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|Chris Hamby||December 23rd 2012|
The Center for Public Integrity
The temperature outside barely reached double digits on the morning of Jan. 15, 2009, and, inside the Crucible Specialty Metals steel mill here, it was bitterly cold. Ice coated the equipment, forcing employees to use torches to free the machines so they could start their work.
Danger was everywhere, federal records show. Equipment was old and in disrepair. Molten steel snaked through the building, and, at any moment, could snag and twist out of control, burning anything in its path. Shafts driving the machines that compress the steel spun at high speeds with no guards to shield employees working nearby. Sometimes, workers said, the torches backfired and burned them.
This was Jack Grobsmithâ€™s domain. Heâ€™d worked at Crucible for more than 35 years and had ascended to the position of head roller. He adjusted the equipment and made sure the steel bars came out just the right size. Around the factory, he was known as a jokester with a purpose â€” showing up at events in character as Crucibella, donning a dress, lipstick and â€˜60s-era Easter hat to preach about safety.
That frigid January morning, Grobsmith went to one of the stands that compresses steel to hook up a water hose. Next to him, two rotating shafts driven by a 900-horse-power motor spun at 240 revolutions per minute. Grobsmith struggled with the hose, which was covered in grease, then slipped on ice coating the area.
The shafts pulled him in, crushed his body and shot him out the other side.
Grobsmithâ€™s assistant roller and longtime friend Rocky Saccone ran over. â€œIt just happened so fast,â€ recalled Saccone, who retired a few months later. â€œWe pulled him out, and that was it.â€
The federal Occupational Safety and Health Administration cited Crucible for more than 70 violations and levied almost $250,000 in fines â€” high numbers for an agency with relatively little power to impose harsh penalties.
What almost no one outside of OSHA has known until now: The agency never collected a penny for Grobsmithâ€™s death because it failed to file paperwork in time after Crucible filed for bankruptcy.
The companyâ€™s bankruptcy case drew significant media coverage because of the economic impact on the community. Yet OSHA, which has an office based in Syracuse, said in a written statement to the Center for Public Integrity that it didnâ€™t learn Crucible was in bankruptcy until March 2010. By then, it was too late to file as a creditor and try to collect. OSHA said collection would have been difficult even if it had filed.
A private equity firm bought the companyâ€™s assets and reopened the mill â€” calling it Crucible Industries â€” with most of the same management. The penalty simply disappeared.
OSHA never told Grobsmithâ€™s wife, Sue. After hearing the news from a reporter, more than three-and-a-half years after her husbandâ€™s death, she fanned herself with her hands. â€œIâ€™m blown away by the fact that Crucible never paid any fines,â€ she said several moments later. â€œOSHA doesnâ€™t feel the need to bring that out?â€
Crucible has not responded to repeated requests for comment.
The events in Syracuse are part of the largely untold story of what happens after a workplace death has faded from memory and OSHA struggles to hold employers accountable. Though OSHA trumpets announced penalties as evidence of its commitment to forcing companies to follow the law, what actually happens to these penalties is more complicated.
Even after investigating a death and issuing a penalty, federal OSHA or the state agencies it oversees have failed to collect any of the original fine in one of every 10 cases since 2001, the Center found. In many other cases, regulators have settled for a fraction of the penalty initially imposed.
Overall, the federal and state agencies have collected at least 40 percent of the monetary penalties initially assessed after workplace inspections, forgoing $1.3 billion in the process, a Center data analysis found.
Most overdue debts end up at a private collection agency under contract with the Treasury Department. Yet a Center analysis of Treasury Department data found that only about 12 percent of OSHA debts have been collected in recent years. The penalties OSHA is allowed by law to impose are significantly lower than those assessed by many other enforcement agencies, providing little incentive for the government or collection agencies to prioritize them.
Both OSHA and the Treasury Department can ask the Justice Department to take an employer to court, but data show relatively little money has been collected this way.
Worker advocates say such failures to collect undermine enforcement.
â€œThe penalties matter,â€ said Peg Seminario, director of safety and health at the AFL-CIO. Not collecting, she said, â€œbasically means that they can violate the law and have very few consequences.â€
OSHA does face substantial hurdles. The agency canâ€™t force an employer to fix a hazard while a citation is contested, and litigation can drag for years. OSHA sometimes settles by deleting violations and erasing or reducing penalties â€” accepting, in some cases, company pledges to make safety improvements.
Even when a penalty becomes final, the agency may not be able to collect. Sometimes an employer disappears or convinces the government it doesnâ€™t have the money. Other times, an employer goes out of business or declares bankruptcy, then forms a new company and continues similar work â€” a path that is difficult to track and requires legal heavy lifting to combat, OSHA said in a statement.
