Attorney General Martha Coakley's Office Resolves Criminal and Civil Cases Against Powers Fasteners
Big Dig epoxy supplier Enters Corporate Compliance Agreement; Pays $16 million in civil damages
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BOSTON - Massachusetts Attorney General Martha Coakley's Office has reached an agreement with Powers Fasteners, Inc. (Powers), resolving both the criminal manslaughter indictment, and the pending civil claims against the company in connection with the July 2006 Big Dig ceiling tunnel collapse. Powers is the Brewster, NY-based company that marketed and distributed the epoxy anchor bolt system used in portions of the I-90 Connector Tunnel. Powers has agreed to enter into a Deferred Prosecution Agreement (DPA) and a Corporate Compliance Agreement to resolve the criminal indictment, and to pay the Commonwealth $16 million in civil damages. Had Powers been convicted of manslaughter, the company would have faced a maximum penalty of a $1,000 fine.
"Our goal in this agreement was to reach a resolution of both the criminal and civil matters pending against Powers in a manner that best serves the Commonwealth," said Attorney General Coakley. "By agreeing to comply with the terms of the Deferred Prosecution Agreement and the compliance program, Powers is taking important steps to ensure that a similar incident will be prevented in the future. This is a far more meaningful outcome than a small monetary fine. In addition, the $16 million civil payment serves as a deterrent, not only for Powers, but for other companies who work on public projects of this magnitude."
Powers was indicted by a Suffolk Grand Jury in August 2007 on one count of involuntary manslaughter in connection with the July 2006 death of Milena Del Valle, age 37, of Jamaica Plain. Pursuant to the DPA, the Commonwealth will file a conditional dismissal within 120 days provided that Powers meets certain conditions. These conditions include that Powers enter into a Corporate Compliance Agreement (CCA) and meet certain condition of the CCA. The indictment may be reinstated within three years if Powers breaches the CCA. The CCA includes the following requirements:
- Powers must immediately stop sales and production of Power-Fast Fast Set epoxy (Fast Set), the product used in the Interstate 90 connector tunnel.
- Powers must terminate all sales and production of all other adhesive anchors unless an accredited lab issues a report that the product complies with applicable technical standards and Powers uses commercially reasonable steps to obtain final approval from the appropriate regulatory agency.
- Powers must recall all of the Fast Set product currently in the field.
- Powers must publish warnings that Fast Set has failed certain tests and that slippage may be a sign of failure. It will also include the technical advisory issued by the Federal Highway Administration relative to Fast Set. Powers will also issue a notice to end users within 60 days.
- Powers must place a notice regarding Fast Set in two consecutive editions of all publications where Fast Set is reasonably believed to have been advertised.
- In addition to the reinstatement of the indictment, Powers will pay $100,000 per year if it materially breaches the CCA.
- Powers, with the approval of the Attorney General's Office, must hire an independent monitor to conduct an annual review of Powers' compliance with the CCA.
In addition to resolving the criminal indictment, Powers has also agreed to a resolution of all civil claims pending against the company. In November 2006, the Attorney General's Office filed a lawsuit against Powers and other companies directly involved in the management, design, construction, and oversight of the Interstate 90 connector tunnel that collapsed in July 2006. The lawsuit alleged negligence and breach of contract against the companies and was filed on behalf of the Commonwealth, the Massachusetts Highway Department and the Massachusetts Turnpike Authority. Powers has agreed to resolve claims asserted in this lawsuit with a payment of $16 million. The majority of the payment, $15.5 million, will go to the Commonwealth's Transportation Infrastructure Fund. The Fund is administered by the Commonwealth and is generally used to pay for Big Dig expenses and the costs of the Statewide Road and Bridge Program. The remaining $500,000 will go to the City of Boston to reimburse the city for costs incurred in the response to the ceiling collapse. In addition, Powers has also agreed that its products will not be qualified to be used on any state or locally publicly funded construction projects in Massachusetts until January 1, 2012.
Powers was indicted following a 13-month joint investigation by the Attorney General's Office, the U.S. Attorney's Office, the U.S. Department of Transportation Office of the Inspector General, the Federal Bureau of Investigation, and the National Transportation Safety Board. During the course of this investigation, authorities learned that the epoxy anchor system marketed and distributed by Powers was used to suspend the concrete ceiling in the section of the Connector Tunnel where the collapse occurred. Investigators further determined that the cause of the ceiling collapse was the use of Power-Fast Fast Set epoxy product in the anchor system. Specifically, the type of epoxy used was found to be unsuitable for sustained loads as it is susceptible to "creep"-a phenomenon whereby the anchors pull away from the ceiling over time. Investigators also believe that Powers was aware, and had been for a number of years, that its Fast Set product was unsuitable for sustained loads based upon the company's own "creep" testing.
The indictment followed, an investigation from which authorities alleged that Powers knew that its epoxy product was being used in the tunnel, and when provided with the opportunity, failed to differentiate to project managers between its Fast Set and Standard Set products. Authorities further alleged that Powers failed to reveal this fact in either its marketing material, or when it was specifically asked. Investigators alleged that Powers had the necessary knowledge and the opportunity to prevent the fatal ceiling collapse but failed to do so, and that this wanton or reckless conduct resulted in the death of Milena Del Valle.
Today's Deferred Prosecution Agreement and civil settlement conclude all pending matters in relation to Powers.
Powers Civil Settlement Agreement (PDF) file size 2MB
Powers Deferred Prosecution Agreement (PDF) file size 3MB
Attorney General Coakley, pictured with Assistant Attorney General James Sweeney.
From left: Sweeney; Attorney General Coakley; Assistant Attorney General Jason Barshak.
Attorney General Coakley discusses today's resolution.
Attorney General Coakley, accompanied by Barshak.
Listen to the press conference audio from December 17, 2008:
- Powers Resolution Press Conference Audio (mp3) file size 3MB
Read a transcript of the press conference: