Last November John Borowski, CEO of Borjohn Optical Technology, a small defense contractor in Burlington, Mass., was sentenced to jail and heavily fined for "knowingly endangering others." His criminal act: instructing employees to dump toxic waste down the company drain.

Borowski was the first person to be sentenced to jail time under a new section of the federal Clean Water Act. Unfortunately for him, the law had been considerably stiffened in 1987. Its guidelines now call for mandatory sentencing of an offending company's leader, with executives guilty of "knowing endangerment" being sent to the slammer for a minimum of 51 months, and their companies subject to fines ranging from $100,000 to $1 million for each count. Furthermore, the pace of Environmental Protection Agency prosecution is accelerating -- so much so that law firms across the country are scrambling to add environmental-regulations specialists to their staffs.

For insight into the issue, Inc. turned to one such authority, William Codinha, the lawyer who defended Borowski. Codinha heads the environmental-litigation arm of Peabody & Brown, a Boston law firm.

Inc.: The EPA seems to be going after small businesses.

Codinha: That's its target. Being in compliance is complicated and expensive, so it's picking on the smaller companies with between $1 million and $12 million in sales, because they tend not to be in compliance.

Inc.: Is this just the beginning?

Codinha: We'll see many more cases, and quickly. The EPA says it already has a backload of cases, and it's ready to go for more. Before, it used to require years to take a case to court. But now a criminal case goes to court as soon as 70 days after an indictment.

Inc.: How does a company wind up on the EPA hit list?

Codinha: By ignoring the EPA's mailings and requests for information. Almost anyone in manufacturing is a producer of hazardous waste and must account for it at each step by keeping careful records: for example, that a hauler picked up x gallons of waste from your factory and that a disposal company received it, and so on. That's the EPA's "cradle-to-grave manifesting" requirement, by which you have to supply manifests to the EPA or your state regulatory agency on request, and it doesn't require a warrant. Smaller companies may be tempted not to keep records or, worse, to file false reports. It's easy for the EPA to catch up with them.

Inc.: How easy is it to find yourself out of compliance?

Codinha: You might have 5,000 gallons of hazardous waste with the containers facing in the wrong direction. Or one of their tops is not screwed on tight. To know the regulations, a CEO would have to walk through them with an environmental specialist or a lawyer who's up on criminal environmental law, or both. It's not expensive -- certainly when compared with jail time. -- Susan Greco

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