Photo: Nina Flores and jliss 1979 via CNN
June 23, 2020
U.S. Department of Justice Press Release
Company to sell its business in Massachusetts and pay $53 million fine, the largest criminal fine ever imposed under the Pipeline Safety Act
BOSTON – Columbia Gas of Massachusetts (CMA) was sentenced today in connection with the gas explosions on Sept. 13, 2018, in Lawrence, Andover and North Andover that killed one individual, injured 22, and damaged homes and businesses.
Bay State Gas Company, d/b/a Columbia Gas of Massachusetts, was ordered by U.S. District Court Chief Judge F. Dennis Saylor IV to pay a criminal fine of $53,030,116 which represents twice the amount of profits that CMA earned between 2015 and 2018 from a pipeline infrastructure program called the Gas System Enhancement Plan (GSEP). In addition to a fine, the Court also sentenced CMA to a three-year period of probation during which CMA’s operations will be subject to a monitor to ensure CMA’s compliance with federal and state safety regulations. The three year period of probation will continue until CMA is sold to a qualified buyer.
In February 2020, the company agreed to plead guilty to violating a minimum safety standard of the Natural Gas Pipeline Safety Act relating to the failure to implement procedures to prevent the over-pressurization of its low-pressure gas distribution system in South Lawrence during a pipe replacement project known as the South Union Project.
“We expect utility companies operating in our communities to do so safely and responsibly,” said United States Attorney Andrew E. Lelling. “Instead Columbia Gas acted with reckless disregard for safety by cutting corners and relying on lax protocols. The result was catastrophic – stealing one life, harming dozens and impacting the home and livelihoods of hundreds more. Today’s sentence serves as little comfort to the victims, but is another step towards terminating Columbia Gas’s business in Massachusetts.”
“Today’s sentencing of Columbia Gas makes clear that those entrusted with the public’s safety have a solemn obligation to make it their highest priority,” said Douglas Shoemaker, Regional Special Agent in Charge, Department of Transportation Office of Inspector General. “Pipelines are a critical part of our Nation’s infrastructure, and working with our Federal, state and local law enforcement and prosecutorial colleagues, we will continue to protect the safety and integrity of our pipeline transportation system from violations of regulation and law.”
“With today’s sentence, Columbia Gas of Massachusetts has finally been held criminally and financially responsible for their sheer greed and reckless disregard for public safety. That said, we realize that the excruciating pain, suffering, and heartbreaking loss of life the citizens of Merrimack Valley endured is beyond reparation,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “It is the FBI’s hope that the departure of Columbia Gas from Massachusetts will bring the residents of these cities and towns some much-needed peace of mind.”
The U.S. Attorney’s Office has also entered into a Deferred Prosecution Agreement (DPA) with CMA’s parent company, NiSource, Inc. based in Indiana. As part of the DPA, NiSource has agreed to undertake their best reasonable best efforts to sell CMA after which NiSource and CMA would stop all gas pipeline operations in Massachusetts. In exchange for the U.S. Attorney’s Office’s agreement to defer prosecution of NiSource, NiSource has also agreed to forfeit any profit it may earn from the sale of CMA and implement each of the safety recommendations from the National Transportation Safety Board (NTSB).
During the afternoon of Sept. 13, 2018, the over-pressurization of a low pressure gas distribution system in South Lawrence caused multiple fires and explosions in the communities of Lawrence, Andover and North Andover. As a result, one individual in Lawrence was killed and another severely disabled, 22 people were injured and approximately 131 residential homes and commercial buildings were damaged.
CMA recklessly disregarded a known safety risk related to regulator control lines – sections of pipe connected to regulator stations that helped monitor and control downstream gas pressure. By at least 2015, according to an internal company notice, CMA knew that the failure to properly account for control lines in construction projects could lead to a “catastrophic event,” including fires and explosions. Aging cast iron pipes were being replaced, but the failure to remove or relocate control line pipes that were later abandoned would automatically cause regulator stations to continually increase pressure to the point of dangerous over-pressurization.
The DPA with NiSource acknowledges the fact that NiSource has previously made substantial voluntary restitution payments to the victims of the September 2018 incident, and has agreed to seek to resolve all pending civil claims. Most of the $53 million fine will be directed to the Justice Department’s Crime Victims Fund, which is a major funding source for victim services throughout the United States.
For more information regarding the case, please visit: https://www.justice.gov/usao-ma/victim-and-witness-assistance-program/united-states-v-bay-state-gas-company-dba-columbia-gas-massachusetts
U.S. Attorney Lelling, DOT-OIG SAC Shoemaker and FBI Boston SAC Bonavolonta made the announcement today. Critical assistance was provided by the Massachusetts State Police and Lawrence Fire Department. Assistant U.S. Attorneys Neil J. Gallagher, Jr. and Evan Gotlob of Lelling’s Public Corruption and Special Prosecutions Unit prosecuted the case.