Judge Denies Restitution in CITGO Criminal Case

CORPUS CHRISTI, Texas (CN) - CITGO need not pay $30 million in restitution to Corpus Christi residents affected by pollution from the oil company's refinery, a federal judge ruled.

A jury in June 2007 convicted CITGO Petroleum and subsidiary CITGO Refining and Chemicals Co. of illegally keeping two oil tanks uncovered at its East Plant refinery in Corpus Christi.

U.S. District Judge John Rainey fined the oil company more than $2 million for violations of the Clean Air Act and the Migratory Bird Treaty Act. The fine was well below the $2 billion originally sought by prosecutors.

Rainey's decision was based on testimony from residents who claimed they suffered health problems from benzene emitted from the tanks.

Before imposing the fine, Rainey determined that more than 300 residents who submitted impact statements to federal prosecutors were "crime victims" under the Crime Victims' Rights Act. He urged them to submit evidence of their medical and property damage for restitution purposes.

Rainey later decided that, in addition to the 300-plus residents who submitted impact statements, anyone who lived near the refinery between January 1994 and May 2003, and could link their health problems to CITGO's pollution, would be granted victim status.

More than 800 people submitted impact statements. They alleged damages to their health and property values, and blamed the pollution for lost wages, auto repairs, dead pets, blankets, clothing and a treadmill, among other losses.

All told, the victims asked for more than $30 million in restitution, with the bulk focused on payments for medical monitoring, future medical costs and relocation costs.

The federal government also wanted CITGO to pay $25 million into a fund to cover victims' relocation and medical costs, and property value losses.

Specifically, the victims asked for $80,900 for medical screenings, claiming they're at a higher risk for future medical problems due to the exposure. They arrived at this figure by estimating their future life expectancies and pegging the cost of annual checkups for each of them at $250.

Rainey was unconvinced, however.

"Even assuming such testing were necessary, the court is without sufficient information to come up with a reasonable figure to address medical monitoring, and it is not inclined to arbitrarily designate a figure without such information," he wrote in an April 30 order.

The judge also shot down the victims' request for $11.8 million in future medical costs, citing his previous finding that "not one single medical record documenting more than 950 office visits ever diagnosed chemical exposure in this case." (Emphasis in original.)

Rainey then addressed the victims' and prosecutors' request for a remedial order forcing CITGO to put $18.4 million in a trust fund to cover home buyouts and relocation expenses.

Due to CITGO's pollution, the victims claimed, many residents moved away from the surrounding Hillcrest neighborhood, where blocks of houses are now boarded up and an elementary school closed, leaving them in a "virtual dead zone."

Rainey also denied that request.

"To the extent the community members seek restitution for damage to their property and to the Hillcrest neighborhood that Tanks 116 and 117 may have previously caused, the court finds that neither the community members nor the government have carried their burden of demonstrating causation or of quantifying an ascertainable amount of loss to their property values," he wrote.

CITGO Petroleum is owned by PDV America Inc., a subsidiary of Venezuela's national oil company.

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