Timber Giant Facing Indictment Federal Probe May Yield Charges Against Louisiana-Pacific
Louisiana-Pacific Corp. confirmed Thursday it expects to be indicted in a 2-year-old federal investigation into alleged fraud and criminal violations of environmental laws.
Results of an internal investigation at the Louisiana-Pacific mill near Olathe, Colo., were reported to the federal government in September 1992.
In its regular quarterly report to the Securities and Exchange Commission filed May 15, the company said it likely will be indicted on charges resulting from allegations of tampering with air pollution monitoring equipment and a cover-up.
The plant, Louisiana-Pacific’s only mill in Colorado, makes oriented strand board, a composite of thinly sliced wood wafers, and glue and wax used in home construction for roofing, flooring and walls.
Louisiana-Pacific also is under investigation for allegedly submitting unrepresentative samples of the board to the American Plywood Association, an industry product certification agency.
The company also expects an indictment in that investigation.
The company has paid $17 million in environmental fines in the past two years, including more than $6 million for pollution caused by its Ketchikan Pulp Co. mill in Ketchikan, Alaska.
The other $11 million in fines were the result of a May 1993 consent decree between LouisianaPacific and the Environmental Protection Agency concerning emissions from 15 plants.
The EPA said the company violated the Clean Air Act and failed to correctly estimate emissions from its plants while getting permits to build them.
The company did not admit fault in the case, but agreed to install $70 million worth of new environmental equipment at plants where it makes oriented strand board, or OSB.
The 1993 EPA charges involved Louisiana Pacific’s Chilco, Idaho, OSB plant, located about 15 miles north of Coeur d’Alene. The company installed some of the new environmental equipment to control emissions there as part of its settlement with the EPA.
Idaho environmental quality inspectors said Thursday that there has been no unusual air quality activity from the Chilco plant recently.
Lousiana Pacific has mills in Sandpoint and Post Falls along with its Chilco operations, making it one of the larger timber employers in the region.
The violations the company could be indicted over come from activities at another OSB plant in Olathe, Colo. The company allegedly falsified emissions data by tampering with equipment at the plant.
Louisiana-Pacific stock closed at 22 Thursday, down from a Wednesday high of 26 a share.
Barry Lacter, spokesman for the Portland-based wood products manufacturer, said Thursday he could not comment on how the company first learned of the tampering allegations in 1992 or its response to a possible indictment.
However, Lacter issued a statement saying the Colorado investigation is focused on pollution sampling procedures no longer used by Louisiana-Pacific.
He also said in the statement that the grand jury probe was separate from lawsuits filed in Florida and Washington state alleging defects in oriented strand board.
Louisiana-Pacific also has agreed to spend up to $6 million more to clean up damage to Ward Cove in Alaska.