In its statement, OSHA said it is doing what it can with the authority it has, but it supports legislation that â€œwould give OSHA the tools to impose appropriate penalties to increase deterrence and save lives.â€
Data and cases from across the country show how penalties can wither or disappear, even after workers are needlessly killed.
A death, a debt and a drawn-out process
Algo Escalante Cota had worked in the U.S. for less than a year when, during a roofing job, he crashed through a skylight and plummeted almost 20 feet to a concrete floor below.
The fine for his death spent the next six years winding through a bureaucratic maze that led from Alabama to Washington, D.C., to a New York-based private collection agency, then back again. In the end, the government collected $0.
Cota, a 39-year-old native of Mexico, found his way to Birmingham, Ala., where he worked for Tony Wright, owner of roofing contractor Integrity Building Services LLC. Wright found Cota and another worker at a congregating spot that Hispanic workers called â€œLa Tiendita,â€ an OSHA report said.
â€œThere Mr. Wright knew he could hire Hispanic workers which, compared to American workers, would work for lower wages and who were not trained on the safety and health hazards associated with roofing work,â€ an OSHA inspector wrote.
Wright brought the men with him on a hot June day in 2005 to repair a leaking roof at a door manufacturing facility in Montgomery. Late in the afternoon of the second day on the job, Cota was lugging two five-gallon buckets of roof sealer when he stepped on a skylight. The fiberglass gave way, and he fell through to the factory floor.
The OSHA inspector cited Wright for failing to cover or guard the skylight and for failing to provide proper fall protection.
Wright had been an officer and co-owner of another business, Superior Roofing Contractors Inc., that had been cited repeatedly for violating fall protection rules. In an interview with the Center, Wright said he negotiated with OSHA on the companyâ€™s behalf after at least one of those inspections. The company went out of business, Wright said, and he formed Integrity Building Services.
The scene of Cotaâ€™s accident troubled the inspector, records show. Arriving the day after the accident, he spotted pieces of plywood covering two of the skylights, including the one through which Cota fell. There were also stanchions â€” stands to mark off dangerous areas on the roof â€” and a poster board containing safety information for temporary workers.
Wright told the inspector the items had been at the scene before Cotaâ€™s accident, according to the OSHA report. But the other worker and the plantâ€™s owner said Wright hadnâ€™t brought the items until after the accident. The inspector believed it was â€œan effort to deceive OSHA.â€
In an interview, Wright acknowledged bringing the equipment to the scene after the accident, but insisted, â€œThat was not to fool anybody.â€ The plywood and stanchions were temporary protection to make sure no one fell in the hole left by Cotaâ€™s accident, he said. Asked why he brought the poster board, he said, â€œThatâ€™s been a while. â€¦ I donâ€™t know.â€
Wright contested all of the citations, which included one classified as â€œwillfulâ€ â€“ the most severe type OSHA can allege, signifying that the agency believes the employer intentionally violated the law or acted with â€œplain indifferenceâ€ to it.
â€œThe proper safety guidelines were in place,â€ Wright told the Center, noting that he had spray-painted lines around the skylights. â€œThe proper training had been performed. Daily communication on safety was done. The workman ignored the safety that was in place for him.â€
In 2006, the $48,750 penalty for Cotaâ€™s death began its trek through the system. The head of the local office that investigated the death urged a Labor Department lawyer to pursue the full penalty to â€œachieve the appropriate deterrent effect.â€ When the department filed its complaint in administrative court, Wright did not respond. Upholding the OSHA citations, a judge concluded Wright had acted â€œwith disdainâ€ for the courtâ€™s rules.
Wright told the Center he had limited resources and had to pick his battles, so he chose to fight what he viewed as the more serious threat, a lawsuit by Cotaâ€™s family.
The waiting game
Faced with such an employer, OSHA has a standard procedure: The local office issues a letter demanding payment, then waits one month. Then the national office issues a similar letter, then waits. When the debt has gone unpaid for 180 days, OSHA refers it to the Treasury Department, which issues its own letter, then waits, usually another month. The department also can try to intercept government payments to the employer, such as tax refunds or payments for contract work.
Ultimately, most OSHA debts end up where Integrity Building Serviceâ€™s did: a private collection agency. Four companies have contracts with the Treasury Department, and they do the bulk of the work pursuing debtors, said Ronda Kent, a deputy assistant commissioner in the departmentâ€™s Financial Management Service.
Under the program, the Treasury Department is charged with collecting anything from debts on government loans to penalties assessed by a host of enforcement agencies.
