CHARLESTON, Tenn. - In January 2005, residents near the chlorine plant here discovered that it was the biggest mercury emitter in the state. Environmentalists warned them against eating fish from their beloved Hiwassee River.
They appealed to the plant's owners, Olin Corp., to do what 100 other chlorine producers had done: abandon a 19th-century process that emits tons of the dangerous neurotoxin. Olin refused.
In fall 2005, the Environmental Protection Agency weighed in - but not to take up the cause of residents.
Instead, EPA called Olin with an offer. Would the Charleston plant like to be enrolled in Performance Track, an elite green club of the nation's most environmentally progressive companies?
In return, Olin could expect regulatory breaks, such as fewer inspections and loosened requirements on hazardous waste disposal, not to mention positive publicity.
Sherry Neidich, who has lived half her life a mile downriver from Olin's plant, was stunned.
"The EPA is a toothless dog," she said. "What right does someone have to ruin my river? To poison our playground?"
Her children grew up fishing and swimming in the river's placid water, but her grandchildren, who live next door, aren't allowed near it. In fact, they'll be moving, to avoid further exposure.
"I love having them here, but I don't think it's safe," she said.
The Bush administration holds up Performance Track as a bold new approach that moves the EPA beyond its traditional role as enforcer of environmental laws. The new EPA collaborates with industry to encourage cutting-edge environmentally sensitive practices.
It is precisely this voluntary approach that Bush's top environmental officials say is part of their plan to fight global warming - to encourage companies to reduce greenhouse gases, rather than forcing them to do so.
But an Inquirer investigation shows that what was conceived as an innovative stewardship program has become little more than smoke and mirrors. Performance Track offers a stark example of how the White House's pro-business ethic weakened the agency and slowed environmental progress.
Among The Inquirer's findings:
The EPA has recruited companies with mixed - even dismal - environmental records to become Performance Track members.
Despite offering members regulatory breaks and promoting the program as one that improves environmental performance, the EPA fails to independently verify that Performance Track companies actually reach their goals.
Some Performance Track members have paid fines to settle EPA accusations that they broke environmental rules. Since 2003, they have racked up more than 100 violations and paid $15.25 million in fines - including $10.25 million paid by DuPont Co. for allegedly failing to provide information to the EPA about the health effects of a pollutant one of its plants spilled into drinking water.
At least a dozen Performance Track members have actually increased the amount of toxic chemicals they pump into the air and water.
The program has spent millions on publicity, but has become so desperate for new members that it has turned to gift shops and post offices with trivial environmental impact to pad its numbers.
The EPA insists that the program - which now numbers 548 members ranging from Fortune 500 companies to trailer parks - is a success. The 42 newest members, inducted this fall, include a Maker's Mark distillery, a veterans center, two municipal incinerators, and a Philip Morris cigarette plant.
Since 2001, the EPA said, Performance Track members report that they have reduced greenhouse gas emissions by 310,000 tons, saved 3.7 billion gallons of water, and cut non-hazardous waste equivalent to that generated by 553,000 households.
Xerox Corp., recently elevated to the most elite Performance Track status, has pledged to reduce greenhouse gas emissions 25 percent by 2012.
"Performance Track was a good fit with what we were already doing and created an opportunity to network with other companies," said Xerox executive Catherine Reeves. "Performance Track pushed us to do more - stretched us to think about setting goals three years into the future instead of one."
Stephen L. Johnson, EPA chief since 2005, said the program encourages companies to brand themselves as environmentally conscious.
"I view that as an essential component of the EPA toolbox, now and for the future," Johnson said. "Who wouldn't want to encourage that?"
Skeptics say that there's no proof that Performance Track works, and that the EPA should not be praising industries that it is required by law to police.
"It's a clear pattern of corporate coziness, deficient accountability, and disregard for the public good," said John Walke, a senior attorney at the Natural Resources Defense Council. "The EPA should get back to the business of enforcing clean water and air protections rather than spending precious time and money on PR for polluters."
The EPA insists that enforcement has not slipped during the Bush administration. The agency measures its success by calculating total "commitments," including consent agreements. EPA said commitments since 2005 exceeded $45 billion, a figure it called a record sum.
But by at least one more traditional statistical measure - fines - enforcement is down. Government Accountability Office figures show that overall, enforcement fines against polluters have declined from their peak of $292 million in 1999 to just $137 million in 2007.
