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When Tanknology, the nation's largest tester of underground storage tanks, agreed last month to plead guilty to 10 felony counts brought by the Department of Justice for falsifying field results at federal facilities, Veeder-Root Co.'s Dean Cheramie shrugged in disbelief.
"The industry hates to see something like this. We have a great relationship with the regulators. Something like this could cause some regulators to be leery," said Cheramie, market development director at the nation's largest tank gauging company, which last year acquired Tanknology's tank permitting assets.
Tanknology's decision to plea to charges covering the years 1997 through 1999 and pay more than $2 million in penalties and restitution raises questions about the company's credibility among its clientele of some 3,000 companies.
The company wasted little time notifying its clients of the charges. "We conducted a preemptive campaign," said Tanknology CEO Allen Porter. "This is behavior that happened a couple years ago. I think they realize if this were still a substantial issue that the Environmental Protection Agency and Department of Justice would have taken more dramatic action, such as closing us down."
Tanknology's customers appear satisfied with the company's quick response. "Tanknology has been honest with us, kept us updated on the situation and provided assurance to us moving forward," said 7-Eleven Inc. spokeswoman Dana Manley.
Porter blamed the wrongdoings on individual inspectors and said the company had instituted changes to prevent future mishaps. In an interview with Convenience Store News, he declined to say whether the guilty employees continue to work for the company. But he conceded that the employees named in the indictment also conducted tests on tanks operated by c-store and petroleum retailers.
Porter said Tanknology — whose clients include Chevron Texaco Corp., Exxon Mobil Corp. and Dairy Mart Convenience Stores Inc. — was first notified of the pending charges in December 1999, but that no serious negotiations between his company and the federal agencies were entered into until the fourth quarter of last year. "The basis of the subpoena had concluded that our corporate behavior as a whole was honest, forthright and had a degree of integrity," he said.
An EPA official, who spoke on condition of anonymity, supported Porter's contentions. "The violations happened in a two-year period. Subsequently, they have toed the mark — they have not been found in violation since 1999 and as far as we're concerned this is the end of it."
According to Cheramie, state and federal regulators rely on the accuracy of underground readings to determine whether an oil company's storage tanks are in compliance. A nonpartisan federal report last year concluded that some 30 percent of the nation's tanks — including a large percentage of federal sites —- are in violation. The report by the General Accounting Office prompted a Senate initiative under discussion that would address many of the tank problems still plaguing the country.
Porter called on a need to establish federal certification standards for field technicians "whereby an individual is certified and licensed and has demonstrated knowledge."
Such a standard would create a pool of talent from which companies like Tanknology could recruit, Porter said, adding, "The tank testing industry, as a whole, is in need of reform."