Scotts Miracle-Gro, the nation’s largest supplier of lawn and garden products, has been sentenced to pay a $4 million fine for 11 criminal violations relating to the use of toxic insecticides in its wild bird feed products. The Marysville, Ohio-based company also agreed to more than $6 million in penalties and $2 million for environmental projects under a settlement that resolves additional civil pesticide violations filed by the Environmental Protection Agency (EPA).
Following a Sept. 7 hearing in U.S. District Court in Columbus, Ohio, Scotts chairman and CEO Jim Hagedorn issued a statement saying the Department of Justice (DOJ), which pursued the criminal charges, identified conduct that was not consistent with the company's core values. Ultimately, the experience resulted in improvements to the company's regulatory compliance programs, he added.
The DOJ’s press release minced no words in describing its investigation of Scotts’ use of pesticides Actellic 5E and Storcide II, which protect bird food from insect infestation during storage. Scotts admitted that it used these pesticides contrary to EPA directives and in spite of labels warning that Storcide II is toxic to fish, birds and other wildlife, according to the DOJ. Scotts sold illegally treated bird food for two years, and management ignored warnings from employees that the pesticides were dangerous, federal investigators said. The bird feed was recalled in March of 2008.
One of the criminal charges was connected to an unnamed “federal product manager” at Scotts who, according to the government, “[submitted ] false documents to EPA and to state regulatory agencies in an effort to deceive them into believing that numerous pesticides were registered with EPA when in fact they were not.”
In its statement, Scotts pointed out that it voluntary recalled its wild bird food products in 2008 when it discovered that they had been treated with an “unauthorized” pest control product and then disclosed the matter to the government. As for the falsified documents, “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,” the company stated.
"While no one else in the company knew about the illegal activities of one of our associates, the company nonetheless bears the responsibility for her actions, and for that we apologize," Hagedorn said.
At the time the criminal violations were discovered, the EPA also began a civil investigation that uncovered “numerous” civil violations spanning five years, according to the DOJ’s press release. These violations included the nationwide distribution or sale of unregistered, canceled or misbranded pesticides into the consumer market, including products with inadequate warnings or cautions, according to EPA investigators. As a result, the EPA issued more than 40 orders to stop the sale, and in some cases removal of, more than 100 of Scotts pesticide-containing products.
Scotts portrayed the EPA violations as more of an issue of errors in the company's product registration records. “While the company stressed that the [$6 million fine] agreement neither admits nor denies the allegations, it believes concluding the matter is in the best interest of the company, its shareholders and its associates,” its statement said. In addition to the $6 million civil penalty, Scotts agreed to complete $2 million worth of environmental projects to acquire, restore and protect 300 acres of land to prevent runoff of agricultural chemicals into nearby waterways.
In the federal government’s view, Scotts transgressions took on more gravitas because of its dominance as a supplier of consumer lawn and garden products.
“As the world’s largest marketer of residential use pesticides, Scotts has a special obligation to make certain that it observes the laws governing the sale and use of its products. For having failed to do so, Scotts has been sentenced to pay the largest fine in the history of FIFRA [Federal Insecticide, Fungicide and Rodenticide Act] enforcement,” said Ignacia Moreno, assistant Attorney General for the Environment and Natural Resources division of the Department of Justice. “The Department of Justice will continue to work with EPA to assure that pesticides applied in homes and on lawns and food are sold and used in compliance with the laws intended to assure their safety.”