Furthermore, a Harvard-University of Pennsylvania study commissioned by the EPA found that companies involved in voluntary programs were no more likely to follow environmental regulations than others.
"One would think from the name - Performance Track - it would be attracting the best environmentally performing companies, and that can't be demonstrated," said the study's co-author, Cary Coglianese, associate dean of the Penn Law School and a leading expert on Performance Track.
"It's not something EPA should be claiming."
A river fouled
Performance Track was created in late 2000, during the waning days of the Clinton administration, as a way to reward green companies and encourage them to do more than merely follow the rules.
Corporate applicants choose four environmental goals - such as energy or waste reduction - and must also promote "environmental stewardship" to the local community.
Applicants must not have had any pollution-related criminal convictions or pending civil suits for the last five years. They also must be in compliance with any court settlement and have had no more than two significant violations in the previous three years.
In theory, a company under fire for its environmental policy should not be a candidate for Performance Track, much less a member.
But records obtained by The Inquirer show that the EPA recruited Olin in 2005, several months after local residents began to complain about the mercury pollution.
Olin's plant in Charleston has not broken any laws or been cited for mercury-related violations since 2003. But the chlorine factory, roughly halfway between Chattanooga and Knoxville on the banks of the Hiwassee, is Tennessee's largest emitter of mercury.
Last year, state officials declared the Hiwassee "impaired." The state posted warnings, saying that eating some fish found there could increase the risk of serious illness in humans. It also warned that children, pregnant women and nursing mothers should avoid the fish, since mercury can impair cognitive development in children.
State tests show levels of mercury in the largemouth bass are 25 percent above the EPA limit, and air tests by environmental groups put mercury concentrations six times above EPA guidelines.
"The closer you get to the plant, the higher the levels of the mercury," said Suzanne Wisdom, who lives near the plant and works for the environmental group Oceana, which organizes protests against Olin.
Beyond chlorine's well-known use as a disinfectant, it is also a key ingredient for hundreds of products - from plastic to bulletproof vests to pharmaceuticals and vinyl.
The Olin plant in Tennessee is one of a handful in the nation still yoked to the century-old method that uses mercury to make chlorine and alkali.
These older plants use tons of mercury. In 2003, chlorine plants bought about 450,000 pounds of it. In 2006, as the number of chlor-alkali plants declined, mercury purchases fell to 58,000 pounds.
They also lose tons of the hazardous element each year. The industry and the EPA say the element never reaches the environment because it disappears in plant equipment.
Still, when these plants were more common, the EPA studied them and said the average plant could not account for tons of mercury each year. In 2003, the EPA said in a public notice: "The fate of all the mercury consumed at mercury cell chlor-alkali plants remains somewhat of an enigma."
Olin is a major benefactor and employer in Charleston and in Cleveland, the county seat. Gary Farlow, who runs the local chamber of commerce, said Olin is well-respected in the community. "They're a very good corporate citizen," he said.
In the area this spring, however, four local brothers circulated a petition at their public high school supporting a bill sponsored by then-U.S. Sen. Barack Obama. Noting that chlorine producers could not account for more than 130 tons of mercury between 2000 and 2004, Obama unsuccessfully sought to ban mercury use in chlorine plants by 2012.
"The Senate bill might eventually pass, but it'll be too late to prevent a lot of damage," said Dillon Yost, 16, who pushed the petition along with his brothers, Grant, 14, and twins Ross and Mason, 18.
Leonard Scott, Olin's director of manufacturing technology, said converting the Tennessee plant to mercury-free technology would cost "hundreds of millions of dollars" and threaten nearly 1,000 jobs.
Before joining Performance Track, Scott said, Olin spent $2.6 million to upgrade its emissions equipment, including roughly $1 million on state-of-the-art mercury monitors. Since December 2006, he said, this has reduced mercury emissions by 63 percent - down from around 1,084 pounds per year.
"Mercury is a very important issue to us," Scott said. "We live here, too."
Olin spokeswoman Elaine Patterson said, "The plant's use of mercury is always careful and controlled. . . . Because of the hard work of the people in our Charleston plant, we continue to meet the established requirements for Performance Track."
Nevertheless, the plant says it emits 420 pounds of mercury into the air and water per year. That's below the EPA's threshold - a special limit created for the few plants that still use mercury. By that standard, Olin has been in compliance on mercury for the last five years.
But Olin has been cited for other environmental violations. Since 2006, the year it joined Performance Track, Olin has been cited for two "significant violations," according to the EPA, although Olin has disputed one. Performance Track members who get three such violations are supposed to be expelled from the program.
When asked why Olin was invited into Performance Track given its track record in Charleston, its outdated technology, and its impact on the Hiwassee, EPA officials said the plant met its criteria.
Performance Track's national manager, Daniel Fiorino, said few industrial factories had perfect EPA compliance records. He said Olin's record on mercury emissions was irrelevant to its continued membership in the program.
"When you look at our requirements and what they are doing, they meet our criteria," Fiorino said. "Does that make them a green company? That's a larger issue, I think. . . . At some point, we would hope that they would move to the new technology."
Jackie Savitz, a senior director at Oceana, which alerted Olin's neighbors about the mercury pollution, said it was troubling that the EPA ducked an opportunity to help a major polluter clean up its act.
"If these are the leaders, I'd hate to see the laggards," she said.
A giant loophole
In EPA's drive to boost its Performance Track membership, it's learned not to be too picky.
To that end, Performance Track decided early on to make membership available to subsidiaries and individual facilities as opposed to simply parent corporations.
The result: A company could have some of its facilities regarded as "environmental leaders" in Performance Track while its other facilities were accused of breaking environmental laws. For example:
Monsanto Corp. won an award from Performance Track for wildlife conservation in 2005, the same year the company accepted responsibility for employees' paying a $50,000 bribe in Indonesia to skirt environmental laws, according to the Department of Justice. When Monsanto tried to win Performance Track status for its world headquarters, records show, federal prosecutors strongly objected.
Pfizer, which has nine plants in Performance Track, paid a $975,000 fine in June for allowing hazardous chemicals to leak into the air at its former factory in Groton, Conn.
In July, Bristol-Myers Squibb, with two factories in Performance Track, agreed as part of a settlement with EPA to spend $3.65 million to repair units that leaked ozone-depleting compounds into the air.
Giving companies with mixed records Performance Track recognition is troubling, said Coglianese, because the marketing value of being recognized as a green company is the main reason most companies join.
"There's no way for EPA to demarcate the public relations payoff on a facility-by-facility basis," the Penn law dean said, "and there's nothing to stop corporations from trumpeting one facility in Performance Track notwithstanding others that may well be laggards."
The EPA administrator disagrees. Corporations are like families, Johnson says, and should be treated as such.
"Say you have two boys: One of your boys does an outstanding job and the other boy messes up. Is your family a problem? Or is your one son a problem?
"The critics would say, 'Wait a minute, that's just marketing,' because the impression is that they've got all their facilities in Performance Track," Johnson says. "What's the alternative? Do nothing? No. We need to be encouraging companies to do the right thing, and make sure that there is accountability."
It doesn't work
Though Performance Track is but a small part of the EPA budget, it represents a big part of the agency's current strategy - particularly with climate change. The program was among the first to embody this underlying philosophy: coax companies - rather than coerce them - to engage in green business practices.
But from the start, the program has had its failings.
A month before George W. Bush became president, Performance Track welcomed 228 charter members. Almost everyone who applied was accepted, including some companies with questionable environmental records, such as U.S. Steel, near Pittsburgh. It was one of 82 companies asked to withdraw for failing to live up to the promise of the program, including 15 for repeated pollution violations.
The program caught the attention of Rick Otis, a former American Plastics Council lobbyist and manager of the Bush 2001 transition team for the EPA. Otis, now an EPA deputy associate administrator, made Performance Track a priority.
"It was a recognition that this is no longer an experiment," he said.
Since then, Performance Track has more than doubled its membership to 548. The office has grown from five to 18 employees - plus consultants - and from an annual budget of $910,000 to $4,700,000.
As early as 2005, internal records show, EPA enforcement officials discovered violations by Performance Track companies, and began to ask questions about compliance and corporate promises.
In 2006, these EPA enforcement officials prepared a confidential and comprehensive analysis of the program. The Inquirer obtained a copy.
"The data in this analysis clearly show that there is considerable non-compliance among [Performance Track] facilities and that many members who are widely touted as meeting or exceeding regulatory requirements actually do not," the analysis said.
At the time, a check of enforcement records showed six Performance Track companies with serious environmental violations and 43 with other pending formal enforcement actions.
Performance Track officials complained that the enforcement division's analysis was faulty because it was based on an EPA database riddled with errors. That database uses the same data EPA posts for public use on its Web site (www.epa.gov/echo).
