Illinois contractor gets 10-year sentence for asbestos violation
An Illinois man whose workers removed and then dumped asbestos-containing insulation with no training or safety protection has been sentenced to 10 years in federal prison. Duane “Butch” O’Malley, 59, was also ordered to pay restitution of $47,086 to the U.S. Environmental Protection Agency (EPA) related to the cleanup of illegally disposed asbestos, as well as a $15,000 fine, according to an EPA announcement.
During O’Malley’s trial, the government presented evidence that his firm, Origin Fire Protection, was hired by Michael Pinski in August 2009 to remove asbestos-containing insulation from pipes in a five-story building in Kankakee, Ill. Neither O’Malley nor his company was trained to perform the asbestos-removal work, and O’Malley agreed to remove the asbestos insulation for an amount that was substantially less than a trained asbestos abatement contractor would have charged for the job.
O’Malley arranged for another individual, James Mikrut, to recruit and oversee workers to remove the asbestos.
O’Malley was charged in June 2010 with five felony violations of the Clean Air Act. He also violated EPA regulations when his workers stripped the asbestos insulation from the pipes while it was dry and then placed it in more than 100 large, unlabeled plastic garbage bags. The bags were dumped in an open field in Hopkins Park, resulting in soil contamination. The workers hired by O’Malley were exposed to asbestos-laden dust and fibers, which can be inhaled into the lungs and cause serious health problems, including lung cancer and mesothelioma.
O’Malley was convicted by a federal jury on Sept. 26, 2011, for the illegal removal, handling and disposal of asbestos. Federal District Court Judge Michael McCuskey handed down the 10-year sentence.
“To increase his profits, a jury found that O’Malley knowingly disregarded federal environmental laws that require asbestos-containing materials be safely removed and properly disposed,” said U.S. Attorney Jim Lewis, Central District of Illinois. “This sentence is a consequence of the defendant’s flagrant disregard for his workers, the public and the environment in exposing them to dangerous airborne asbestos fibers.”
Michael Pinski, 42, entered a plea of guilty on Aug. 19, 2011, to one count of violation of the Clean Air Act. James Mikrut, 49, pleaded guilty on Aug. 24, 2011, to five counts of violation of the CAA. The sentencing hearings for Pinski and Mikrut will be scheduled at a future date.
Sales flat at Masco
Home products manufacturer Masco Corp. reported net sales of $2.0 billion for its second fiscal quarter, flat compared with $1.99 billion in the same quarter the year before. North American sales increased 3% and international sales decreased 9%, the company reported. In local currencies, international sales were flat compared with the second quarter of 2011.
Net loss for the company for the second quarter, which ended June 30, was $75 million, compared with $8 million in profit during the second quarter of 2011.
“While general economic activity slowed in the second quarter and our sales were flat compared with last year, our top line benefitted from increased new-home construction activity and sales of plumbing products in North America, and from selling price increases,” said Masco’s CEO, Tim Wadhams. Also, despite the weakening economic environment in Europe, our international sales were flat in local currencies.”
“We continue to make progress on our strategic initiatives, which include leveraging our brands, reducing our costs, improving our installation and cabinet segments and strengthening our balance sheet. Our installation and cabinet segments improved their performance by approximately $20 million in operating profit, in aggregate, compared with the second quarter of 2011, and for the first half of 2012, these segments achieved more than $45 million of operating profit improvement,” Wadhams said. “We expect both segments to benefit in the second half of 2012 from the continued improvement in North America new-home construction activity.”
However, the Troy, Mich., company has met some challenges implementing its countertop and dealer strategies for cabinets, according to the CEO. “In addition, while we are relatively pleased with our first-half results, we expect the second half of 2012 to be less robust than previously anticipated, as the U.S. economy appears to be losing momentum and Euro-zone economies continue to struggle,” Wadhams added.
Coming to a market near you: eminent domain
Several cities in California’s Inland Empire, which was devastated by the housing bust, have decided not to wait around for relief from the feds or the banking industry. They are ready to invoke a rarely used power — eminent domain — to stop foreclosures in their communities and help struggling homeowners restructure their mortgages.
The banking and securities industry is not excited over the idea.
Fontana and Ontario, two cities in San Bernardino County, were the first to float the proposal. Because of falling property values, approximately half of the homeowners in the county owe more than their house is worth. Unemployment hovers around 12%.
Under the plan, Fontana and Ontario would partner with the county and seize mortgages that are “underwater” using private funds. The “Homeowner Protection Plan” would then lower the amount owed on the house and restructure the payments, according to an article in the Los Angeles Times.
While not officially endorsing the idea, state Lt. Gov. Gavin Newsom, the former mayor of San Francisco, said that the Inland Empire cities should be given the chance to explore the “bold” idea, the Times reported.
The Securities Industry and Financial Markets Association has warned that seizing mortgages through eminent domain is, in all likelihood, unconstitutional. Litigation is almost guaranteed.
Meanwhile, other cities are reportedly contemplating similar eminent domain plans, including Berkeley, Calif., Chicago and Suffolk County in New York.