A Small Town's Sweet Sorrow 

The tight bond between Crockett and C&H sugar has been polluted along with local waterways.

Three generations of Keith Olsen's family live in the small town of Crockett, nestled among acres of rolling green hills along the waters of the Carquinez Strait. Not one of the local historian's relatives has ever worked for C&H Sugar, a fact that makes his family something of an anomaly among the town's longtime clans. Back in the 1920s, some 95 percent of Crockett residents worked for the California and Hawaiian Sugar Refining Company, toiling away in its huge brick building along the waterfront.

In addition to being the town's economic lifeblood, the plant gave workers and town residents access to a virtual fairyland of public amenities. Separate men's and women's clubs on the C&H grounds offered everything from tea parties to a bowling alley. Company tennis courts, a shooting club, and swimming pools offered additional enjoyment, while the refiner's gardeners kept all of Crockett in bloom. It was, in every respect, a company town.

But over the decades, that relationship has slowly unraveled. Like Willy Wonka's chocolate factory in the Roald Dahl story, C&H these days seems a more forbidding place. The cane processor's brick fortress is tightly patrolled by security guards and protected by chain-link fences, and public tours were halted several years ago. Nor is the plant still a major local employer: Only a small fraction of Crockett's 3,200 residents now work there. And the company's contributions to the town, once doled out generously, have increasingly been the result, not of corporate beneficence, but of legal settlements.

The latest in a string of such settlements is expected next week, when C&H must appear before the California Regional Water Quality Control Board to address nearly $400,000 in fines the state has slapped on the company. The civil fines, related to pollutants released by C&H into the Carquinez Strait over the past seven years, come on the heels of other civil and criminal legal actions over the plant's pattern of water-permit violations.

Given Crockett's surroundings, it seems almost laughable that its quaint sugar mill would be a cause for environmental concern. At the C&H refinery, shipments of sugarcane are turned into the various forms of white and brown powders and cubes that you see at your local market. The refining process involves several stages of washing, clarifying, and filtering the raw product. And it involves a lot of water, hence the company's nearby treatment facility, which cleans the wastewater before it's pumped into the Bay.

By way of contrast, the town is flanked by some of west Contra Costa County's dirtiest industries -- including oil refineries operated by Tosco and Phillips Petroleum. But while the chemicals used by C&H to treat its wastewater are far less dangerous than petroleum distillates, the company has, in fact, racked up many more water-permit violations than its industrial neighbors. A report issued last month by the state water board details 144 separate violations by C&H from 1995 through 2001, including illegal releases of life-quenching chlorine and some 2.5 million gallons of improperly treated wastewater containing excess coliform bacteria, oil and grease, or other pollutants into the Carquinez Strait.

But much worse than the pollution from a regulator's viewpoint has been the company's falsification of paperwork. In 72 instances, according to the April 15 report, C&H released chlorine into the waterway but told the board that it hadn't. "Falsified reporting undermines the entire regulatory process," says Wil Bruhns, the board's enforcement coordinator.

The report hints that the sugar operation has tried to blame its problems on Parsons Engineering, a contractor it hired to oversee day-to-day operations at its treatment plant. But the board has ruled that C&H bears ultimate responsibility: Although it was Parsons employees who monitored the wastewater testing, C&H signed off on monthly compliance reports that were filed with the water board. "Had [C&H] closely monitored the treatment plant performance, they should have considered other corrective measures to mitigate the chlorine residual violations," the report states. C&H officials turned down requests to be interviewed for this story, and phone calls to Parsons public relations personnel were not returned.

Long before the fines came down, C&H was dealing with legal outfall from the water board investigation, which began in July 2000. That October, the California Sportfishing Protection Alliance sued C&H based on pollutant violations uncovered by the state inspectors. The case was settled out of court for an undisclosed amount, but that wasn't the end of it. State officials called in the US Environmental Protection Agency after discovering the falsified reports, leading to a criminal case against the manager of C&H's treatment facility. (The sugar refinery is majority owner and operator of the Crockett-Valona treatment plant; the public Crockett-Valona Sanitary District owns a seventeen percent stake.) The plant's former manager, William Perley, was indicted by a federal grand jury last April for filing false reports with the board. In January, he cut a plea deal with prosecutors that got him three years of probation and $2,500 in fines. Neither Perley nor his lawyer returned phone calls seeking comment.

