An American-based ship operator has agreed to plead guilty to criminal pollution charges, and the company will pay a $1 million criminal fine as well as $500,000 for community service programs.

Pacific-Gulf Marine Inc. admitted that violations occurred onboard its four giant car carrier vessels, according to the U.S. Justice Department.

PGM admitted that ships´ records misrepresented that hundreds of thousands of gallons of oil-contaminated bilge waste were properly treated before being pumped overboard, when in reality the crews allegedly bypassed the pollution control equipment to discharge untreated oily water. The ships´ crews sometimes referred to the bypass device as a "magical pipe," according to Justice officials.

In agreeing to plead guilty, PGM admitted its onshore management "failed to provide sufficient management resources and support to the ships, and also failed to exercise sufficient supervision and management controls to prevent or detect criminal violations by its employees." The motive for the criminal conduct was to save money, according to papers filed in court.

After learning of the federal investigation, PGM voluntarily disclosed to the federal government the results of an internal investigation that included interviews with current and former employees.

"PGM wants to be part of the solution, not part of the problem," company CEO Todd Johnson said. "We deeply regret that some of our crews violated environmental laws, and we apologize for these actions."

The federal government took into account the company´s cooperation when proposing the penalty, which must be approved by a federal judge, according to Justice officials.

"Just as we give consideration to individual criminals who tell us what they know about crimes by other people, so, too, we reward corporations that voluntarily disclose the results of their internal investigations," said Rod Rosenstein, U.S. attorney for the District of Maryland.

The criminal investigation began on Sept. 2, 2003, after U.S. Coast Guard inspections of the PGM´s M/V Tellus and M/V Tanabata in Baltimore.

While the company has agreed to the plea deal, a federal grand jury returned an indictment June 28 charging two former chief engineers of the M/V Tanabata, Stephen Karas and Mark Humphries, with environmental crimes, including conspiracy, violating the Act to Prevent Pollution from Ships, and making false statements. An indictment is a formal charge and does not imply innocence or guilt.

Pacific-Gulf Marine has reviewed and revised its operating processes to ensure complete compliance with environmental laws, according to the company.

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