Enforcement officials acknowledged errors but noted that the problem with bad data worked both ways - the database wrongly identified at least 28 companies as Performance Track members, theoretically entitling them to lower inspection rates. Incredibly, one enforcement official noted in an e-mail, this included the Hanford nuclear facility in Washington state, made famous by the 1983 movie Silkwood. Fiorino said this was a misunderstanding.
Last year, an EPA inspector general's audit confirmed some of the enforcement division's findings. "EPA had hoped to achieve ambitious goals through Performance Track, but EPA cannot show how its program can lead to the desired outcomes," auditors wrote.
Only two of the 30 companies sampled by the inspector general met all four of the anti-pollution goals they set.
Coglianese's extensive research, some of it EPA-funded, said the EPA's claims that Performance Track is beneficial to the environment are simply rhetoric. There are no data to prove this, the Penn dean said.
In fact, said Coglianese, data show that there's little difference between the environmental records of companies that join and companies that don't.
The difference: "Companies who join Performance Track seem to do so because they seek attention," he said. They want that green EPA seal of approval.
James Wilkins, environmental and safety manager at the Marathon Petroleum L.L.C. refinery near New Orleans, said that seal of approval was more important to his workers than for executives seeking regulatory benefits or good publicity.
"You get validation," said Wilkins, whose company joined Performance Track in 2002, a year after signing a consent decree with the Justice Department over air pollution.
In 2006, Marathon received what EPA cited as one of the best benefits ever conferred on a Performance Track member: Louisiana expedited permits for a 70 percent plant expansion that will make the Marathon refinery the fourth largest in the nation.
Wilkins downplayed the benefit. He said that while Marathon's application was moved to the top of the pile, this probably only saved a month on a year-long process.
Another critic, the advocacy group Environmental Integrity Project, studied Performance Track members' public toxic release reports. It found that seven large factories increased emissions after they joined the program - by a total of two million pounds between 2000 and 2004.
EPA officials said the study contained errors - though they have since decided to review such data to prevent this from happening again, they say.
But an Inquirer review shows that some of the same Performance Track companies that Environmental Integrity raised questions about two years ago continue to increase toxic emissions. According to EPA's latest Toxic Release Inventory data, emissions at the Verso Paper factory in Jay, Maine, have increased 160 percent since 2001, to 1.9 million pounds.
Performance Track relies on states, which enforce most federal environmental laws, to ease regulatory oversight of its members. At least 19 states partner with the program, but others remain wary - including Lisa Jackson, New Jersey's former Department of Environmental Protection chief and now chief of staff to Gov. Corzine.
"For a long time, they tried to pressure us to partner and we said no," Jackson said in October, before she became an Obama transition adviser. "I think it's just one of those window-dressing programs that has little value."
Francine Carlini, regional director for air quality in Southeastern Pennsylvania, said EPA had asked the state to dispense with some of its usual regulatory duties.
"It all sounds good . . . but you can't give away the store to get that done," she said. "Imagine if we went to a landfill and they said, 'We're in Performance Track,' and we said we wouldn't inspect them. There is kind of a disconnect here. That's the problem."
But Sharon Baxter, who runs Virginia's Environmental Excellence Program, which complements Performance Track, thinks it works well.
"Having that plaque on the wall is a huge motivator for management," Baxter said.
The case of DuPont
One quality that Performance Track demonstrates consistently is loyalty to its members.
Even after companies are accused of violating environmental rules and pay huge fines, Performance Track is reluctant to kick them out.
Consider what happened when the program discovered that a member facility in Newark, Del., was under investigation for allegedly keeping important health information from the public.
The Performance Track member was DuPont's Stine Haskell Research Center, which had been lauded by the EPA in 2004 and 2005 for, among other things, recycling mercury from the lab's lightbulbs.
During those same years, EPA's enforcement arm was pursuing the lab for withholding information about a likely carcinogen - perfluorooctanoic acid, or PFOA - used to make Teflon and other nonstick plastics.
DuPont began studying PFOA in the 1960s and by the 1980s suspected it was toxic to humans, according to the EPA.
In 1984 the company realized that the chemical was turning up in the drinking water of nearly 50,000 people living near its Washington Works in West Virginia. By 1991, DuPont discovered that PFOA levels in the water there surpassed its own safety guidelines. The chemical was also accumulating in the bodies of DuPont workers.
Today, PFOA is found in the blood of almost all Americans, though no one is sure how it gets there, or how much is harmful.
