnitude of the problem revealed in a magnificent triumph of truth and right-to-know.

As a result, a site-wide cleanup is started and medical monitoring is instituted.

The people of Fernald, after decades, are finally allowed to know the true facts about their environment that impacts their lives and their property.

It is a great story of decades of struggle.

What lesson did Ohio's government learn from this triumph of citizens' right-to-know?

Several years after this victory, the Ohio Senate passed a bill, SB 138, that turns the clock back on truth and right-to-know -- it turns the clock back to the 1950's, except that this bill does not even require a claim of "national security" to involve secrecy.

Under this bill, the level of truth we had about Fernald in the 1950's would be the level at which the search for truth would end for the Fernalds of the 1990's.

Anything the owners of the "Fernalds of the 1990's" do not want anyone to know will be a permanent secret under SB 138, even in courts of law.

SB 138 not only ignores these lessons but it reverses the right-to-know trend in state law and even under federal law. (See the USEPA budget rider that requires the EPA to follow state audit privilege laws.)

The secrecy provision is so intolerable that during the last month a new group has been forming -- Families Against Environmental Secrecy. It is made up of the families that live around Phthalchem, Elano, Hilton Davis and many other sites, including AK Steel in Middletown, Ohio.

One of the charter members of that group, Nancy Helter, is here with me today, along with her son and daughter, to testify about their recent (and still unfolding) experience.

Here is an illustration of how the bill in front of you will work:

You own a manufacturing plant in an area of Ohio where the groundwater is relatively close to the surface. Several years ago, your employees dumped solvent and paint waste in the back part of your property in an unlined pit. You observed that a stream on your property fed by water under the pit runs purple every now and then. You know that the stream runs in the direction of the adjacent property, a lower middle-class housing development where the residents get their water from individual wells. You call an environmental firm and take some tests and learn that the chemicals saturating the ground on your property are extremely dangerous. You are told that there is nothing to keep the chemicals out of the groundwater.

As part of your audit of this problem you talk to a risk expert. He tells you that: first, during the wet season the chemicals will not pose a significant threat to "normal healthy neighbors" due to his assumptions about the dilution of the chemicals. Second, he tells you that the chemicals will probably not reach the neighbors' well field for one to two years.

Based on this information you decide to do nothing because you have other priorities.

One of your employees hears about these test results. (He had indirectly "participated" in the audit by gathering audit-related information.) He tells his boss that he is concerned about his brother who lives in the neighboring development. You call your lawyer. He explains to your employee that he is prevented from disclosing this protected information. You can sue him for $5,000,000 in damages if the private citizens force a cleanup.

This story is not basically different from the facts of case after case throughout Ohio and the country. Up until now, victims of pollution have always had a right to get (at the very least) the factual information about pollution. You will deny any semblance of fairness to the victim if you allow facts about pollution to be hidden under the cloak of "audit privilege". For example, under the Federal Environmental Audit Policy, while the analysis, conclusions and recommendations resulting from an environmental audit are considered part of the audit report and under some circumstances need not be disclosed, the data obtained by, or the testimonial evidence concerning, the environmental audit are never shielded from disclosure.

In fact, the extensive national debate on audit privilege ended in an entirely different conclusion than that reached by SB 138. Eighteen months of debate failed to produce any evidence that a privilege was needed. Use of environmental audits have expanded rapidly over the last decade without the stimulus of a privilege. Concern about confidentiality ranked as one of the least important factors in business decisions to do audits.

Privilege, by definition, invites secrecy when what is needed is openness -- openness to build public trust in industries' ability to self police. Current U.S. law reflects the high value that the public places on fair access to facts.

Finally, the search for the facts about threats to your home and your family are the most fundamental and sacred duties of family members. The search is difficult enough for the families that live around places like Fernald, Hilton Davis, and Phthalchem. If you do not change SB 138, you will make that search virtually impossible.