OSHA debts, however, are typically much smaller than those of other enforcement agencies, and it is one of few federal agencies excluded from a law that allows penalties to rise with inflation, with penalties the agency can impose stuck at 1990 levels. A violation deemed â€œseriousâ€ â€” one that, by OSHAâ€™s definition, â€œwould most likely result in death or serious physical harmâ€ â€” carries a maximum penalty of $7,000.
â€œJust because somethingâ€™s a low dollar amount, it could be a fine that itâ€™s important to collect it because you certainly donâ€™t want repeat offenders,â€ Treasuryâ€™s Kent said. â€œYou donâ€™t want to make it cost-beneficial for the businesses to continue to violate the law.â€
Thereâ€™s no requirement, though, that this attitude trickle down to the private collection agencies. When it is assigned a debt, an agency must send a letter demanding payment. Beyond that, the agency can choose which debts are worth pursuing. â€œWe leave that to them to make those decisions,â€ Kent said, noting that the agencies are regularly evaluated.
Between the 2006 and 2012 fiscal years, OSHA referred about $131 million in debts to the Treasury Department, but only about $16 million was collected. Data to compare OSHA collections with other agencies was not available.
Likewise, it is relatively rare for an employer to end up in court and be ordered to pay an OSHA debt. During the seven-year period, the Justice Department collected just over $267,000 in OSHA debts referred to it by Treasury. OSHA can also refer debts directly to the Justice Department. Since 2008, the department has collected about $910,000 in debts sent to it by OSHA. For all federal agencies, the Justice Department collected about $15.4 billion between the 2008 and 2011 fiscal years.
â€œItâ€™s a problem,â€ said the AFL-CIOâ€™s Seminario, â€œbut the government has limitations in terms of what it can do, both in terms of its authority and in terms of its resources. â€¦ Itâ€™s making choices. It isnâ€™t necessarily that theyâ€™re ignoring these cases.â€
Legislation that would increase both civil and criminal penalties was introduced in both houses of Congress in 2009 and 2011. The bills havenâ€™t made it out of committee.
In Cotaâ€™s death, the private collection agency Pioneer Credit Recovery called Wright a few times trying to collect, Wright recalled. He told them he was fighting a private lawsuit, and Wright said a Pioneer employee suggested he write a letter and â€œask for forgivenessâ€ of the debt. Wrightâ€™s lawyer did so.
â€œDebtor attorney states is in process of settlement agreement in court,â€ Pioneer reported back to the government. The head of OSHAâ€™s debt collection office replied that getting sued doesnâ€™t mean an employer can avoid paying a penalty. Still, an invitation to negotiate stood out in bold, underlined text: â€œIn an effort to assist the debtor in settling this debt, OSHA is willing to review a reasonable compromise offer for this debt.â€
On June 13, 2011, OSHAâ€™s debt collection office said Treasury had deemed the debt â€œuncollectible.â€ The case was being closed. Pioneer refused repeated requests for comment, and the Treasury Department declined to answer questions about the specific debt, citing privacy concerns.
â€œWe are disturbed that no penalties were collected in this case,â€ OSHA responded to a Center inquiry. The agencyâ€™s Mobile, Ala., office â€œhas been on alert,â€ and, if future violations occur, OSHA â€œwill pursue action to the extent of the law to hold this employer accountable.â€
Wright, 57, said he still works in the Birmingham area as a consultant to a construction contractor. Integrity Building Services still exists, he said, though it is not taking jobs and is winding down its legal obligations as it prepares to go out of business. The company doesnâ€™t have the assets to pay the OSHA fine, he said.
â€œEven if we had had the money,â€ he said, â€œI would have refused to pay.â€
Negotiations, deletions and more deaths in South Texas
Some cases never make it to the collection stage. After OSHA investigates a death and issues citations, it is often faced with a choice: The agency can push to uphold all the violations and penalties, a process that can involve years of litigation. Or it can negotiate a settlement, which often involves reducing penalties or reclassifying violations.
Another option is deleting violations entirely, erasing the penalties that go with them. In more than 600 cases since 2001, OSHA has investigated a death, issued violations carrying a penalty â€” and then deleted them all, the Center found. That occurred in roughly one in every 20 cases.
In all closed cases since 2001, OSHA has agreed to delete more than 104,000 violations that had an initial fine, erasing more than $240 million in penalties.
â€œThere are occasional instances when, after citations are issued, an employer may present additional evidence to indicate that a citation is not warranted,â€ OSHA said. â€œIf that evidence, when taken into account, persuades the agency that a citation was not warranted, the citation may be deleted.â€
Mark Lies, a partner in the Chicago office of the law firm Seyfarth Shaw LLP, is among the lawyers who specialize in squaring off against OSHA. Lies said he often gets involved soon after an accident occurs and has communications come to him, creating an attorney-client privilege. He sits in on employee interviews with OSHA, if the employee chooses, and reviews OSHAâ€™s requests for documents.
