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November 26, 2008

General Maritime to appeal guilty verdicts in pollution case

A federal jury in Corpus Christi, Texas returned guilty verdicts against General Maritime Management (Portugal), the operator of a fleet of tanker vessels, Chief Engineer Antonio Rodrigues, and First Engineer Jose Cavadas, for making false statements to the United States Coast Guard and failing to maintain an accurate oil record book as required by United States and international law, the Justice Department announced. Each defendant was convicted of two felony violations.

General Maritime Corporation (NYSE: GMR) says that the company, which is a wholly owned General Maritime subsidiary, intends to appeal the guilty verdicts and to make motions for a judgment of acquittal and a new trial.

The U.S. Department of Justice says the criminal convictions were related to events occurring on board the tanker M/T Genmar Defiance during a voyage to Corpus Christi in November 2007.

On Nov. 24, 2007, says the Department of Justice, engine room crew members were directed by First Engineer Cavadas to assist in hooking-up a flexible hose between the ship's bilge pump and the overboard discharge valve bypassing the vessel's pollution prevention equipment--its oil-water separator--and allowed crew members to pump the contents of the bilge tank directly into the sea.

On Nov. 26, 2007, according to the Department of Justice, one of the crew members working in the ship's engine room was ordered by First Engineer Cavadas and Chief Engineer Rodrigues to assist in connecting a hose from the vessel's fresh water supply to the oil content meter on the ships oil-water separator. The connection allowed the engineers to "trick" the oil content meter and prevent it from shutting a valve that would re-circulate oily water to the bilge tank where it would be treated through the oil water separator before being discharged overboard. By tricking the oil content meter, the oily water was permitted to be discharged directly overboard in violation of international law. Two engine room crewmen secretly photographed the illegal connection and provided the photographs to the Coast Guard during a routine boarding of the vessel on Nov. 28, 2007 while the Defiance was docked at the Valero refinery.

General Maritime says that the jury held GMM Portugal vicariously liable for the acts of the two vessel officers, as it determined these crewmembers were acting within the scope of their employment and for the benefit of GMM Portugal when they presented the oil record book to the U.S. Coast Guard with entries that they knew to be false.

"These three convictions are the result of crewmembers who had the courage to speak up," said Ronald J. Tenpas, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. "Pollution from ocean-going ships is all too frequent and the Justice Department and our sister investigative agencies will continue to work to stem the tide of intentional pollution from these vessels."

"The Coast Guard places a high priority on its stewardship of the marine environment," said Captain John H. Korn, Chief of Staff of the Eighth Coast Guard District. "We appreciate the dedicated efforts of the Department of Justice; the successful investigation and prosecution of cases like the M/V GENMAR DEFIANCE takes considerable coordination among interagency partners. Efforts such as this are key to protecting the environment for all."

"The laws are there to prevent the oceans and waterways from being used as dumping grounds for waste oil," said Warren Amburn, Special Agent in Charge for EPA's Criminal Investigation Division in Dallas. "Today's conviction shows that neither the government nor the public will tolerate those who commit environmental crimes."

The defendants, Rodrigues and Cavadas each face a maximum penalty of up to five years in prison and a fine of up to $250,000 or twice the gross gain or loss caused by the offenses. General Maritime Management (Portugal) faces a maximum fine of $1 million or twice the gross gain or loss caused by the offenses and probation for up to five years.

The trial was presided over by the Honorable Janis Graham Jack, U.S. District Judge. Sentencing is scheduled for Feb. 10, 2009.


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