Monday, October 29th, 2012

Confronting Dishonest and Distorted Advocacy Journalism by a Soros-funded Publication

Despite our good faith efforts to provide specific and detailed responses to what we felt were largely irrelevant and loaded questions, on October 29, The Texas Observer published a thoroughly dishonest and misleading piece by Melissa del Bosque that is flawed in several critical respects.

For example:

– Ms. del Bosque misrepresented her intent when she first contacted Flint Hills Resources. She indicated that she was researching how oil refining generally impacted communities on the Texas Gulf Coast — only to reveal later that her true intent was an attack on Flint Hills Resources and Koch Industries specifically.

– Flint Hills Resources responded swiftly and in thorough detail to each of Ms. del Bosque’s queries, even though many of them were based on inaccurate, incomplete, or irrelevant historical issues, many of which didn’t even concern Flint Hills or its Corpus Christi refinery. Further, many of the issues involved matters that could easily have been checked against the public record or our prior posts on www.KochFacts.com. Yet, the facts, background, studies, and other information we provided were entirely disregarded by Ms. del Bosque.

– We quickly followed up with Ms. del Bosque to point out that her piece was false, incomplete, and misleading. We also asked for an explanation on why she had deceived us with her initial overture and why she failed to use any of the detailed information we provided, which would have rebutted or provided context to much of Ms. del Bosque’s dishonest reporting. Neither she nor the publication have responded.

Here below is the full thread of written exchange we had with Ms. del Bosque. Her publication, Texas Observer, is highly partisan and has been significantly funded by the left-wing Open Society Foundations, which themselves are funded by left-wing activist George Soros. In addition, the Observer’s staff is populated with former Open Society Fellows. We would urge both readers and other publications to treat this slanted piece of advocacy journalism with deep skepticism. It contains false, misleading, and distorted information, and is written with a blatantly partisan point of view.

From: Stavinoha, Katie
Sent: Monday, October 29, 2012 1:01 PM
To: Melissa del Bosque
Subject: Re: Your article in Texas Observer

Melissa –

Your story in the Texas Observer – “Kochland” – is dishonest, deceptive and distorted. I provided you with a wealth of information on the alleged health impacts of refining in Corpus Christi and the environmental record of Flint Hills Resources. In addition, I provided you with detailed information in response to your questions about largely irrelevant historical issues, most of which did not even involve Flint Hills’ Corpus Christi operations. My e-mail message below had critical information that should have been included in any story attempting an accurate accounting of the impact of refining on Corpus Christi. None of that information was presented in your article and the result is a story that grossly and maliciously misrepresents the demonstrated record of the company and its impact on the community.

Please immediately revise your article to include the information that I provided you so that your readers can consider all the information in assessing the fairness and accuracy of your story.

I am also deeply disappointed with your dishonesty in dealing with me. When you first contacted me on August 23, you said that you were working on a story on the impact of refining on fenceline communities on the Gulf Coast. That obviously was not true, as your article demonstrates that you were focused solely on Flint Hills and planning a dishonest hit piece against our company. When your true agenda began to be revealed two weeks ago, you told me that you wished to capitalize on the interest of the left in the “Koch Brothers.” Even with that agenda, the lack of professionalism and consideration you have shown for demonstrated facts is disappointing and disturbing. While I am disappointed with the cynical and dishonest treatment from you and the Texas Observer, I probably should not have been surprised given the extensive financial support and other ties that George Soros’ Open Society Foundations have to the Texas Observer, which shows its blatant partisan nature and agenda.

Sincerely,
Katie Stavinoha

From: Stavinoha, Katie
Sent: Thursday, October 18, 2012 5:14 PM
To: Melissa del Bosque
Subject: From Katie Stavinoha

Melissa –

I am responding to your latest request for information below. I hope you will carefully examine the facts around the complaints you say you’ve heard…and that issues that were raised and resolved many years ago do not overshadow or distort the key facts regarding Flint Hills Resources results when it comes to operating safely and in an environmentally responsible manner. All of the issues that you are re-hashing have been covered many times, and the information that I am providing to you is available on our websites and in our publications. We have a strong history of addressing issues proactively, and striving for continuous improvement. If we fall short, we take action to correct and work to ensure there is no recurrence.

In addition, you say that your story centers on the involvement of our shareholders in the political process — which of course is their right. I do hope that you have utilized www.kochfacts.com to get true and factual information rather than repeat mistakes and distortions.

If you have not spoken with Steve Mason, EPA Region 6, I suggest you do so. In a public meeting last year put on by EPA, he told the crowd that the Corpus Christi LEPC was one of the best in the entire region. Too, I’ve included the quote from former regional director, Al Armendariz, regarding the relationship that has been forged by our company. There are any number of community and environmental groups who we have worked in the past and are doing so now. I trust you have spoken to them as well.

Sincerely,

Katie Stavinoha

[The reporter's original email is in bold, our reponses are in italics]

Residents say they can’t definitively prove that refineries such as Flint Hills Resources are causing their illnesses, yet they believe emissions from the plants are causing illnesses such as cancer, birth defects, chronic asthma and other lung diseases.

