FOR IMMEDIATE RELEASE ENRD

THURSDAY, JUNE 22, 2006 (202) 514-2007

WWW.USDOJ.GOV TDD (202) 514-1888

Puerto Rico Aqueduct and Sewer

Authority Indicted for Environmental
Crimes;
Will Pay $10 Million in Criminal and
Civil Fines and Spend $1.7 Billion
Improving Wastewater Treatment
WASHINGTON – The Puerto Rico Aqueduct and Sewer Authority (PRASA)
entered into an agreement to plead guilty to an indictment charging 15 felony counts
of violating the federal Clean Water Act (CWA) through the illegal discharge of
pollutants from nine sanitary wastewater treatment plants and five drinking water
treatment plants, the Justice Department and Environmental Protection Agency
(EPA) announced today. Under the plea agreement, PRASA will pay a criminal
fine of $9 million—the largest fine ever paid by a utility for violating the CWA. In
addition, a comprehensive civil settlement was reached between PRASA and the
United States of America resolving repeated environmental violations at 61
wastewater treatment plants throughout the Commonwealth.

In the civil settlement, PRASA will spend an estimated $1.7 billion implementing
capital improvement projects (CIPs) and other remedial measures at all of its 61
wastewater treatment plants and related collection systems over the next 15 years.
To comply with the settlement, PRASA will complete 145 short-, mid-, and long-
term CIPs, which will include installing dechlorination equipment, installing flow
proportional chlorination equipment, repairing and replacing equipment, and
implementing a chemical treatment program for phosphorous removal, among other
things.

“Today’s criminal and civil actions are a landmark step in assisting PRASA, an
offender with a pervasive history of violations, to comply with the Clean Water
Act, a law that protects both the people and the environment of Puerto Rico from
undue exposure to harmful pollutants,” said Sue Ellen Wooldridge, Assistant
Attorney General for the Justice Department’s Environment and Natural Resources
Division. “We are pleased that we have reached a resolution to these matters, and
that PRASA has agreed to make the necessary improvements and committed funds
to ensure significant improvements to its wastewater treatment plants.”

“The Bush Administration is holding polluters accountable for their actions and
using enforcement tools to enhance our environment and protect public health,” said
Granta Y. Nakayama, EPA’s Assistant Administrator for Enforcement and
Compliance Assurance. “This action is the largest criminal fine ever paid by a
utility under the Clean Water Act.”

This morning, the federal grand jury in San Juan returned a 15-count indictment
charging PRASA with criminal violations of the Clean Water Act arising out of
PRASA’s role, as owner and operator, and its conduct in the operation and
management of the wastewater and drinking water treatment systems in Puerto
Rico. The Justice Department also filed this morning, a plea agreement with
PRASA under which the utility will plead guilty to the indictment filed by the grand
jury. Under the plea agreement, PRASA will pay a fine of $9 million, complete
capital improvements to the nine wastewater treatment systems for nearly $109
million, spend $10 million to correct the discharges to the Martin PeZa Creek, and
serve a five-year term of probation. Further, under the agreement, PRASA is
required to fully comply with the terms in the civil consent decree and has agreed
that the court may extend PRASA’s term of probation, with all available sentencing
options, to ensure that PRASA comes into substantial compliance with the
conditions of probation.

“This record settlement reaffirms the Bush Administration’s commitment to

protecting public health and the environment,” said Alan J. Steinberg, EPA
Regional Administrator. “The proposed settlement and plea agreement address a
history of noncompliance on the part of PRASA that has resulted in the discharge of
millions of gallons of inadequately treated sewage and raw sewage through illegal
discharges. Once actions are taken under the civil consent decree and plea
agreement, the quality of the environment in the Commonwealth of Puerto Rico will
be improved.”

“The United States Attorney’s Office in Puerto Rico is committed to environmental

enforcement aimed at improving the quality of life in Puerto Rico especially the
quality of water,” said Rosa Emilia Rodríguez Vélez, U.S. Attorney for the District
of Puerto Rico.

Today’s civil settlement resolves allegations that PRASA violated pollution

discharge permits issued by the EPA under the CWA; failed to properly operate and
maintain all 61 treatment facilities; and discharged raw sewage from seven
collection systems in violation of the CWA. In addition to the nearly $1.7 billion in
capital improvements and other remedial measures, PRASA will pay a $1 million
civil penalty and implement a supplemental environmental project at an estimated
cost of $3 million. The project requires PRASA to provide sewer service to at least
one community on the Island that has not been connected to PRASA’s facilities.

Senior Litigation Counsel Howard Stewart, of the U.S. Department of Justice,

Environmental Crimes Section and Special Assistant U.S. Attorney Silvia Carreño
of the U.S. Attorney’s Office in Puerto Rico are the criminal prosecutors in this
case. Senior Attorney Patricia A. McKenna, of the U.S. Department of Justice
Environmental Enforcement Section and Assistant U.S. Attorney Isabel Muñoz of
the U. S. Attorney’s Office in Puerto Rico are the civil prosecutors in this case. At
the EPA, Diane Gomes, Assistant Regional Counsel; Charles Hoffmann, Associate
Regional Counsel for Criminal Enforcement; Jaime Geliga, Caribbean
Environmental Protection Division; Special Agent in Charge William Lometti; and
Associate Special Agent in Charge Jonathan Thalasinos were instrumental in this
action.

The consent decree will be subject to a 30-day public comment period and is
available on the Justice Department website at http://www.usdoj.gov/enrd/open.html
and on the EPA website at
http://www.epa/gov/compliance/resources/cases/civil/cwa/prasa060706.html.

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