System worried about further cuts

by Brian Leubitz

The UC and CSU systems stand to be some of the biggest winners (or losers) of the November election. If Prop 30, the Governor’s revenue initiative goes down, they will be facing over $250mil in cuts. That fact makes this story rather unsurprising:

The university announced on Monday that because of $750 million in funding cuts in the 2011-12 school year and the prospect of another $250 million in losses if Gov. Jerry Brown’s tax initiative* does not pass, only 10 campuses will accept students in spring 2013, and even those campuses will enroll a limited number. (EdSource)

This move will particularly hit students who are planning on transferring from community colleges. Many of these students will be waitlisted pending the outcome of the election, but this is no way to treat our future.  Gambling on funding, while seemingly necessary in this case, just isn’t a system that is sustainable in the long-term.

Both the UC and CSU systems need a consistent revenue stream in order to appropriately plan for the future.

If a tree falls in a forest and no one is around to hear it, does it make a sound? If a hazardous vapor spews out of an industrial plant, but no regulator reacts, was there ever a leak?

Well, on July 6, Evergreen Oil workers decided not to stick around to find out. Some 70 workers walked off the job the minute they heard there was a leak at the hazardous waste and used motor oil recycling plant. It was a “self-evacuation,” according to the Alameda County Fire Department. One worker did go to a medical facility, was evaluated for exposure, and later released. Everybody else came back sometime after the leak was contained in the mid-morning.

But no worries, said the Alameda Fire Department. The leak was harmless to people’s health. And Newark City officials patted Evergreen’s plant manager on the back for, get this, reporting the leak properly and quickly. Sadly, that could be a first.

Here’s what we know about Evergreen Oil up in Newark, California in the East Bay area:  It handles hazardous waste materials like anti-freeze and other toxic waste. And it’s the only oil refinery recycling used motor oil here in the West. It employs a couple of hundred workers, generates about $36 million in sales each year, and has been operating since the mid 1980s.

Now, recycling used motor oil is a great idea. We want to live sustainably. And we need to do something about the underbelly of toxic waste in California from chemicals used to make computers to the engine oil you left behind at your last oil change.

The problem is that Evergreen Oil’s operations aren’t safe. It’s a serial toxic polluter with a very long record. The point isn’t just this particular leak on July 6, which was quickly contained. The point is this leak is part of a much bigger problem involving Evergreen’s record of operations, and its ability to negotiate its way out any real accountability.

Since opening in 1986, nearly every agency with the ability to fine Evergreen has done so. Evergreen’s been cited for dangerous levels of cyanide, arsenic, and other harmful chemicals in its wastewater, for violating public health standards, for the toxic gases it has allowed to emanate from the site and that have, on occasion, reached the nostrils of school children, for poisonous fumes and odors at the site, for an explosion, and for illegally handling, treating and disposing of hazardous waste.

Yet, almost every single time, California’s Department of Toxic Substances Control has given Evergreen a pass to stay out of court with wrist-slap fines and promises the company will clean up its act. But somehow, Evergreen is never clean. Since it opened, Evergreen has had at least five major fires at its facility, at least three major oil spills, over 100 hazmat and odor incidents requiring the Newark Fire Department’s response, and thousands of complaints from the community to local authorities. If that wasn’t enough, in March 2011, a huge explosion at the Evergreen facility involving a hydrochloric acid tank and waste oil sent flames hundreds of feet into the air and nearly required an evacuation of the surrounding areas.

It’s understandable that local officials and the community want the jobs. But when it came to land use, local officials didn’t think much about the plant’s location. Evergreen operations are less than half a mile from a housing development. A former Newark City Manager, Alberto Huezo, put it like this to the Oakland Tribune: “This goes back to the fact that it’s an industry we desperately need. But it was put in the wrong place-and the neighbors were there first.”

An alphabet soup of state and local regulators has authority over Evergreen. It has permits for hazardous waste handling, storage, and disposal, air quality, waste water and more. But all these regulators seem to be leaving it to the next guy to figure out what went wrong and who’s responsible for enforcement. There are some boots on the ground investigating, but nothing is bubbling to the surface yet.