Numerous independent health studies have not indicated causation. Here is a list of studies.

Primary Websites for Corpus Christi
ATSDR summary of recent activities in Corpus
http://www.atsdr.cdc.gov/sites/corpuschristi/final_report.html
ATSDR main Corpus website
http://www.atsdr.cdc.gov/sites/corpuschristi/index.html
TXDSHS birth defects cluster investigations (list)
http://www.dshs.state.tx.us/birthdefects/ClusterPage/BDclusters.shtm
TXDSHS Completed Cancer Investigations (list)
http://www.dshs.state.tx.us/injury/clusters/Completed-Investigations.doc
TXDSHS Health Assessments and Consultations (includes Dona Park biomonitoring)
http://www.dshs.state.tx.us/epitox/assess.shtm
TCEQ Tox Evaluations of Ambient Air Monitoring Data
http://www.tceq.texas.gov/toxicology/regmemo/AirMain.html
TCEQ Dona Park Neighborhood Assessment (no mention of biological monitoring)
http://www.tceq.texas.gov/remediation/sites/donapark
TCEQ Hillcrest Community Environmental Investigation
http://www.tceq.texas.gov/toxicology/research/hillcrest.html
TCEQ Hillcrest Community Environmental Investigation: Meeting Agendas and Newsletters
http://www.tceq.texas.gov/toxicology/research/hillcrest-community-environmental-investigation/hillcrest-community-environmental-investigation-previous-meeting-agendas-and-newsletters
TCEQ Hillcrest Community Environmental Investigation, Phase I
http://www.tceq.texas.gov/toxicology/research/hillcrest-community-environmental-investigation/hillcrest-community-environmental-investigation-phase-i
TCEQ Hillcrest Community Environmental Investigation, Phase II
http://www.tceq.texas.gov/toxicology/research/hillcrest-community-environmental-investigation/hillcrest-community-environmental-investigation-phase-ii
TCEQ Hillcrest Community Environmental Investigation: Related Remediation Information
http://www.tceq.texas.gov/toxicology/research/hillcrest-community-environmental-investigation/related_info
TCEQ/EPA Sampling at Former Encycle Facility
http://www.tceq.texas.gov/remediation/sites/encycle_facility/tceq_epa_sampling

The Flint Hills Resources web site says the company “strives to work with communities, neighbors and regulators to provide a safe and clean environment.” In what ways or what are some of the projects in Corpus Christi that it has done to achieve this?

The list is very long. In addition to establishing and stewarding several community advisory councils, the company participates in many community-based programs either providing funding or volunteers or both.

When it comes to safe and environmentally responsible operations, Flint Hills Resources has spent hundreds of millions of dollars at its two Corpus Christi refineries that have ultimately resulted in environmental benefits for the community. Here are a few examples:

  • Reduced emissions of commonly regulated substances by more than 90 percent
  • Reduced refinery flare time by more than 90 percent
  • Reduced benzene emissions by almost two-thirds since 2005

In addition, the company has worked with state and federal regulators to share knowledge and develop approaches that have been lauded on many levels. For example, the company’s ability to reduce refinery flare time in Corpus Christi and Minnesota earned a Clean Air Act award from EPA. Flint Hills Resources’ efforts to develop a process to deflex air permits in Texas was cited as “a model” by former Region 6 EPA administrator, Al Armendariz.

Most recently, the company has established a neighbor panel to share knowledge regarding its West Refinery permit application. That project, if approved, will allow the company to re-tool equipment and utilize new processes and technology to reduce emissions of commonly regulated substances.

I have a section (see explanation below about which ones I cite) about various environmental violations against Koch Industries (before Flint Hills name change). Could the company give a response?

Flint Hills Resources is committed to operating in full compliance with all laws and regulations. We work cooperatively and constructively with regulators, including the EPA and the TCEQ. For example, as mentioned above, in October 2010, then-EPA Region 6 head Al Armendariz praised Flint Hills for developing a process for transitioning the Company’s air permits, stating that the process was “excellent” and that he hoped would “serve as a model for other companies.” When challenges arise, the company works quickly to address and correct the situation as necessary. You have asked several questions concerning events that happened many years ago, some of which did not involve Flint Hills.

In November 1995, Koch Petroleum Group made a voluntary disclosure to the government related to its reporting of wastewater monitoring tests. After making this voluntary disclosure, Koch Industries, Koch Petroleum Group and four individuals were prosecuted by EPA and the Department of Justice for alleged violations of Clean Air Act provisions related to benzene. A federal court overseeing the case reduced the original 97-count complaint nearly 90 percent in January 2001. This matter was resolved almost six years later with Koch Petroleum Group pleading guilty in April 2001 to a single count related to the wastewater reporting it had voluntarily disclosed in November 1995.

