By Matt Coker
By R. Scott Moxley
By Charles Lam
By Nick Schou
By Gustavo Arellano
By Gustavo Arellano
By Steve Lowery
By R. Scott Moxley
Photo by Daniel C. TsangAt press time, DA Tony Rackauckas announced that ARCO agreed to pay just $8 million for leaks of the gasoline additive MTBE at scores of Orange County gas stations. The settlement was ridiculously low. In this story, investigative reporter R. Scott Moxley explains why Rackauckas settled for so little—and staked so much—in his own private oil war.
Tony Rackauckas entered an Oct. 19, 2000, press conference to announce his pursuit of suspected environmental villains. While the environment was on his lips, one man's political future was on Rackauckas' mind: his own.
After winning the 1998 DA race over prosecutor Wally Wade, Rackauckas promised to achieve "lofty things." It was telling, then, that one of his earliest acts was to hire a full-time public relations manager—a first for the DA's office.
Despite the $72,000 a year he spent for help with the media, Rackauckas nevertheless found himself continually battling embarrassing revelations:
• A jury voted 12-0 against the DA in the sensational Shantae Molina infant-murder case.
• Assistant Chief DA Devallis Rutledge was demoted and then quit. Rutledge went on to file a discrimination lawsuit asserting, in part, that while he was a judge, Rackauckas had engaged in an unethical, secret sexual affair with prosecutor Kay Anderle. The DA, who officially left his first wife for Anderle in 1997, denied the allegation, but the county quietly settled Rutledge's claim hours before Rackauckas was scheduled to testify.
• A concealed-weapons permit issued to Ghaby Nassar, head of the mysterious and ill-fated Tony Rackauckas Foundation, was revoked after sheriff's deputies discovered that the Orange County businessman had lied under oath about his criminal record.
• The DA's 31-year-old plumber son and daughter-in-law were arrested, she on drunk driving charges, he when police found him near Irvine Park—naked and asleep in a truck carrying drug paraphernalia and two grams of cocaine.
All of this followed Rackauckas into his press conference, where he announced "important litigation that the DA's office is engaged in to protect the groundwater of this county."
Dutifully, both local daily newspapers gave the DA the favorable coverage he likely hoped would overshadow a long stretch of bad publicity. How else can one explain the odd timing of the press conference—22 months after Rackauckas' environmental-prosecution unit had launched its case against oil companies and gas station polluters?
But the tardy press conference wouldn't be the last time Rackauckas' personal predicaments overshadowed and jeopardized the most important environmental corruption case in Orange County history.
More than 3 million Orange County residents get 70 percent of their drinking water from local groundwater supplies, but government officials say this increasingly precious resource has been threatened for two decades by continual leaks from gas storage tanks at ARCO, Shell, Thrifty and other Orange County service stations. Improperly discharged gasoline and its chemical additives—benzene, toluene, ethylbenzene, xylene and methyl tertiary-butyl ether (MTBE)—pose alarming health and environmental dangers. Benzene causes cancer in humans; toluene adversely affects the brain and the reproductive system.
But the most problematic chemical is MTBE. Since 1980, refiners have added MTBE to gas to improve automobile engine performance. Medical researchers say MTBE is a known animal carcinogen and, if ingested, likely causes cancer in humans. Unlike other additives—including benzene and toluene—MTBE is nearly impossible to contain once it is leaked. It dissolves into water upon contact and does not generally biodegrade. One drop is enough to make an Olympic-pool-sized supply of water taste like turpentine.
In Orange County, however, it hasn't just been a few minuscule drops of MTBE that have leaked into the soil and in some instances, such as in Yorba Linda, into public water supplies. The chemical has literally poured into the local environment. Leaks are so widespread throughout the county that the current list of MTBE-contaminated sites—available through the county's Health Care Agency—costs $37 to copy. In 2000, the nonprofit group Communities for a Better Environment studied inspection reports of underground gas-storage tanks here and found that soil around 444 of 636 reviewed sites was already contaminated. Prosecutors have singled out ARCO for their harshest criticism. Investigators found underground storage tank leaks at 102 of 132 ARCO-owned or -operated gas stations in the county. At the company's station on Magnolia Street in Fountain Valley, a July 20, 1998, groundwater test found MTBE levels of 3,400,000 parts per billion. California health officials say MTBE's danger threshold is 5 parts per billion.
If prosecutors are right, the oil companies knew that their underground storage tanks were leaky environmental time bombs but did little to correct the problem. Inspections of gas stations in Orange County routinely found:
• disconnected or inoperable leak monitoring equipment
• failures to conduct required integrity testing of tanks and to upgrade faulty tanks
• refusals to report contamination leaks to water quality officials in a timely manner, if at all
• a lackadaisical attitude toward regulators' demands to correct violations.
"We would visit sites and tell them their detection systems weren't working and they'd tell us, 'Oh, sorry. We'll fix it.' Then we'd go back to that same site a year later and find the same defect. They hadn't done a damn thing," said a county official who spoke on condition of anonymity. "They obviously weren't worried about the problems. It was a disgusting situation, and it was happening all over the place."