The Department of Toxic Substances Control should step in as the lead regulator. Evergreen is a hazardous waste plant, after all. But the department says its permit exempts from regulation the part of Evergreen’s plant involving certified recycled oil since it is no longer considered a “hazardous material.” That’s the part of the plant where the leak allegedly occurred. Never mind that recycled oil still contains toxins. And what leaked wasn’t the oil anyway, it was a hazardous heat transfer chemical used in the refining process.

As the DTSC investigates its own authority to regulate, its first instinct should always be proactive and protective. Because when an Evergreen falls, it definitely gives off smells and sometimes much worse.

Google — facing the possibility of a penalty of around $4 billion — is trying to cut a deal with European antitrust regulators that would settle the regulators’ objections without having to pay a fine.

It’s not certain that an agreement can be reached, but if one is, it will have a direct impact on the United States.  Joaquin Almunia, EU competition commissioner, said that any concessions the Internet giant offers to resolve the EU’s antitrust concerns would be applied worldwide.

“We will look for worldwide solutions; it will not be very useful to get European-wide solutions,” he said.

One of the main complaints against Google is the way it unfairly favors its own properties ahead of competitors in search results.  We documented that two years ago in our study, Traffic Report: How Google is Squeezing out Competitors and Muscling Into New Markets.

In May the Commission said it was concerned that Google was favoring its own services in search, copying material from websites of competitors without permission, shutting out advertising competition and placing restrictions on the portability of online search advertising campaigns from its platform AdWords to the platforms of competitors. Almunia told the company to offer changes or face a formal statement of objections with the risk of fines in the billions of dollars. In Europe antitrust penalties can be imposed before a court proceeding.

At the time I predicted that Google would not offer meaningful remedies.  Despite my skepticism, the EU is saying that Google is apparently responding. The New York Times quoted Almunia from a news conference Wednesday:

“We were trying to clarify to them how these solutions should be established. They were exploring with us what kind of solutions we were asking for, and now we have enough clarifications so as to start the process of technical meetings.”

“They will try to solve it. And I have reasons to believe that they think it’s worth it.”

Funny how $4 billion concentrates the mind, isn’t it.

Reportedly, one of the things that moved the possibility of a settlement forward was that Google agreed that any concessions it makes on search will apply to all  platforms including computers and mobile devices.

I’m sure the EU is acting in good faith.  I have my doubts about Google. The real difficulty in accurately assessing the situation is the secrecy that surrounds the negotiations.  We simply don’t know what Google has proposed and what the EU wants.  When an antitrust case gets to this stage, it really all should be on the public record.

Here is what another critic said, as reported by The New York Times:

“For years, Google has said it deserves the benefit of the doubt,” said Jonathan Zuck, president of the Association for Competitive Technology, an industry group heavily financed by Microsoft. “Unfortunately, they’ve played us for fools every time.”

Mr. Zuck praised the commission’s “persistent work,” but said an “effective remedy” required an admission by Google of wrongdoing. “Without that understanding on the part of Google, it will never implement the kind of fundamental changes to its business practices that are necessary to curb these abuses,” he said.

I agree.

Besides the the European antitrust investigation, the Internet giant faces antitrust investigations by the U.S. Federal Trade Commission and several states. Antitrust officials in Korea, India and Brazil are also looking into Google’s business practices. A European deal could well serve as a blueprint for settlements with other authorities.  The FTC and the EU have been in close touch about their investigations.

One difference is that the FTC’s probe includes an investigation into whether Google has abused its dominance of the Android operating system. The EU is not looking into that, but Almunia held out the possibility that it might.

Interestingly, in the semi-boilerplate language found in Google’s just-filed Form 10-Q, is a clear indication that the Internet giant finally gets that it is under scrutiny:

We are subject to increased regulatory scrutiny that may negatively impact our business.

