Alcoa in the United States
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ALCOA Fined $750,000 by Commerce Department
For Illegal Chemical Shipments
(not potliners but raw materials used to produce Aluminum)
WASHINGTON -- The Commerce Department's Under Secretary for Export
Administration, William A. Reinsch, imposed a civil penalty of $750,000
on Aluminum Company of America (ALCOA) for 100 violations of U.S.
export regulations involving shipments of potassium fluoride and sodium
fluoride.
The penalty results from Reinsch's affirming an administrative
law judge's (ALJ) recommended findings in the case. The ALJ found that
ALCOA exported potassium fluoride and sodium fluoride from the United
States to Jamaica and Suriname on 50 separate occasions without
obtaining the required Commerce Department export licenses. The
violations occurred between June 1991 and December 1995. The ALJ also
found that the company made false statements on export control
documents in each shipment.
Potassium fluoride and sodium fluoride are controlled because they can
be used to make chemical weapons. These chemicals were added to the
Department's control list in March 1991, but ALCOA's export compliance
program failed to recognize and incorporate the change. There was no
indication that in this case the chemicals were used for weapons
purposes.
Reinsch observed, "This penalty should send the message that there are
significant advantages to having an internal compliance program that
catches and reports problems quickly."
Reinsch's action imposes the maximum civil penalty of $10,000 for each
of the 50 shipping without a license violations. He also imposed a
penalty of $5,000 for each false statement.
Commerce's Export Administration Regulations provide that an
administrative law judge administrative enforcement proceedings be
conducted by who recommends an appropriate resolution of the case to
the Under Secretary for Export Administration. The Under Secretary may
affirm, modify, or vacate the ALJ's recommendation. In this case,
Reinsch agreed with the findings but modified the penalties recommended
by the ALJ.
Reinsch's order and the ALJ's recommendations will be printed in the Federal Register.
The Aluminum Electricity Racket
During the Clinton years, the big aluminum companies negotiated new
contracts with the BPA, allowing them to sell excess power on the
western electric grid at market prices. And although the logic of
giving these companies preferential rates was to provide good-paying
jobs in rural areas of the Northwest, there was no requirement that the
companies actually use the power to keep their plants open.
Thus, the aluminum companies promptly idled their plants, sent
thousands of workers home, and sold their subsidized power to
California to capitalize on the skyrocketing rates. The profits are
staggering. The aluminum companies have taken power that they bought
from the BPA for about $25 per megawatt hour and sold it on the
wholesale market for between $200 and $1,000 per megawatt hour. This
year alone, Alcoa has made more than $210 million on BPA-subsidized
"load curtailments" designed to redirect power to California. And it
stands to make another $39 million this summer.
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