In 1997, the EPA asked the chemical giant for information on PFOA. The company did not provide any, though the Toxic Substances Control Act required it to do so.
Joe Kiger, an elementary school teacher who lives in Parkersburg, W. Va., said he received a letter in 2000 from his local water district explaining that there was PFOA in the water, but at a safe level.
That made Kiger wonder.
"What's this chemical?" Kiger recalled thinking. "What's it doing in my water?"
He says he called the EPA in Philadelphia and was advised to get an attorney.
The following year, he sued DuPont, along with a group of citizens. They later uncovered documents showing the company had been concerned about PFOA since 1981.
In July 2004, the EPA announced a formal enforcement action against DuPont, alleging the lab withheld information about the substantial risk of injury to human health or the environment.
A year later, DuPont paid a $10.25 million fine, the largest civil penalty in EPA history at the time, and agreed to spend $6.25 million on environmental projects. The company also paid a $107 million settlement to residents in West Virginia and Ohio for polluting their drinking water.
Yet for more than a year, the DuPont lab remained in Performance Track. It was not until 2007 that the EPA asked the DuPont lab not to reapply to its program.
Five other DuPont facilities remain in Performance Track, including one that uses PFOAs.
In settling the case, DuPont did not admit any liability. In a statement to The Inquirer, Mark Hause, DuPont's global environmental competency leader, said the company differed with the EPA on the interpretation of the reporting requirement. DuPont said it chose to withdraw its renewal application.
"In the letter acknowledging our withdrawal, EPA recognized that [Stine Haskell Research Center] is an environmental leader, and was an asset to the program," said Hause.
Performance Track officials also praised DuPont in an interview with The Inquirer.
"If you compared a lot of those companies that are members of Performance Track to the general rating of chemical companies, you would find DuPont is considered to be an environmental leader," Fiorino said.
The latest available EPA data show that the company, which had pledged to cut hazardous emissions, saw its total toxic chemical release by Performance Track plants rise 15 percent, to nearly a half-million pounds.
A desperate show
While the EPA has expended little effort to verify that Performance Track members keep their promises, it has spent millions marketing their achievements and trying to woo recruits.
The program, funded with tax dollars, writes news releases for companies, heralds them on government Web sites, and plants positive stories in trade publications.
No act of enthusiasm is considered too small. Lockheed Martin, the multibillion-dollar defense contractor, is praised on the Performance Track's Web site for proudly showing "its commitment to environmental excellence by flying the Performance Track flag over its Manassas, Va., facility."
Over the last four years, Performance Track has paid two outside consulting firms more than $4.2 million.
Last year alone, records show, EPA paid ICF Consulting of Fairfax, Va., nearly $700,000, including $249,875 for member recruitment and $311,287 for "branding, outreach and communications."
The other consultant, Industrial Economics Inc. of Cambridge, Mass., has received $2.7 million to help run the program and operate its hotline, records show. Spokesmen for ICF and Industrial Economics declined to comment for this story.
In 2007, EPA placed public service announcements touting its corporate members' accomplishments in Forbes, Fortune and Business Week.
One full-page ad claimed that Performance Track members cut water use by 3.5 billion gallons: "That's a big drop in the bucket," the ad said.
Performance Track helps companies look good in other ways too. In 2006, it arranged for several governors to write letters to member companies praising them for joining Performance Track.
Despite these efforts, recruitment has been slow. Records show that Performance Track has resorted to recruiting small fish - companies that don't pollute much in the first place or members that aren't companies at all.
These include the gift shop/cafeteria at the Statue of Liberty, three dozen post office facilities, and even the EPA regional office on Arch Street in Philadelphia.
In a November 2006 internal e-mail, one EPA staffer noted the potential of partnering with a quasi-government agency.
"Sure will up the numbers for Performance Track!!"
Performance Track employees have struggled to come up with success stories, records show. In 2006, when a staffer went looking for examples of environmental good deeds, she came up short.
"Pickings were slim," she reported to a colleague in an internal e-mail. "I won't be able to come up with other examples . . . because most companies do not provide very good information on HOW they accomplished their achievements."
In fact, environmental gains achieved by Performance Track members are, in many cases, underwhelming.
A new Performance Track member, Rio Grande Village Store & RV Park in Texas, announced that its goal would be "turning off all equipment when not being used, computers on power saving mode. . . . "
And in Fife, Wash., the postal distribution facility said that among its environmental "goals," it would recycle plastic - and undeliverable bulk mail.