Citgo was convicted of criminal charges under the Clean Air Act in 2007 for operating two large tanks at its Corpus Christi East Plant without emissions controls from 1994 to 2003. The lack of controls, prosecutors say, exposed nearby residents to the carcinogen benzene and other compounds.
But seven years after the conviction, the case is still a focus of attention in this industrial port city on the Gulf Coast of Texas, where refineries abut largely poor and minority neighborhoods. Victims are continuing to press their case for restitution payments from Citgo for hundreds of people.
Citgo was hit with a $2 million fine when sentencing for the 2007 conviction occurred in February, but more recently a federal judge ruled against providing what the Justice Department and victims say should be far more to address future medical costs and more.
Melissa Jarrell, an associate professor of criminal justice at Texas A&M University (Corpus Christi), said the $2 million fine imposed against Citgo early this year sends the wrong signal.
"There is no deterrent value, really, in our sentencing guidelines for corporations, because we know that $2 million is not a deterrent for a major, multibillion-dollar corporation," Jarrell, who works with activists here, said in an interview in early May. "I'm certain other corporations saw that."
The penalty that district court Judge John Rainey imposed is indeed relatively little money for the major refiner, a subsidiary of Venezuela's state-owned oil company PDVSA.
The Justice Department has argued that a vastly larger fine could be imposed, and has not ruled out an appeal. Two million dollars was the maximum fine specified in law, but corporate crime statutes also allow an alternative of twice the gain that an offender reaped, and prosecutors argued Citgo gained $1 billion through illegal operation of the refinery.
The very recent past has brought two key developments in the case.
On April 30, the judge handed the Justice Department and community members a defeat by rejecting victims' bid for tens of millions of dollars in restitution to pay for medical screening for cancer and other diseases, future medical expenses, and relocation of people who live near the refinery.
On Monday, a three-judge panel of the U.S. Court of Appeals for the 5th Circuit denied the victims' bid for review of Rainey's April 30 ruling. The Justice Department says it's reviewing the April 30 ruling, which can also be appealed by the department, and a spokesman said in a statement that the department is "disappointed" by the decision to deny restitution.
People who live near the refinery have told the court that they experienced ailments such as headaches, skin irritation, fatigue, burning throat and lungs, and other woes.
But Citgo has argued in court filings that there is no evidence to support paying tens of millions of dollars in restitution.