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In Mich. Cleanup, a Missed Opportunity for Local Workers and Abuse of Undocumented Ones

Investigation Into Serious Labor Violations in Oil Spill Cleanup Leads to Broader Questions

Staff Report

In July, a 30-inch oil pipeline burst in Battle Creek, Mich., near a tributary of the Kalamazoo River. The cracked pipe leaked an estimated million gallons of oil into the water, and at the time, Enbridge Energy, the Canadian company that owns the pipe, promised a complete cleanup and rigorous review of its practices. “This is our responsibility,” said Patrick Daniel, Enbridge’s chief executive officer. “This is our mess. We’re going to clean it up."

But that cleanup has itself been messy. An investigation by the Michigan Messenger – a sister site of the Washington Independent, also part of the American Independent News Network – found undocumented workers laboring in unsafe conditions at the cleanup site.

Hallmark workers at the site of an oil spill cleanup operation. (Michigan Messenger) An Enbridge Energy subcontractor bused in undocumented workers to labor for up to 100 hours a week, clearing debris and cleaning up oil in unsafe conditions. In response to the Messenger investigation, Enbridge fired the subcontractor, who sent the workers back to Texas. There, the undocumented workers, awaiting cash payments for their efforts, met with local authorities – and many were detained.

The scandal has gone national, with politicians expressing dismay at the conditions at the Michigan cleanup site and the labor abuses, and authorities turning their attention to the companies doing the dirty business of getting America’s waterways clean.

An Unsafe Cleanup

After the Michigan oil spill, Enbridge hired contractor Garner Environmental Services to aid in the cleanup of the river. Garner, in turn, hired Texas-based Hallmark Industrial to supply workers. Last month, Hallmark bused scores of undocumented workers to the cleanup site. Living in hotels, the workers spent 12 to 14 hours a day cleaning oil-soaked islands and shorelines along the Kalamazoo River. The workers received $800 per week in cash for their efforts.

After receiving an initial tip from a Hallmark worker who asked not to be identified for fear of reprisals, the Michigan Messenger visited a rally site where the workers were picked up every morning. Half of two dozen men interviewed there admitted to being undocumented workers. All of them asked not to be identified.

Photographs supplied by a whistle-blower showed clear violations of safety standards. In those photos, undocumented workers were seen covered in oil and mud getting food and water. In one photo, a worker covered in oil sits on the white cooler from which workers get their water.

Last week, after the Messenger investigation, Garner fired Hallmark. The workers were put on charter buses back to Texas.

Workers, Seeking Pay, End Up Detained

The buses stopped in Winnie, Texas, behind a bank. Reportedly, the workers on the buses were expecting cash payments from Phillip Hallmark, the head of Hallmark Industrial. Soon after, neighbors complained to the police about the buses, which were blocking a street. When sheriffs arrived, the men held in the buses ran.

Local authorities took custody of 59 of the Battle Creek workers, and about 40 men got away. Authorities say 42 of the 59 detained workers were undocumented, and they were sent to a detention facility in Houston. Legal residents were released and allowed to collect their belonging from the buses. Authorities continue to search for men who escaped during the detention process.

Chambers County Sheriff Joe LaRive spoke with the Messenger after the incident. “The [charter bus] drivers were told to drive them to this small house in our little community,” LaRive said in a phone interview. “They were to meet Mr. Hallmark once they got there. Of course, he was nowhere around when we showed up.”

LaRive indicated that law enforcement is looking for Phillip Hallmark. “I’m sure the federal authorities will be very interested in talking to him,” he says.

Enbridge Pushes Back

In the wake of the Messenger investigation, the firing of Hallmark and the detention of its workers, Enbridge Energy — the company repsonsible for the spill — has claimed no responsibility for the workers cleaning it up.

Last week, Enbridge officials said there was no official proof that the undocumented workers were in any way connected to the spill cleanup in Michigan. “This is an issue between law enforcement, Hallmark and Garner,” said Terri Larson, Enbridge spokesperson. “There is no direct connection between Enbridge and Hallmark.”