Employers often fight even small OSHA penalties because having a violation on record could open up a company to more severe penalties in the future and haunt it in related civil lawsuits, said Julie Pace, a senior member at the Cavanagh Law Firm in Arizona.
There are many ways to attack an OSHA citation, lawyers say. A lawyer could argue that the OSHA standard cited didnâ€™t apply to the work in question, that no one was actually exposed to the danger or that employee misconduct was to blame, among other defenses.
And if OSHA is unwilling to compromise, Lies said, â€œitâ€™s very easy for the employer to go to a judge.â€
A stark example of a companyâ€™s ability to beat back OSHA citations has played out in South Texas.
Gulf Stream Marine loads and unloads ships at ports along the Gulf Coast. In Houston and Brownsville, the company experienced six fatal accidents from 2007 to 2011. OSHA investigated and issued violations in each case, but, in half of them, agreed to delete all of the violations and erase the penalties.
The accidents bore similarities, OSHA records show. In January 2007, a Houston Gulf Stream Marine employee â€” not certified to drive a fork truck â€” ran into a security guard with the pipes being carried on the truck, causing fatal chest wounds. Three months later, also in Houston, a bundle of pipes being lifted by crane knocked a worker into the side of a ship. He fell into the water and never surfaced.
In 2008, a worker in Houston was crushed by a truck that came loose from the crane loading it onto a ship. The next year, in Brownsville, a large chain suspended from a crane got stuck, then snapped loose and hit a worker in the head, killing him. An employee in Houston was run over by a truck in 2010, and, the following year, a truck driver in Brownsville was hit with a 40-ton metal beam and killed.
In one case, OSHA deleted two serious violations carrying a $9,800 penalty after Gulf Stream Marineâ€™s safety director sent the agency a map showing the areas of the port leased by the company and the areas controlled by the Port of Brownsville. A spot labeled â€œincident siteâ€ showed the accident occurred just outside the area under Gulf Stream Marineâ€™s control. OSHA noted in the file, â€œThe evidence suggests Gulf Stream Marine â€¦ had no controlling authority over safety and health.â€ The citations vanished.
In another case, OSHA deleted two serious violations carrying a $10,000 fine because â€œthere were issuesâ€ with the phrasing of the regulations cited, OSHA told the Center. In a third case, OSHA deleted two serious violations and a $10,000 fine in a settlement. OSHA said it got something in return â€” a company pledge to adopt a new policy.
Others who have dealt with Gulf Stream Marine have been less forgiving than OSHA. â€œWeâ€™re getting people killed out there for no reason,â€ said George Gavito, who recently retired as chief of the Port of Brownsvilleâ€™s police department.
Gavito said he constantly clashed with the company over safety issues. Brownsville is near the Mexican border, and many workers are poor immigrants, he said. â€œTheyâ€™re not going to raise hell,â€ he said.
Lawyer Bill Tinning has battled Gulf Stream Marine twice. In 2005, he represented a worker who was offloading large pipes from a truck when one came loose and crushed his head, leaving him in a vegetative state.
In 2003, he sued on behalf of the family of a worker who had been crushed to death by a load that came loose from a crane Gulf Stream Marine was operating. Tinning alleged in court filings that the company replaced key parts of the crane immediately after the accident, started disposing of the crane even though there was an ongoing OSHA investigation and withheld information about the accident â€” claiming that one investigator Tinning wanted to depose was a â€œnon-existent person.â€
â€œIt was the most outrageous conduct Iâ€™ve run across,â€ Tinning said.
Gulf Stream Marine refused repeated requests for comment. The company contested the violations in each of the six deaths and, in settlement agreements, has denied breaking the law.
OSHA defended its handling of Gulf Stream Marine, saying â€œviolations have been abated that could have lingered for years had we not settled the cases.â€
The agency acknowledged, however, that officials in Houston had failed to flag the inspection of the 2008 death as meeting the criteria for the agencyâ€™s â€œEnhanced Enforcement Program.â€ Had they done so, there would have been required follow-up inspections and perhaps visits to other company sites. These inspections, OSHA said, might have prevented future accidents.
