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

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The Washington Independent

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

by
Staff Report

Hallmark workers at the site of an oil spill cleanup operation. (Michigan Messenger)

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.

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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