Larson stressed that contractor agreements with Enbridge contained “very strict” provisions about following all applicable state and federal laws. Asked if the Hallmark situation would impact the Garner contract, Larson said, “That’s something I cannot discuss.”

Larson referred many questions to Garner Environmental, which has consistently failed to return media inquiries.

A Broader Investigation

But the Messenger investigation is ginning up broader questions about Enbridge’s labor and safety practices. A look at the company’s record reveals a pattern of problems with worker safety including multiple worker deaths in recent years.

This summer the Department of Labor’s Occupational Safety and Health Administration (OSHA) cited Enbridge for “willful” and “serious” violations after a chemical release at a company natural gas processing plant in Texas resulted in the death of a worker. According to OSHA one employee died and another was left in critical condition on Jan. 10 when hydrogen sulfide was released as workers replaced a faulty valve on a waste heat boiler in the sulfur plant.

Federal officials say Enbridge failed to develop and implement safe work practices for workers exposed to hydrogen sulfide and failed to provide the workers with respirators — required personal protection equipment.

These violations were committed, they said “with intentional, knowing or voluntary disregard for the law’s requirements, or with plain indifference to employee safety and health.”

OSHA also cited Enbridge for failing to review current operating procedures, failing to inform contract workers of the known potential fire, explosion or toxic release hazards related their work and not requiring the use of necessary flame resistant clothing. The agency assessed $152,100 in fines for these violations.

In August, the Department of Transportation’s Pipeline Hazardous Materials Administration fined Enbridge $2.4 million for safety violations involving worker safety and failure to conduct required monitoring and maintenance.

DOT officials said that two Enbridge workers died in a crude oil explosion in Clearbrook, Minn., as they worked to make repairs on the Lakehead pipeline, and they cited Enbridge for failing to safely and adequately perform maintenance and repair activities, clear the designated work area from possible sources of ignition, and hire properly trained and qualified workers.

The agency also ordered Enbridge to revise and implement certain pipeline maintenance and repair procedures and to train and requalify its employees.

While work seems dangerous for Enbridge employees — overall, from 2004-2008, 395 injuries were recorded by Enbridge and then reported to management according to the Canadian environmental group the Polaris Institute — actual statistics are probably much higher because 80 percent of Enbridge workers are non-union and have little protection against discrimination if they report a problem.

“Officially, Enbridge provides on the job health and safety training as mandated by federal and provincial jurisdictions, and has established health and safety committees at each site,” Polaris writes. “However, the only collective agreement negotiated with the company to include specific provisions regarding proactive health and safety precautions, training and remedial action is between Enbridge Gas Distribution and the Communications Energy and Paperworkers Union in Ontario.”

Many workers involved in direct cleanup of the Kalamazoo River spill were hired by subcontractors who were required only to provide on site lectures about hazardous substances and personal protection gear.

Under Michigan regulations all employers at a multi-employer job sites share responsibility for ensuring that proper safety ruled are followed, according to Michael T. Mason, safety and health manager for the Michigan Occupational Safety and Health Administration.

Inspectors at the Enbridge oil spill cleanup site on a daily basis, conducted “walkarounds” of the job site and asked workers if they had been trained, Mason said. “We can tell by interviews and by watching them we can tell if [workers] have been trained.” Mason acknowledged that direct observation can be difficult at a 25-mile job site such as the cleanup area along the Kalamazoo River.

Political Attention in the Wake of the Spill

And the Michigan and Texas incident has garnered the attention of politicians as well.

For one, politicians in Michigan are incensed that Enbridge did not use local workers, as the state has the second-highest unemployment rate in the country. Rep. Mark Schauer (D) sent letters to the administrator of the Environmental Protection Agency as well as the Secretary of Labor calling for an investigation of Enbridge, due to the Messenger investigation.