John Newquist, a former assistant regional administrator for OSHA who retired this year, said Gulf Stream Marineâ€™s record and OSHAâ€™s handling of the death cases â€œshould trigger maybe an outside review of it because thereâ€™s something wrong.â€
â€œThis should never happen,â€ he said. â€œItâ€™s an embarrassment if youâ€™ve got fatality cases and citations deleted.â€
â€˜I think about it a lotâ€™
Every Monday morning at 6:30, the management and employees at Crucible Specialty Metals met to talk safety. Speaking for the workers on the mill floor often fell to Rocky Saccone, who embraced the role. â€œThey would say, â€˜Rockâ€™s on a roll; let him go,â€™ â€ Saccone recalled. â€œIt would be days or weeks or months before they would address these issues on the mill, and they wonder why you get upset. It was like pulling teeth.â€
One issue that repeatedly surfaced, he said, was installing guards to enclose the rotating shafts on the mill â€” like the ones that crushed Jack Grobsmith. â€œIt should have been corrected years and years ago,â€ he said.
A few years before Grobsmithâ€™s death, Saccone said he nearly suffered the same fate when the sleeve of his shirt touched an unguarded shaft. â€œIt ripped it right off in about half a second,â€ he recalled. â€œAll that was left was the collar of my shirt. The rest of the shirt was disintegrated.â€
Then, in May 2008, another workerâ€™s shirt was caught in an unguarded bar straightener, federal records show. He was flipped over and injured. OSHA investigated and issued a citation. By that time, OSHA had already cited the company multiple times â€“ in 1997 and again in 2002 â€“ for failing to have machines guarded. An inspector noted portentously in 2002, â€œPotentially an employee could trip or slip â€¦ and be caught in the two rollers.â€
Though OSHA said Crucible fixed the specific problem cited in 2008, the agency told the Center: â€œThe company should have installed guards on similar machines throughout the plant.â€ Had Crucible done so, â€œthis may have preventedâ€ Grobsmithâ€™s death, OSHA wrote.
In 2009, OSHAâ€™s Syracuse area director authorized the maximum fine for violations related to Grobsmithâ€™s death â€œto get the necessary deterrent effect,â€ he wrote in a memo, noting the companyâ€™s history of accidents and failure to guard machines.
Three days after a judge approved the settlement between Crucible Specialty Metals and OSHA, a private equity firm finalized its purchase of the company. A few months later, OSHA received a letter, this time on Crucible Industries letterhead, saying it would take longer than initially agreed to fix the problems inspectors found. The company â€œdoes not admit it bears responsibility for any citations and penalties â€¦ issued to and incurred by the previous owners.â€ It maintained it was correcting cited hazards â€œin the interest of providing of Crucible Industriesâ€™ employees a safe workplace.â€
Both the settlement agreement and the letter were signed by the same person.
Crucible employees said that, with new owners, there have been safety signs both positive and negative. â€œI want to believe that the people up top want the cultural change and want it to work, but Iâ€™m not sure it filtered all the way down,â€ said Ed Moran, the safety chairman for the United Steelworkersâ€™ local.
After her husbandâ€™s death, Sue Grobsmith considered a lawsuit. Because of state workersâ€™ compensation laws, she couldnâ€™t sue Crucible; her lawyerâ€™s only option was to investigate the contractors who installed the equipment. Crucible, however, said it couldnâ€™t find any of the contracts. â€œClearly, Crucible â€¦ was to blame,â€ the lawyer wrote to her. â€œUnfortunately, with all of this evidence against the employer, we still canâ€™t sue them.â€
Now 59, Sue works for the local school district and keeps in touch with Jackâ€™s friends from Crucible. One recent fall day, Saccone and Dave Peel, another longtime friend from Crucible, sat with Sue in the living room of the house she and Jack bought 32 years ago, drinking coffee and talking about Jack.
Sue and Jack started dating in 1969, in high school. â€œRight out of high school, I worked for Allstate Insurance, Jack went to school and we knew we were going to get married,â€ Sue said. When Jack finished at a two-year college, he planned to go back to school and become a teacher and coach. Yet a summer job at Crucible changed his mind; the promise of a good paycheck enticed him.
They married in 1972 and had three children. As Jack ascended the ranks at Crucible, double shifts became common. He became close with co-workers, sharing barbecues, graduations, weddings.
â€œHeâ€™d have me in tears at times because heâ€™d be so damn funny,â€ Rocky said. â€œIt could be an old, stale joke that I would still laugh at after 30 years.â€
Inevitably, the conversation returned to Jan. 15, 2009. As Rocky described running to Jackâ€™s battered body, Sueâ€™s expression changed. â€œI didnâ€™t know that you were the first there,â€ she said, grabbing his hand. â€œThanks, Rock.â€
Rocky paused, and his eyes welled. â€œI think about it a lot,â€ he said. â€œI still do. I think about it a lot.â€