Scotts Miracle-Gro gets record penalties in pesticide case

After a hearing today in federal court in Ohio, the Scotts Miracle-Gro Company will pay $12.5 million in criminal fines and civil penalties for violating federal pesticide laws.

The U.S. Environmental Protection Agency said in a press release that this was the largest criminal penalty and the largest civil settlement ever under the pesticide law.

What's mind-blowing is that the company was dousing its bird food products with insecticides that are toxic to ...  birds! The idea, apparently, was to keep bugs from eating the food before the birds did.

Here's how the EPA press release explains what happened: "In the plea agreement, Scotts admitted that it applied the pesticides Actellic 5E and Storcide II to its bird food products even though EPA had prohibited this use. Scotts had done so to protect its bird foods from insect infestation during storage. Scotts admitted that it used these pesticides contrary to EPA directives and in spite of the warning label appearing on all Storcide II containers stating, 'Storcide II is extremely toxic to fish and toxic to birds and other wildlife.' Scotts sold this illegally treated bird food for two years after it began marketing its bird food line and for six months after employees specifically warned Scotts management of the dangers of these pesticides. By the time it voluntarily recalled these products in March 2008, Scotts had sold more than 70 million units of bird food illegally treated with pesticide that is toxic to birds."

Information on the Storcide II product label warns: "Exposed treated seeds are hazardous to birds and other wildlife. Dispose of all excess treated seeds and seed packaging by burial away from bodies of water."

No word on whether or how any birds were actually harmed, but I suppose the "toxic" is a hint.

According to the EPA, Scotts Scotts pleaded guilty in February 2012 to illegally applying insecticides to its wild bird food products that are toxic to birds, falsifying pesticide registration documents, distributing pesticides with misleading and unapproved labels, and distributing unregistered pesticides.

Additional violations that led to the civil settlement include include distributing or selling unregistered, canceled, or misbranded pesticides, including products with inadequate warnings or cautions.

"Today's sentence and unprecedented civil settlement hold Scotts accountable for widespread company noncompliance with pesticide laws, which put products into the hands of consumers without the proper authorization or warning labels," said Cynthia Giles, assistant administrator for EPA's Office of Enforcement and Compliance Assurance.

In the company's own press release, ScottsMiracle-Gro chairman and CEO Jim Hagedorn said the DOJ's investigation identified conduct that was not consistent with the company's core values, but ultimately resulted in improvements to the company's regulatory compliance programs.

"As we reach closure on these issues, it's important for all of our stakeholders to know that we have learned a lot from these events and that new people and processes have been put in place to prevent them from happening again," Hagedorn said. "Our consumers are at the heart of our business, and I hope they'll see our openness, cooperation, and acceptance of responsibility are all a part of our commitment to provide products they can trust and rely upon."

In 2008, the company voluntarily recalled its wild bird food products it discovered that they had been treated with the unauthorized pesticide. The company also voluntarily disclosed the matter to the government, the release said.

Also in the release: "Later that same year, in an unrelated matter, the company recalled several additional lawn and garden products after it was discovered by the EPA that a former associate had created fraudulent documentation that allowed them – which were safe to use as directed and did not harm consumers or the environment – to be sold without proper approval from the agency. The former associate has pleaded guilty to federal crimes related to these activities and awaits sentencing. She has repeatedly acknowledged to law enforcement authorities that she acted alone."

ScottsMiracle-Gro has posted an open letter from Hagedorn on its website, www.scottsmiraclegro.com. (Look on the lower right, under "Our Perspectives.")