“Enbridge needs to live up to the commitment it made to our community, be a good neighbor, and start hiring qualified Michigan workers to clean up the spill,” Schauer said. “Our community repeatedly asked the EPA and Enbridge to use local labor, and the fact that Enbridge allowed one of its contractors to hire illegal immigrants is appalling.”

In an interview with the Michigan Messenger, Schauer took aim not only at the undocumented worker hiring scandal, but also the whole culture of using independent contractors to skirt the law.

“I have worked for some time on the independent contractor fraud that goes on. This is when, typically in the construction trades — and this situation on the river clean up sort of classically fits the mold — where companies will hire workers as independent contractors, as 1099 independent contractors. It’s specifically done to evade paying taxes,” Schauer said, noting independent contractor payments do not have any federal or state taxes deducted from them.

This leaves the individual responsible for those taxes. “Now that’s cheating the taxpayer, but it’s also creating an unfair advantage for these companies that are hiring workers as independent contractors rather than full employees.”

This of course is an issue tied to undocumented workers, Schauer noted. In an interview with the Messenger, Hallmark said his independent contractors were not required to fill out I-9 federal forms. Those forms verify that a person is legally eligible to work in the United States.

“In this case this seems to be a loophole in which the employer is claiming they don’t have to check the legal status of these workers and require them to complete I-9 forms,” Schauer said. “So there’s tax fraud and there’s also a violation of the law by hiring undocumented workers, it appears.”

Schauer says this unfair advantage the independent contracting process allows, combined with the lack of legal status verification, makes it hard for Michigan workers to compete.

“It’s outrageous and disgusting that our local workers — including many who have hazmat training and certifications — have been cheated out of these opportunities to do this work,” Schauer said. “This is another example of a company cutting corners ad cheating our workers out of an opportunity to support their families.”

Schauer said he has been trying “since the very start” of the spill to connect local workers with Enbridge Energy Partners. But those attempts have failed.

Schauer said the allegations of safety violations and the hiring of undocumented workers will become part of a scheduled Sept. 15 House Committee on Transportation and Infrastructure hearings on the July 25 oil spill.

He says the oil spill was a violation of the people of Calhoun county and “it shouldn’t have happened.”

“What people are looking for is fundamental fairness and that appears to have been violated here,” he said.

Further Allegations About Hallmark

The incident is also shining a light on Phillip Hallmark and his company’s labor practices. The Texas Independent reports Hallmark is already under indictment by a Chambers County jury for insurance fraud and theft in a previous, unrelated case.

Hallmark’s attorney Joseph C. “Lum” Hawthorn said last week he had recently been in touch with his client and was aware of Hallmark’s whereabouts. When asked where Hallmark is, Hawthorn cited attorney-client privilege, saying, “That’s none of your business.”

Hawthorn said Hallmark was not currently in custody, that he was aware of.

Regarding the charge involving insurance fraud and theft, Hallmark has a court date set in Anahuac for Oct. 1. He was originally slated to appear in court Friday, Aug. 27.

Allegedly, in July 2006, Hallmark’s accomplice Joe Collins claimed to State Farm Insurance Company that Collins’ 2003 Ford F-150 was stolen from a parking lot, when Hallmark and Collins were hiding the truck, according to grand jury indictments from December 2009.

Hallmark’s wife Holly is an insurance agent in Port Arthur for Farmers Insurance Group. She is not named in court documents.

In 2004, Hallmark was fined $1,000 after pleading no contest to election code violations involving campaigns for Port of Port Arthur commissioner. Hallmark was charged with failing to report newspaper advertisements that he paid for to the candidates he supported or to authorities. Hawthorn also represented Hallmark during the 2004 case.

Hallmark is the son of former Jefferson County Commissioner Waymon Hallmark, who retired in 2009.

The Michigan Messenger’s Todd Heywood and Eartha Jane Meltzer, the Florida Independent’s Travis Pillow and the Texas Independent’s Patrick Brendel contributed reporting and writing to this story.

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