SCWW: Secret SP stash,
SPFD testimony,
potential securities fraud revealed

August 26, 2015
Santa Paula News

A stash of chemicals and suspected radioactive material secretly stored on city leased property next to a residential neighborhood. 

Testimony from injured workers including a Santa Paula Firefighter. 

Allegations of potential securities fraud by Santa Clara Waste Water-Green Compass in a proposed $90 million sellout to the same company they later hired for the cleanup following the November 18 explosions and fires at their Mission Rock Road plant.

That and more are among the allegations addressed in more than 300 pages of search warrant affidavits unsealed last week detailing the investigation by the Ventura County District Attorney’s Office and others into the explosion and business practices at the SCWW.

A 71-count indictment unsealed in a Ventura County Superior Court August 19 alleged a pattern of criminal behavior by SWW and Green Compass Environmental Solutions, its business affiliate and nine company officials. 

District Attorney Investigator Jeff Barry concluded in the search warrant affidavits that the plant was unsafely managed, employees were poorly trained and lacked even basic safety equipment and records were routinely falsified before the November 18 explosions and fires occurred.

The District Attorney’s Office began investigating SCWW-Green Compass after the rear of a vacuum truck hissed and exploded with a blue flame at the plant about 3:45 a.m. on November 18, causing a 1,000-gallon chemical spill and fire, sending shrapnel and the contents flying hundreds of feet. The incident included the later ignition of a toxic cloud that had formed over the plant that led to a declaration of an emergency by the county, mass evacuations and closure of the immediate area for days. Firefighters had to stand by helplessly as the fire spread to totes containing unknown chemicals that exploded and burned.

The boots of those on scene exploded into fire, as did the tires on the SPFD engine. The incident caused evacuations, serious injuries to first workers as well as first responders as well as complaints of chemical exposure symptoms to those in the area; in all about 50 people were treated.

The company hired former District Attorney Mike Bradbury to conduct an internal investigation that tied the explosion to an accidental mixture of sodium chlorite and residential sewage. Such an incident noted the report—that lacked naming consultants in such matters—could be prevented in the future with upgraded procedures and training.

A Ventura County Grand Jury met secretly for three weeks to consider the DA’s case and issued the indictments August 7 followed by the arrests of company personnel including the company’s CEO and chairman of the board who had been CEO; they are all out on bail.

Just about two weeks before the blast Ventura County Environmental Health inspected the plant. It is not known if they were ever notified by the county Planning Department that nearby neighbors had been documenting incidents at the plant for more than a year complaining of heavy night traffic and fumes that ranged from sewage to chemicals.

According to the DA’s investigation, “Evidence and admissions revealed,” a company official “designed a scheme to evade inspections by Ventura County Environmental Health.”

That alleged scheme included removing labels from totes, affixing false labels to others and moving dangerous chemicals not reported to regulators as well as radioactive waste to property SCWW-Green Compass had leased from the city in July 2014. The lease agreement specifically banned the storage of such materials on the property.

Within days of the explosion a warrant was served at the yard, located at 600 S. Palm Ave. just south of a tightly packed residential neighborhood. 

The affidavits noted that the City of Oxnard, prior to the explosion, had found radioactivity at its wastewater plant where SCWW was permitted to send up to 600,000 gallons (14,285.71 barrels) of wastewater a day. The Oxnard plant received the wastewater through the 12-mile pipeline that connected to SCWW.

During its semi-annual radioactivity inspection, Oxnard officials found the unit for measuring such concentrations, the pCi/L, was 94, which exceeded the limit of 50. The city launched an investigation that included taking a sample from a SCWW sample port outside the city’s plant. 

“The sample results,” wrote Barry, “indicated a Gross Beta [radioactive] concentration of 4,400 pCi/L.”

Among those still recovering from the blast are three Santa Paula Firefighters including Captain Milo Bustillos who in December was interviewed by investigators.

Bustillos said when the SPFD engine company arrived on scene at about 4 a.m. the facility was dark and employees toting flashlights told him they needed help on the other side of the facility.

One employee told firefighters ”You have nothing to worry about. It is just treated sewage water.” 

When firefighters got to the other side, the employee said: “There is nothing toxic here, there is no chemicals, we are fine.”

 Bustillos said two more workers also offered assurances but he was growing increasingly suspicious as the spill smelled to him like “battery acid.”

When an ambulance worker reported that her eyes had started to burn, Bustillos told his crew to back up from the spill, as “he knew he wasn’t in sewer water.”

According to the affidavit, Bustillos had repeatedly asked employees what he was dealing with and angrily told one of them not to lie to him.

 Santa Paula Firefighter Matt May had been helping to treat a Patriot Environmental Services employee who had received a gash in his calf and fallen into the spilled substances.

May approached Bustillos and told him: “Hey some guy just came up to me and said this is some nasty (stuff) we are in and there is all kinds of stuff in here.”

While using caution tape to seal off the area Bustillos turned and his boot flared up, then abou 15 minutes later both caught fire, incidents that he said made him think of stepping on a pop rock.

He told Ventura County Fire personnel and others on scene he was going to move the SPFD fire engine, but according to the affidavit, “When the truck moved a short distance, a massive fireball erupted and engulfed the fire engine,” that lasted approximately 10 seconds.

Bustillos, May and Fire Engineer Matt Lindsey became ill after the incident and are still not back at work. 

The incident was a setback for SCWW, Green Compass, which the affidavits note, was apparently negotiating to sell the company to Patriot Environmental Services (PES) for about $90-milion.

In the 10 years or so the present owner(s) had SCWW business had boomed: a financial spreadsheet obtained by a warrant at the company’s Oxnard headquarters showed revenues in 2013 had been $18-milllion. Projected revenues for 2015 were $25-million. 

On November 7, 2014, 11 days before the explosion, SCWW official sent a text noting there had been a “good meeting with Patriot” and a purchase offer of about $90-million was expected the following week. 

There were also SCWW messages noting that the radioactive issue needed to be resolved, an issue that investigators believe was not known by PES, one of the company’s longtime customers.

Not disclosing such issues noted the affidavit is securities fraud. 

Patriot was retained by SCWW for the clean up of the facility, a move that was questioned by some.

In the meantime, those injured—including a PES employee who was the most severely hurt—are recovering.

But in his interview with investigators Bustillos reported serious lung issues—including frequent bouts of coughing and weakness that limits physical activity such as climbing stairs—and damage to his sinus cavity as well as difficulty sleeping.

“He and his family,” the affidavit also notes, “are very worried about his health,” especially as at the time of the December interview, “doctors do not know how to treat him because they do not know what he was exposed to...”

Bustillos told investigators, “If they just would have been truthful when we got on scene none of this would have happened...”





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