Ex-Freedom official Southern sentenced to 30 days, $20K fine

CHRIS DORST | Gazette-Mail
Gary Southern enters the Robert C. Byrd United States Courthouse, in Charleston, for his sentencing Wednesday. Southern, who was president of Freedom Industries at the time of the January 2014 Elk River chemical spill, was sentenced to 30 days in prison and ordered to pay a $20,000 fine.

Gary Southern, the last of six former Freedom Industries officials to face sentencing, will spend 30 days in jail and pay a $20,000 fine for his role in pollution crimes that caused the January 2014 Elk River chemical spill that contaminated the drinking water supply for hundreds of thousands of people in the Kanawha Valley and surrounding area.

U.S. District Judge Thomas Johnston also sentenced Southern, Freedom’s president at the time of the spill, to six months of supervised release by the U.S. Probation Office.

Noting that the three charges Southern admitted to in a plea deal with prosecutors were misdemeanors, Johnston said he might not have given Southern any jail time at all, if he had not been convinced that Southern had lied in U.S. Bankruptcy Court about his role at Freedom’s chemical storage operation, where the spill occurred.

“Like the others, this defendant is hardly a criminal,” the judge said, echoing his comments during sentencing hearings for five other Freedom officials, and this time emphasizing, “I stand by that statement.”

Johnston sentenced Southern to well below the range of 18 to 24 months recommended by the advisory guidelines issued by the U.S. Sentencing Commission.

The judge noted, as he had in previous Freedom officials’ sentencings, that those guidelines are generally intended for “knowing” crimes that involve criminal intent and specifically allow for sentence reductions when the offenses in question were instead committed with “negligence” or charges brought because of “strict liability” for water pollution violations.

Southern had faced a statutory maximum of three years in prison, one year for each of the three pollution crimes he has admitted to: negligent discharge of a pollutant; discharge of refuse material; and negligent violation of a Clean Water Act permit. He could have been fined up to $300,000.

“I am very sorry for the events that happened at Freedom,” Southern told the judge before he was sentenced. “I recognize that I clearly failed to do my part at Freedom.”

Four other former Freedom officials — co-owners Charles Herzing and William Tis, plant manager Michael Burdette and environmental manager Robert Reynolds — had previously received probation-only sentences from Johnston. Each admitted to one misdemeanor charge. Former Freedom co-owner and longtime company president Dennis Farrell was sentenced to 30 days in jail after he pleaded guilty to two pollution counts. In all, the six former Freedom officials were fined a total of $92,500. Freedom, the company, was fined the maximum of $900,000 for three criminal charges, including one felony for a knowing permit violation, but Johnston noted that the bankrupt company is unlikely to ever pay.

“We are pleased to bring these cases to conclusion,” acting U.S. Attorney Carol Casto said in a prepared statement. “Many thought that those responsible for contaminating our water would never see the inside of a courtroom, but six individuals and Freedom Industries now stand convicted and have been sentenced for the offenses that they committed.

“It is my hope that these prosecutions will serve as a message to others that we will follow the evidence, charge the cases that are developed, and hold those responsible accountable to the extent permitted by law.”

In response to questions earlier this month about the cases, Casto had acknowledged that “the public may not be satisfied in the end with the sentences imposed.”

Casto’s office had helped five of the six Freedom officials — all but Farrell, who was the last one to make a deal — receive lighter sentences by asking the court to give them credit for providing officials with “substantial assistance” in the investigation.

For four of the five — Tis, Herzing, Burdette and Reynolds — the move led Johnston to cut in half the “offense level,” the number that’s plugged into a table to come up with a recommended sentencing range. That lowered the recommended sentence for those defendants from 18 to 24 months to zero to six months.

Prosecutors told the judge that Southern also provided them with substantial assistance, but they asked that he receive less credit for his cooperation. Johnston accepted the prosecution’s recommendation, after holding a roughly 10-minute private conference to hear about help Southern provided in an unresolved criminal case in another district. Court records did not identify any details of that case, but one of Southern’s lawyers, Mark Moore, said in court that it was in the Northern District of Michigan.

Johnston accepted an agreement from the parties that increased Southern’s sentencing range for “obstruction of justice,” but the judge questioned the government’s plea deal, which dropped 12 felony counts related to allegations that Southern lied in Freedom’s bankruptcy in a scheme to hide his personal wealth from spill victims and creditors.

The plea deal, approved last year by then-U.S. Attorney Booth Goodwin, also promised to return to Southern more than $7 million and a Bentley luxury car that the government had seized from him because of the fraud charges. In return, Southern agreed to language that gave up any right to sue the federal government over the initial property seizures or to argue in a lawsuit that the government’s actions against him were “vexatious, frivolous, or taken in bad faith.”

Johnston called the deal with Southern, “an extraordinary plea agreement, the likes of which I’ve never seen” and asked Assistant U.S. Attorney Phil Wright rhetorically, “What did that say to me about your case? About all of your cases?”

Two area residents and activists had asked Johnston to give Southern a stiff sentence. Angie Rosser, executive director of the West Virginia Rivers Coalition, said the public needs to know that the court system works in such cases and that corporate executives are not above the law.

“For him to avoid jail time or serve a minimal sentence and then ride off in his Bentley doesn’t seem like justice,” said Charleston City Councilwoman Karan Ireland, who ran for office after the spill and says exposure to the contaminated water made her sick.

Southern and his lawyers argued that he had tried to improve the situation at Freedom and was wrongly targeted by prosecutors after he became the face of Freedom at a now-infamous news conference that was held when he was tired and ill with pneumonia. They said the event led to him being “pilloried in the media, which incorrectly reported repeatedly that he was one of the founders and an owner of Freedom.”

Southern lawyer William Wilkins said his client already has suffered financially, having paid a more than $400,000 penalty for early termination of a retirement account when its assets were seized by the government.

At the end of the sentencing, Johnston granted a request from Southern that he be able to fly home to Florida in a friend’s private plane. The judge also said the one night Southern spent in jail in Florida when he was initially arrested would be counted toward his one-month sentence.

Reach Ken Ward Jr. at kward@wvgazettemail.com, 304-348-1702 or follow @kenwardjr on Twitter.

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