The growth of our company and our expansion into a variety of new fields implicate a variety of new regulatory issues, and we have experienced increased regulatory scrutiny as we have grown. In particular, we are cooperating with the regulatory authorities in the United States and abroad, including the U.S. Federal Trade Commission (FTC), the European Commission (EC), and several state attorneys general in investigations they are conducting with respect to our business and its impact on competition. Legislators and regulators, including those conducting investigations in the U.S. and Europe, may make legal and regulatory changes, or interpret and apply existing laws, in ways that make our products and services less useful to our users, require us to incur substantial costs, expose us to unanticipated civil or criminal liability, or cause us to change our business practices. These changes or increased costs could negatively impact our business and results of operations in material ways.

I hope the Europeans extract meaningful concessions, though  I remain skeptical that will happen. Google has a history of stonewalling and foot-dragging.  The best solution would be to break Google into different companies devoted to different lines of business.

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John M. Simpson is a leading voice on technological privacy and stem cell research issues. His investigations this year of Google’s online privacy practices and book publishing agreements triggered intense media scrutiny and federal interest in the online giant’s business practices. His critique of patents on human embryonic stem cells has been key to expanding the ability of American scientists to conduct stem cell research. He has ensured that California’s taxpayer-funded stem cell research will lead to broadly accessible and affordable medicine and not just government-subsidized profiteering. Prior to joining Consumer Watchdog in 2005, he was executive editor of Tribune Media Services International, a syndication company. Before that, he was deputy editor of USA Today and editor of its international edition. Simpson taught journalism a Dublin City University in Ireland, and consulted for The Irish Times and The Gleaner in Jamaica. He served as president of the World Editors Forum. He holds a B.A. in philosophy from Harpur College of SUNY Binghamton and was a Gannett Fellow at the Center for Asian and Pacific Studies at the University of Hawaii. He has an M.A. in Communication Management from USC’s Annenberg School for Communication.

Timidity and Fragmented Oversight of Evergreen Oil Plant Hamper Enforcement, Endanger Community, Says Group

New information obtained from emergency responders shows that a July 6th high-temperature leak at the Evergreen Oil re-refining plant in Newark, California involved a hazardous industrial chemical, not just recycled motor oil, as initially reported. Consumer Watchdog called on the chief regulator of the facility to shut the plant down. In a letter sent Tuesday to Debbie Raphael, Director of the Department of Toxic Substances Control (DTSC), the consumer organization asked her to convene fragmented regulatory agencies and respond strongly to the latest in a long series of safety violations and accidents at the plant in Newark, CA.

According to Consumer Watchdog, regulators are unclear about who is the lead regulator overseeing the facility, with DTSC’s own enforcers acknowledging they are uncertain of the department’s authority over the whole plant, which processes used motor oil. They were also not aware of what actions other agencies might be taking.

“The DTSC, which should be the leader in any event involving this serial safety violator, seems almost to be looking for reasons not to get involved,” said Consumer Watchdog advocate Liza Tucker. “This is an opportunity for the new director to show strong leadership and creativity in a department that appears to have faltered for years.”

The letter sent Tuesday said in part:

“Such holes in oversight must be filled for the safety of all Californians.  Rather than parsing its ability to regulate this portion and not that portion of a toxic waste plant, the DTSC should put itself at the forefront of saying that this is one dangerous accident too many….. ”

“On its face, the idea that the DTSC would have authority to regulate one part of a hazardous waste plant but not another is absurd, particularly when the release on July 6 was hazardous enough to warrant an evacuation, whether the dangerous leak was in the re-refinery area of the plant or not. ”

Download the entire letter here with a timeline of events

On July 6, a pipe leak spewed a hazardous vapor filled with “heat transfer” chemicals used in re-refining. That  triggered an emergency evacuation of the facility.  The company and Newark police warned the surrounding community, including a nearby elementary school, to expect a wave of “strong chemical odors” from the leak.

See link to CAL-EMA public record of initial report here.

