By Wes Hills, Timothy R. Gaffney and Rebecca Carr
whills@DaytonDailyNews.com
tgaffney@DaytonDailyNews.com
rcarr@coxnews.com

October 1, 2003

DAYTON | Emery Worldwide Airlines Inc. on Tuesday agreed to pay a $6 million fine for flying hazardous materials on airplanes without properly notifying pilots. Emery pleaded guilty to criminal charges that it violated shipping laws.

In Washington, D.C., U.S. Attorney General John Ashcroft said Emery's plea to 12 criminal counts was part of a new initiative to crack down on illegal shipments of hazardous cargo that could lead to accidents or be used by terrorists to mount attacks.

"With the sheer amount of hazardous materials being shipped on our nation's transportation infrastructure," Ashcroft said, "we must track down and bring to justice those who violate our transportation laws."

The move follows Dayton Daily News reports in June 1999 that Emery supervisors had warned of dangerous practices with hazardous materials and a pattern of violations spanning two years. The reports disclosed internal Emery documents and memos that detailed the allegations.

The violations involved Emery's North American freight hub at Dayton International Airport and its Dayton-based cargo airline, which ceased operations in August 2001. The hub and airline companies are units of Palo Alto, Calif.-based CNF Inc., a global freight company with $4.8 billion in revenues last year.

Separately, CNF on Tuesday said Emery also will pay a $500,000 civil penalty to the Federal Aviation Administration "to resolve a parallel enforcement matter." In 2001, the FAA proposed the $500,000 penalty for 19 failures to notify pilots when hazardous materials were loaded on their airplanes.

Without that notification, the pilot wouldn’t be able to properly respond to an on-board fire or spill.

Emery also agreed to cooperate with law enforcement, to be placed on probation for five years and to start a program to prevent future violations.

Among the hazardous materials listed were explosives, flammable liquids and aerosols, sulfuric acid and automobile air bags. The FAA said the violations occurred between October 1998 and July 1999.

CNF said Tuesday's plea agreement came after the company "had previously remedied its faulty procedures that were of concern to the government." In a written statement, it said the case "covered events during the period between 1998 and mid-1999."

The most serious allegations, detailed in memos by hazardous materials Supervisor Debbra O. Bullock, described hundreds of shipments of hazardous materials without documentation or pilot notification and shipping materials not permitted in Emery's air cargo system. Chief U.S. District Judge Walter H. Rice apparently referred to Bullock, who still works for Emery, while reading a "statement of facts."

"On Feb. 1, 1998," Rice noted, "the employee sent an e-mail to various management personnel advising them . . . that an audit over a two-week period found 439 hazmat shipments that moved without paperwork." Bullock's attorney, Larry Greger, said, "She's an absolutely courageous woman who led the parade" of others who came forward later.

Greger said he represents two other Emery employees who assisted in the probe.

After Emery changed its computer system in August 1999, Rice said, the number of hazmat shipments moved without pilot notification "became negligible."

The U.S. initiative also includes cargo shipments on passenger airlines. The 1996 ValuJet crash in the Everglades, which killed 110 people, was blamed on a fire caused by illegal shipment of oxygen generators in the cargo hold.

In the late 1990s, Emery's Dayton hub processed about 2,500 tons of freight daily, about 3 percent — 75 tons a day — involving hazardous materials or what the air freight industry calls dangerous goods. These included explosives, flammable liquids, toxic substances, radioactive materials and biomedical products.

The hub's freight volume today is about half of what it was then, CNF Spokesman Jim Allen said.

Tuesday's announcements are the largest but not the first major fines Emery has agreed to pay for safety violations involving air freight.

In September 2001, a month after it grounded its airline under pressure from the FAA, Emery agreed to pay a $1 million fine in a consent agreement aimed at resuming operations. Emery had grounded its fleet of DC-8 and DC-10 cargo jets and furloughed about 800 employees after the FAA threatened to revoke its operating certificate on allegations of more than 100 safety violations.

The grounding followed by more than a year a February 2000 crash of an Emery DC-8 near Sacramento, Calif., that killed all three crew members. The National Transportation Safety Board this summer concluded the crash was caused by an unsecured bolt.

Emery never resumed airline operations. In December 2002, it reorganized its Emery operations under the current Menlo Worldwide, a CNF unit.

Emery's operations are a small part of the nation's hazardous materials transport system. About 300 million shipments of hazardous materials, totaling about 3.2 billion tons, are transported each year, according to the Department of Transportation. About 5 percent is carried by air, 94 percent moves by motor carrier and 1 percent by rail.

Contact Wes Hills at 225-2162. Contact Timothy Gaffney at 225-2390. Contact Rebecca Carr at (202) 887-8362.