During the five-plus year investigation, KPG discovered that a document the Department of Justice presented to the Grand Jury did not contain critical exculpatory evidence. During a November 27, 1995 meeting with State of Texas regulators, KPG told the State regulators that the company was out of compliance and would follow up. This self disclosure of non-compliance is clearly stated in the summary of the meeting that KPG obtained from the State through a Freedom of Information Act request. The last sentence of the meeting summary states: “They will investigate further and return with a follow-up in early February with the (sic) how far and how long they have been out of compliance.” However, in the version of the meeting summary that the Department of Justice presented to the Grand Jury as a basis to bring charges against the company, this critical exculpatory language is clearly absent – the language only says “They will investigate further and return with a follow-up in early February.” Accordingly, while the original government document demonstrated KPG was honest and open about its noncompliance from the outset, someone altered that document before the grand jury to better fit the government’s inaccurate view of the facts.

The federal government’s case ultimately collapsed after the company finally had an opportunity to challenge the government’s key expert witness in a hearing before the federal judge less than a month before the trial’s start. The government’s expert witness testified that sampling evidence used to prove criminal or civil violations of the BZ NESHAPS regulation, which was at issue in the case, must be collected and analyzed according to strict scientific protocols set forth in EPA’s regulations. However, on cross-examination by a company lawyer (the first time the company and the other defendants had a chance to examine any government witness), the government’s expert witness admitted that the samples he and the government relied upon for the basis of their prosecution of Koch and the other defendants were not taken in a way that was consistent with EPA’s or the BZ NESHAPS regulations’ requirements. The witness admitted that he never visited the Koch facility at issue, that he had no first-hand knowledge how the samples were taken, that the samples did not follow EPA requirements, that the government did not conduct any independent verification of the samples, and that the expert witness had never before tried to use in court samples similar to the unreliable samples the government was relying upon in its prosecution of Koch and the individual defendants.

The government’s case toppled quickly after that, with the dropping of all the counts against Koch Petroleum Group, Koch Industries, and the four individual defendants. As part of the settlement, the government required the four individuals to waive their right to sue the government for malicious prosecution.

Also in 2000, Koch paid $35 million for oil spills in Texas and five other states.

Twelve years ago, Koch paid $35 million to settle two lawsuits concerning pipeline releases dating back to the 1990s. The government had originally demanded 3 to 10 times this amount to resolve these issues. It’s important to note, however, that the reason it was the largest fine to date (it’s been eclipsed many times over by now) was that it marked the first time the government had bundled multiple incidents – stretching out over nearly 10 years in six states over multiple pipeline systems – into a single enforcement action. In addition, under the relevant statutes, companies are liable for pipeline spills regardless of their cause, and this settlement included leaks that occurred because of third party actions. Since that time, Koch-operated pipelines have earned numerous state- and federal-level honors for industry-leading records for safe operations.

In 1999, a jury imposed a $296 million verdict on Koch for the deaths of two teenagers in a pipeline blast in Lively, Texas.

In August 1996, there was a pipeline explosion that claimed the lives of two people. Koch Pipeline Company immediately accepted responsibility for the tragic and unacceptable incident, which is the only event of its kind in the company’s 60- plus year history. The thorough review conducted of this pipeline the year before the accident did not uncover any issues that posed a foreseeable threat to public safety. The bacteria-induced corrosion that caused the accident acted more quickly to damage this pipeline than had ever been documented by any industry expert.

Koch’s cooperative efforts to identify the source and cause of this problem so that this knowledge could be shared throughout industry were praised by the National Transportation Safety Board, which conducted a two-year investigation into the incident. Koch Pipeline Company has used the lessons learned from this incident to modify its operating procedures to help avoid any repeat of a similar accident.

Also, some long-term residents near the East and West plants say they are not notified when there is an accident at the refinery. Or they get part of a robo-message that makes no sense. I know you asked for specific dates, times on incidents when people weren’t notified or got nonsensical calls but multiple residents brought it up and say its gone on for years. For instance, there is a mention in the Caller Times in May 2009 when there was a refinery fire at the Flint Hills East plant where a resident says he never got a call from the refinery.

To be able to respond to such a broad and nonspecific challenge in the global sense is extremely difficult if not impossible. We work hard to be a good neighbor and be responsive to them. To be clear, the LEPC is charged with alerting neighbors of industrial issues. Therefore, any neighbor notification would come from that city governmental entity via phone, text or other means…this system is supported by all of industry and is consistently being upgraded to respond to the changing ways people prefer communication.

For the 2009 issue that you raised, there was a fire and FHR notified LEPC, which utilized the call system.http://www.caller.com/news/2009/may/19/fire-flint-hills-east-refinery/ The story clearly states that it was utilized. We trust that the LEPC followed up with the gentleman quoted in the story to ensure his number was in the system. The notification system is incumbent on residents providing their contact information. In fact, a door-to-door push by LEPC this spring resulted in a large increase in the number of individuals signed up to receive phone and/or text alerts. As people have moved from landlines to cellphones, it has been a challenge to ensure everyone is aware of the LEPC alert system. Bottomline, when it comes to neighbor alerts we believe the 2009 information is an isolated issue — for Flint Hills Resources.

It would be great to get the company’s perspective for my story. If Flint Hills would like to comment, could you get the responses back to me by Thursday?

Thanks,
Melissa

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