The DTSC said that the leak on July 6 took place in a portion of Evergreen’s facility where recycled oil is processed.  A DTSC official stated that the department’s hands are tied because the permit issued to Evergreen does not cover the part of the facility where the leak occurred. According to DTSC, once the waste oil has been partially treated, it is no longer considered a “hazard.”  But the heat transfer liquid used to control refining temperatures is hazardous, according to the Alameda County Health and Environmental Agency.

“Evergreen’s long history of repeated and serious safety violations has to come to an end,” said Tucker. “The department has to take control of the situation, including coordination with other regulators, for the sake of the community surrounding the Evergreen plant, and to set an example for all Californians.”

The July 6 accident markeds the latest in a string of problems at the plant that includes a burst pipe and major fire in March 2011 and repeated citations by the DTSC for safety violations and carelessness.  Yet the DTSC has let the company off the hook with consent decrees and hand-slap fines for at least a dozen years, said Consumer Watchdog.  The group said now is the opportune time for new leadership at the DTSC to rethink its approach to regulating hazardous waste and recycling facilities.

Click here for more.

Read Consumer Watchdog’s July 16 letter to DTSC Director Debbie Raphael here.

Also read Consumer Watchdog’s April 9 letter to the Senate Judiciary Committee.  

State Parks face difficult questions regarding $54 in reserve

by Brian Leubitz

In an interesting KQED Forum program, Elizabeth Goldstein, head of the California State Parks Foundation, discussed the possiblities of what could happen with the excess funds that were hidden for a decade or more:

Goldstein has reason to be cautious. Of the $54 million surplus, $33.5 million is in the Off Highway Vehicle Trust Fund and can only be spent on off-highway vehicle services. That leaves $20.4 million in the Parks and Recreation Fund for the state legislature to re-allocate to keep the parks open, the San Francisco Chronicle reported Sunday.

There’s no word on when or if the legislature will consider re-allocating the funds.

“We all hope the legislature is going to rededicate this funding… to state parks,” Goldstein said. “This is one of the things that should be on everyone’s list.”

But even if the legislature approves the re-allocation, it still won’t solve all the parks’ financial issues. Goldstein noted that the department has a $1.3 billion maintenance backlog that needs to be addressed.(KQED)

That backlog is growing by the day. If you walk around the state parks for a while (I’m a huuuge fan of the state parks), you’ll notice fixes that have been left undone for too long. A broken step, or poor trail maintenance, to the larger items like maintenance on structures.  There is just a lot to be done. And like the rest of California’s infrastructure, there just isn’t enough money to get the job done.

$54 is a lot of money, don’t get me wrong. But this pot of change isn’t going to address the larger issues with the state parks. Fundamentally they are being starved of resources at the same time as they have been going through a prolonged leadership crisis.  I know John Laird has been working to improve the parks, and the interim director, Janelle Beland, brings some great experience. But, when it comes down to it, the system just hasn’t been managed as well as other state park systems and especially the national park system.

We have many priorities to be funded in an overstretched budget, but ignoring the parks comes only at our peril.

State Park system had been holding on to money for nearly 12 years

by Brian Leubitz

Over the last few years, hundreds of state park closures have been narrowly avoided, and many have actually occurred. At the same time, the state park system has been squirreling away 54 million dollars:

State Parks Director Ruth Coleman resigned this morning and her second in command has been fired after officials learned the department has been sitting on nearly $54 million in surplus money for as long as 12 years.(SacBee)

Now, in some ways, you hate to drive out people for doing what very may well be long-term planning. However, the Legislature, as the body empowered by the voters to decide how our state revenue is spent, should have had that information. Maybe they would have used it to keep all parks open or to keep the parks open longer hours. Maybe they would have diverted it elsewhere, but ultimately that should have been the Legislature’s call.

That $54 million is a one-time thing, and won’t be repeating. Details on how that gets distributed weren’t available yet.

UPDATE: Gov. Brown just appointed Janelle Beland acting interim director of the CA Parks and Rec Dept. Hopefully the quick transition will get the department back on the right track right away.