It's debatable whether the sugar company's actions did any lasting harm to marine life. Bruhns considers it unlikely, but Jonathan Kaplan begs to differ. A spokesman for the environmental monitoring group BayKeepers, Kaplan says C&H's releases are indeed dangerous when considered cumulatively. "The problem we face in the Bay Area is not that there's one enormous, awful source destroying the ecosystem, but it's all the small releases that add up to an environmental crisis," he says. "It's like death by a thousand cuts.

"The EPA has set a zero limit for chlorine releases for a reason: chlorine is extremely toxic to marine life," Kaplan adds. "I mean, you're essentially sterilizing the bottom of the food chain."

The coliform bacteria violations are also of concern, he says, especially for people who recreate on the Bay, such as swimmers, kayakers, and windsurfers. People can become ill if exposed to the bacteria through breaks in the skin.

The falsified records are most troubling, however, since California's water-permit process depends largely on corporate honesty. Companies under the water board's jurisdiction must report any releases into San Francisco Bay waters; if those reports show that a business violated its permit levels, the company faces penalties. State inspectors drop in on the companies at least once a year to do their own sampling and peruse internal logs. If the inspections turn up conflicting data, the board may launch an investigation, as it did with C&H. On occasion, investigations are prompted by an inside whistle-blower.

This honesty system generally works, says Bruhns, offering some figures to back up his claim: Nearly all of the water board's information -- 98 percent -- comes from self-reporting by companies. In the last two years, the board has issued 65 penalties for a total of $1.9 million in fines. And of the companies cited, Bruhns says, C&H was the only one that had failed to disclose its violations.

Such behavior opens up a company to additional civil and criminal penalties. The C&H case represents "one of those instances where it's better to tell the truth, even if it hurts," says Scott West, special agent in charge of the EPA's criminal investigation unit. Had it honestly reported the releases in the first place, says Bruhns, the sugar company would be facing perhaps one-third of the fines it now does.

Most of the companies under the water board's purview are larger, industrial operations -- chemical plants and refineries such as Dow Chemical and Shell Oil. Some of them have problems with groundwater contamination, but Bruhns says C&H tops them all in water-permit violations.

Sounds like a bad economic strategy, says Greg Karras, a senior scientist for the nonprofit Communities for a Better Environment, who has helped numerous companies forge pollution-reduction plans. "It's pretty disgraceful to have a company breaking the law for so many years without the problem being fixed," says Karras. "In my experience, it costs the least to prevent pollution, while it costs the most to allow the damage from the pollution to be unchecked and unmonitored." (Indeed, the water board determined that C&H did not stand to profit from its violations.)

The falsifying of records has yet another, less tangible, cost: It undermines community trust at a time when Crockett locals are less concerned with C&H's peccadilloes than with the increasingly polluted bond between the town and its former sugar daddy.

The history of Crockett and its big factory are inextricably linked, and 72-year-old Keith Olsen, who has curated at the Crockett Historical Museum for the past dozen years, knows a thing or two about both.

Prior to 1993, C&H was an agricultural cooperative of Hawaiian cane-growers that set up a sugar refinery in town just a week before the 1906 earthquake. By 1915, the company had grown from a few hundred to more than a thousand employees, peaking at 2,500 workers just prior to World War II.

The refiner owned most of the land in Crockett, which came to be known as "Sugar Town." It would set up its employees -- the vast majority lived locally in those days -- with plots of land and favorable bank loans. And if a lot of the houses in town ended up looking very much alike, it's no coincidence: C&H also assisted with architectural design. "In the old days, C&H was very paternalistic," said Ruth Blakeney, a longtime resident and community activist. "The boss would throw the big Christmas party every year, and provide funding for school programs and all sorts of community programs."

By the 1960s, however, this heyday was coming to an end. The company started providing fewer local amenities, instead shifting its community investments more toward the county level. The plant's workforce also dwindled over the years, and ownership changes in the 1990s led to layoffs that reduced personnel to about 500 by 1997. Employment now stands at about 540, mostly folks from elsewhere. "Fifteen years ago, the warehouse itself would have had 500 workers," notes Olsen.

Crockett's loyalty was put to the test in 1984, when C&H proposed to build a power generation plant in town. "It was an environmental disaster, the way it was first planned," said resident Sandra Dare, who moved to town in 1995 to write her master's thesis about local environmental issues. Residents formed the Crockett Power Plant Committee and spent nine years fighting the proposal, and ultimately forcing a complete revision of the initial plan. "It was the first time that a California residents' group had successfully fought a power-plant proposal," said Dare. "But the whole thing tore the town apart."

Opponents couldn't stop the plant entirely, however, and finally relented. Crockett Cogeneration, a natural-gas-powered facility that generates steam for the C&H refinery and pumps leftover electricity into the grid, was ultimately built, but in a settlement with the citizens' committee, C&H agreed to give the town $300,000 annually for the next thirty years. Much of the money goes to fund local police and the volunteer fire department.

Despite the payoff, the long, contentious fight left some residents with a taste of cynicism they hadn't known before. "I wouldn't put anything past them," says Blakeney, when asked about C&H's falsified water board reports.

The ownership changes also wore on C&H's relationship with the town. The cane farmers sold out in 1993 to Hawaii-based Alexander & Baldwin, which turned C&H from a co-op into a corporation. Five years later, Alexander sold a controlling interest to CitiCorp Venture Capital. The results have been less than sweet. Sales fell from $470 million in 1999 to $413 million in 2000, and profits plummeted from $7.4 million to $3.3 million. And while the company's revenues rebounded a bit last year, it posted a net loss of $6.5 million. Most recently, C&H has riled up the town by ending the lease on Crockett's beloved post office building, which the company owns (see 7 Days, page 11).

The company now has the opportunity to deal with its water-permit problems and win back a little goodwill at the same time. It has until May 22 to approach the water board with an environmental project it could fund in lieu of a portion of the fines. If it declines, the board will impose a three-year payment plan for the $394,000 owed. "Our preference certainly is that companies use some of the fine money on local environmental projects," says Bruhns, adding that sixty to seventy percent of all such fines over the past decade have gone toward this purpose.

C&H knows the drill. In 1995, its settlement of a $24,000 fine for violations between 1991 and 1995 included a $16,300 grant to the Carquinez Regional Environmental Education Center, which the company helped seed in 1995 as part of its settlement with the Power Plant Committee. "To us, that was really big money," says Dave Hicks, the center's treasurer and secretary. "We wouldn't be around today if it wasn't for C&H." These days, however, the center survives on $40,000 to $50,000 annually, most of which comes from an annual art sale. Besides the $5,000 in seed money and the 1997 grant, Hicks says C&H contributes about $500 per year. That could soon increase. Sandra Dare says she's approached C&H execs about contributing to CREEC as part of the company's payment of its most recent fines. "I feel confident that we'll work something out," she says.

For its part, Crockett-Valona Sanitary District, the minority owner of C&H's treatment plant, is off the hook and incredibly relieved. The district, which manages all of Crockett's municipal waste and has an annual budget of just $1.6 million, was braced for big fines, but the board ruled it wasn't liable. "The alternative would have had a big effect on ratepayers," says Douglass Tubbs, the district's president.

Back in town, those ratepayers are doing their best to remain oblivious to the whole mess. Despite past bickering and the recent turmoil over its hometown sugar plant and its post office, Crockett would much prefer to chug along as it always has. Asked why they enjoy living here, the townspeople respond in chorus: the tight-knit community. "Of all the places I've lived in my life, this place has the most community spirit," says Dare. Olsen cites a recent local fish fry and an upcoming town-wide yard sale and pasta feed. Jane Bordeaux, who has lived here for a decade, likes the winding streets and pathways, the old architecture, and the views of the Carquinez Strait. She talks about how her neighbors regularly gather around her street corner to chat. "It's like a town that time forgot," she says.

And in many ways, residents are aware that they still have C&H to thank for their town. The company played an integral role in creating the tight-knit community, and though it's no longer involved with the day-to-day, C&H remains a part of Crockett, for better or worse. Indeed, many old-timers still feel loyal toward the company. "Those of us who have been around for a while don't want to let go of the good things the company has done over the years," explains Olsen. And maybe, just maybe, a few hundred thousand dollars in community projects would take the company and its town one small step backwards, back toward the glory days.

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